1
Exhibit 10.2
ANTEC CORPORATION
$100,000,000
4 1/2% CONVERTIBLE SUBORDINATED NOTES DUE 2003
Purchase Agreement
May 5, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
2
$100,000,000
4 1/2% Convertible Subordinated Notes due 2003
of ANTEC CORPORATION
PURCHASE AGREEMENT
May 5, 1998
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
ANTEC Corporation, a Delaware corporation (the "COMPANY"), proposes to
issue and sell to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation (the
"INITIAL PURCHASER") an aggregate of $100,000,000 in principal amount of its 4
1/2% Convertible Subordinated Notes due 2003 (the "FIRM NOTES"), subject to the
terms and conditions set forth herein. The Company also proposes to issue and
sell to the Initial Purchaser not more than an additional $15,000,000 principal
amount of 4 1/2% Convertible Subordinated Notes due 2003, of the Company (the
"ADDITIONAL NOTES"), if requested by the Initial Purchaser as provided in
Section 2 hereof. The Firm Notes and the Additional Notes are herein
collectively referred to as the "NOTES." The Firm Notes are to be issued
pursuant to the provisions of an indenture (the "INDENTURE"), to be dated as of
the Closing Date (as defined below), between the Company and The Bank of New
York, as trustee (the "TRUSTEE"), pursuant to which the Notes, as provided
therein, will be convertible at the option of the holders thereof, into shares
of Common Stock, par value $.01, of the Company (the "COMMON STOCK"). The Notes
and the Common Stock issuable upon conversion thereof are herein collectively
referred to as the "SECURITIES." The Securities and the Indenture are more
fully described in the Offering Memorandum (as hereinafter defined). Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Indenture.
24. OFFERING MEMORANDUM. The Notes will be offered and sold to the Initial
Purchaser pursuant to one or more exemptions from the registration requirements
under the Securities Act of 1933, as amended (the "ACT"). The Company has
prepared a preliminary offering
3
memorandum, dated April 23, 1998 (the "PRELIMINARY OFFERING MEMORANDUM") and a
final offering memorandum, dated May 5, 1998 (the "OFFERING MEMORANDUM"),
relating to the Notes.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Notes (and all securities issued
in exchange therefor, in substitution thereof or upon conversion thereof) shall
bear the following legend:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED 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 OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT)(A "QIB"), (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A UNDER THE SECURITIES ACT, (C) TO AN IAI THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF THE COMPANY SO REQUESTS, AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT, IT IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT (D) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF
THE SECURITIES ACT, (E) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR
(G)
B-2
4
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING."
25. AGREEMENTS TO SELL AND PURCHASE. (a) On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to the terms
and conditions contained herein, the Company agrees to issue and sell to the
Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Company, an aggregate principal amount of $100,000,000 of Firm Notes at a
purchase price equal to 97% of the principal amount thereof (the "PURCHASE
PRICE").
(b) On the basis of the representations and warranties contained in
this Agreement, and subject to the terms and conditions hereof, the Company
agrees to issue and sell to the Initial Purchaser, and the Initial Purchaser
shall have the right, but not the obligation, to purchase from the Company from
time to time up to all of the Additional Notes at the Purchase Price.
Additional Notes may be purchased solely for the purpose of covering
over-allotments made in connection with the Offering of the Firm Notes. The
Initial Purchaser may exercise its right to purchase Additional Notes in whole
or in part from time to time by giving written notice thereof to the Company at
any time within 30 days after the date of this Agreement. Such notice shall
specify the aggregate principal amount of Additional Notes to be purchased
pursuant to such exercise and the date for payment and delivery thereof. The
date specified in any such notice shall be a business day (i) no earlier than
the Closing Date (as hereinafter defined), (ii) no later than ten business days
after such notice has been given and (iii) no earlier than two business days
after such notice has been given.
26. TERMS OF OFFERING. The Initial Purchaser has advised the Company that the
Initial Purchaser will make offers and sales (the "EXEMPT RESALES") of the Notes
purchased hereunder on the terms set forth in the Offering Memorandum, as
amended or supplemented, solely to persons whom the Initial Purchaser reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A under the
Act ("QIBS"), (such persons being referred to herein as the "ELIGIBLE
PURCHASERS"). The Initial Purchaser will offer the Notes to Eligible Purchasers
initially at a price equal to 100% of the principal amount thereof. Such price
may
B-3
5
be changed at any time without notice.
Holders (including subsequent transferees) of the Securities will have
the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in a form
resonably acceptable to the Initial Purchaser, for so long as such Securities
constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
will agree to file with the Securities and Exchange Commission (the
"COMMISSION") under the circumstances set forth therein, a shelf registration
statement pursuant to Rule 415 under the Act (the "SHELF REGISTRATION
STATEMENT") relating to the resale by certain holders of the Securities and to
use its reasonable best efforts to cause such Registration Statement to be
declared and remain effective and usable for the periods specified in the
Registration Rights Agreement. This Agreement, the Indenture, the Notes and the
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "OPERATIVE DOCUMENTS."
27. DELIVERY AND PAYMENT.
a. Delivery of, and payment of the Purchase Price for, the Firm Notes
shall be made at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP ("Skadden") or such other location as may be mutually acceptable.
Such delivery and payment shall be made at 9:00 a.m. New York City
time, on May 8, 1998 or at such other time on the same date or such
other date as shall be agreed upon by the Initial Purchaser and the
Company. The time and date of such delivery and the payment for the
Firm Notes are herein called the "Closing Date."
b. Delivery to the Initial Purchaser of and payment for any Additional
Notes to be purchased by the Initial Purchaser shall be made at the
offices of Skadden at 9:00 a.m., New York City time, on the date
specified in the exercise notice given by the Initial Purchaser
pursuant to Section 2(b) or such other time on the same or such other
date as the Initial Purchaser and the Company shall agree in writing.
The time and date of delivery and payment for any Additional Notes are
hereinafter referred to as an "OPTION CLOSING DATE."
c. One or more of the Notes in definitive global form, registered in the
name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the
aggregate principal amount of the Notes (collectively, the "GLOBAL
NOTE"), shall be delivered by the Company to the Initial Purchaser (or
as the Initial Purchaser directs) in each case with any transfer taxes
thereon duly paid by the Company against payment by the Initial
Purchaser of the Purchase Price thereof by wire transfer in same day
funds to the order of the Company. The Global Note
B-4
6
shall be made available to the Initial Purchaser for inspection not
later than 9:30 a.m., New York City time, on the business day
immediately preceding the Closing Date.
