EXHIBIT 1.1
RENT-A-CENTER, INC.
$100,000,000
11.00% Senior Subordinated Notes due 2008, Series C
PURCHASE AGREEMENT
December 12, 2001
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXXX & CO. INCORPORATED
BEAR, XXXXXXX & CO. INC.
XXXXXX BROTHERS INC.
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
RENT-A-CENTER, INC., a Delaware corporation ("RAC" or the
"Company"), proposes to issue and sell $100,000,000 aggregate principal amount
of its 11.00% Senior Subordinated Notes due 2008, Series C (the "Notes"). The
Company's obligations under the Notes will be irrevocably and unconditionally
guaranteed (each, a "Subsidiary Guarantee") by ColorTyme, Inc. ("ColorTyme") and
Advantage Companies, Inc. ("Advantage", and together with ColorTyme, the
"Subsidiary Guarantors"). The Notes and the Subsidiary Guarantees are
collectively referred to as the "Securities". The Securities will be issued
pursuant to an Indenture to be dated as of December 19, 2001 (the "Indenture")
among the Company, the Subsidiary Guarantors and The Bank of New York, as
trustee (the "Trustee"). The Company hereby confirms its agreement with X.X.
Xxxxxx Securities Inc. ("JPMorgan"), Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx"), Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx") and Xxxxxx Brothers Inc.
("Xxxxxx Brothers" and together with JPMorgan, Xxxxxx Xxxxxxx, Bear Xxxxxxx and
Xxxxxx Brothers, the "Initial Purchasers") concerning the purchase of the
Securities from the Company by the Initial Purchasers.
The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon an exemption therefrom. The Company has
prepared a preliminary offering memorandum dated December 3, 2001 (the
"Preliminary Offering Memorandum") and will prepare an offering memorandum dated
the date hereof (the "Offering Memorandum") setting forth information concerning
the Company, the Subsidiary Guarantors and the Securities. Copies of the
Preliminary Offering Memorandum have been, and copies of the Offering Memorandum
will be, delivered by the Company to the Initial Purchasers pursuant to the
terms of this agreement (the "Agreement"). Any references herein to the
Preliminary Offering Memorandum and the
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Offering Memorandum shall be deemed to include all amendments and supplements
thereto, unless otherwise noted. The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchasers in accordance with Section 2.
Holders of the Securities (including the Initial Purchasers
and their direct and indirect transferees) will be entitled to the benefits of
an Exchange and Registration Rights Agreement, substantially in the form
attached hereto as Annex A (the "Registration Rights Agreement"), pursuant to
which the Company will agree to file with the Securities and Exchange Commission
(the "Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of senior
subordinated notes of the Company and guarantees of each of the Subsidiary
Guarantors (the "Exchange Securities") which are identical in all material
respects to the Securities (except that the Exchange Securities will not contain
terms with respect to transfer restrictions or additional interest upon certain
failures to comply with the Registration Rights Agreement) and (ii) under
certain circumstances, a shelf registration statement pursuant to Rule 415 under
the Securities Act (the "Shelf Registration Statement").
The Company will use the net proceeds from the offering of the
Securities to repay approximately $30 million of indebtedness of the Company
represented by the Senior Credit Facility, repurchase approximately $34.7
million of its common stock from its former Chairman and Chief Executive Officer
and for general corporate purposes.
1. Representations, Warranties and Agreements of the Company
and the Subsidiary Guarantors. The Company and the Subsidiary Guarantors,
jointly and severally, represent and warrant to the several Initial Purchasers
on and as of the date hereof and the Closing Date (as defined in Section 3)
that:
(a) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, did not, and on the
Closing Date the Offering Memorandum will not, contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided that the Company and the Subsidiary Guarantors
make no representation or warranty as to information contained in or
omitted from the Preliminary Offering Memorandum or the Offering
Memorandum based upon information the Initial Purchasers furnished to
the Company by or on behalf of any Initial Purchaser specifically for
use therein (collectively, the "Initial Purchasers' Information").
(b) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, contains all of the
information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective
purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 2 and their
compliance with the agreements set forth therein, it is not necessary,
in connection with the issuance and sale of the Securities to the
Initial Purchasers and the offer, resale and delivery of the Securities
by the Initial Purchasers in the manner contemplated by this Agreement
and the Offering
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Memorandum, to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
(d) The Company, the Subsidiary Guarantors and each of their
respective subsidiaries have been duly incorporated and are validly
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure to so qualify or have such
power or authority would not, singularly or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
results of operations, business or prospects of the Company, the
Subsidiary Guarantors and their respective subsidiaries taken as a
whole (a "Material Adverse Effect").
(e) The Company will, on the Closing Date (as hereinafter
defined), have capitalization as set forth in the Offering Memorandum
under the heading "Capitalization"; and all of the outstanding shares
of capital stock of the Company and the Subsidiary Guarantors have been
duly and validly authorized and issued and are fully paid and
non-assessable. All of the outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company and the Subsidiary Guarantors, respectively,
free and clear of any lien, charge, encumbrance, security interest,
restriction upon voting or transfer or any other claim of any third
party, except for Permitted Liens (as that term is defined in the
Indenture) and as otherwise disclosed in the Offering Memorandum.
(f) Each of the Company and each Subsidiary Guarantor has full
right, power and authority to execute and deliver this Agreement, the
Indenture, the Registration Rights Agreement, the Securities and the
Subsidiary Guarantees (collectively, the "Transaction Documents") to
which it is a party and to perform its obligations hereunder and
thereunder; and all corporate action required to be taken for the due
and proper authorization, execution and delivery of each of the
Transaction Documents to which it is a party and the consummation of
the transactions contemplated thereby have been duly and validly taken.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and each Subsidiary Guarantor and constitutes
a valid and legally binding agreement of the Company and each
Subsidiary Guarantor.
(h) The Registration Rights Agreement has been duly authorized
by the Company and each of the Subsidiary Guarantors and, when duly
executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement
of the Company and each of the Subsidiary Guarantors enforceable
against the Company and each of the Subsidiary Guarantors in accordance
with its terms,
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except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
(i) The Indenture has been duly authorized by the Company and
each of the Subsidiary Guarantors and, when duly executed and delivered
in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company and
each of the Subsidiary Guarantors enforceable against the Company and
each of the Subsidiary Guarantors in accordance with its terms, except
to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding
in equity or at law). On the Closing Date, the Indenture will conform
in all material respects to the requirements of the Trust Indenture Act
and the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder.
(j) The Subsidiary Guarantees have been duly authorized by
each of the Subsidiary Guarantors and, when the Securities have been
duly executed, authenticated, issued and delivered as provided in the
Indenture and paid for as provided herein, will constitute a valid and
legally binding obligation of each of the Subsidiary Guarantors,
enforceable against each of the Subsidiary Guarantors in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
(k) The Securities and the Exchange Securities have been duly
authorized by the Company and the Subsidiary Guarantors and, when duly
executed, authenticated, issued and delivered as provided in the
Indenture and paid for as provided herein, will be duly and validly
issued and outstanding and will constitute valid and legally binding
obligations of the Company and each of the Subsidiary Guarantors
entitled to the benefits of the Indenture and enforceable against the
Company and the Subsidiary Guarantors in accordance with their terms,
except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
(l) Each Transaction Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum.
