EXHIBIT 4.5
EXECUTION COPY
$85,000,000
XXXXXX, FARGO & CO.
10% SENIOR SUBORDINATED NOTES DUE 2004
PURCHASE AGREEMENT
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January 17, 1997
XXXXXX BROTHERS INC.
NATIONSBANC CAPITAL MARKETS, INC.
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx, Fargo & Co., a Delaware corporation (the "Company"), proposes
to issue and sell to Xxxxxx Brothers Inc. and NationsBanc Capital Markets, Inc.
(the "Initial Purchasers") $85,000,000 in aggregate principal amount of the
Company's 10% Senior Subordinated Notes due 2004 (the "Senior Subordinated
Notes"). The payment of principal, premium, interest and liquidated damages on
the Senior Subordinated Notes and the Company's 10% Senior Subordinated Notes
due 2004 to be issued in the Exchange Offer (the "New Senior Subordinated Notes"
and, together with the Senior Subordinated Notes, the "Notes") will be
unconditionally guaranteed on a senior subordinated basis by each of (i) Loomis
Holding Corporation (to be renamed LFC Holding Corporation), a Delaware
corporation ("LFC"), (ii) Xxxxxx Armored Inc. (to be renamed Xxxxxx, Fargo &
Co.), a Texas corporation and a wholly-owned subsidiary of LFC (the "Operating
Subsidiary"), (iii) Xxxxx Fargo Armored Service Corporation of Texas (to be
renamed LFC Armored of Texas Inc.), a Texas corporation ("Xxxxx Fargo of
Texas"), (iv) Xxxxx Fargo Armored Service Corporation of Puerto Rico (to be
renamed Xxxxxx, Fargo & Co. of Puerto Rico), a Tennessee corporation ("Xxxxx
Fargo of Puerto Rico"), and (v) any other subsidiary formed or acquired after
the Closing Date (as defined below) that either (x) guarantees any Senior Debt
of the Company or any Indebtedness of the Company that is pari passu in right of
payment with the Notes or (y) is or becomes a Significant Subsidiary (whether as
a result of creation, acquisition, additional investment, internal growth, or
otherwise), and their respective successors and assigns (collectively, the
"Guarantors") pursuant to their guarantees (the "Subsidiary Guarantees"). The
Senior Subordinated Notes are to be issued pursuant to an indenture to be dated
as of January 24, 1997 (the "Indenture") among the Company, the Guarantors party
thereto and Marine Midland Bank, as trustee (the "Trustee"), substantially in
the form attached hereto as Exhibit A.
Upon original issuance thereof, and until such time as is no longer
required under the applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), the Senior Subordinated Notes (and all
securities issued in exchange therefor or in substitution thereof) shall bear
the following legend:
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT IN CONNECTION WITH THE SALE
HEREOF, AND SUCH PURCHASER REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT
OF THE COMPANY THAT: (I) IT HAS ACQUIRED A "RESTRICTED" SECURITY WHICH HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE LATER OF THE DATE WHICH IS THREE
YEARS AFTER THE DATE OF ORIGINAL ISSUANCE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF SUCH RESTRICTED
SECURITIES (OR ANY PREDECESSOR) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (D) OUTSIDE THE UNITED STATES
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT,
OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY APPLICABLE
JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE RESTRICTIONS SET
FORTH IN (II) ABOVE; ANY OFFER, SALE OR OTHER DISPOSITION PURSUANT TO THE
FOREGOING CLAUSES (II)(D) AND (E) IS SUBJECT TO THE RIGHT OF THE ISSUER OF THIS
SECURITY AND THE TRUSTEE FOR SUCH SECURITIES TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO THEM IN
FORM AND SUBSTANCE."
A HOLDER OF THIS NOTE SHALL HAVE ALL THE RIGHTS SET FORTH IN THE
REGISTRATION RIGHTS AGREEMENT.
The Senior Subordinated Notes will be offered and sold to the Initial
Purchasers without being registered under the Securities Act in reliance on an
exemption from such registration requirements. The Company has prepared a
preliminary offering memorandum, dated
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December 23, 1996 (the "Preliminary Offering Memorandum"), and will prepare a
final offering memorandum to be dated the date hereof (the "Final Offering
Memorandum" and, together with the Preliminary Offering Memorandum, the
"Offering Memorandum"), setting forth or including a description of the terms of
the Senior Subordinated Notes, the terms of the offering and the Transactions
(as defined below), a description of the Company, LFC, the Operating Subsidiary
and Xxxxx Fargo Armored Service Corporation ("Xxxxx Fargo") and any material
developments relating to the Company, LFC, the Operating Subsidiary and Xxxxx
Fargo (collectively, the "Operative Entities") occurring after December 23,
1996. Copies of the Preliminary Offering Memorandum have been, and copies of the
Final Offering Memorandum will be, delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement. Any references herein to the
Preliminary Offering Memorandum, the Final Offering Memorandum and the Offering
Memorandum shall be deemed to include all amendments and supplements thereto.
The Company hereby confirms that it has authorized the use of the Offering
Memorandum in connection with the offering and resale of the Senior Subordinated
Notes by the Initial Purchasers in accordance with Section 3 hereof.
It is understood by the parties hereto that simultaneous with the
closing of the transactions contemplated under this Agreement (i) pursuant to a
contribution agreement (the "Contribution Agreement") dated as of November 28,
1996 among the Company, Xxxx-Xxxxxx Security Corporation, Xxxxx Fargo, LFC, the
Operating Subsidiary and the Loomis Stockholders Trust, a Delaware business
trust (the "Business Trust"), the Company will (A) acquire all right, title and
interest in all outstanding equity securities of LFC, (B) acquire all right,
title and interest in substantially all of the assets of Xxxxx Fargo and (C)
take such other actions as shall be contemplated thereunder and (ii) the
Business Trust and Xxxxx Fargo will become the sole stockholders of the Company
and will enter into a stockholders agreement, dated the Closing Date, with the
Company and Xxxxxxx Partners, L.P., a Delaware limited partnership (the
"Stockholders Agreement") (the transactions described in clauses (i) and (ii)
herein referred to as the "Transactions"). It is further understood by the
parties hereto that the Company, LFC and the Operating Subsidiary will enter
into a credit facility (the "New Credit Facility") with Xxxxxx Commercial Paper,
Inc. and NationsBank of Texas, N.A., as agents for themselves and other
potential lenders, providing for revolving credit borrowings in an amount not to
exceed $115 million, of which $32.4 million shall be available to be drawn upon
by the Company on the Closing Date.
The Initial Purchasers and their direct and indirect transferees will
be entitled to the benefits of the Registration Rights Agreement (the
"Registration Rights Agreement"), substantially in the form attached hereto as
Exhibit B, pursuant to which the Company and the Guarantors will agree to use
their reasonable best efforts to commence an offer to exchange the Senior
Subordinated Notes for New Senior Subordinated Notes that have been registered
under the Securities Act, and that otherwise are identical in all respects to
the Senior Subordinated Notes, or to cause a shelf registration statement to
become effective under the Securities Act and to remain effective for the period
designated in the Registration Rights Agreement.
Capitalized terms used herein and not otherwise defined are used as
defined in the Offering Memorandum.
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1. Representations, Warranties and Agreements of the Company, LFC
and the Operating Subsidiary. Each of the Company, LFC and the Operating
Subsidiary hereby represents, warrants and agrees that:
(a) Each of the Preliminary Offering Memorandum and the Final
Offering Memorandum as of its date did not, and the Final Offering
Memorandum as of the Closing Date will not, contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company, LFC and the
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Operating Subsidiary make no representation or warranty as to information
contained in or omitted from the Preliminary Offering Memorandum or the
Final Offering Memorandum, as amended or supplemented, in reliance upon and
in conformity with written information furnished to the Company by or on
behalf of the Initial Purchasers specifically for inclusion in the
Preliminary Offering Memorandum or the Final Offering Memorandum.
(b) Each of the Company, LFC and the Operating Subsidiary has
been duly organized and is validly existing and in good standing under the
laws of its respective jurisdiction of incorporation and, as of the date
hereof LFC is, and, as of the Closing Date, the Company will be, duly
qualified to do business and is in good standing as a foreign corporation
in the State of Texas (except where the failure to be so qualified and in
good standing, whether singly or in the aggregate, would not (i) have a
material adverse effect on the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise), or
prospects of the Company, LFC and the Operating Subsidiary, taken as a
whole or (ii) have a material adverse effect on the ability of the Company,
LFC and the Operating Subsidiary to consummate the transactions
contemplated under this Agreement, the Indenture, the Registration Rights
Agreement, the New Credit Facility, the Senior Guarantees (as defined
below), the Contribution Agreement and the Stockholders Agreement
(collectively, the "Operative Agreements") (any of the events set forth in
clause (i) or (ii), a "Material Adverse Effect"), and has all power and
authority necessary to own or hold its respective properties and to conduct
the business in which it is engaged, in each case as of the date hereof and
after giving effect to the Transactions. On the Closing Date, (x) LFC will
be a direct, wholly owned subsidiary of the Company, (y) the Operating
Subsidiary, Xxxxx Fargo of Texas and Xxxxx Fargo of Puerto Rico will be
indirect, wholly owned subsidiaries of the Company and (z) the Company will
have no other subsidiaries.