28. AGREEMENTS OF THE COMPANY. The Company hereby agrees with the Initial
Purchaser as follows:
a. To advise the Initial Purchaser promptly and, if requested by the
Initial Purchaser, confirm such advice in writing, (i) of the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Notes for
offering or sale in any jurisdiction designated by the Initial
Purchaser pursuant to Section 5(e) hereof, or the initiation of any
proceeding by any state securities commission or any other federal or
state regulatory authority for such purpose and (ii) of the happening
of any event during the period referred to in Section 5(c) below that
makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Offering Memorandum untrue or that requires
any additions to or changes in the Preliminary Offering Memorandum or
the Offering Memorandum in order to make the statements therein not
misleading. The Company shall use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or
exemption of any Notes under any state securities or Blue Sky laws
and, if at any time any state securities commission or other federal
or state regulatory authority shall issue an order suspending the
qualification or exemption of any Notes under any state securities or
Blue Sky laws, the Company shall use its reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest
possible time.
b. To furnish the Initial Purchaser and those persons identified by the
Initial Purchaser to the Company as many copies of the Preliminary
Offering Memorandum and the Offering Memorandum, any documents
incorporated by reference therein, and any amendments or supplements
thereto, as the Initial Purchaser may reasonably request for the time
period specified in Section 5(c). Subject to the Initial Purchaser's
compliance with its representations and warranties and agreements set
forth in Section 7 hereof, the Company consents to the use of the
Preliminary Offering Memorandum and the Offering Memorandum, any
documents incorporated by reference therein, and any amendments and
supplements thereto required pursuant hereto, by the Initial Purchaser
in connection with Exempt Resales.
c. During such period as in the opinion of counsel for the Initial
Purchaser an Offering Memorandum is required by law to be delivered in
connection with
B-5
7
Exempt Resales by the Initial Purchaser, (i) not to make any amendment
or supplement to the Offering Memorandum of which the Initial
Purchaser shall not previously have been advised or to which the
Initial Purchaser shall reasonably object after being so advised and
(ii) to prepare promptly upon the Initial Purchaser's reasonable
request, any amendment or supplement to the Offering Memorandum which
may be necessary or advisable in connection with such Exempt Resales.
d. If, during the period referred to in Section 5(c) above, any event
shall occur or condition shall exist as a result of which, in the
opinion of counsel to the Initial Purchaser, it becomes necessary to
amend or supplement the Offering Memorandum in order to make the
statements therein, in the light of the circumstances when such
Offering Memorandum is delivered to an Eligible Purchaser, not
misleading, or if, in the opinion of counsel to the Initial Purchaser,
it is necessary to amend or supplement the Offering Memorandum to
comply with any applicable law, forthwith to prepare an appropriate
amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the
light of the circumstances when it is so delivered, be misleading, or
so that such Offering Memorandum will comply with applicable law, and
to furnish to the Initial Purchaser and such other persons as the
Initial Purchaser may designate such number of copies thereof as the
Initial Purchaser may reasonably request.
e. Prior to the sale of all Notes pursuant to Exempt Resales as
contemplated hereby, to cooperate with the Initial Purchaser and
counsel to the Initial Purchaser in connection with the registration
or qualification of the Notes for offer and sale to the Initial
Purchaser and pursuant to Exempt Resales under the securities or Blue
Sky laws of such United States jurisdictions as the Initial Purchaser
may request and to continue such registration or qualification in
effect so long as required for Exempt Resales and to file such
consents to service of process or other documents as may be necessary
in order to effect such registration or qualification; provided,
however, that the Company shall not be required in connection
therewith to qualify as a foreign corporation in any jurisdiction in
which it is not now so qualified or to take any action that would
subject it to general consent to service of process or taxation other
than as to matters and transactions relating to the Preliminary
Offering Memorandum, the Offering Memorandum or Exempt Resales, in any
jurisdiction in which it is not now so subject. The Company will
continue such qualification in effect so long as required by law for
distribution of the Notes.
f. So long as the Notes are outstanding, (i) to mail and make generally
available
B-6
8
as soon as practicable after the end of each fiscal year to the record
holders of the Notes a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report
of all unconsolidated subsidiaries, if any), all such financial
reports to include a consolidated balance sheet, a consolidated
statement of operations, a consolidated statement of cash flows and a
consolidated statement of shareholders' equity as of the end of and
for such fiscal year, together with comparable information as of the
end of and for the preceding year, certified by the Company's
independent public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly
period (except for the last quarterly period of each fiscal year) to
such holders, a consolidated balance sheet, a consolidated statement
of operations and a consolidated statement of cash flows (and similar
financial reports of all unconsolidated subsidiaries, if any) as of
the end of and for such period, and for the period from the beginning
of such year to the close of such quarterly period, together with
comparable information for the corresponding periods of the preceding
year.
g. So long as the Notes are outstanding, to furnish to the Initial
Purchaser as soon as available copies of all reports or other
communications furnished by the Company to its security holders or
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed and
such other publicly available information concerning the Company
and/or its subsidiaries as the Initial Purchaser may reasonably
request.
h. So long as any of the Notes remain outstanding and during any period
in which the Company is not subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to
make available to any holder of Securities in connection with any sale
thereof and any prospective purchaser of such Securities from such
holder, the information ("RULE 144A INFORMATION") required by Rule
144A(d)(4) under the Act.