(m) The execution, delivery and performance by the Company and
each of the Subsidiary Guarantors of each of the Transaction Documents
to which it is a party, the issuance, authentication, sale and delivery
of the Securities and compliance by the Company and each of the
Subsidiary Guarantors with the terms thereof and the consummation of
the transactions contemplated by the Transaction Documents to which
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it is a party will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or the Subsidiary Guarantors
pursuant to, any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which the
Company or any Subsidiary Guarantor is a party or by which the Company
or any Subsidiary Guarantor is bound or to which any of the property or
assets of the Company or any Subsidiary Guarantor is subject, nor will
such actions result in any violation of the provisions of the charter
or by-laws of the Company or any Subsidiary Guarantor or any statute or
any judgment, order, decree, rule or regulation of any court or
arbitrator or governmental agency or body having jurisdiction over the
Company or any Subsidiary Guarantor or any of their respective
properties or assets; and no consent, approval, authorization or order
of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by the Company or each of the Subsidiary Guarantors of each
of the Transaction Documents to which it is a party, the issuance,
authentication, sale and delivery of the Securities and compliance by
the Company and each of the Subsidiary Guarantors with the terms
thereof and the consummation of the transactions contemplated by the
Transaction Documents to which it is a party, except for such consents,
approvals, authorizations, filings, registrations or qualifications (i)
which shall have been obtained or made prior to the Closing Date, (ii)
as may be required to be obtained or made under the Securities Act and
applicable state securities laws as provided in the Registration Rights
Agreement and (iii) which shall not adversely affect the ability of the
Company and each Subsidiary Guarantor to consummate the transactions
contemplated by the Transaction Documents.
(n) Xxxxx Xxxxxxxx LLP are independent certified public
accountants with respect to the Company and its subsidiaries (i) as
required by the Securities Act and the rules and regulations of the
Commission thereunder and (ii) within the meaning of Rule 101 of the
Code of Professional Conduct of the American Institute of Certified
Public Accountants ("AICPA") and its interpretations and rulings
thereunder. The historical financial statements (including the related
notes) contained in the Offering Memorandum comply in all material
respects with the requirements applicable to a registration statement
on Form S-1 under the Securities Act; such financial statements have
been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods covered thereby
and fairly present the financial position of the entities purported to
be covered thereby at the respective dates indicated and the results of
their operations and their cash flows for the respective periods
indicated; and the financial information contained in the Offering
Memorandum under the headings "Summary--Summary Historical Consolidated
Financial Information", "Capitalization", "Selected Historical
Consolidated Financial Data" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations", is derived from the
accounting records of the Company and its subsidiaries and such
sections of the Offering Memorandum fairly present the information
purported to be shown thereby in all material respects. The pro forma
financial information contained in the Offering Memorandum has been
prepared on a basis consistent with the historical financial statements
contained in the
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Offering Memorandum (except for the pro forma adjustments specified
therein), includes all material adjustments to the historical financial
information required by Rule 11-02 of Regulation S-X under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") to reflect the transactions described in the Offering
Memorandum, gives effect to assumptions made on a reasonable basis and
fairly presents the historical and proposed transactions contemplated
by the Offering Memorandum and the Transaction Documents in all
material respects. The other historical financial and statistical
information and data included in the Offering Memorandum are, in all
material respects, fairly presented.
(o) Except as otherwise stated in the Offering Memorandum,
there are no legal or governmental proceedings pending to which the
Company or any Subsidiary Guarantor is a party or of which any property
or assets of the Company or any Subsidiary Guarantor is the subject
which, singularly or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, could reasonably be expected to
have a Material Adverse Effect; and to the best knowledge of the
Company and each Subsidiary Guarantor, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(p) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental agency
or body which prevents the issuance of the Securities or suspends the
sale of the Securities in any jurisdiction; no injunction, restraining
order or order of any nature by any federal or state court of competent
jurisdiction has been issued with respect to the Company or any
Subsidiary Guarantor which would prevent or suspend the issuance or
sale of the Securities or the use of the Offering Memorandum in any
jurisdiction; no action, suit or proceeding is pending against or, to
the knowledge of the Company or any Subsidiary Guarantor after
reasonable due inquiry, threatened against or affecting the Company or
any Subsidiary Guarantor before any court or arbitrator or any
governmental agency, body or official, domestic or foreign, which could
reasonably be expected to interfere with or adversely affect the
issuance of the Securities or in any manner draw into question the
validity or enforceability of any of the Transaction Documents or any
action taken or to be taken pursuant thereto; and the Company and each
Subsidiary Guarantor have complied with any and all requests by any
securities authority in any jurisdiction for additional information to
be included in the Preliminary Offering Memorandum and the Offering
Memorandum.
(q) Neither the Company nor any Subsidiary Guarantor is (i) in
violation of its charter or by-laws, (ii) in default in any material
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or (iii) in
violation in any material respect of any material law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject.
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(r) The Company and the Subsidiary Guarantors possess all
material licenses, certificates, authorizations and permits issued by,
and have made all declarations and filings with, the appropriate
federal, state or foreign regulatory agencies or bodies which are
necessary or desirable for the ownership of their respective properties
or the conduct of their respective businesses as described in the
Offering Memorandum, except where the failure to possess or make the
same would not, singularly or in the aggregate, have a Material Adverse
Effect, and neither the Company nor any Subsidiary Guarantor has
received notification of any revocation or modification of any such
license, certificate, authorization or permit or has any reason to
believe that any such license, certificate, authorization or permit
will not be renewed in the ordinary course.
(s) The Company and the Subsidiary Guarantors have filed all
federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes
due thereon, except such returns, which individually or in the
aggregate, do not involve material amounts or where the failure to file
such returns by the Company and the Subsidiary Guarantors, as the case
may be, would not, individually or in the aggregate, materially
adversely affect the business, operations or prospects of such entity,
and no tax deficiency has been determined adversely to the Company or
any Subsidiary Guarantor, as the case may be, which has had (nor does
the Company or any Subsidiary Guarantor have any knowledge of any tax
deficiency which, if determined adversely to the Company or any
Subsidiary Guarantor, as the case may be, could reasonably be expected
to have) a Material Adverse Effect, except to the extent that the
validity thereof is being contested in good faith pursuant to
appropriate proceedings.
(t) Neither the Company nor any Subsidiary Guarantor is (i) an
"investment company" or a company "controlled by" an investment company
within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and the rules and regulations of the
Commission thereunder or (ii) a "holding company" or a "subsidiary
company" of a holding company or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(u) The Company and the Subsidiary Guarantors maintain 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.
(v) The Company and the Subsidiary Guarantors maintain
insurance of the types and in the amounts generally deemed adequate for
their businesses and consistent with insurance coverage maintained by
similar companies and businesses, all of which insurance is in full
force and effect.