(c) Assuming the Senior Subordinated Notes are issued, sold and
delivered under the circumstances contemplated by the Offering Memorandum
and this Agreement, that the representations and warranties and covenants
of the Initial Purchasers contained in Section 3 hereof are true, correct
and complete, and the Initial Purchasers comply with their covenants in
Section 3 hereof, (i) registration under the Securities Act of the Senior
Subordinated Notes or qualification of the Indenture in respect of the
Senior Subordinated Notes under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), is not required in connection with the offer
and sale of the Senior Subordinated Notes to the Initial Purchasers in the
manner contemplated by the Offering
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Memorandum or this Agreement and (ii) initial resales of the Senior
Subordinated Notes by the Initial Purchasers on the terms and in the manner
set forth in the Offering Memorandum and Section 3 hereof are exempt from
the registration requirements of the Securities Act.
(d) The Company has an authorized capitalization as set forth in
the Offering Memorandum. On each of (i) the date hereof and (ii) the
Closing Date after giving effect to the Transactions, all of the capital
stock or other ownership interests of the Company are and will have been
duly and validly authorized and issued, fully paid and nonassessable.
(e) This Agreement has been duly authorized, executed and
delivered by each of the Company, LFC and the Operating Subsidiary and
(assuming the due execution and delivery thereof by the Initial Purchasers)
is a legally valid and binding agreement of each of the Company, LFC and
the Operating Subsidiary, enforceable against each of them in accordance
with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and to general
equitable principles (whether considered in a proceeding in equity or at
law).
(f) The Indenture has been duly authorized by the Company and,
as of the Closing Date, will have been duly authorized by the Guarantors
party thereto, and when duly executed and delivered by the Company and the
Guarantors party thereto (assuming the due execution and delivery thereof
by the Trustee) will be a legally valid and binding agreement of each of
the Company and the Guarantors party thereto, enforceable against each of
them in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and to
general equitable principles (whether considered in a proceeding in equity
or at law).
(g) The Senior Subordinated Notes have been duly authorized,
and, when duly executed, authenticated, issued and delivered upon payment
therefor as provided herein, will be validly issued and outstanding, and
will constitute the legally valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally
and to general equitable principles (whether considered in a proceeding in
equity or at law).
(h) As of the Closing Date, the New Senior Subordinated Notes
will have been duly authorized, and, when duly executed, authenticated,
issued and delivered in exchange for the Senior Subordinated Notes, will be
validly issued and outstanding, and will constitute the legally valid and
binding obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights
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generally and to general equitable principles (whether considered in a
proceeding in equity or at law).
(i) Upon consummation of the Transactions, the Company will own
100% of the outstanding capital stock of LFC and there will be no
outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, the capital stock of LFC. As of the
Closing Date, all of the shares of capital stock of LFC will be owned by
the Company free and clear of any security interest, claim, lien or
encumbrance (except for liens arising from the New Credit Facility).
(j) On each of (i) the date hereof and (ii) the Closing Date
after giving effect to the Transactions, LFC will own 100% of the
outstanding capital stock of the Operating Subsidiary and there will be no
outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, the capital stock of the Operating
Subsidiary. As of the Closing Date, all of the shares of capital stock of
the Operating Subsidiary will be owned by LFC free and clear of any
security interest, claim, lien or encumbrance (except for liens arising
from the New Credit Facility).
(k) The Registration Rights Agreement has been duly authorized
by the Company and, as of the Closing Date, will have been duly authorized
by the Guarantors, and when duly executed and delivered by the Company and
the Guarantors (assuming the due execution and delivery by the Initial
Purchasers) will be a legally valid and binding agreement of the Company
and the Guarantors, enforceable against each of them in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally and to general equitable
principles (whether considered in a proceeding in equity or at law).
(l) As of the Closing Date, the New Credit Facility will have
been duly authorized, executed and delivered by the Company and (assuming
the due execution and delivery by the parties thereto other than the
Company) is a legally valid and binding agreement of the Company,
enforceable against it in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and to general equitable principles (whether considered in
a proceeding in equity or at law).
(m) As of the Closing Date, the guarantees of the New Credit
Facility (the "Senior Guarantees") will have been duly authorized, executed
and delivered by each of the Guarantors and (assuming the due execution and
delivery by the parties thereto other than the Guarantors) are legally
valid and binding agreements of each of the Guarantors, enforceable against
each of them in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally
and to general equitable principles (whether considered in a proceeding in
equity or at law).
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(n) The Contribution Agreement has been duly authorized,
executed and delivered by each of the Operative Entities which is a party
thereto and (assuming the due execution and delivery by the parties thereto
other than such Operative Entities) is a legally valid and binding
agreement of the Operative Entities party thereto, enforceable against each
of them in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and to
general equitable principles (whether considered in a proceeding in equity
or at law).
(o) The Stockholders Agreement has been duly authorized by each
of the Operative Entities contemplated to be a party thereto and when
executed by each of such Operative Entities and (assuming the due execution
and delivery by the parties thereto other than the Operative Entities party
thereto) will be a legally valid and binding agreement of such Operative
Entities, enforceable against each of them in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and to general equitable principles (whether
considered in a proceeding in equity or at law).
(p) (i) The execution, delivery and performance of the Operative
Agreements by the Operative Entities party thereto and the consummation of
the transactions contemplated hereby and thereby (including, without
limitation, the Transactions), (ii) the issuance and sale of the Notes and
the Subsidiary Guarantees by the Company and the Guarantors, as applicable,
and (iii) the use of the proceeds from the sale of the Notes as described
in the Offering Memorandum, will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which any of the Operative Entities is a party
or by which any of the Operative Entities is bound or to which any of the
property or assets of any of the Operative Entities is subject, nor will
such actions result in any violation of the provisions of the charter, by-
laws, operating agreement or other organizational documents of any of the
Operative Entities or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over any of the
Operative Entities or any of their properties or assets (except to the
extent any such conflict, breach, violation or default would not, whether
singly or in the aggregate, have a Material Adverse Effect); and except
such consents, approvals, authorizations, registrations or qualifications
as may be required under the applicable state securities laws in connection
with the purchase and distribution of the Notes by the Initial Purchasers
or as set forth in the Registration Rights Agreement, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the execution, delivery and
performance of the Operative Agreements by the Operative Entities party
thereto and the consummation of the transactions contemplated hereby and
thereby, and the issuance and sale of the Notes and the Subsidiary
Guarantees by the Company and the Guarantors, as applicable (except to the
extent the failure to obtain any such consent, approval, authorization or
order or to make any such filing or registration would not, whether singly
or in the aggregate, have a Material Adverse Effect).
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(q) None of the Operative Entities is in breach or violation of
any of the terms or provisions of any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of the property or assets (and with
respect to Xxxxx Fargo, the property or assets subject to transfer in
accordance with the Contribution Agreement) of any of the Operative
Entities is subject, nor is any of the Operative Entities in violation of
the provisions of its respective charter, by-laws, operating agreement or
other organizational documents or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over any of the Operative Entities or any of their respective properties or
assets (and with respect to Xxxxx Fargo, the property or assets subject to
transfer in accordance with the Contribution Agreement) (except to the
extent any such conflict, breach, violation or default does not have,
whether singly or in the aggregate, a Material Adverse Effect).
(r) The Notes, the Indenture, the Subsidiary Guarantees, the
Registration Rights Agreement, the New Credit Facility, the Senior
Guarantees, the Contribution Agreement and the Stockholders Agreement
conform in all material respects to the descriptions thereof contained in
the Offering Memorandum.
(s) There are no legal or governmental proceedings pending to
which any of the Operative Entities is a party or of which any property or
assets (and with respect to Xxxxx Fargo, the property or assets subject to
transfer in accordance with the Contribution Agreement) of any of the
Operative Entities is the subject which, if determined adversely to such
Operative Entity, could reasonably be expected to have, whether singly or
in the aggregate, a Material Adverse Effect, otherwise than as set forth or
contemplated in the Offering Memorandum; and to the best knowledge of the
Company, LFC and the Operating Subsidiary, except as set forth or
contemplated in the Offering Memorandum, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
(t) Except as set forth in the Registration Rights Agreement and
the Stockholders Agreement, there are no contracts, agreements or
understandings between the Company and any person granting such person the
right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities
in any securities being registered pursuant to any registration statement
filed by the Company under the Securities Act.