i. Whether or not the transactions contemplated hereby are consummated or
this Agreement is terminated, to pay or cause to be paid all expenses
incident to the performance of the obligations of the Company under
this Agreement, including, without limitation: (i) the fees,
disbursements and expenses of counsel to the Company and accountants
of the Company in connection with the sale and delivery of the Notes
to the Initial Purchaser and pursuant to Exempt Resales, and all other
fees and expenses in connection with the preparation, printing, filing
and distribution of the Preliminary Offering Memorandum, the Offering
Memorandum, any documents incorporated by
B-7
9
reference and all amendments and supplements to any of the foregoing
(including financial statements), including the mailing and delivering
of copies thereof to the Initial Purchaser and persons designated by
it in the quantities specified herein, (ii) all costs and expenses
related to the transfer and delivery of the Notes to the Initial
Purchaser and pursuant to Exempt Resales, including any transfer or
other taxes payable thereon, (iii) all costs of printing or producing
this Agreement, the other Operative Documents and any other agreements
or documents in connection with the offering, purchase, sale or
delivery of the Securities, (iv) all expenses in connection with the
registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of the several states and all
costs of printing or producing any preliminary and supplemental Blue
Sky memoranda in connection therewith (including the filing fees and
fees and disbursements of counsel for the Initial Purchaser in
connection with such registration or qualification and memoranda
relating thereto), (v) the cost of printing certificates representing
the Securities, (vi) all expenses and listing fees in connection with
the application for quotation of the Notes in the National Association
of Securities Dealers, Inc. ("NASD") Automated Quotation System -
PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee and the
Trustee's counsel in connection with the Indenture and the Notes,
(viii) the costs and charges of any transfer agent, registrar and/or
depositary (including DTC), (ix) any fees charged by rating agencies
for the rating of the Notes, (x) all costs and expenses of the
Registration Statement, as set forth in the Registration Rights
Agreement, (xi) all expenses and listing fees in connection with the
application for listing the Common Stock on the NASDAQ National Market
and (xii) all other costs and expenses incident to the performance of
the obligations of the Company hereunder for which provision is not
otherwise made in this Section 5(i).
j. To use its best efforts to effect the inclusion of the Notes in PORTAL
and to maintain the listing of the Notes on PORTAL for so long as the
Notes are outstanding.
k. To obtain the approval of DTC for "book-entry" transfer of the Notes,
and to comply with all of its agreements set forth in the
representation letters of the Company to DTC relating to the approval
of the Notes by DTC for "book-entry" transfer.
l. To cause the Common Stock issuable upon conversion of the Notes to be
duly included for quotation on the Nasdaq Stock Market's National
Market (the "NASDAQ NATIONAL MARKET") prior to the Firm Closing Date
subject to notice of official issuance. The Company will ensure that
such Common Stock remains included for quotation on the Nasdaq
National Market or any
B-8
10
other national securities exchange following the Firm Closing Date for
so long as any shares of Common Stock remain registered under the
Exchange Act.
m. The Company shall not, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for, warrants, options or rights
to purchase or acquire, Common Stock ("Other Securities") or in any
other manner transfer all or a portion of the economic consequences
associated with the ownership of any Common Stock, or (ii) enter into
any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Common
Stock (regardless of whether any of the transactions described in
clause (i) or (ii) is to be settled by the delivery of Common Stock,
or such Other Securities, in cash or otherwise), except to the Initial
Purchaser pursuant to this Agreement, for a period of 90 days after
the Closing Date without the prior written consent of the Initial
Purchaser. Notwithstanding the foregoing, during such period (i) the
Company may grant stock options pursuant to the Company's existing
stock option plan and (ii) the Company may issue shares of Common
Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof. The Company also agrees not
to file, except pursuant to the Registration Rights Agreement, any
registration statement with respect to any shares of Comon Stock or
any securities convertible into or exercisable or exchangeable for
Common Stock for a period of 90 days after the Closing Date without
the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation other than (i) registration statements in favor of
employees providing services to the Company on Form S-8 and (ii)
registration statements to the extent required pursuant to the
Company's currently existing registration rights agreements with TCI
TSX, Inc. and Anixter International Inc. The Company shall, prior to
or concurrently with the execution of this Agreement, deliver an
agreement executed by each of the Company's Chief Executive Officer,
Chief Operating Officer and Chief Financial Officer to the effect that
such person will not, during the period commencing on the date such
person signs such agreement and ending 90 days after the Closing Date
without the prior written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, (A) engage in any of the transactions
described in the first sentence of this paragraph or (B) make any
demand for, or exercise any right with respect to, the registration of
any shares of Common Stock or any Other Securities.
B-9
11
n. Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Notes to the Initial
Purchaser or pursuant to Exempt Resales in a manner that would require
the registration of any such sale of the Notes under the Act.
o. Not to claim voluntarily, and to resist actively any attempt to claim,
the benefit of any usury laws against the holders of any Notes.
p. To comply with all of its agreements set forth in the Registration
Rights Agreement.
q. To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by it prior to
or after the Closing Date or the Option Closing Date, as the case may
be, and to satisfy all conditions precedent to the delivery of the
Notes.
29. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. As of the date
hereof, the Company represents and warrants to, and agrees with, the Initial
Purchaser that:
a. The Preliminary Offering Memorandum and the Offering Memorandum
including the information incorporated by reference therein (the
"INCORPORATED DOCUMENTS") do not, and any supplement or amendment to
them will not, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall
not apply to statements in or omissions from the Preliminary Offering
Memorandum or the Offering Memorandum (or any supplement or amendment
thereto) based upon information relating to the Initial Purchaser or
the Initial Purchaser's plan to distribute the Notes furnished to the
Company in writing by the Initial Purchaser expressly for use therein.
No stop order preventing the use of the Preliminary Offering
Memorandum or the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued. The Incorporated Documents,
at the time they were or hereafter are filed or last amended, as the
case may be, with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act.
b. Each of the Company and its subsidiaries has been duly incorporated,
is validly existing as a corporation in good standing under the laws
of its
B-10
12
jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Preliminary
Offering Memorandum and the Offering Memorandum and to own, lease and
operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole (a "MATERIAL
ADVERSE EFFECT").
c. All outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights.
d. The entities listed on Schedule A hereto are the only subsidiaries,
direct or indirect, of the Company that constitute "significant
subsidiaries" as defined in Rule 1-02(w) of Regulation S-X (the
"Subsidiaries"). All of the outstanding shares of capital stock of
each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and are owned by
the Company, directly or indirectly through one or more subsidiaries,
free and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature (each, a "LIEN") other than in favor of
the Company's bank lenders under the Existing Credit Facility and the
New Credit Facility as defined and described in the Offering
Memorandum.
e. This Agreement has been duly authorized, executed and delivered by the
Company.
f. The Indenture has been duly authorized by the Company and, on the
Closing Date, will have been validly executed and delivered by the
Company. When the Indenture has been duly executed and delivered by
the Company, the Indenture will be a valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, and on each Option Closing Date,
if any, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the "TIA"
or "TRUST INDENTURE ACT"), and the rules and regulations of the
Commission
B-11
13
applicable to an Indenture which is qualified thereunder.