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(w) The Company and the Subsidiary Guarantors own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses; and the
Company and the Subsidiary Guarantors have not received any notice of
any claim of conflict with, any such rights of others, except for such
notices of conflicts, which, if individually or in the aggregate
determined adversely to the Company or any Subsidiary Guarantor, as the
case may be, would not have a Material Adverse Effect.
(x) The Company and the Subsidiary Guarantors have good and
marketable title to, or have valid rights to lease or otherwise use,
all items of real and personal property which are material to the
business of the Company and the Subsidiary Guarantors, in each case
free and clear of all liens, encumbrances, claims and defects and
imperfections of title except such as (i) do not materially interfere
with the use made and proposed to be made of such property by the
Company and the Subsidiary Guarantors, (ii) pledged under the Senior
Credit Facility (as such term is defined in the Indenture) or (iii)
could not reasonably be expected to have a Material Adverse Effect.
(y) No strike or work stoppages by the employees of the
Company or any Subsidiary Guarantor exists or, to the Company's or any
Subsidiary Guarantor's knowledge after reasonable due inquiry, is
contemplated or threatened.
(z) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan of
the Company or any Subsidiary Guarantor which could reasonably be
expected to have a Material Adverse Effect; each such employee benefit
plan is in compliance in all material respects with applicable law,
including ERISA and the Code; the Company and each Subsidiary Guarantor
have not incurred and do not expect to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from, any
pension plan for which the Company or any Subsidiary Guarantor would
have any liability; and each such pension plan that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which could reasonably be expected to cause the loss of
such qualification.
(aa) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release of
any kind of toxic or other wastes or other hazardous substances by, due
to or caused by the Company or any Subsidiary Guarantor upon any of the
property now or, to the knowledge of the Company or any Subsidiary
9
Guarantor, as the case may be, previously owned or leased by the
Company or any Subsidiary Guarantor, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit or which
would, under any statute or any ordinance, rule (including rule of
common law), regulation, order, judgment, decree or permit, give rise
to any liability, except for any violation or liability which could not
reasonably be expected to have, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Effect; and there
has been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property of
any toxic or other wastes or other hazardous substances with respect to
which the Company or any Subsidiary Guarantor has knowledge, except for
any such disposal, discharge, emission or other release of any kind
which could not reasonably be expected to have, singularly or in the
aggregate with all such discharges and other releases, a Material
Adverse Effect.
(bb) Neither the Company nor any Subsidiary Guarantor nor, to
the Company's or any Subsidiary Guarantor's knowledge after reasonable
due inquiry, any employee or agent of the Company, or any Subsidiary
Guarantor, has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity, made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds;
violated or is in violation of any provisions of the Foreign Corrupt
Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(cc) On and immediately after the Closing Date, the Company
and each Subsidiary Guarantor (after giving effect to the issuance of
the Securities and to the other transactions related thereto as
described in the Offering Memorandum) will be Solvent. As used in this
paragraph, the term "Solvent" means, with respect to a particular date,
that on such date (i) the present fair market value (or present fair
saleable value) of the assets of the Company and of each Subsidiary
Guarantor, as the case may be, is not less than the total amount
required to pay the probable liabilities of the Company or such
Subsidiary Guarantor on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured,
(ii) each of the Company and the Subsidiary Guarantors is able to
realize upon its assets and pay its debts and other liabilities,
contingent obligations and commitments as they mature and become due in
the normal course of business, (iii) assuming the sale of the
Securities as contemplated by this Agreement and the Offering
Memorandum, each of the Company and the Subsidiary Guarantors is not
incurring debts or liabilities beyond its ability to pay as such debts
and liabilities mature and (iv) the Company and each Subsidiary
Guarantor is not engaged in any business or transaction, and is not
about to engage in any business or transaction, for which its property
would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the
Company and each Subsidiary Guarantor is engaged. In computing the
amount of such contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount that, in the light of
all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
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(dd) Neither the Company nor any Subsidiary Guarantor owns any
"margin securities" as that term is defined in Regulations T and U of
the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), and the offer, issuance and sale of the Securities and
the application of the net proceeds therefrom will not violate
Regulation T, U or X of the Federal Reserve Board.
(ee) Except as contemplated by this Agreement, neither the
Company nor any Subsidiary Guarantor is a party to any contract,
agreement or understanding with any person that would give rise to a
valid claim against the Company, any Subsidiary Guarantor or the
Initial Purchasers for a brokerage commission, finder's fee or like
payment in connection with the offering and sale of the Securities.
(ff) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(gg) Assuming the accuracy of the representations and
warranties of the Initial Purchasers set forth in Section 2 hereof,
none of the Company, any of the Subsidiary Guarantors, any of their
respective affiliates or any person acting on its or their behalf has
engaged or will engage in any directed selling efforts (as such term is
defined in Regulation S under the Securities Act ("Regulation S")), and
all such persons have complied and will comply with the offering
restrictions requirement of Regulation S to the extent applicable.
(hh) Assuming the accuracy of the representations and
warranties of the Initial Purchasers set forth in Section 2 hereof,
neither the Company nor any of the Subsidiary Guarantors nor any of
their affiliates has, directly or through any agent, sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as such term is defined in the Securities Act) which is
or will be integrated with the sale of the Securities in a manner that
would require registration of the Securities under the Securities Act.
(ii) Assuming the accuracy of the representations and
warranties of the Initial Purchasers set forth in Section 2 hereof,
none of the Company, any of the Subsidiary Guarantors, or any of their
respective affiliates or any other person acting on its or their behalf
has engaged, in connection with the offering of the Securities, in any
form of general solicitation or general advertising within the meaning
of Rule 502(c) under the Securities Act.
(jj) Assuming the accuracy of the representations and
warranties of the Initial Purchasers set forth in Section 2 hereof, the
Company, each Subsidiary Guarantor or any of their respective
affiliates or any other person acting on its or their behalf has
engaged, has not taken and will not take, directly or indirectly, any
action prohibited by Regulation M under the Exchange Act in connection
with the offering of the Securities.
(kk) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Preliminary
11
Offering Memorandum or the Offering Memorandum has been made or
reaffirmed without, in light of the circumstances under which such
statements were made, a reasonable basis or has been disclosed other
than in good faith.
(ll) None of the Company or any Subsidiary Guarantor does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Florida Statutes Section 517.075.
(mm) Since the date as of which information is given in the
Offering Memorandum, except as otherwise stated therein, (i) there has
been no material adverse change or any development involving a
prospective material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, management or business
prospects of the Company or any Subsidiary Guarantor, whether or not
arising in the ordinary course of business, (ii) the Company and the
Subsidiary Guarantor have not incurred any material liability or
obligation, direct or contingent, other than in the ordinary course of
business, (iii) the Company and the Subsidiary Guarantors have not
entered into any material transaction other than in the ordinary course
of business and (iv) there has not been any change in the capital stock
or long-term debt of the Company or any Subsidiary Guarantor, or except
with respect to dividends of the Company's Series A Preferred Stock,
any dividend or distribution of any kind declared, paid or made by the
Company or any Subsidiary Guarantor on any class of its capital stock,
or any redemption in respect thereof.