(u) None of the Operative Entities has sustained, since the date
of the latest audited financial statements included in the Offering
Memorandum, any material losses or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Offering
Memorandum; and, since such date, there have not been any material changes
in the capital stock or long-term debt of any of the Operative Entities, or
any material adverse changes, or any developments involving any of the
Operative Entities that would
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reasonably be expected to involve a prospective material adverse change, in
or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, LFC and the
Operating Subsidiary, taken as a whole after giving effect to the
Transactions, otherwise than as set forth or contemplated in the Offering
Memorandum.
(v) The financial statements (including the related notes and
supporting schedules) of the Operative Entities which appear in the
Offering Memorandum comply as to form in all material respects with the
requirements of the Securities Act, present fairly the financial condition
and results of operations of such entities purported to be shown thereby,
at the dates and for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved except as set forth
therein; the pro forma information, together with related notes forming
part of the Offering Memorandum, have been prepared on a basis consistent
with the historical statements, except for the pro forma adjustments
specified therein, and give effect to assumptions made on a reasonable
basis and present fairly the historical and proposed transactions
contemplated by the Contribution Agreement, the Offering Memorandum and
this Agreement; the other historical, financial and statistical information
and data set forth in the Offering Memorandum is, in all material respects,
fairly presented and prepared on a basis consistent with such financial
statements and the books and records of the entities covered thereby.
(w) Ernst & Young LLP and Deloitte & Touche LLP, who have
certified certain financial statements contained in the Offering
Memorandum, whose reports appear in the Offering Memorandum, and who have
delivered the initial letters referred to in Section 7(g) hereof, are
independent public accountants, in the case of Ernst & Young LLP with
respect to the Company, LFC and the Operating Subsidiary and in the case of
Deloitte & Touche LLP with respect to Xxxxx Fargo, under Rule 101 of the
American Institute of Certified Public Accountants' ("AICPA") Code of
Professional Conduct and its interpretations and rulings during the periods
covered by the financial statements on which they reported contained in the
Offering Memorandum.
(x) After giving effect to the Transactions, (i) the Company,
LFC and the Operating Subsidiary will have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by each of them, including such property as shall be
transferred to the Company, LFC or the Operating Subsidiary pursuant to the
terms of the Contribution Agreement, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Offering Memorandum, or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to
be made of such property by the Company, LFC or the Operating Subsidiary
after consummation of the Transactions; and (ii) except as set forth in the
Offering Memorandum, all real property, trucks, buildings and other
property held under lease, including leases relating to such real property,
trucks, buildings and other property as shall be transferred to the
Company, LFC or the Operating Subsidiary pursuant to the terms of the
Contribution Agreement, will be held by the Company, LFC and the Operating
Subsidiary under valid, subsisting and enforceable
9
leases, with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such real property, trucks,
buildings and other property by the Company, LFC and the Operating
Subsidiary after consummation of the Transactions. You have been provided
with true, correct and complete information regarding the amount of title
insurance (if any) previously issued with respect to real property owned or
leased by the Operative Entities on the date hereof and to be owned or
leased by the Company, LFC and the Operating Subsidiary after giving effect
to the Transactions. The Operative Entities enjoy peaceful and undisturbed
possession under all leases to which each of them is a party as lessee,
except for such leases that, in the aggregate will not be material to the
business of the Company, LFC and the Operating Subsidiary taken as a whole
after giving effect to the Transactions. No consent need be obtained from
any person with respect to any such lease or agreement in connection with
the transactions contemplated hereby, pursuant to the Contribution
Agreement and in the Offering Memorandum (except as set forth in the
Offering Memorandum or except to the extent that the failure to obtain any
such consent, whether singly or in the aggregate, would not have a Material
Adverse Effect). None of the properties or assets, the value of which is
reflected in the balance sheets referred to in Section 1(v) hereof, is held
under any lease (except for properties or assets held under capital leases
and leasehold improvements held under both capital leases and operating
leases) or as conditional vendee under any conditional sale or other title
retention agreement. Except for such assets, trucks, plants and facilities
as are not material in the aggregate to the business of the Company, LFC
and the Operating Subsidiary taken as a whole after giving effect to the
Transactions, all tangible assets, trucks, plants and facilities of the
Operative Entities are in good condition and repair (ordinary wear and tear
excepted) and are adequate, in the reasonable opinion of the Company, LFC
and the Operating Subsidiary, for the uses to which they are being put or
are expected to be put in the ordinary course of business.
(y) After giving effect to the Transactions, the Company, LFC
and the Operating Subsidiary will maintain with reputable insurers such
insurance as may be required by law and is reasonably adequate in respect
of the Company's business, in accordance with industry standards and the
requirements of any documents to which the Company, LFC or the Operating
Subsidiary respectively is a party.
(z) The Operative Entities own or possess, and after giving
effect to the Transactions, the Company, LFC and the Operating Subsidiary
will own or possess, adequate rights to use all material patents, patent
applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights and licenses
necessary for the conduct of their respective businesses and the Company,
LFC and the Operating Subsidiary have no reasonable basis to believe that
the conduct of such businesses will conflict with, and have not received
any notice of any claim of conflict with, any such rights of others.
(aa) No relationship, direct or indirect, exists on the date
hereof or will exist on the Closing Date and after giving effect to the
Transactions between or among the Company, LFC or the Operating Subsidiary
on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company, LFC or the Operating Subsidiary on
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the other hand, which is required to be described in the Offering
Memorandum which is not so described pursuant to Regulation S-K of the
Securities and Exchange Commission (the "Commission") (assuming Regulation
S-K is applicable to the Offering Memorandum).
(bb) The Company has complied with all of the provisions of
Florida H.B. 1771, codified as Section 517.075 of the Florida statutes, and
all regulations promulgated thereunder relating to issuers doing business
with the Government of Cuba or with any person or any affiliate located in
Cuba.
(cc) After giving effect to the Transactions, the fair saleable
value of the assets of the Company, LFC and the Operating Subsidiary
exceeds the amount that will be required to be paid on or in respect of
their respective debts and other liabilities (including, without
limitation, contingent liabilities) as they become absolute and matured.
The assets of the Company, LFC and the Operating Subsidiary after giving
effect to the Transactions do not constitute unreasonably small capital to
carry out their businesses as conducted or as proposed to be conducted. The
Company, LFC and the Operating Subsidiary do not intend to, nor do they
believe that they will, incur debts beyond their ability to pay such debts
as they mature. Upon the issuance of the Notes and the Subsidiary
Guarantees and after giving effect to the New Credit Facility and the
Transactions, the present fair saleable value of the assets of the Company,
LFC and the Operating Subsidiary, as the case may be, will exceed the
respective amounts that will be required to be paid on or in respect of
their respective existing debts and other liabilities (including, without
limitation, contingent liabilities) as they become absolute and matured.
The assets of the Company, LFC and the Operating Subsidiary, upon issuance
of the Notes and the Subsidiary Guarantees and after giving effect to the
New Credit Facility and the Transactions, will not constitute unreasonably
small capital to carry out their respective businesses as now conducted,
including, without limitation, their respective capital needs, taking into
account their respective capital requirements and capital availability.
(dd) Except as set forth in the Offering Memorandum, none of the
Operative Entities (i) has violated any federal, state, local or foreign
environmental safety or similar law or regulation applicable to its
business relating to the protection of human health and safety or the
environment or imposing liability or standards of conduct concerning any
Hazardous Materials ("Environmental Laws"), (ii) lacks any permits,
licenses or other approvals required of it under applicable Environmental
Laws to own, lease and operate its respective properties and to conduct its
business as described in the Offering Memorandum, (iii) is violating any
terms and conditions of any such permit, license or approval or (iv) has
permitted to occur any event that allows, or after notice or lapse of time
would allow, the revocation or termination of any such permit, license or
approval or that results in any impairment of their rights thereunder that
, with respect to any matter specified in clause (i), (ii), (iii) or (iv)
above, could reasonably be expected to have, singly or in the aggregate, a
Material Adverse Effect. The term "Hazardous Material" means (a) any
"hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (b) any
"hazardous waste" as defined by the Resource Conservation and Recovery Act,
as
11
amended, (c) any petroleum or petroleum product, (d) any polychlorinated
biphenyl and (e) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material, waste or substance regulated under or within the
meaning of any other Environmental Law.