g. The Notes have been duly authorized and, on the Closing Date, and on
each Option Closing Date, if any, will have been validly issued,
executed and delivered by the Company. When the Notes have been
issued, executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, the Notes
will be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company, enforceable in accordance with
their terms, except as (A) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, or on each Option Closing Date,
if any, the Notes will conform as to legal matters to the description
thereof contained in the Offering Memorandum.
h. The Notes are convertible into Common Stock in accordance with the
terms of the Indenture; the shares of Common Stock issuable upon
conversion of the Notes have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such conversion,
will be validly issued, fully paid and nonassessable, will conform to
the description thereof contained in the Offering Memorandum and will
be duly authorized for listing on the Nasdaq National Market, subject
to notice of official issuance; the Company has the authorized and
outstanding capital stock as set forth in the Offering Memorandum; and
the stockholders of the Company or other holders of the Company's
securities have no preemptive or similar rights with respect to the
Notes or the Common Stock issuable upon the Notes.
i. The Registration Rights Agreement has been duly authorized by the
Company and, on the Closing Date will have been duly executed and
delivered by the Company. When the Registration Rights Agreement has
been duly executed and delivered, the Registration Rights Agreement
will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) the
availability of equitable remedies may be limited by equitable
principles of general applicability. On the Closing Date, or any
Option Closing Date, as the case may be, the Registration Rights
Agreement will conform as to legal matters to the description thereof
in the Offering Memorandum.
j. Neither the Company nor any of its subsidiaries is in violation of its
B-12
14
respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken
as a whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
property is bound and there exists no condition which, with the
passage of time or otherwise would constitute such a default under any
such document or instrument.
k. The execution, delivery and performance of this Agreement and the
other Operative Documents by the Company, the compliance by the
Company with all provisions hereof and thereof and the consummation of
the transactions contemplated hereby and thereby will not (i) require
any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except
such as may be required under the securities or Blue Sky laws of the
various states), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or by-laws
of the Company or any of its subsidiaries or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or their respective property is
bound, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over the Company, any of its
subsidiaries or their respective property, (iv) result in the
imposition or creation of (or the obligation to create or impose) a
Lien under, any agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, or (v) result in
the termination, suspension or revocation of any Authorization (as
defined below) of the Company or any of its subsidiaries or result in
any other impairment of the rights of the holder of any such
Authorization.
l. There are no legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is or could be a party
or to which any of their respective property is or could be subject,
which might result, singly or in the aggregate, in a Material Adverse
Effect.
m. Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), any provisions
B-13
15
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or any provisions of the Foreign Corrupt Practices Act, or
the rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a
Material Adverse Effect.
n. There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on
operating activities and any potential liabilities to third parties)
which would, singly or in the aggregate, have a Material Adverse
Effect.
o. Each of the Company and its subsidiaries has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and
notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including without limitation, under any applicable Environmental Laws,
as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, have a Material Adverse Effect. Each
such Authorization is valid and in full force and effect and each of
the Company and its subsidiaries is in compliance with all the terms
and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect
thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which
allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or
results or, after notice or lapse of time or both, would result in any
other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that
are burdensome to the Company or any of its subsidiaries; except where
such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a
Material Adverse Effect.
p. The accountants, Ernst & Young LLP, that have certified the financial
statements and supporting schedules included in the Preliminary
Offering Memorandum and the Offering Memorandum are independent public
accountants with respect to the Company, as required by the Act and
the Exchange Act. The historical financial statements, together with
related schedules and notes, set forth in or incorporated by reference
into the Preliminary Offering Memorandum and the Offering Memorandum
comply
B-14
16
as to form in all material respects with the requirements applicable
to registration statements on Form S-3 under the Act.
q. The historical financial statements presented or incorporated by
reference in the Preliminary Offering Memorandum and the Offering
Memorandum, together with related schedules and notes forming part of
the Offering Memorandum (and any amendment or supplement thereto),
present fairly the consolidated financial position, results of
operations and changes in financial position of the Company and its
subsidiaries on the basis stated or incorporated by reference in the
Offering Memorandum at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as disclosed therein; the supporting schedules, if
any, included in the Preliminary Offering Memorandum and the Offering
Memorandum present fairly in accordance with generally accepted
accounting principles the information required to be stated therein;
and the other financial and statistical information and data set forth
or incorporated by reference in the Preliminary Offering Memorandum
and the Offering Memorandum (and any amendment or supplement thereto)
are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and
records of the Company.
r. The pro forma financial statements included or incorporated by
reference in the Preliminary Offering Memorandum and the Offering
Memorandum have been prepared on a basis consistent with the
historical financial statements of the Company and its subsidiaries
and give effect to assumptions used in the preparation thereof on a
reasonable basis and in good faith and present fairly the historical
and proposed transactions contemplated by the Preliminary Offering
Memorandum and the Offering Memorandum; and such pro forma financial
statements comply as to form in all material respects with the
requirements applicable to pro forma financial statements included in
registration statements on Form S-3 under the Act. The other pro
forma financial and statistical information and data included in the
Preliminary Offering Memorandum and the Offering Memorandum are, in
all material respects, accurately presented and prepared on a basis
consistent with the pro forma financial statements.
s. The Company is not and, after giving effect to the offering and sale
of the Notes and the application of the net proceeds thereof as
described in the Offering Memorandum, will not be, an "investment
company," as such term is defined in the Investment Company Act of
1940, as amended.