2. Purchase and Resale of the Securities. (a) On the basis of
the representations, warranties and agreements contained herein, and subject to
the terms and conditions set forth herein, the Company agrees to issue and sell
to each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on Schedule 1 hereto at a purchase price equal to 97.06225% of
the principal amount thereof. The Company shall not be obligated to deliver any
of the Securities except upon payment for all of the Securities to be purchased
as provided herein.
(b) The Initial Purchasers have advised the Company that they
propose to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents, warrants and agrees that (i)
it is purchasing the Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act and (iii) it has solicited and will
solicit offers for the Securities only from, and has offered or sold and will
offer, sell or deliver the Securities, as part of their initial offering, only
(A) within the United States to persons whom it reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers"), as defined in
Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has
12
represented to it that each such account is a Qualified Institutional Buyer to
whom notice has been given that such sale or delivery is being made in reliance
on Rule 144A and in each case, in transactions in accordance with Rule 144A and
(B) outside the United States to persons other than U.S. persons in reliance on
Regulation S under the Securities Act ("Regulation S").
(c) In connection with the offer and sale of Securities in
reliance on Regulation S, each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that:
(i) the Securities have not been registered under the
Securities Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except pursuant
to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act;
(ii) such Initial Purchaser has offered and sold the
Securities, and will offer and sell the Securities, (A) as part of
their distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering of the Securities and the
Closing Date, only in accordance with Regulation S or Rule 144A or any
other available exemption from registration under the Securities Act;
(iii) neither of such Initial Purchaser nor any of its
affiliates nor any other person acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to
the Securities, and all such persons have complied and will comply with
the offering restrictions requirement of Regulation S;
(iv) at or prior to the confirmation of sale of any Securities
sold in reliance on Regulation S, such Initial Purchaser will have sent
to each distributor, dealer or other person receiving a selling
concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially
the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering of
the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule
144A or any other available exemption from registration under
the Securities Act. Terms used above have the meanings given
to them by Regulation S."; and
(v) such Initial Purchaser has not and will not enter into any
contractual arrangement with any distributor with respect to the
distribution of the Securities, except with its affiliates or with the
prior written consent of the Company.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
13
(d) Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that (i) such Initial Purchaser has not offered
or sold and prior to the date six months after the Closing Date will not offer
or sell any Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (ii) such Initial Purchaser has complied
and will comply with all applicable provisions of the Financial Services Xxx
0000 and the Public Offers of Securities Regulations 1995 with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom; and (iii) such Initial Purchaser has only issued
or passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Securities to a person who is
of a kind described in Article 11(3) of the Financial Services Xxx 0000
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
(e) Each Initial Purchaser, severally and not jointly, agrees
that, prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Company pursuant hereto, such Initial Purchaser shall furnish
to that purchaser a copy of the Offering Memorandum (and any amendment or
supplement thereto that the Company shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale). In addition to the
foregoing, each Initial Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 5(d) and (e), counsel for the Company and for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers and their compliance with their agreements
contained in this Section 2, and each Initial Purchaser hereby consents to such
reliance.
(f) The Company acknowledges and agrees that the Initial
Purchasers may sell Securities to any affiliate of an Initial Purchaser and that
any such affiliate may sell Securities purchased by such affiliate to an Initial
Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of
and payment for the Securities shall be made at the offices of Xxxxxxx Xxxxxxx &
Xxxxxxxx, New York, New York, or at such other place as shall be agreed upon by
the Initial Purchasers and the Company, at 9:00 A.M., New York City time, on
December 19, 2001, or at such other time or date, not later than seven full
business days thereafter, as shall be agreed upon by the Initial Purchasers and
the Company (such date and time of payment and delivery being referred to herein
as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchasers of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the
14
Initial Purchasers hereunder. Upon delivery, the Securities shall be in global
form, registered in such names and in such denominations as JPMorgan on behalf
of the Initial Purchasers shall have requested in writing not less than two full
business days prior to the Closing Date. The Company agrees to make one or more
global certificates evidencing the Securities available for inspection by
JPMorgan on behalf of the Initial Purchasers in New York, New York at least 24
hours prior to the Closing Date.
4. Further Agreements of the Company and the Subsidiary
Guarantors. The Company and each of the Subsidiary Guarantors agree with each of
the Initial Purchasers:
(a) to advise the Initial Purchasers promptly and, if
requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made in the Offering
Memorandum untrue or which requires the making of any additions to or
changes in the Offering Memorandum (as amended or supplemented from
time to time) in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; to advise
the Initial Purchasers promptly of any order preventing or suspending
the use of the Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any
jurisdiction and of the initiation or threatening of any proceeding for
any such purpose; and to use its best efforts to prevent the issuance
of any such order preventing or suspending the use of the Offering
Memorandum or suspending any such qualification and, if any such
suspension is issued, to obtain the lifting thereof at the earliest
possible time;
(b) to furnish promptly to each of the Initial Purchasers and
counsel for the Initial Purchasers, without charge, as many copies of
the Offering Memorandum (and any amendments or supplements thereto) as
may be reasonably requested;
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to each of the Initial
Purchasers and counsel for the Initial Purchasers and not to effect any
such amendment or supplement to which the Initial Purchasers shall
reasonably object by notice to the Company after a reasonable period to
review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary, in the opinion of
counsel for the Initial Purchasers or counsel for the Company, to amend
or supplement the Offering Memorandum in order that the Offering
Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Offering Memorandum to comply with applicable
law, to promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the
Offering Memorandum, as so amended or supplemented, will comply with
applicable law;
15
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request
of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act (the foregoing agreement
being for the benefit of the holders from time to time of the
Securities and prospective purchasers of the Securities designated by
such holders);
(f) for a three-year period ending on the third anniversary of
the Closing Date, to furnish to the Initial Purchasers copies of any
annual reports, quarterly reports and current reports filed by the
Company with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Company
to the Trustee or to the holders of the Securities pursuant to the
Indenture or the Exchange Act or any rule or regulation of the
Commission thereunder;
(g) to promptly take from time to time such actions as the
Initial Purchasers may reasonably request to qualify the Securities for
offering and sale under the securities or Blue Sky laws of such
jurisdictions in the United States as the Initial Purchasers may
reasonably designate and to continue such qualifications in effect for
so long as required for the resale of the Securities; and to arrange
for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial
Purchasers may reasonably request; provided that the Company and its
subsidiaries will not be required to qualify generally to do business
in any jurisdiction where they are not then so qualified or to take any
action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so subject;
(h) to assist the Initial Purchasers in arranging for the
Securities to be designated Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") Market securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL
Market and for the Securities to be eligible for clearance and
settlement through The Depository Trust Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as such term is defined in the Securities Act) which