(ee) (i) Except as set forth in the Offering Memorandum, each of
the Operative Entities has, and each of the Company, LFC and the Operating
Subsidiary will have after giving effect to the Transactions, all
certificates, consents, exemptions, orders, permits, franchises, licenses,
authorizations, or other approvals (each an "Authorization") of and from,
and has made all declarations and filings with and notices to, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary or required to
own, lease, license, operate and use its properties and assets and to
conduct its business in the manner described in the Offering Memorandum,
except to the extent that the failure so to obtain or file would not,
singly or in the aggregate, have a Material Adverse Effect, (ii) all such
Authorizations are or will be valid and in full force and effect except to
the extent that the failure to be valid and in full force and effect would
not, whether singly or in the aggregate, have a Material Adverse Effect and
(iii) the Operative Entities are in compliance with the terms and
conditions of all such Authorizations and with the rules and regulations of
the regulatory authorities and governing bodies having jurisdiction with
respect thereto except to the extent that such failure to comply would not,
singly or in the aggregate, have a Material Adverse Effect.
(ff) Each of the Company, LFC and the Operating Subsidiary is in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
("ERISA"); no "reportable event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in ERISA) for which the Company,
LFC or the Operating Subsidiary would have any liability; none of the
Company, LFC or the Operating Subsidiary has incurred nor does it expect to
incur liability, whether as a result of the Transactions or otherwise,
under (i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which
the Company, LFC or the Operating Subsidiary would have any liability,
whether as a result of the Transactions or otherwise, that is intended to
be qualified under Section 401(a) of the Code is so qualified in all
material respects and, to the knowledge of the Company, LFC or the
Operating Subsidiary, nothing has occurred, whether by action or by failure
to act, which would cause the loss of such qualification.
(gg) No organized labor disturbance by the employees of the
Operative Entities exists or, to the knowledge of the Company, LFC or the
Operating Subsidiary, is imminent which could reasonably be expected to
have a Material Adverse Effect.
(hh) Each of the Operative Entities has filed all federal, state
and local income and franchise tax returns required to be filed through the
date hereof and have paid, or made adequate reserve or provision for the
payment of, all taxes due thereon, and
12
no tax deficiency has been determined adversely to any of the Operative
Entities which has had (nor does the Company, LFC or the Operating
Subsidiary have any knowledge of any tax deficiency which, if determined
adversely to any of the Operative Entities, might have) a Material Adverse
Effect, except as set forth or contemplated in the Preliminary Offering
Memorandum, as of its date, or the Offering Memorandum.
(ii) Each of the Operative Entities (i) makes and keeps accurate
books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for their assets is compared with existing assets
at reasonable intervals.
(jj) None of the Company, LFC or the Operating Subsidiary, nor,
to the knowledge of the Company, LFC or the Operating Subsidiary, any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company, LFC or the Operating Subsidiary, 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 provision
of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(kk) None of the Company, LFC or the Operating Subsidiary is, or
will be upon the issuance and sale of the Notes and the application of net
proceeds therefrom as described in the Offering Memorandum, an "investment
company" within the meaning of such term under the Investment Company Act
of 1940 and the rules and regulations of the Commission thereunder.
(ll) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Senior Subordinated Notes are
listed on any national securities exchange registered under Section 6 of
the Exchange Act or quoted on an automated inter-dealer quotation system.
(mm) None of the Company, its affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act ("Regulation D")) or any
person acting on its or their behalf, has, directly or through any agent
(provided that no representation is made as to the Initial Purchasers or
any person acting on their behalf), (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) that is or will be integrated with the
offering and sale of the Senior Subordinated Notes in a manner that would
require the registration of the Senior Subordinated Notes under the
Securities Act or (ii) engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with
the offering of the Senior Subordinated Notes.
13
(nn) None of the Company, its affiliates or any person acting on
their behalf, has engaged in any directed selling efforts (as that term is
defined in Regulation S under the Securities Act ("Regulation S")) with
respect to the Notes and the Company and its affiliates and any person
acting on its or their behalf have complied with the offering restrictions
requirement of Regulation S provided that no representation is made as to
the Initial Purchasers or any person acting on their behalf.
(oo) Neither the Company nor any of its affiliates has taken, nor
will take, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or manipulation
of the price of the Senior Subordinated Notes.
(pp) Each of the Preliminary Offering Memorandum, together with
any amendment or supplement thereto, and the Final Offering Memorandum,
together with any amendment or supplement thereto, as of their respective
dates, contain the information specified in, and meet the requirements of,
Rule 144A(d)(4) under the Act.
(qq) None of the Company, LFC or the Operating Subsidiary has
taken, and none of them will take, any action that might cause this
Agreement or the issuance or sale of the Notes or the Subsidiary Guarantees
to violate Regulations G, T, U or X of the Board of Governors of the
Federal Reserve System or analogous foreign laws and regulations.
2. Purchase of the Senior Subordinated Notes by the Initial
Purchasers.
On the basis of the representations and warranties contained in, and
subject to the terms and conditions of, this Agreement, the Company agrees to
sell to the Initial Purchasers and each of the Initial Purchasers severally and
not jointly agrees to purchase from the Company, the principal amount of Senior
Subordinated Notes as set forth opposite each Initial Purchaser's name on
Schedule I hereto, at a purchase price equal to 97% of the principal amount
thereof.
The Company shall not be obligated to deliver any of the Senior
Subordinated Notes to be delivered except upon payment for all the Senior
Subordinated Notes to be purchased as provided herein or in the Offering
Memorandum.
3. Sale and Resale of the Senior Subordinated Notes by the Initial
Purchasers.
Each of the Initial Purchasers represents and warrants to the Company
that it will offer the Senior Subordinated Notes for resale only upon the terms
and conditions set forth in this Agreement and in the Offering Memorandum. Each
of the Initial Purchasers hereby represents and warrants to, and agrees with,
the Company that such Initial Purchaser (i) is an institutional Accredited
Investor within the meaning of Rule 501 under the Securities Act, (ii) is
purchasing the Senior Subordinated Notes pursuant to a private sale exempt from
registration under the Securities Act, (iii) will not solicit offers for, or
offer or sell, the Senior Subordinated Notes by means of any form of general
solicitation or general advertising or in any manner involving a
14
public offering within the meaning of Section 4(2) of the Securities Act, and
(iv) will solicit offers for the Senior Subordinated Notes only from, and will
offer, sell or deliver the Senior Subordinated Notes, as part of their initial
offering, only to (A) persons in the United States whom the Initial Purchaser
reasonably believes to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the Securities Act, as such
rule may be amended from time to time ("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 represented to the Initial
Purchaser 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, (B) to a limited number of other institutional accredited investors
("Accredited Investors") as defined in Rule 501(a)(1)(2), (3) or (7), in the
case of (A) and (B), in transactions under Rule 144A or Regulation D in private
sales exempt from registration under the Securities Act and (C) outside the
United States to persons other than U.S. persons (as defined in Regulation S) in
reliance on Regulation S.
4. Delivery of and Payment for the Senior Subordinated Notes.
Delivery of and payment for the Senior Subordinated Notes shall be
made at the office of Xxxxxxx Xxxx & Xxxxxxxxx, Citicorp Center, 000 X. 00xx
Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New York City time, on January 24,
1997 or at such other date or place as shall be determined by agreement between
the Initial Purchasers and the Company. This date and time are sometimes
referred to as the "Closing Date." On the Closing Date, the Company shall
deliver or cause to be delivered the Senior Subordinated Notes to the Initial
Purchasers for the account of the Initial Purchasers against payment to or upon
the order of the Company of the purchase price by wire transfer in federal
(same-day) funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of the Initial Purchasers hereunder. Upon delivery, except for the
Temporary Regulation S Global Note, which shall be in temporary form, the Senior
Subordinated Notes shall be in definitive fully registered form and registered
in such names and in such denominations as the Initial Purchasers shall request
in writing not less than two full business days prior to the Closing Date. For
the purpose of expediting the checking and packaging of the Senior Subordinated
Notes, the Company shall make the Senior Subordinated Notes available for
inspection by the Initial Purchasers in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the Closing Date.
5. Further Agreements of the Company. The Company agrees:
(a) To furnish to the Initial Purchasers, without charge, as
many copies of the Preliminary Offering Memorandum and the Final Offering
Memorandum and any supplements and amendments thereto as they may
reasonably request.
(b) Prior to making any amendment or supplement to the Offering
Memorandum, the Company shall furnish a copy thereof to the Initial
Purchasers and counsel to the Initial Purchasers and will not 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.
15
(c) If, at any time prior to completion of the distribution of
the Senior Subordinated Notes by the Initial Purchasers to 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 not misleading in light of the circumstances existing at the time
it is delivered to a purchaser, 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
and to furnish to the Initial Purchasers such number of copies as they may
reasonably request.
(d) So long as any Senior Subordinated Notes are outstanding and
are "Restricted Securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Senior Subordinated Notes and
prospective purchasers of Senior Subordinated Notes 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.