B-15
17
t. There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to
any securities of the Company or to require the Company to include
such securities with the Notes or the Common Stock registered pursuant
to any Shelf Registration Statement other than the currently existing
registration rights agreements in favor of TCI TSX, Inc. and Anixter
International Inc.
u. Neither the Company nor any of its subsidiaries nor any agent thereof
acting on the behalf of them has taken, and none of them will take,
any action that might cause this Agreement or the issuance or sale of
the Notes to violate Regulation T (12 C.F.R. Part 220), Regulation U
(12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board
of Governors of the Federal Reserve System.
v. No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Company that it is considering imposing)
any condition (financial or otherwise) on the Company's retaining any
rating assigned to the Company, or any securities of the Company or
(ii) has indicated to the Company that it is considering (a) the
downgrading, suspension, or withdrawal of, or any review for a
possible change that does not indicate the direction of the possible
change in, any rating so assigned or (b) any change in the outlook for
any rating of the Company or any securities of the Company.
w. Since the respective dates as of which information is given in the
Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material
adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material
adverse change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor
any of its subsidiaries has incurred any material liability or
obligation, direct or contingent.
x. All indebtedness of the Company that will be repaid with the proceeds
of the issuance and sale of the Securities was incurred, and the
indebtedness represented by the Notes is being incurred, for proper
purposes and in good
B-16
18
faith; and (i) the Company was at the time of the incurrence of such
indebtedness that will be repaid with the proceeds of the issuance and
sale of the Notes, and will be on the Closing Date or any Option
Closing Date, as the case may be (after giving effect to the
application of the proceeds from the issuance of the Notes) solvent;
and (ii) the Company had at the time of the incurrence of such
indebtedness that will be repaid with the proceeds of the issuance and
sale of the Notes, and will have on the Closing Date or any Option
Closing Date, as the case may be (after giving effect to the
application of the proceeds from the issuance of the Notes) sufficient
capital for carrying on its business and (iii) the Company was, at the
time of the incurrence of such indebtedness that will be repaid with
the proceeds of the issuance and sale of the Notes, and will be on the
Closing Date or any Option Closing Date, as the case may be (after
giving effect to the application of the proceeds from the issuance of
the Notes) able to pay its debts as they mature.
y. There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens related to
or entitling any person to purchase or otherwise to acquire any shares
of the capital stock of, or other ownership interest in, the Company
or any subsidiary thereof except as otherwise disclosed or
incorporated by reference in the Offering Memorandum or which have
been granted pursuant to the Company's stock option plans in an amount
not greater than 250,000 shares of Common Stock.
z. The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names
("INTELLECTUAL PROPERTY") currently employed by them in connections
with the business now operated by them, except where the failure to
own or possess or otherwise be able to acquire such intellectual
property would not, singly or in the aggregate, have a Material
Adverse Effect.
aa. Except as disclosed or incorporated by reference in the Offering
Memorandum, no relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company or any of its subsidiaries on the other hand, which would be
required by the Act to be described or incorporated by reference in
the Offering Memorandum if the Offering Memorandum were a prospectus
included in a registration statement on Form S-3 filed with the
Commission.
B-17
19
(bb) 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 generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(cc) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received by
the Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(dd) There is no (i) significant labor practice complaint,
grievance or arbitration proceeding pending or threatened against the Company or
any of its subsidiaries before the National Labor Relations Board or any state
or local labor relations board, (ii) strike, labor dispute, slowdown or stoppage
pending or threatened against the Company or any of its subsidiaries or (iii)
union representation question existing with respect to the employees of the
Company or any of its subsidiaries, except in the case of clauses (i), (ii) and
(iii) for such which, singly or in the aggregate, would not have a Material
Adverse Effect. To the best knowledge of the Company, no collective bargaining
organizing activities are taking place with respect to the Company or any of its
subsidiaries.
(ee) No action has been taken and no law, statute, rule or
regulation or order has been enacted, adopted or issued by any governmental
agency or body which prevents the execution, delivery and performance of any of
the Operative Documents, the issuance of the Notes, or the Common Stock issuable
upon conversion thereof, or suspends the sale of the Notes, or the Common Stock
issuable upon conversion thereof, in any jurisdiction referred to in Section
5(e); and no injunction, restraining order or other order or relief of any
nature by a federal or state court or other tribunal of competent jurisdiction
has been issued with respect to the Company or any of its subsidiaries which
would prevent or suspend the issuance or sale of the Notes, or the Common Stock
issuable upon conversion thereof, in any jurisdiction referred to in Section
5(e).
(ff) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains (including information
incorporated therein by reference) all the information specified in, and meeting
the requirements of, Rule 144A(d)(4) under the Act.
B-18
20
(gg) When the Notes are issued and delivered pursuant to this
Agreement, the Notes will not be of the same class (within the meaning of Rule
144A under the Act) as any security of the Company that is listed on a national
securities exchange registered under Section 6 of the Exchange Act or that is
quoted in a United States automated inter-dealer quotation system.
(hh) No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Company or any of its
representatives (other than the Initial Purchaser, as to whom the Company makes
no representation) in connection with the offer and sale of the Notes and Common
Stock contemplated hereby, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising. No
securities of the same class as the Securities have been issued and sold by the
Company within the six-month period immediately prior to the date hereof.
(ii) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the Trust Indenture Act.
(jj) No registration under the Act of the Securities is required
for the sale of the Securities to the Initial Purchaser as contemplated hereby
or for the Exempt Resales assuming the accuracy of the Initial Purchaser's
representations and warranties and agreements set forth in Section 7 hereof.
(kk) Each certificate signed by any officer of the Company and
delivered to the Initial Purchaser or counsel for the Initial Purchaser shall be
deemed to be a representation and warranty by the Company to the Initial
Purchaser as to the matters covered thereby.
The Company acknowledges that the Initial Purchaser and, for purposes
of the opinions to be delivered to the Initial Purchaser pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchaser will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
30. INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES. The Initial Purchaser
represents and warrants to, and agrees with, the Company:
a. Such Initial Purchaser is a QIB, with such knowledge and experience in
financial and business matters as is necessary in order to evaluate
the merits and risks of an investment in the Notes.
b. Such Initial Purchaser (A) is not acquiring the Securities with a view
to any
B-19
21
distribution thereof or with any present intention of offering or
selling any of the Securities in a transaction that would violate the
Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling
the Securities only to QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A under the
Act.
c. Assuming the accuracy of the Company's representations and warranties
set forth in this Agreement, such Initial Purchaser agrees that no
form of general solicitation or general advertising (within the
meaning of Regulation D under the Act) has been or will be used by
such Initial Purchaser or any of its representatives in connection
with the offer and sale of the Securities pursuant hereto, including,
but not limited to, articles, notices or other communications
published in any newspaper, magazine or similar medium or broadcast
over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
d. Such Initial Purchaser agrees that, in connection with Exempt Resales,
such Initial Purchaser will solicit offers to buy the Securities only
from, and will offer to sell the Securities only to, persons such
Initial Purchaser reasonably believes are Eligible Purchasers.
e. The Initial Purchaser acknowledges that the Company and, for purposes
of the opinions to be delivered to each Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial
Purchaser will rely upon the accuracy and truth of the foregoing
representations and the Initial Purchaser hereby consents to such
reliance.