could be integrated with the sale of the Securities in a manner which
would require registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates not to, and not to
authorize or knowingly permit any person acting on their behalf to,
solicit any offer to buy or offer to sell the Securities by means of
any form of general solicitation or general advertising within the
meaning of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities
16
Act; and not to offer, sell, contract to sell or otherwise dispose of,
directly or indirectly, any securities under circumstances where such
offer, sale, contract or disposition would cause the exemption afforded
by Section 4(2) of the Securities Act to cease to be applicable to the
offering and sale of the Securities as contemplated by this Agreement
and the Offering Memorandum;
(k) from the date hereof and until the earlier of (i) 90 days
after the date of the Offering Memorandum or (ii) the consummation of
the Exchange Offer, not to offer for sale, sell, contract to sell or
otherwise dispose of, directly or indirectly, or file a registration
statement for, or announce any offer, sale, contract for sale of or
other disposition of any debt securities issued or guaranteed by the
Company or any Subsidiary Guarantor (other than as contemplated by the
Registration Rights Agreement) without the prior written consent of the
Initial Purchasers;
(l) during the period from the Closing Date until two years
after the Closing Date, without the prior written consent of the
Initial Purchasers, not to, and not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities that have been reacquired by them, except for Securities
purchased by the Company or any of its affiliates and resold in a
transaction registered under the Securities Act;
(m) not to, for so long as the Securities are outstanding, be
or become, or be or become owned by, an open-end investment company,
unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act, and to not be or become, or be or become owned by, a closed-end
investment company required to be registered, but not registered
thereunder;
(n) in connection with the offering of the Securities, until
JPMorgan on behalf of the Initial Purchasers shall have notified the
Company of the completion of the distribution of the Securities, not
to, and to cause its affiliated purchasers (as defined in Regulation M
under the Exchange Act) not to, either alone or with one or more other
persons, bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial interest, any Securities, or
attempt to induce any person to purchase any Securities; and not to,
and to cause its affiliated purchasers not to, make bids or purchase
for the purpose of creating actual, or apparent active trading in or of
raising the price of the Securities;
(o) to furnish to each of the Initial Purchasers on the date
hereof a copy of the independent accountants' report included in the
Offering Memorandum signed by the accountants rendering such report;
(p) to do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use its reasonable best efforts to
satisfy all conditions precedent on its part to the delivery of the
Securities;
17
(q) prior to the Closing Date, not to issue any press release
or other communication directly or indirectly or hold any press
conference with respect to the Company or any Subsidiary Guarantor, its
condition, financial or otherwise, or earnings, business affairs or
business prospects (except for routine oral marketing communications in
the ordinary course of business and consistent with the past practices
of the Company and of which the Initial Purchasers are notified),
without prior consultation with the Initial Purchasers, unless in the
judgment of the Company or such Subsidiary Guarantor and their
respective counsel, and after notification to the Initial Purchasers,
such press release or communication is required by law; and
(r) to apply the net proceeds from the sale of the Securities
as set forth in the Offering Memorandum under the heading "Use of
Proceeds".
5. Conditions of Initial Purchasers' Obligations. The
respective obligations of the several Initial Purchasers hereunder are subject
to the accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Company and the Subsidiary Guarantors
contained herein, to the accuracy of the statements of the Company, and the
Subsidiary Guarantors and their respective officers made in any certificates
delivered pursuant hereto, to the performance by the Company and the Subsidiary
Guarantors of their respective obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial
Purchasers may agree; and no stop order suspending the sale of the
Securities in any jurisdiction shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Company on or prior to the Closing Date that the
Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of a fact which, in the written advice of counsel for
the Initial Purchasers, is material or omits to state any fact which,
in the written advice of such counsel (a copy of which shall be
supplied to the Company), is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other matters required for
due authorization and validity of each of the Transaction Documents and
the transactions contemplated thereby and the Offering Memorandum shall
be satisfactory in all material respects to the Initial Purchasers, and
the Company and the Subsidiary Guarantors shall have furnished to the
Initial Purchasers copies of such documents and information that they
or their counsel may reasonably request to enable them to pass upon
such matters.
(d) Xxxxxxxx Xxxxxxxx & Xxxxxx P.C. shall have furnished to
the Initial Purchasers their written opinion, as counsel to the Company
and the Subsidiary Guarantors addressed to the Initial Purchasers and
dated the Closing Date, in form and
18
substance reasonably satisfactory to the Initial Purchasers,
substantially to the effect set forth in Annex B hereto.
(e) The Initial Purchasers shall have received from Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Initial Purchasers may reasonably require, and the Company and the
Subsidiary Guarantors shall have furnished to such counsel such
documents and information as they request for the purpose of enabling
them to pass upon such matters.
(f) The Company shall have furnished to the Initial Purchasers
a letter (the "Initial Letter") of Xxxxx Xxxxxxxx LLP, addressed to the
Initial Purchasers and dated the date hereof, in form and substance
satisfactory to the Initial Purchasers.
(g) The Company shall have furnished to the Initial Purchasers
a letter (the "Bring-Down Letter") of Xxxxx Xxxxxxxx LLP, addressed to
the Initial Purchasers and dated the Closing Date (i) confirming that
they are independent public accountants with respect to the Company and
its subsidiaries and Rent-A-Center and its subsidiaries, respectively,
within the meaning of Rule 101 of the Code of Professional Conduct of
the AICPA and its interpretations and rulings thereunder, (ii) stating,
as of the date of the Bring-Down Letter (or, with respect to matters
involving changes or developments since the respective dates as of
which specified financial information is given in the Offering
Memorandum, as of a date not more than three business days prior to the
date of the Bring-Down Letter), that the conclusions and findings of
such accountants with respect to the financial information and other
matters covered by its Initial Letter are accurate and (iii) confirming
in all material respects the conclusions and findings set forth in its
Initial Letter.
(h) The Company and each of the Subsidiary Guarantors shall
have furnished to the Initial Purchasers a certificate, dated the
Closing Date, of their respective chief executive officers and chief
financial officers or such other persons who possess similar authority
or perform similar functions, solely in their capacity as officers and
not in their individual capacity, stating that (A) such persons have
examined the Offering Memorandum, (B) in their opinion, the Offering
Memorandum, as of its date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and since the date of the Offering Memorandum, no event has
occurred which should have been set forth in a supplement or amendment
to the Offering Memorandum so that the Offering Memorandum (as so
amended or supplemented) would not include any untrue statement of a
material fact and would not omit to state a material fact required to
be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading and (C) to such officer's knowledge after reasonable due
inquiry, as of the Closing Date, the representations and warranties of
the Company and each of the Subsidiary Guarantors, as the case may be,
in this Agreement are true and correct, the Company and each of the
Subsidiary Guarantors, as the case may
19
be, has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder on or prior to the
Closing Date in all material respects, and subsequent to the date of
the most recent financial statements contained in the Offering
Memorandum, there has been no material adverse change in the financial
position or results of operations of the Company, the Subsidiary
Guarantors and their respective subsidiaries taken as a whole, or any
change, or any development including a prospective change, in or
affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company, the Subsidiary
Guarantors and their respective subsidiaries taken as a whole that
would, or could reasonably be expected to, result in a Material Adverse
Effect, except as set forth in the Offering Memorandum. Such persons
may also state that (i) they participated in the preparation of the
Offering Memorandum, and (ii) they are generally familiar with the
operations and business of the respective corporations of which they
were officers or directors, have made such inquiries as they deemed
appropriate in connection with making this certificate and have
conferred amongst themselves in its preparation.