(e) For a period of five years following the Closing Date, to
furnish to the Initial Purchasers copies of any annual reports, quarterly
reports and current reports filed 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 Notes
pursuant to the Indenture.
(f) To use its reasonable best efforts to qualify the Notes for
sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers reasonably designate and to continue such qualifications
in effect so long as required for the distribution of the Notes. The
Company will also arrange for the determination of the eligibility for
investment of the Notes under the laws of such jurisdictions as the Initial
Purchasers reasonably request. Notwithstanding the foregoing, the Company
shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to file a general consent
to service of process in any jurisdiction.
(g) To use its reasonable best efforts to permit the Senior
Subordinated Notes to be designated Private Offerings, Resales and Trading
through Automated Linkages Market ("PORTAL") securities in accordance with
the rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL market and to permit the
Senior Subordinated Notes to be eligible for clearance and settlement
through The Depository Trust Company ("DTC").
(h) Not to, and will cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the
16
Securities Act) in a transaction that could be integrated with the sale of
the Senior Subordinated Notes in a manner which would require the
registration under the Securities Act of the Senior Subordinated Notes.
(i) Except following the effectiveness of any Registration
Statement (as defined in the Registration Rights Agreement) and except for
such offers as may be made as a result of, or subsequent to, filing such
Registration Statement or amendments thereto prior to the effectiveness
thereof, not to, and will cause its affiliates not to, solicit any offer to
buy or offer to sell the Senior Subordinated Notes by means of any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
(j) To apply the net proceeds from the sale of the Senior
Subordinated Notes as set forth in the Offering Memorandum.
(k) To take such steps as shall be necessary to ensure that
neither the Company nor any Subsidiary shall become an "investment company"
within the meaning of such term under the Investment Company Act and the
rules and regulations of the Commission thereunder.
(l) To do all things necessary to satisfy the closing conditions
set forth in Section 7 hereof.
(m) As promptly as practicable following the Closing Date to
take such action as shall be necessary to duly qualify each of the Company
and its subsidiaries to do business and to be in good standing as a foreign
corporation in each jurisdiction in which its ownership or leasing of
property or the conduct of its business requires such qualification.
6. Expenses. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Notes and any duties and
taxes payable in that connection; (b) the costs incident to the preparation and
printing of the Preliminary Offering Memorandum and the Offering Memorandum and
any amendments and exhibits thereto; (c) the costs of distributing the
Preliminary Offering Memorandum and the Final Offering Memorandum and any
amendment or supplement thereto or any document incorporated by reference
therein; (d) the costs of reproducing and distributing the Operative Agreements;
(e) the fees and expenses of qualifying the Notes under the securities laws of
the several jurisdictions as provided in Section 5(f) and of preparing, printing
and distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Initial Purchasers); (f) the costs incident to the preparation,
printing and delivery of the certificates representing the Notes; (g) the fees
and disbursements of the Company's counsel and accountants; (h) the fees and
expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of any counsel for the Trustee in connection with the Notes, the
Indenture and any other Operative Agreements to which the Trustee is a party;
(i) the fees paid to rating agencies in connection with the rating of the Notes;
(j) the costs and expenses of DTC and its nominee, including its book-entry
system, (k) all expenses and listing fees incurred
17
in connection with the application for quotation of the Senior Subordinated
Notes on the PORTAL market; and (l) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement provided
that, except as provided in this Section 6(e) and in Section 10, the Initial
Purchasers shall pay their own costs and expenses, including the costs and
expenses of their counsel.
7. Conditions of Initial Purchasers' Obligations.
The respective obligations of the Initial Purchasers hereunder are
subject to the following terms and conditions:
(a) No Initial Purchaser 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 opinion of Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the
Initial Purchasers, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) All of the representations and warranties of the Company,
LFC and the Operating Subsidiary contained in this Agreement shall be true
and correct on the date hereof and on the Closing Date with the same force
and effect as if made on and as of the date hereof and the Closing Date,
respectively. The Company, LFC and the Operating Subsidiary shall have
performed or complied in all material respects with all of the agreements
herein contained and required to be performed or complied with by them at
or prior to the Closing Date.
(c) The Final Offering Memorandum shall have been printed and
copies distributed to the Initial Purchasers not later than 10:00 a.m., New
York City time, on the business day following the date of this Agreement or
at such later date and time as to which the Initial Purchasers may agree,
and no stop order suspending the qualification or exemption from
qualification of the Senior Subordinated Notes in any jurisdiction referred
to in Section 5(f) shall have been issued and no proceeding for that
purpose shall have been commenced or shall be pending or threatened.
(d) All corporate proceedings and other legal matters incident
to the authorization, form and validity of all of the Operative Agreements,
the Notes, the Offering Memorandum and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
satisfactory in all material respects to counsel for the Initial
Purchasers, and the Company, LFC and the Operating Subsidiary shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(e) Weil, Gotshal & Xxxxxx LLP, counsel for the Company, LFC and
the Operating Subsidiary, shall have furnished to the Initial Purchasers
its written opinion, as counsel to the Company, LFC and the Operating
Subsidiary, addressed to the Initial
18
Purchasers and dated the Closing Date, substantially in the form set forth
in Schedule II hereto.
(f) You shall have received on the Closing Date a letter from
Xxxxx Xxxx & Xxxxxxxx granting permission to the Initial Purchasers to rely
on opinion delivered pursuant to Section 9.2(c) of the Contribution
Agreement.
(g) You shall have received on the Closing Date a letter from
the General Counsel of Xxxx-Xxxxxx Corporation granting permission to the
Initial Purchasers to rely on opinions delivered pursuant to Section 9.2(d)
of the Contribution Agreement.
(h) You shall have received on the Closing Date a letter from
Prickett, Jones, Xxxxxxx, Xxxxxxx and Xxxxxx granting permission to the
Initial Purchasers to rely on opinions delivered pursuant to Section 9.3(d)
of the Contribution Agreement.
(i) You shall have received on the Closing Date an opinion of
Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the Initial Purchasers, dated the
Closing Date and addressed to you, in form and substance reasonably
satisfactory to you.
(j) You shall have received on the Closing Date letters from
Weil, Gotshal & Xxxxxx LLP granting permission to the Initial Purchasers to
rely on opinions delivered pursuant to Section 5.1 of the Credit Agreement,
dated as of January 1997, among the Company, Xxxxxx Commercial Paper Inc.,
NationsBanc Capital Markets, Inc. and Nationsbank of Texas, N.A.
(k) [Reserved.]
(l) With respect to the letters of Ernst & Young LLP and
Deloitte & Touche LLP delivered to the Initial Purchasers concurrently with
the execution of this Agreement (the "initial letter"), the Company shall
have furnished to the Initial Purchasers a letter (as used in this
paragraph, the "bring-down letter") of each of such accountants, addressed
to the Initial Purchasers and dated the Closing Date (i) confirming that
they are independent public accountants under the guidelines of the AICPA,
(ii) stating, as of the date of the bring-down letter, the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(m) The Company, the Guarantors party thereto and the Trustee
shall have entered into the Indenture and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
(n) [Reserved.]
(o) The Company, the Guarantors and the Initial Purchasers shall
have entered into the Registration Rights Agreement and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
19
(p) The Company, the Guarantors and each other party thereto
shall have entered into the New Credit Facility and the Initial Purchasers
shall have received counterparts, conformed as executed, thereof and of all
other documents and agreements entered into in connection therewith,
including without limitation, the Senior Guarantees and at least $32.4
million shall be available for borrowing under the New Credit Facility.
(q) The Company, LFC, the Operating Subsidiary and each other
party thereto shall have entered into the Contribution Agreement and the
Initial Purchasers shall have received counterparts, conformed as executed,
thereof and of all other documents and agreements entered into in
connection therewith, including without limitation, the Stockholders
Agreement.
(r) The Company and the Operating Subsidiary shall have obtained
such cargo, automobile and general liability insurance as described in the
Offering Memorandum and such insurance shall be in full force and effect on
the Closing Date.
(s) All material conditions set forth in Article IX of the
Contribution Agreement shall have been satisfied.
(t) The consummation of the Transactions shall have occurred
concurrently with the purchase and sale hereunder.
(u) The Federal Reserve Bank of New York shall have informed the
Company that there shall be no interruption in the business of the Company
or its subsidiaries as a result of the Transactions.