31. INDEMNIFICATION.
a. The Company agrees to indemnify and hold harmless the Initial
Purchaser, its directors, its officers, agents, representatives and
employees and each person, if any, who controls such Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages,
liabilities, expenses and judgments (including, without limitation,
any legal or other expenses incurred in connection with investigating
or defending any matter, including any action, that could give rise to
any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact
contained or incorporated by reference in the Offering Memorandum (or
any amendment or supplement thereto), the Preliminary Offering
Memorandum or any Rule 144A Information provided by the Company to any
holder or prospective purchaser of Securities pursuant to
B-20
22
Section 5(h) or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities, expenses or judgments are caused
by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to the Initial Purchaser
or the Initial Purchaser's plan to distribute the Notes contained in
the first paragraph on page (i) and paragraphs 4 and 8 under the
caption "Plan of Distribution" in the Offering Memorandum.
b. The Initial Purchaser agrees to indemnify and hold harmless the
Company, and its respective directors and officers and each person, if
any, who controls the Company (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act), to the same extent as the
foregoing indemnity from the Company to the Initial Purchaser but only
with reference to information relating to the Initial Purchaser on
page (i) and paragraphs 4 and 8 under the caption "Plan of
Distribution" in the Offering Memorandum.
c. In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING
PARTY") in writing and the indemnifying party shall assume the defense
of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees and
expenses of such counsel, as incurred (except that in the case of any
action in respect of which indemnity may be sought pursuant to both
Sections 8(a) and 8(b), the Initial Purchaser shall not be required to
assume the defense of such action pursuant to this Section 8(c), but
may employ separate counsel and participate in the defense thereof,
but the fees and expenses of such counsel, except as provided below,
shall be at the expense of the Initial Purchaser). Any indemnified
party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the indemnified
party, unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such
action or employ counsel reasonably satisfactory to the indemnified
party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been advised
by such counsel that there may be one or more legal defenses available
to it which are inconsistent with those available to the indemnifying
B-21
23
party (in which case the indemnifying party shall not have the right
to assume the defense of such action on behalf of the indemnified
party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, in the case of the parties indemnified pursuant to
Section 8(a), and by the Company, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities, expenses and judgments by reason
of any settlement of any action (i) effected with its written consent
or (ii) effected without its written consent if the settlement is
entered into more than twenty business days after the indemnifying
party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party)
and, prior to the date of such settlement, the indemnifying party
shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent
to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been
a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise
or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the
subject matter of such action and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.
d. To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities, expenses or judgments referred
to therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities, expenses and judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Initial Purchaser, on the other hand, from
the offering of the Securities or (ii) if the allocation provided by
clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause
B-22
24
8(d)(i) above but also the relative fault of the Company, on the one
hand, and the Initial Purchaser, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims,
damages, liabilities, expenses or judgments, as well as any other
relevant equitable considerations. The relative benefits received by
the Company, on the one hand, and the Initial Purchaser, on the other
hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities (after Initial
Purchaser's discounts or commissions, but before deducting expenses)
received by the Company, and the total discounts and commissions
received by the Initial Purchaser bear to the total price to investors
of the Securities, in each case as set forth in the table on the cover
page of the Offering Memorandum. The relative fault of the Company,
on the one hand, and the Initial Purchaser, on the other hand, shall
be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or the Initial Purchaser, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The Company and the Initial Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. 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, subject to the
limitations set forth above, any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities, expenses or judgments. Notwithstanding the provisions of
this Section 8, the Initial Purchaser shall not be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by such Initial Purchaser exceeds the amount of any damages which the
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
e. The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
32. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The obligations of the
Initial
B-23
25
Purchaser to purchase the Firm Notes under this Agreement on the Closing Date
and the Additional Notes, if any, on the Option Closing Date are subject to the
satisfaction of each of the following conditions:
a. All the representations and warranties of the Company contained in
this Agreement shall be true and correct as well as on the date of
this Agreement, on the Closing Date and on each Option Closing Date,
if any, with the same force and effect as if made on and as of the
Closing Date or on each Option Closing Date, if any.
b. On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended
review) for a possible change that does not indicate the direction of
the possible change in, any rating of the Company or any securities of
the Company (including, without limitation, the placing of any of the
foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any
"nationally recognized statistical rating organization" as such term
is defined for purposes of Rule 436(g)(2) under the Act, (ii) there
shall not have occurred any change, nor shall any notice have been
given of any potential or intended change, in the outlook for any
rating of the Company or any securities of the Company by any such
rating organization and (iii) no such rating organization shall have
given notice that it has assigned (or is considering assigning) a
lower rating to the Notes than that on which the Notes were marketed.
c. Since the respective dates as of which information is given in the
Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there shall not have occurred any change
or any development involving a prospective change in the condition,
financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii)
there shall not have been any change or any development involving a
prospective change in the capital stock or in the long-term debt of
the Company or any of its subsidiaries and (iii) neither the Company
nor any of its subsidiaries shall have incurred any liability or
obligation, direct or contingent, the effect of which, in any such
case described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in your
judgment, is material and adverse and, in your judgment, makes it
impracticable to market the Securities on the terms and in the manner
contemplated in the Offering Memorandum.