(i) The Initial Purchasers shall have received a counterpart
of the Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of the Company and each of the
Subsidiary Guarantors.
(j) The Indenture shall have been duly executed and delivered
by the Company, the Subsidiary Guarantors and the Trustee, and the
Securities shall have been duly executed and delivered by the Company,
the Subsidiary Guarantors and duly authenticated by the Trustee.
(k) The Securities shall have been approved by the NASD for
trading in the PORTAL Market.
(l) If any event shall have occurred that requires the Company
under Section 4(d) to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchasers shall have been given a reasonable
opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchasers reasonably in advance of the
Closing Date.
(m) There shall not have occurred any invalidation of Rule
144A under the Securities Act by any court or any withdrawal or
proposed withdrawal of any rule or regulation under the Securities Act
or the Exchange Act by the Commission or any amendment or proposed
amendment thereof by the Commission which, in the case of a proposed
withdrawal, in the written advice of counsel to the Initial Purchasers,
a copy of which will be delivered to the Company, is reasonably likely
to occur and would materially impair the ability of the Initial
Purchasers to purchase, hold or effect resales of the Securities as
contemplated hereby.
(n) Except as otherwise disclosed in the Offering Memorandum
(exclusive of any amendment or supplement thereto), subsequent to the
execution and delivery of this Agreement or, if earlier, the dates as
of which information is given in the Offering
20
Memorandum (exclusive of any amendment or supplement thereto), there
shall not have been any change in the capital stock or long-term debt
or any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company and the Subsidiary
Guarantors taken as a whole, the effect of which, in any such case
described above, is, in the judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to
proceed with the sale or delivery of the Securities on the terms and in
the manner contemplated by this Agreement and the Offering Memorandum,
which change or development shall be specified in writing by the
Initial Purchasers to the Company (exclusive of any amendment or
supplement thereto).
(o) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the
Securities.
(p) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Securities or any of the Company's or any Subsidiary Guarantor's other
debt securities or preferred stock by any "nationally recognized
statistical rating organization", as such term is defined by the
Commission for purposes of Rule 436(g)(2) of the rules and regulations
of the Commission under the Securities Act and (ii) no such
organization shall have publicly announced that it has under
surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of the Securities or
any of the Company's or any Subsidiary Guarantor's other debt
securities or preferred stock.
(q) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the
over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or
market by the Commission, by any such exchange or by any other
regulatory body or governmental authority having jurisdiction, or
trading in any securities of the Company on any exchange or in the
over-the-counter market shall have been suspended or (ii) any
moratorium on commercial banking activities shall have been declared by
federal or New York state authorities or if any material disruption in
commercial banking or securities settlement or clearance services shall
have occurred or (iii) an outbreak or escalation of hostilities or acts
of terrorism involving the United States or a declaration by the United
States of a national emergency or war shall have occurred or (iv) a
material adverse change in general economic, political or financial
conditions (or in the effect of international conditions on the
financial markets in the United States) or any calamity or crisis,
either within or outside the United States, shall have occurred, the
effect of which, in the case of this clause (iv), are, in the judgment
of the Initial Purchasers, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering, sale or the
delivery of the Securities on the terms and in the manner contemplated
by this
21
Agreement and in the Offering Memorandum (exclusive of any amendment or
supplement thereto).
(r) The Initial Purchasers shall have received copies of the
documentation evidencing the amendment of the Senior Credit Facilities
(the "Bank Document"), certified by the secretary of the Company as
being true, complete and correct.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers, in their absolute
discretion, by notice given to and received by the Company prior to delivery of
and payment for the Securities if, prior to that time, any of the events
described in Section 5(m), (n), (o), (p) or (q) shall have occurred and be
continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing Date,
any Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchasers may make arrangements for the
purchase of the Securities which such defaulting Initial Purchaser agreed but
failed to purchase by other persons satisfactory to the Company and the
non-defaulting Initial Purchasers, but if no such arrangements are made within
48 hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers, the Company or the Subsidiary
Guarantors, except that the Company and the Subsidiary Guarantors will continue
to be liable for the payment of expenses to the extent set forth in Sections 8
and 12 and except that the provisions of Sections 9 and 10 shall not terminate
and shall remain in effect. As used in this Agreement, the term "Initial
Purchasers" includes, for all purposes of this Agreement unless the context
otherwise requires, any party not listed in Schedule 1 hereto that, pursuant to
this Section 7, purchases Securities which a defaulting Initial Purchaser agreed
but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting
Initial Purchaser of any liability it may have to the Company, the Subsidiary
Guarantors or any non-defaulting Initial Purchaser for damages caused by its
default. If other persons are obligated or agree to purchase the Securities of a
defaulting Initial Purchaser, either the non-defaulting Initial Purchasers or
the Company may postpone the Closing Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Initial Purchasers may be necessary in the Offering Memorandum
or in any other document or arrangement, and the Company agrees to promptly
prepare any amendment or supplement to the Offering Memorandum that effects any
such changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6 or 7, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason or (c) the Initial Purchasers shall decline to purchase the
Securities for any reason permitted under this Agreement, the Company shall
reimburse the Initial Purchasers for such out-of-pocket expenses (including
reasonable fees and disbursements of counsel) as shall have been reasonably
incurred by the Initial Purchasers in
22
connection with this Agreement and the proposed purchase and resale of the
Securities. If this Agreement is terminated pursuant to Section 7 by reason of
the default of one or more of the Initial Purchasers, the Company shall not be
obligated to reimburse any defaulting Initial Purchaser on account of such
expenses.
9. Indemnification. (a) The Company and the Subsidiary
Guarantors shall indemnify and hold harmless each Initial Purchaser, its
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act or the Exchange Act (collectively referred to for
purposes of this Section 9(a) and Section 10 as an Initial Purchaser), from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of the Securities), to which
that Initial Purchaser may become subject, whether commenced or threatened,
under the Securities Act, the Exchange Act, any other federal or state statutory
law or regulation, at common law or otherwise, solely insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum or in any amendment
or supplement thereto or in any information provided by the Company pursuant to
Section 4(e) or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse each Initial Purchaser promptly upon
demand for any legal or other expenses reasonably incurred by that Initial
Purchaser in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with any Initial Purchasers' Information furnished by such Initial Purchaser;
and provided, further, that with respect to any such untrue statement in or
omission from the Preliminary Offering Memorandum, the indemnity agreement
contained in this Section 9(a) shall not inure to the benefit of any such
Initial Purchaser to the extent that the sale to the person asserting any such
loss, claim, damage, liability or action was an initial resale by such Initial
Purchaser and any such loss, claim, damage, liability or action of or with
respect to such Initial Purchaser results from the fact that both (A) to the
extent required by applicable law, a copy of the Offering Memorandum was not
sent or given to such person at or prior to the written confirmation of the sale
of such Securities to such person and (B) the untrue statement in or omission
from the Preliminary Offering Memorandum was corrected in the Offering
Memorandum unless such failure to deliver the Offering Memorandum was a result
of non-compliance by the Company with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, the Subsidiary Guarantors, their
respective officers, directors, employees, representatives and agents, and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act (collectively referred to for purposes of this Section
9(b) and Section 10 as the Company), from and against any loss, claim,
23
damage or liability, joint or several, or any action in respect thereof, to
which the Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, solely insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum or in any amendment
or supplement thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Initial Purchasers' Information
furnished by such Initial Purchaser, and shall reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (i)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has reasonably
concluded (based upon written advice of counsel to the indemnified party, a copy
of which shall be provided to the indemnifying party) that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, (iii) a conflict or
potential conflict exists (based upon written advice of counsel to the
indemnified party, a copy of which shall be provided to the indemnifying party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (iv) the indemnifying party has not in
fact employed counsel reasonably satisfactory to the indemnified party to assume
the defense of such action within a reasonable time after receiving
24
notice of the commencement of the action, in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 9(a) and 9(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
The obligations of the Company, the Subsidiary Guarantors and
the Initial Purchasers in this Section 9 and in Section 10 are in addition to
any other liability that the Company, the Subsidiary Guarantors or the Initial
Purchasers, as the case may be, may otherwise have, including in respect of any
breaches of representations, warranties and agreements made herein by any such
party.