(v) The Company, LFC and the Operating Subsidiary shall have
each furnished to the Initial Purchasers a certificate, dated the Closing
Date, of its Chairman of the Board or President and its Chief Financial
Officer stating that:
(i) the representations and warranties of the Company,
LFC and the Operating Subsidiary, as applicable, in Section 1 are true
and correct on the Closing Date with the same force and effect as if
made on the Closing Date; the Company, LFC and the Operating
Subsidiary, as applicable, have performed or complied in all material
respects with all their respective agreements contained herein; and
the conditions set forth in Section 7 have been fulfilled in all
material respects; and
(ii) the has reviewed the Offering Memorandum and, in his
opinion (A) as of the Closing Date, the Offering Memorandum 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 to
make the statements therein, in light of the circumstances under which
they were made, not misleading, and (B) 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 and was not so set
forth.
20
(w) (i) None of the Operative Entities shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Offering Memorandum losses or
interferences with their businesses from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any organized labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Offering Memorandum or (ii) since such
date there shall not have been any change in the capital stock or long-term
debt of the Operative Entities or any change, or any development involving
a prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Operative Entities, taken as a whole, otherwise than as set forth or
contemplated in the Offering Memorandum, the effect of which, in any such
case described in clause (i) or (ii), is, in the reasonable judgment of the
Initial Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Senior
Subordinated Notes being delivered on the Closing Date on the terms and in
the manner contemplated herein or in the Offering Memorandum.
(x) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, have a Material
Adverse Effect; no action, suit or proceeding shall have been commenced and
be pending against or affecting or, to the best knowledge of the Company,
threatened against, the Company, LFC or the Operating Subsidiary or any of
the assets or operations to be acquired in the Transactions before any
court or arbitrator or any governmental body, agency or official that, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect; and no stop order shall have been issued by the Commission
or any governmental agency of any jurisdiction referred to in Section 5(f)
preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or which could reasonably be expected to have a
Material Adverse Effect.
(y) 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 American Stock
Exchange or in the over-the-counter market shall have been suspended or
materially limited, or minimum prices shall have been established on such
exchange by the Commission, or by such exchange or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities, (iii)
the United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or there
shall have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the reasonable judgment of the Initial
Purchasers, impracticable or inadvisable to proceed with the offering or
delivery of the Senior Subordinated Notes being delivered on the Closing
Date on the terms and in the manner contemplated in the Offering
Memorandum.
21
(z) Subsequent to the execution and delivery of this Agreement,
(i) no downgrading shall have occurred in the rating accorded the Senior
Subordinated Notes by a nationally recognized statistical rating
organization, as that term is defined by the Commission for purposes of
Rule 436(g)(2) of the rules and regulations of the Commission (the "Rules
and Regulations"), and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Senior Subordinated Notes.
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.
8. Indemnification and Contribution.
(a) The Company, LFC and the Operating Subsidiary, jointly and
severally, agree to indemnify and hold harmless each Initial Purchaser and
each person, if any, who controls any Initial Purchaser within the meaning
of the Securities Act or the Securities Exchange Act of 1934 (the "Exchange
Act"), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to,
any loss, claim, damage, liability or action relating to purchases and
sales of Senior Subordinated Notes), to which such Initial Purchaser or
controlling person may become subject, under the Securities Act or
otherwise, 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 Final Offering Memorandum or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (iii) any act or failure to act or any alleged act or failure
to act by any Initial Purchaser in connection with, or relating in any
manner to, the Notes or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii)
above (provided that the Company, LFC and the Operating Subsidiary shall
not be liable under this clause (iii) to the extent that it is determined
in a final judgment by a court of competent jurisdiction that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Initial Purchaser
through its gross negligence or willful misconduct), and shall reimburse
each Initial Purchaser and each such controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Initial
Purchaser or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
the Company, LFC and the Operating Subsidiary 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, any untrue statement or alleged
untrue statement or omission or alleged omission made in the Preliminary
Offering Memorandum or Final Offering Memorandum or in any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company, LFC
22
and the Operating Subsidiary by or on behalf of any Initial Purchaser
specifically for inclusion therein. The foregoing indemnity agreement is in
addition to any liability which the Company, LFC and the Operating
Subsidiary may otherwise have to any Initial Purchaser or to any
controlling person of such Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless each of the Company, LFC and the Operating
Subsidiary, each of their respective directors, each of their respective
officers and each person, if any, who controls either the Company, LFC or
the Operating Subsidiary within the meaning of the Securities Act or the
Exchange Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which either the Company,
LFC, the Operating Subsidiary or any such director, officer or controlling
person may become subject, under the Securities Act or otherwise, 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 Final 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 to make the statements therein, in 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 written information furnished to the Company, LFC and the Operating
Subsidiary by or on behalf of that Initial Purchaser specifically for
inclusion therein, and shall reimburse the Company, LFC and the Operating
Subsidiary and any such director, officer or controlling person for any
legal or other expenses reasonably incurred by the Company, LFC and the
Operating Subsidiary or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Initial Purchaser may otherwise have to the Company, LFC and the
Operating Subsidiary or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 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 under this Section 8, 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 8 except to the extent it has been materially prejudiced by such
failure and, provided further, that the failure to notify the indemnifying
party pursuant to this Section 8 shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section
8. 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
23
indemnified party under this Section 8 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 any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment thereof has been specifically
authorized by the indemnifying party in writing, (ii) such indemnified
party shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to
those available to the indemnifying party and in the reasonable judgment of
such counsel it is advisable for such indemnified party to employ separate
counsel or (iii) the indemnifying party has failed to assume the defense of
such action and employ counsel reasonably satisfactory to the indemnified
party, in which case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense
of the indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (and local counsel) at
any time for all such indemnified parties, which firm shall be designated
in writing by the Initial Purchasers, if the indemnified parties under this
Section 8 consist of the Initial Purchasers or any of their controlling
persons, or by the Company, if the indemnified parties under this Section 8
consist of the Company, LFC, the Operating Subsidiary or any of their
respective directors, officers or controlling persons. Each indemnified
party, as a condition of the indemnity agreements contained in Sections
8(a) and 8(b), shall use its best 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 of 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.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
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, LFC and the
Operating Subsidiary on the one hand and the Initial Purchasers on the
other from the offering of the Senior Subordinated Notes 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, LFC and the Operating Subsidiary on the
24
one hand and the Initial Purchasers on the other with respect to the
statements or omissions which 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,
LFC and the Operating Subsidiary 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 Senior
Subordinated Notes purchased under this Agreement (before deducting
expenses) received by the Company, on the one hand, and the total
underwriting discounts and commissions received by the Initial Purchasers
with respect to the Senior Subordinated Notes purchased under this
Agreement, on the other hand, bear to the total gross proceeds from the
offering of the Senior Subordinated Notes under this Agreement, in each
case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied
by the Company, LFC and the Operating Subsidiary or the Initial Purchasers,
the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company, LFC, the Operating Subsidiary and the Initial
Purchasers agree that it would not be just and equitable if contributions
pursuant to this Section 8(d) were to be determined by pro rata allocation
or by any other method of allocation which 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 8(d) shall
be deemed to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at
which the Senior Subordinated Notes purchased by it and sold to investors
in exempt resales 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 11 of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The parties hereto confirm and agree that the statements
with respect to the offering of the Senior Subordinated Notes set forth in
the last paragraph on the cover page, the stabilization legend on the
inside cover page and under the caption "Plan of Distribution" in the
Offering Memorandum constitute the only information furnished in writing to
the Company by or on behalf of the Initial Purchasers specifically for
inclusion in the Offering Memorandum.
9. Termination.
(a) The obligations of the Initial Purchasers hereunder may be
terminated by the Initial Purchasers by notice given to and received by the
Company prior to delivery of and payment for the Senior Subordinated Notes
if, prior to that time, any of the events described in Sections 7(w) and
7(y) shall have occurred or if the Initial
25
Purchasers shall decline to purchase the Senior Subordinated Notes for any
reason permitted under this Agreement.
(b) If, on the Closing Date, the Initial Purchasers shall
default in the performance of their obligations under this Agreement, this
Agreement shall terminate without liability on the part of the Company, LFC
and the Operating Subsidiary, except that the Company will continue to be
liable for the payment of expenses to the extent set forth in Section 6 and
except that the provisions of Section 8 shall not terminate and shall
remain in full force and effect.
10. Reimbursement of Initial Purchasers' Expenses. If (a) the
Company, LFC or the Operating Subsidiary shall fail or refuse to comply with the
terms or to fulfill any of the conditions of this Agreement or (b) the Initial
Purchasers shall decline to purchase the Senior Subordinated Notes for any
reason permitted under this Agreement (other than termination of this Agreement
pursuant to Section 7(w) or 7(y)), the Company shall reimburse the Initial
Purchasers for the reasonable fees and expenses of its counsel and for such
other out-of-pocket expenses as shall have been incurred by them in connection
with this Agreement and the proposed purchase of the Senior Subordinated Notes,
and upon demand the Company shall pay the full amount thereof to the Initial
Purchasers.