B-24
26
d. You shall have received on the Closing Date a certificate dated the
Closing Date, and on each Option Closing Date, if any, dated such
Option Closing Date, signed by the President and the Chief Financial
Officer of the Company confirming the matters set forth in Sections
6(x), 6(w), 9(a), 9(b) and 9(m) and stating that each of the Company
has complied with all the agreements and satisfied all of the
conditions herein contained and required to be complied with or
satisfied on or prior to the Closing Date or Option Closing Date, as
the case may be.
e. You shall have received on the Closing Date and each Option Closing
Date, if any, an opinion (satisfactory to you and counsel for the
Initial Purchaser), dated the Closing Date or such Option Closing
Date, as the case may be, of Xxxxxx Xxxxxx & Xxxxx, counsel for the
Company with respect to opinions (i) through (x), (xii), (xiii), and
(xv) through (xix), and of Xxxxx Xxxx, General Counsel to the Company,
with respect to opinions (xi) and (xiv), to the effect that:
i. each of the Company and its Subsidiaries has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of
incorporation and has the corporate power and authority to carry
on its business and to and own, lease and operate its properties
as described in the Offering Memorandum, except, in the case of a
Subsidiary, where the failure to be in good standing would not
have a Material Adverse Effect;
ii. the Company is duly qualified and is in good standing as a
foreign corporation authorized to do business in Delaware,
Georgia, Illinois, Michigan, Washington and Texas;
iii. all the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar
rights created under the charter or bylaws of the Company or, to
the knowledge of such counsel, any other agreements binding on
the Company;
iv. to such counsel's knowledge, all of the outstanding shares of
capital stock of each of the Company's Subsidiaries are owned,
directly or indirectly, by the Company;
v. the Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchaser in
accordance with
B-25
27
the terms of this Agreement, will be entitled to the benefits
of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except
as (A) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of
general applicability;
vi. the Indenture has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms except as (A) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
vii. the Notes are convertible into Common Stock in accordance with
the terms of the Indenture; the shares of Common Stock
initially issuable upon conversion of the Notes have been duly
authorized and reserved for issuance upon such conversion and,
when issued upon such conversion, will be validly issued, fully
paid and nonassessable and will conform to the description
thereof contained in the Offering Memorandum and will be duly
authorized for listings on the Nasdaq National Market, subject
to notice of official issuance; the Company has the authorized
and outstanding capital stock as set forth in the Offering
Memorandum; and the stockholders of the Company have no
preemptive or similar rights created under the charter or
bylaws of the Company or, to the knowledge of such counsel, any
other agreement or laws binding on the Company with respect to
the Notes or the Common Stock issuable upon the Notes.
viii. this Agreement has been duly authorized, executed and delivered
by the Company;
ix. The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (B)
rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general
applicability;
B-26
28
x. the statements under the captions "Description of Notes,"
"Description of Capital Stock," "Certain United States Tax
Consequences," and "Plan of Distribution" in the Offering
Memorandum, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to
therein, fairly present in all material respects such legal
matters, documents and proceedings;
xi. neither the Company, nor to the knowledge of such counsel, any
of its subsidiaries is in violation of its respective charter
or by-laws and, to the best of such counsel's knowledge after
due inquiry, neither the Company nor any of its subsidiaries is
in default in the performance of any obligation, agreement,
covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument
that is material to the Company and its subsidiaries, taken as
a whole, to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or
their respective property is bound,
xii. the execution, delivery and performance of this Agreement and
the other Operative Documents by the Company, the compliance by
the Company with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and
thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be
required under the securities or Blue Sky laws of the various
states), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or
by-laws of the Company or any of its Subsidiaries or the
indentures, loan agreements, mortgages, leases or other
agreements or instruments that have been identified to such
counsel including but not limited to those referred to on
Schedule B by the Company as being material to the Company and
its subsidiaries, taken as a whole ("Material Contracts"),
(iii) violate or conflict with any applicable law or any rule
or regulation or to such counsel's knowledge any judgment,
order or decree of any court or any governmental body or agency
having jurisdiction over the Company, any of its Subsidiaries
or their respective property (except that such counsel need not
express an opinion with respect to the federal securities laws
or other laws, rules, regulations or relating to
misrepresentations or fraud), (iv) result in the imposition or
creation of (or the obligation to create or impose) a Lien
under any Material Contract, or (v) result in the
B-27
29
termination, suspension, revocation or impairment of any
Authorization known to such counsel of the Company or any of
its Subsidiaries.
xiii. to such counsel's knowledge there are no legal or governmental
proceedings pending or threatened to which the Company or any
of its subsidiaries is or could be a party or to which any of
their respective property is or could be subject, which might
result, singly or in the aggregate, in a Material Adverse
Effect.
xiv. to such counsel's knowledge, each of the Company and its
subsidiaries has such Authorizations of, and has made all
filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts
and other tribunals, including without limitation, under any
applicable Environmental Laws, as are necessary to own, lease,
license and operate its respective properties and to conduct
its business, except where the failure to have any such
Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. To
such counsel's knowledge, each such Authorization is valid and
in full force and effect and each of the Company and its
subsidiaries is in compliance with all the terms and conditions
thereof and with the rules and regulations of the authorities
and governing bodies having jurisdiction with respect thereto;
and to such counsel's knowledge, no event has occurred
(including the receipt of any notice from any authority or
governing body) which allows or, after notice or lapse of time
or both, would allow, revocation, suspension or termination of
any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the
rights of the holder of any such Authorization, and such
Authorizations contain no restrictions that are burdensome to
the Company or any of its subsidiaries, except where such
failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of
any such restriction would not, singly or in the aggregate,
have a Material Adverse Effect.
xv. the Company is not and, after giving effect to the offering and
sale of the Notes and the application of the net proceeds
thereof as described in the Offering Memorandum, will not be,
an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
xvi. to such counsel's knowledge there are no contracts, agreements
or
B-28
30
understandings between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the
Company or to require the Company to include such securities
with the Notes or the Common Stock to be issued upon conversion
thereof, registered pursuant to any Shelf Registration
Statement other than the registration rights agreements
currently in effect in favor of TCI TSX, Inc. and Anixter
International Inc.;
xvii. the Indenture complies as to form in all material respects with
the requirements of the TIA, and the rules and regulations of
the Commission applicable to an indenture which is qualified
thereunder. It is not necessary in connection with the offer,
sale and delivery of the Notes to the Initial Purchaser in the
manner contemplated by this Agreement or in connection with the
Exempt Resales to qualify the Indenture under the TIA.
xviii. no registration under the Act of the Securities is required for
the sale of the Securities to the Initial Purchaser as
contemplated by this Agreement or for the Exempt Resales
assuming that (i) each Initial Purchaser is a QIB, (ii) the
accuracy of, and compliance with, the Initial Purchaser's
representations and agreements contained in Section 7 of this
Agreement, (iii) the accuracy of the representations of the
Company set forth in Sections 5(h) of this Agreement.