10. Contribution. If the indemnification provided for in
Section 9 is unavailable or insufficient to hold harmless an indemnified party
under Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and the Subsidiary
Guarantors on the one hand and the Initial Purchasers on the other from the
offering of the Securities or (ii) if the allocation provided by clause (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 (i) above but
also the relative fault of the Company and the Subsidiary Guarantors on the one
hand and the Initial Purchasers on the other with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Subsidiary Guarantors on the
one hand and the Initial Purchasers on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Securities purchased under this Agreement (before deducting
expenses) received by or on behalf of the Company and the Subsidiary Guarantors,
on the one hand, and the total discounts and commissions received by the Initial
Purchasers with respect to the Securities purchased under this Agreement, on the
other, bear to the total gross proceeds from the sale of the Securities under
this Agreement. The relative fault shall be determined by reference to, among
other
25
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 the Company or
information supplied by the Company or the Subsidiary Guarantors on the one hand
or to any Initial Purchasers' Information on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company, the
Subsidiary Guarantors and the Initial Purchasers agree that it would not be just
and equitable if contributions pursuant to this Section 10 were to be determined
by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation that does not take
into account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending or preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 10, no Initial Purchaser shall be
required to contribute any amount in excess of the amount by which the total
discounts and commissions received by such Initial Purchaser with respect to the
Securities purchased by it under this Agreement exceeds the amount of any
damages which such Initial Purchaser has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 12(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute as provided in this Section 10 are several
in proportion to their respective purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Company, the Subsidiary Guarantors and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except as provided in Sections 9 and 10 with respect to
affiliates, officers, directors, employees, representatives, agents and
controlling persons of the Company, the Subsidiary Guarantors and the Initial
Purchasers and in Section 4(e) with respect to holders and prospective
purchasers of the Securities. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
11, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
12. Expenses. Each of the Company and the Subsidiary
Guarantors agrees with the Initial Purchasers to pay (a) the costs incident to
the authorization, issuance, sale, preparation and delivery of the Securities
and any taxes payable in that connection; (b) the costs incident to the
preparation, printing and distribution of the Preliminary Offering Memorandum,
the Offering Memorandum and any amendments or supplements thereto; (c) the costs
of reproducing and distributing each of the Transaction Documents; (d) the costs
incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (e) the fees and expenses of the
Company's counsel and their independent accountants; (f) the fees and expenses
of qualifying the Securities under the securities laws of the several
jurisdictions as provided in Section 4(g) and of preparing, printing and
distributing Blue Sky Memoranda (including related fees and
26
expenses of counsel for the Initial Purchasers); (g) any fees charged by rating
agencies for rating the Securities; (h) the fees and expenses of the Trustee and
any paying agent (including related fees and expenses of any counsel to such
parties); (i) all expenses and application fees incurred in connection with the
application for the inclusion of the Securities on the PORTAL Market and the
approval of the Securities for book-entry transfer by DTC; and (j) all other
costs and expenses incident to the performance of the obligations of the Company
and the Subsidiary Guarantors under this Agreement which are not otherwise
specifically provided for in this Section 12; provided, however, that except as
provided in this Section 12 and Section 8, the Initial Purchasers shall pay
their own costs and expenses.
13. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company and the
Initial Purchasers contained in this Agreement or made by or on behalf of the
Company or the Initial Purchasers pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons, until such
time as the applicable statute of limitations has expired.
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail or telecopy transmission to X.X. Xxxxxx Securities Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxx
(telecopier no.: (000) 000-0000); or
(b) if to the Company, or the Subsidiary Guarantors shall be
delivered or sent by mail or telecopy transmission to the address of
the Company set forth in the Offering Memorandum, Attention: Xxxxxx X.
Xxxxx, Chief Financial Officer (telecopier no.: (000) 000-0000).
provided that any notice to an Initial Purchaser pursuant to Section 9(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by JPMorgan.
15. Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
16. Initial Purchasers' Information. The parties hereto
acknowledge and agree that, for all purposes of this Agreement, the Initial
Purchasers' Information consists solely of the following information under the
heading "Plan of Distribution" in the Preliminary Offering
27
Memorandum and the Offering Memorandum: the information contained in (i) the
first sentence of the third paragraph, (ii) the second and third sentences of
the fifth paragraph, (iii) the seventh paragraph, (iv) the fifth and sixth
sentence of the eighth paragraph, (v) the tenth, eleventh and twelfth
paragraphs.
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
19. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
28
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the parties hereto in
accordance with its terms.
Very truly yours,
RENT-A-CENTER, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------
Xxxx X. Xxxxxx
Chief Executive Officer
COLORTYME, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------
Xxxx X. Xxxxxx
Vice President
ADVANTAGE COMPANIES, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------
Xxxx X. Xxxxxx
President
29
Accepted:
X.X. XXXXXX SECURITIES INC.
XXXXXX XXXXXXX & CO. INCORPORATED
BEAR, XXXXXXX & CO. INC.
XXXXXX BROTHERS INC.
By: X.X. XXXXXX SECURITIES, INC.
By: /s/ Xxx Xxxxxxxx
-----------------------------------
Authorized Signatory
Addresses for notices pursuant to Section 9(c):
X.X. Xxxxxx Securities Inc.