11. 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, telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 000-000-0000), with a copy to Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. X'Xxxxxxxx (Fax: 212-
000-0000);
(b) if to the Company, LFC or the Operating Subsidiary, shall be
delivered or sent by mail, telex or facsimile transmission to the address
of the Company set forth in the Offering Memorandum, Attention: Chief
Financial Officer (Fax: 000-000-0000) with a copy to Xxxx Xxxxxxx and
Xxxxxx LLP, 000 Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention:
Xxxx X. Xxxxx (Fax 000-000-0000);
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.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
LFC and the Operating Subsidiary and their respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except that (A) the representations, warranties, indemnities and
agreements of the Company, LFC and the Operating Subsidiary contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Initial Purchasers within the meaning of Section 15 of
the Securities Act or Section 20 of the
26
Exchange Act and (B) the indemnity agreement of the Initial Purchasers contained
in Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of each of the Company, LFC and the Operating Subsidiary, officers of
each of the Company, LFC and the Operating Subsidiary and any person controlling
the Company, LFC or the Operating Subsidiary within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act. Nothing in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 12, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
13. Survival. The respective indemnities, representations,
warranties and agreements of the Company, LFC and the Operating Subsidiary and
the Initial Purchasers contained in this Agreement or made by or on behalf on
them, respectively, pursuant to this Agreement, shall survive the delivery of
and payment for the Senior Subordinated Notes and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.
14. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF NEW YORK.
16. Counterparts. This Agreement may be executed in one or more
counterparts 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.
17. 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.
27
If the foregoing correctly sets forth the agreement between the
Company and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours.
XXXXXX, FARGO & CO.
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
Title: Vice President
LOOMIS HOLDING CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
Title: Vice President
XXXXXX ARMORED INC.
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
-----------------------------------
Name: Xxxxx X. Xxxxxxxx, Xx.
Title: Vice President
Accepted:
XXXXXX BROTHERS INC.
By: /s/ Xxxx X. Xxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
NATIONSBANC CAPITAL MARKETS, INC.
By: /s/ Xxxxxxx X. Xxxxx Xx.
-----------------------------
Name: Xxxxxxx X. Xxxxx Xx.
Title: Senior V.P and Director
SCHEDULE I
Principal Amount of
Initial Purchaser Notes to be Purchased
----------------- ----------------------
Xxxxxx Brothers Inc. $ 72,250,000
NationsBanc Capital Markets, Inc. 12,750,000
----------------------
$ 85,000,000
======================
29
SCHEDULE II
Form of Opinion of Weil, Gotshal & Xxxxxx LLP
January 24, 1997
Xxxxxx Brothers Inc.
NationsBanc Capital Markets, Inc.
c/x Xxxxxx Brothers Inc.
Three Word Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to Xxxxxx, Fargo & Co., a Delaware
corporation (the "Company"), Loomis Holding Corporation (to be renamed LFC
Holding Corporation), a Delaware corporation ("LFC"), and Xxxxxx Armored Inc.
(to be renamed Xxxxxx, Fargo & Co.), a Texas corporation (the "Operating
Subsidiary"), in connection with the preparation, authorization, execution and
delivery of the Purchase Agreement (the "Purchase Agreement"), dated January 17,
1997, entered into among the Company, LFC, and the Operating Subsidiary, and
Xxxxxx Brothers Inc. and NationsBanc Capital Markets, Inc. (together, the
"Initial Purchasers"), and the consummation of the transactions contemplated
thereby, including the issuance and sale by the Company to the Initial
Purchasers of $85,000,000 aggregate principal amount of 10% Senior Subordinated
Notes due 2004 (the "Notes"). Capitalized terms defined in the Purchase
Agreement and used but not otherwise defined herein are used herein as so
defined in the Purchase Agreement.
In so acting, we have examined executed copies of the following:
(a) the Purchase Agreement;
(b) the Notes delivered on the Closing Date;
(c) the Indenture (the "Indenture"), dated as of January 24, 1997,
among the Company, LFC, the Operating Subsidiary, Xxxxx Fargo
Armored Service Corporation of Texas (to be renamed LFC Armored
of Texas Inc.), a Texas corporation ("LFC of Texas"), and Xxxxx
Fargo Armored Service Corporation of Puerto Rico (to be renamed
Xxxxxx, Fargo & Co. of Puerto Rico), a Tennessee corporation
("LFC of Puerto Rico"), and Marine Midland Bank, as trustee (the
"Trustee");
(d) the Registration Rights Agreement (the "Registration Rights
Agreement"), dated as of January 24, 1997, among the Company,
LFC, the Operating Subsidiary, LFC of Texas, LFC of Puerto Rico
and the Initial Purchasers;
(e) the Contribution Agreement (the "Contribution Agreement"), dated
as of November 28, 1996, among the Company, LFC, the Operating
Subsidiary, Xxxxx Fargo Armored Service Corporation ("Xxxxx Fargo
Armored"), Xxxx-Xxxxxx Security Corporation and the Loomis
Stockholders Trust;
(f) the Stockholders Agreement (the "Stockholders Agreement"), dated
as of January 24, 1997, among the Company, the Loomis
Stockholders Trust, Xxxxx Fargo Armored and Xxxxxxx Partners,
L.P.; and
(g) the Credit Agreement (the "New Credit Facility"), dated as of
January 24, 1997, among the Company, the banks lenders thereto,
and Xxxxxx Commercial Paper, Inc., NationsBanc Capital Markets,
Inc. and NationsBanc of Texas, N.A., as agents.
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records, agreements, documents
and other instruments, and such certificates or comparable documents of public
officials and of officers and representatives of each of the Company, LFC and
the Operating Subsidiary and have made such inquiries of such officers and
representatives as we have deemed relevant and necessary as a basis for the
opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to all questions
of fact material to this opinion that have not been
2
independently established, we have relied upon certificates or comparable
documents of officers and representatives of each of the Company, LFC and the
Operating Subsidiary and upon the representations and warranties of the Company
contained in the Purchase Agreement. As used herein "to our knowledge" or "of
which we are aware" means the conscious awareness of facts or other information
by any lawyer in our firm actively involved in negotiating the transactions
contemplated by the Operative Agreements.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as described in the Final Offering Memorandum.
2. The authorized capital stock of the Company consists of
20,000,000 shares of common stock, $0.01 par value per share, and 1,000,000
shares of preferred stock, $0.01 par value per share. Upon consummation of the
Transactions, there will be 10,000,000 shares of common stock issued and
outstanding, and all of such outstanding shares of the Company's capital stock
will have been duly authorized and validly issued, and will be fully paid and
nonassessable.
3. Each of LFC and the Operating Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and the State of Texas, respectively, and each of LFC and the
Operating Subsidiary has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as described in
the Final Offering Memorandum. Upon consummation of the Transactions, all of the
outstanding shares of capital stock of LFC will be owned of record by the
Company, and all of the outstanding shares of capital stock of the Operating
Subsidiary will be owned of record by LFC, in each case free and clear, to our
knowledge, of all liens, claims, limitations on voting rights, options, security
interests and other encumbrances other than those arising from the New Credit
Facility and will have been duly authorized and validly issued, and will be
fully paid and nonassessable. To our knowledge, there are no outstanding or
authorized options, warrants, calls, subscriptions, rights, commitments or any
other agreements of any character obligating LFC or the Operating Subsidiary to
issue any shares of capital stock of LFC or the Operating Subsidiary or any
securities convertible into, exchangeable for or evidencing the right to
purchase or subscribe for any shares of such stock.
3
4. To our knowledge and other than as set forth in the Final
Offering Memorandum, there is no litigation, proceeding or governmental
investigation pending or overtly threatened against the Company, LFC or the
Operating Subsidiary that, if determined adversely to the Company, LFC or the
Operating Subsidiary, would have a material adverse effect on the business,
operations or financial condition of the Company, LFC and the Operating
Subsidiary considered as a whole.
5. Each of the Company, LFC and the Operating Subsidiary has all
requisite corporate power and authority to execute and deliver the Purchase
Agreement and to perform its obligations thereunder. The execution, delivery and
performance of the Purchase Agreement by each of the Company, LFC and the
Operating Subsidiary and the consummation by each of the Company, LFC and the
Operating Subsidiary of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of each of the Company,
LFC and the Operating Subsidiary. The Purchase Agreement has been duly and
validly executed and delivered by each of the Company, LFC and the Operating
Subsidiary and (assuming the due authorization, execution and delivery thereof
by the Initial Purchasers) constitutes the legal, valid and binding obligation
of each of the Company, LFC and the Operating Subsidiary, enforceable against
each of them in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except that
rights to indemnification and contribution thereunder may be limited by federal
or state securities laws or public policy relating thereto.