xix. such counsel has no reason to believe that, as of the date of
the Offering Memorandum or as of the Closing Date or the Option
Closing Date, as the case may be, the Offering Memorandum and
any information incorporated by reference therein, as amended
or supplemented, if applicable (except for the financial
statements and other financial data included therein, as to
which such counsel need not express any belief) contains any
untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
The opinions of Xxxxxx Xxxxxx & Xxxxx and Xx. Xxxx described in
Section 9(e) above shall be rendered to you at the request of the Company and
shall so state therein. In giving such opinion with respect to the matters
covered by Section 9(e)(xix), Xxxxxx Xxxxxx & Xxxxx may state that their opinion
and belief are based upon their participation in the preparation of the Offering
Memorandum and any amendments or supplements thereto and review and discussion
of the contents thereof, but are without independent check or
B-29
31
verification except as specified.
f. The Initial Purchaser shall have received on the Closing Date and on
each Option Closing Date, if any, an opinion, dated the Closing Date,
of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Initial
Purchaser, in form and substance reasonably satisfactory to the
Initial Purchaser.
g. The Initial Purchaser shall have received, at the time this Agreement
is executed and at the Closing Date and on each Option Closing Date,
letters dated the date hereof or the Closing Date and any Option
Closing Date, as the case may be, in form and substance satisfactory
to the Initial Purchaser from Ernst & Young LLP, independent public
accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to the Initial
Purchaser with respect to the financial statements and certain
financial information contained in the Offering Memorandum.
h. The Notes shall have been approved by the NASD for trading and duly
listed in PORTAL.
(i) The Notes shall have been rated "B-" by Standard & Poor's
Corporation and "B2" by Xxxxx'x Investors Services, Inc.
(j) The Initial Purchaser shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company and the Trustee.
(k) The Company shall have executed the Registration Rights
Agreement and the Initial Purchaser shall have received an original copy
thereof, duly executed by the Company.
(l) All amounts outstanding under the Existing Credit Facility
(as defined in the Offering Memorandum) shall have been repaid and the Existing
Credit Facility shall have terminated and be of no further force and defect.
(m) The Company shall not have failed at or prior to the Closing
Date or any Option Closing Date, as the case may be, to perform or comply with
any of the agreements herein contained and required to be performed or complied
with by the Company, at or prior to the Closing Date or Option Closing Date, as
the case may be.
(n) The proceeds of the Offering (as defined in the Offering
Memorandum) shall have been applied in the manner and in the time periods set
forth in the Offering Memorandum under the caption "Use of Proceeds."
X-00
00
00. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement may be
terminated at any time on or prior to the Closing Date by the Initial Purchaser
by written notice to the Company if any of the following has occurred: (i) any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in the Initial Purchaser's judgment, is
material and adverse and, in the Initial Purchaser's judgment, makes it
impracticable to market the Securities on the terms and in the manner
contemplated in the Offering Memorandum, (ii) the suspension or material
limitation of trading in securities or other instruments on the New York Stock
Exchange, the American Stock Exchange, the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange, the Chicago Board of Trade or the Nasdaq
National Market or limitation on prices for securities or other instruments on
any such exchange or the Nasdaq National Market, (iii) the suspension of trading
of any securities of the Company on any exchange or in the over-the-counter
market, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects,
or will materially and adversely affect, the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole, (v) the declaration of a banking moratorium by either federal or New
York State authorities or (vi) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs which in
your opinion has a material adverse effect on the financial markets in the
United States.
34. MISCELLANEOUS. Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (i) if to the Company to ANTEC Corporation, 0000
Xxxxxxxxx Xxxxxxx, XX, Xxxxxxxx, XX 00000, telephone: (000) 000-0000 and (ii)
if to the Initial Purchaser, Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the Initial Purchaser set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Securities
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of the Initial Purchaser, the officers or directors of the
Initial Purchaser, any person controlling the Initial Purchaser, the Company,
the officers or directors of the Company or any person controlling the Company,
(ii) acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Notes are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to
B-31
33
Section 10) the Company agrees to reimburse the Initial Purchaser for all
out-of-pocket expenses (including the fees and disbursements of counsel)
incurred by it. Notwithstanding any termination of this Agreement, the Company
shall be liable for all expenses which it has agreed to pay pursuant to Section
5(i) hereof. The Company also agrees, to reimburse the Initial Purchaser and
its officers, directors and each person, if any, who controls such Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act for any and all fees and expenses (including without limitation the
fees and expenses of counsel) incurred by them in connection with enforcing
their rights under this Agreement (including, without limitation, pursuant to
Section 8 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Initial
Purchaser, the Initial Purchaser's directors and officers, any controlling
persons referred to herein, the directors of the Company and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Securities from the Initial Purchaser merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York, including without limitation, New York General
Obligations Law Section 5-1401.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
B-32
34
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchaser.
Very truly yours,
ANTEC Corporation
By:
Name:
Title:
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
Name:
Title:
35
SCHEDULE A
SUBSIDIARIES
Keptel, Inc.
Texscan Corporation
TSX Corporation
SCHEDULE B
36
MATERIAL CONTRACTS
1. Tax Allocation Agreement dated July 16, 1993 by and between Itel
Corporation and the Company,
2. Xxxx of Sale and General Conveyance and Assumption of Liabilities by and
among Anixter Bros, Inc. (Anixter International, Inc.) and ANTEC, LTD.
(ANTEC) dated June 1, 1993,
3. Limited Liability Company Agreement of Products Venture L.L.C. (Arris Joint
Venture),
4. Agreement dated as of February 27, 1998 among Northern Telecom Inc., the
Company and Arris Interactive L.L.C., amending among other agreements the
Limited Liability Company Agreement of Products Venture L.L.C. (Arris
Joint Venture),
5. Products Distribution Agreement between Products Venture L.L.C. and the
Company (Arris Joint Venture),
6. Tele-Communications, Inc. Registration Rights Agreement (via TSX),
7. TCI Option Agreements (via TSX) for options to acquire an additional
854,341 shares of the Company,
8. The Amend and Restated Revolving Credit Agreement and amendments thereto,
9. Plan of Merger dated October 28, 1996, among the Company, TSX Corporation
and TSX Acquisition Corporation,
10. Registration Rights Agreement with Anixter International, and
11. Agreement and Plan of Merger dated as of July 27, 1994 between and among
the Company, ANTEC Acquisition Corporation and Keptel, Inc.