Xxx Xxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Legal Department
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxx
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx
Xxxxxx Brothers Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
30
SCHEDULE 1
Principal Amount of Securities
Initial Purchasers to be Purchased
------------------ ------------------------------
X.X. Xxxxxx Securities Inc. $ 35,000,000
Xxxxxx Xxxxxxx & Co. Incorporated $ 35,000,000
Bear, Xxxxxxx & Co. Inc. $ 20,000,000
Xxxxxx Brothers Inc. $ 10,000,000
--------------------
Total $ 100,000,000
====================
31
ANNEX A
[FORM OF EXCHANGE AND REGISTRATION RIGHTS AGREEMENT]
32
ANNEX B
[Form of Opinion of Counsel for the Company]
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C. shall have furnished to the
Initial Purchasers their written opinion, as counsel to the Company, and the
Subsidiary Guarantors addressed to the Initial Purchasers and dated the Closing
Date, in form and substance reasonably satisfactory to the Initial Purchasers,
substantially to the effect set forth below:
(i) each of the Company and the Subsidiary Guarantors has been
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction listed on Schedule I attached hereto, and has all power
and authority necessary to own or hold its properties and to conduct
the businesses in which it is engaged (except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a Material Adverse Effect);
(ii) the Company has an authorized capitalization as set forth
in the Offering Memorandum, and all of the outstanding shares of
capital stock of the Company and each Subsidiary Guarantor have been
duly and validly authorized and issued and are fully paid and
non-assessable;
(iii) the descriptions in the Offering Memorandum of statutes,
legal and governmental proceedings and contracts and other documents
are accurate in all material respects; the statements in the Offering
Memorandum under the heading "Tax Considerations," to the extent that
they constitute summaries of matters of law or regulation or legal
conclusions, have been reviewed by such counsel and fairly summarize
the matters described therein in all material respects;
(iv) the Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations
of the Commission applicable to an indenture which is qualified
thereunder;
(v) the Company and each Subsidiary Guarantor has full right,
power and authority to execute and deliver each of the Transaction
Documents and to perform its obligations thereunder; and all corporate
actions required to be taken for the due and proper authorization,
execution and delivery of each of the Transaction Documents and the
consummation of the transactions contemplated thereby have been duly
and validly taken;
(vi) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and the Subsidiary
Guarantors and constitutes a valid and legally binding agreement of the
Company and the Subsidiary Guarantors enforceable against the Company
and the Subsidiary Guarantors in accordance with its terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws
33
affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law) and
except to the extent that the indemnification provisions thereof may be
unenforceable;
(vii) the Purchase Agreement has been duly authorized,
executed and delivered by the Company and the Subsidiary Guarantors and
constitutes a valid and legally binding agreement of the Company and
the Subsidiary Guarantors enforceable against the Company and the
Subsidiary Guarantors in accordance with its terms, except to the
extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding
in equity or at law) and except to the extent that the indemnification
provisions thereof may be unenforceable;
(viii) the Indenture, including the Guarantees therein, has
been duly authorized, executed and delivered by the Company and the
Subsidiary Guarantors and, assuming due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally
binding agreement of the Company and the Subsidiary Guarantors
enforceable against the Company and the Subsidiary Guarantors in
accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law);
(ix) the Securities have been duly authorized and issued by
the Company and the Subsidiary Guarantors and, assuming due
authentication thereof by the Trustee and upon payment and delivery in
accordance with the Purchase Agreement, will constitute valid and
legally binding obligations of the Company and the Subsidiary
Guarantors entitled to the benefits of the Indenture and enforceable
against the Company and the Subsidiary Guarantors in accordance with
their terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law);
(x) the Bank Document has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
agreement of the Company enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law);
(xi) each Transaction Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum;
34
(xii) the execution, delivery and performance by the Company
and the Subsidiary Guarantors of each of the Transaction Documents to
which it is a party, the issuance, authentication, sale and delivery of
the Securities and compliance by the Company with the terms thereof and
the consummation of the transactions contemplated by the Transaction
Documents will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, any agreement binding upon the Company or any of its
subsidiaries that has been filed as an exhibit (including exhibits
previously filed and incorporated therein) to the Company's Annual
Report on Form 10-K for the year ended December 31, 2000 or the
Company's Quarterly Reports on Form 10-Q (or 10-Q/A, as the case may
be) for the quarters ended March 31, 2001, June 31, 2001 and September
30, 2001, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of its
subsidiaries or any statute or any judgment, to our knowledge, order,
decree, rule or regulation of any court or arbitrator or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets; and no consent,
approval, authorization or order of, or filing or registration with,
any such court or arbitrator or governmental agency or body under any
such statute, judgment, to our knowledge, order, decree, rule or
regulation is required for the execution, delivery and performance by
the Company of each of the Transaction Documents, the issuance,
authentication, sale and delivery of the Securities and compliance by
the Company with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, filings, registrations or
qualifications (i) which have been obtained or made prior to the
Closing Date and (ii) as may be required to be obtained or made under
the Securities Act and applicable state securities laws as provided in
the Registration Rights Agreement;
(xiii) to the knowledge of such counsel, other than those
disclosed in the Offering Memorandum there are no pending actions or
suits or judicial, arbitral, rule-making, administrative or other
proceedings to which the Company or any of its subsidiaries is a party
or of which any property or assets of the Company or any of its
subsidiaries is the subject which (A) singularly or in the aggregate,
if determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect or (B)
questions the validity or enforceability of any of the Transaction
Documents or any action taken or to be taken pursuant thereto; and to
the actual knowledge of such counsel, other than as described in the
Offering Memorandum, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others which would be
required to be described in the Offering Memorandum if the Offering
Memorandum were a prospectus included in the registration statement on
Form S-1 that are not described as so required;
(xiv) neither the Company nor any of its subsidiaries is (A)
an "investment company" or a company "controlled by" an investment
company within the meaning of the Investment Company Act and the rules
and regulations of the Commission thereunder, without taking account of
any exemption under the Investment Company Act arising out of the
number of holders of the Company's securities or (B) a "holding
35
company" or a "subsidiary company" of a holding company or an
"affiliate" thereof within the meaning of the Public Utility Holding
Company Act of 1935, as amended;
(xv) neither the consummation of the transactions contemplated
by this Agreement nor the sale, issuance, execution or delivery of the
Securities will violate Regulation T, U or X of the Federal Reserve
Board; and
(xvi) assuming the accuracy of the representations, warranties
and agreements of the Company of the Subsidiary Guarantors and of the
Initial Purchasers contained in the Purchase Agreement, no registration
of the Securities under the Securities Act or qualification of the
Indenture under the Trust Indenture Act is required in connection with
the issuance and sale of the Securities by the Company and the offer,
resale and delivery of the Securities by the Initial Purchasers in the
manner contemplated by the Purchase Agreement and the offering of the
Securities.
Such counsel shall also state that they have participated in
conferences with representatives of the Company, representatives of its
independent accountants and counsel and representatives of the Initial
Purchasers and their counsel at which conferences the contents of the
Preliminary Offering Memorandum and the Offering Memorandum and any amendment
and supplement thereto and related matters were discussed and, although such
counsel assumes no responsibility for the accuracy, completeness or fairness of
the Offering Memorandum or any amendment or supplement thereto (except as
expressly provided above), nothing has come to the attention of such counsel to
cause such counsel to believe that the Offering Memorandum or any amendment or
supplement thereto (other than the financial statements and other financial and
statistical information contained therein, as to which such counsel need express
no belief), as of the date thereof and as of the Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials which are furnished to the Initial
Purchasers.