6. Each of the Company, LFC and the Operating Subsidiary has all
requisite corporate power and authority to execute and deliver the Indenture and
to perform its obligations thereunder. The execution, delivery and performance
of the Indenture by each of the Company, LFC and the Operating Subsidiary and
the consummation by each of the Company, LFC and the Operating Subsidiary of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of each of the Company, LFC and the Operating
Subsidiary. The Indenture has been duly and validly executed and delivered by
each of the Company, LFC and the Operating Subsidiary and (assuming the due
authorization, execution and delivery thereof by the Trustee) constitutes the
legal, valid and binding obligation of each of the Company, LFC and the
Operation Subsidiary, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general
4
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
7. The Notes and the New Senior Subordinated Notes have been duly
authorized by the Company. The Notes, when executed by the Company and
authenticated by the Trustee in accordance with the terms of the Indenture and
delivered against receipt of payment therefor in accordance with the terms of
the Purchase Agreement, will be legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity) and
subject to the qualification that we express no opinion as to the effect on the
Notes of the laws of any jurisdiction other than federal law and the laws of the
States of New York and Texas wherein any purchaser of the Notes may be located
or wherein enforcement may be sought which limits the rate of interest legally
chargeable or collectible. Assuming that (i) authorization of the New Senior
Subordinated Notes had not been withdrawn and there had been no change in the
Certificate of Incorporation or Bylaws of the Company, (ii) the New Senior
Subordinated Notes were issued in the form attached to the Indenture as Exhibit
-------
A-3 on the date hereof, with no change in the form or content of the Indenture,
---
(iii) the Exchange Offer (as defined in, and contemplated by, the Registration
Rights Agreement) were completed on the date hereof in accordance with the
provisions and requirements of the Securities Act and the rules and regulations
promulgated thereunder and applicable interpretations thereof by the Securities
and Exchange Commission, (iv) the New Senior Subordinated Notes were duly
executed by the Company and authenticated by the Trustee, and (v) the New Senior
Subordinated Notes were duly delivered on the date hereof against receipt of
Notes surrendered in exchange therefor, the New Senior Subordinated Notes would
be legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and subject to the
qualification that we express no opinion as to the effect on the New Senior
Subordinated Notes of the laws of any jurisdiction other than federal law and
the laws of the States of New York and Texas wherein any purchaser of the Notes
may be located or wherein enforcement may be sought which limits the rate of
interest legally chargeable or collectible.
5
8. Each of the Company, LFC and the Operating Subsidiary has all
requisite corporate power and authority to execute and deliver the Registration
Rights Agreement and to perform its respective obligations thereunder. The
execution, delivery and performance of the Registration Rights Agreement by each
of the Company, LFC and the Operating Subsidiary and the consummation by each of
the Company, LFC and the Operating Subsidiary of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the part
of each of the Company, LFC and the Operating Subsidiary. The Registration
Rights Agreement has been duly and validly executed and delivered by each of the
Company, LFC and the Operating Subsidiary and (assuming the due authorization,
execution and delivery thereof by the Initial Purchasers) constitutes the legal,
valid and binding obligations of each of the Company, LFC and the Operating
Subsidiary, enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and except that rights to indemnification and contribution thereunder
may be limited by federal or state securities laws or public policy relating
thereto.
9. Each of the Company, LFC and the Operation Subsidiary has all
requisite corporate power and authority to execute and deliver the Contribution
Agreement and to perform its respective obligations thereunder. The execution,
delivery and performance of the Contribution Agreement by each of the Company,
LFC and the Operation Subsidiary and the consummation by each of the Company,
LFC and the Operating Subsidiary of the transactions contemplated thereby have
been duly authorized by all necessary corporate action on the part of each of
the Company, LFC and the Operation Subsidiary. The Contribution Agreement has
been duly and validly executed and delivered by each of the Company, LFC and the
Operating Subsidiary and (assuming the due authorization, execution and delivery
thereof by each of the other parties thereto) constitutes the legal, valid and
binding obligations of each of the Company, LFC and the Operating Subsidiary,
enforceable against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
10. The Company has all requisite corporate power and authority to
execute and deliver the Stockholders Agreement and to perform its obligations
thereunder. The execution, delivery and performance of the Stockholders
Agreement by the Company and the
6
consummation by the Company of the transactions contemplated thereby have been
duly authorized by all necessary corporate action on the part of the Company.
The Stockholders Agreement has been duly and validly executed and delivered by
the Company and (assuming the due authorization, execution and delivery thereof
by each of the other parties thereto) constitutes the legal, valid and binding
obligation of the Company, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity)
11. The Notes, the Indenture, the Subsidiary Guarantees, the
Registration Rights Agreement, the New Credit Facility, the Contribution
Agreement and the Stockholders Agreement conform in all material respects as to
legal matters to the descriptions thereof contained in the Final Offering
Memorandum.
12. The execution and delivery of the Purchase Agreement, the
Indenture, the Notes, the Subsidiary Guarantees, the Registration Rights
Agreement, the Contribution Agreement and the Stockholders Agreement, the
consummation of the transactions contemplated thereby and compliance by each of
the Company, LFC and the Operating Subsidiary with any of the provisions thereof
will not conflict with, result in a breach of, constitute a default under or
violate (i) any of the terms, conditions or provisions of the charter or bylaws
of the Company, LFC or the Operating Subsidiary, (ii) any of the terms,
conditions or provisions of any material document, agreement or other material
instrument to which the Company, LFC or the Operating Subsidiary is a party or
by which the Company, LFC or the Operating Subsidiary is bound of which we are
aware, (iii) any New York, Texas, Delaware corporate or federal law or
regulation (other than federal securities laws or regulations, as to which we
express no opinion in this paragraph 12, or state securities or blue sky laws or
regulations, federal antitrust laws, state and local regulation of armored car
transport services, firearms or guard services, or the Federal Motor Carrier
Act, as to which we express no opinion) or (iv) any judgment, writ, injunction,
decree, order or ruling of any court or governmental authority binding on the
Company, LFC or the Operating Subsidiary of which we are aware.
13. No consent, approval, waiver, license or authorization or other
action by or filing with any New York, Texas, Delaware corporate or federal
governmental authority is required in connection with the execution and delivery
by the Company, LFC or the Operating Subsidiary of the Purchase Agreement, the
Indenture, the Subsidiary Guarantees, the Registration Rights Agreement and the
Stockholders Agreement or the consummation by each of the Company, LFC and the
Operating Subsidiary of the
7
transactions contemplated thereby, except (i) those already obtained or made,
(ii) those required by federal securities laws or regulations, as to which we
express no opinion in this paragraph 13, and (iii) those required by state
securities or blue sky laws or regulations, state and local regulation of
armored car transport services, firearms or guard services, or the Federal Motor
Carrier Act, as to which we express no opinion.
14. Assuming the representations of the Initial Purchasers contained
in the Purchase Agreement are true, correct and complete and assuming compliance
by the Initial Purchasers with their covenants set forth in the Purchase
Agreement, it is not necessary in connection with the offer, sale and delivery
of the Notes to the Initial Purchasers pursuant to the Purchase Agreement or the
resales of the Notes by the Initial Purchasers in the manner contemplated by the
Purchase Agreement to register the Notes under the Securities Act, or to qualify
the Indenture under the Trust Indenture Act.
15. Each of the Company, LFC and the Operating Subsidiary is not and,
after giving effect to the issuance and sale of the Notes in accordance with the
terms of the Purchase Agreement and the application of the net proceeds
therefrom on substantially the terms described in the Final Offering Memorandum
under the caption "Use of Proceeds," will not be an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
We have participated in conferences with directors, officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, representatives of the Initial Purchasers and
representatives of counsel for the Initial Purchasers, at which conferences the
contents of the Final Offering Memorandum and related matters were discussed,
and, although we have not independently verified and are not passing upon and
assume no responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Offering Memorandum (except as specifically
set forth in paragraph 11 above), no facts have come to our attention that lead
us to believe that the Final Offering Memorandum, on the date thereof or on the
date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (it being understood
that we express no view with respect to the financial statements and related
notes, and the other financial, statistical and accounting data included in the
Final Offering Memorandum).
The opinions expressed herein are limited to the laws of the States of
New York and Texas, the corporate laws of the State of Delaware and the federal
laws of the United States, and we express no opinion as to the effect on
the matters covered by this letter of the laws of any other jurisdiction.
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The opinions expressed herein are rendered solely for your benefit in
connection with the transactions described herein. Those opinions may not be
used or relied upon by any other person, nor may this letter or any copies
thereof be furnished to a third party, filed with a governmental agency, quoted,
cited or otherwise referred to without our prior written consent; provided,
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however, that the opinions expressed herein may be relied upon by Marine Midland
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Bank, as Trustee under the Indenture, as if they were addressed and delivered to
them.
Very truly yours,
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