Exhibit 1.1
EXECUTION COPY
X'XXXXXXXX INDUSTRIES, INC.
X'XXXXXXXX INDUSTRIES HOLDINGS, INC.
as Issuers
X'XXXXXXXX INDUSTRIES - VIRGINIA, INC.
as Guarantor
$100,000,000
100,000 UNITS CONSISTING OF
133/8% SENIOR SUBORDINATED NOTES DUE 2009
OF X'XXXXXXXX INDUSTRIES, INC. AND
WARRANTS TO PURCHASE CAPITAL STOCK OF
X'XXXXXXXX INDUSTRIES HOLDINGS, INC.
PURCHASE AGREEMENT
November 23, 1999
XXXXXX BROTHERS INC.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
X'Xxxxxxxx Industries, Inc., a Delaware corporation (the "COMPANY") and
X'Xxxxxxxx Industries Holdings, Inc., a Delaware corporation ("HOLDINGS" and,
together with the Company, the "ISSUERS"), propose to issue and sell to Xxxxxx
Brothers Inc. (the "INITIAL PURCHASER"), upon the terms and considerations set
forth in this agreement ("AGREEMENT"), 100,000 Units (the "UNITS"), each
consisting of $1,000 principal amount of the Company's 133/8% Senior
Subordinated Notes due 2009 (the "SERIES A NOTES") and one warrant
(collectively, the "COMMON WARRANTS") to purchase 0.9327 shares of common stock
of Holdings (the "COMMON STOCK") and one warrant (collectively, the "PREFERRED
WARRANTS" and, together with the Common Warrants, the "WARRANTS") to purchase
0.3927 shares of series B junior preferred stock of Holdings (the "PREFERRED
STOCK"), in each case with a par value of $0.01 per share, and each at an
exercise price of $0.01 per share. Shares of Common Stock and Preferred Stock
issuable upon exercise of the Warrants are collectively referred to herein as
the "WARRANT SHARES." The Units, the Notes (as defined herein), the Warrants and
the Warrant Shares are collectively referred to herein as the "SECURITIES." The
Securities will have terms and provisions which are summarized in the Offering
Memorandum dated as of the date hereof. The Series A Notes are to be issued
pursuant to an indenture (the "INDENTURE") to be entered into among the Company,
the Guarantor (as defined below) and Norwest Bank Minnesota, NA, as trustee (the
"TRUSTEE"). The Series A Notes and the Exchange Notes (as defined herein)
issuable in exchange therefor
are collectively referred to as the "NOTES." The Notes will be guaranteed (the
"SUBSIDIARY GUARANTEE") by X'Xxxxxxxx Industries - Virginia, Inc. (the
"GUARANTOR"). The Common Warrants and the Preferred Warrants are to be issued
pursuant to separate warrant agreements, each to be dated the Closing Date
(collectively, the "WARRANT AGREEMENTS"), between Holdings and Norwest Bank
Minnesota, NA, as warrant agent (the "WARRANT AGENT"). The Units are to be
issued pursuant to a unit agreement to be dated the Closing Date (the "UNIT
AGREEMENT") among the Issuers, the Guarantor and Norwest Bank Minnesota, NA, as
unit agent (the "UNIT AGENT"). This is to confirm the agreement concerning the
purchase of the Units from the Issuers by the Initial Purchaser. Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Indenture.
Proceeds from the offering of the Securities will be used in connection
with the recapitalization (the "RECAPITALIZATION") pursuant to the terms of an
Amended and Restated Agreement and Plan of Merger, dated as of October 18, 1999
(the "AGREEMENT AND PLAN OF MERGER"), between OSI Acquisition, Inc. ("OSI") and
Holdings. As part of the Agreement and Plan of Merger, OSI shall be merged with
and into Holdings, with Holdings being the surviving corporation. The Agreement
and Plan of Merger, the related agreements governing the terms of the
Recapitalization and all closing documents relating to the closing of the
Recapitalization are herein referred to as the "RECAPITALIZATION DOCUMENTS."
The Units will be offered and sold to the Initial Purchaser pursuant to
an exemption from the registration requirements under the Securities Act of
1933, as amended (the "SECURITIES ACT"). The Company and the Guarantor have
prepared a preliminary offering memorandum, dated October 29, 1999 (the
"PRELIMINARY OFFERING MEMORANDUM"), setting forth information regarding the
Company, the Guarantor, the Notes and the Subsidiary Guarantee and the Issuers
and the Guarantor have prepared an offering memorandum, dated November 23, 1999
(the "OFFERING MEMORANDUM"), setting forth information regarding the Issuers,
the Guarantor, the Securities and the Subsidiary Guarantee. Any references
herein to the Preliminary Offering Memorandum and the Offering Memorandum shall
be deemed to include all documents incorporated by reference and all amendments
and supplements thereto. The Issuers and the Guarantor hereby confirm that they
have authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Units by the
Initial Purchaser.
It is understood and acknowledged that upon original issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the Securities Act, the Units (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION
FROM THE REGISTRATION
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REQUIREMENTS OF THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH
EVIDENCE, IF ANY, REQUIRED UNDER THE [INDENTURE] [WARRANT AGREEMENT]
PURSUANT TO WHICH THIS SECURITY IS ISSUED) AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE
HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) 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, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN
PURCHASER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."
You have advised the Issuers that you will make offers (the "EXEMPT
RESALES") of the Units purchased by you hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely (i) to persons whom you
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Securities Act ("QIBS") and (ii) outside the United States to
certain persons in offshore transactions in reliance on Regulation S
("REGULATION S") under the Securities Act (the persons specified in clauses (i)
and (ii) being referred to herein as the "ELIGIBLE PURCHASERS"). As used herein,
the terms "offshore transaction," "United States" and "U.S. person" have the
respective meanings given to them in Regulation S. You will offer the Units to
Eligible Purchasers initially at a price equal to $980.46 per Unit. Such price
may be changed at any time without notice.
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Holders (including subsequent transferees) of the Series A Notes will
have the registration rights described in the Offering Memorandum, which will be
set forth in the registration rights agreement related thereto (the "DEBT
REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchaser, for so long as such
Series A Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the
Registration Rights Agreements). Holders (including subsequent transferees) of
the Warrants and Warrant Shares will have the registration rights described in
the Offering Memorandum, which will be set forth in the registration rights
agreement (the "EQUITY REGISTRATION RIGHTS AGREEMENT" and, together with the
Debt Registration Rights Agreement, the "REGISTRATION RIGHTS AGREEMENTS"), to be
dated the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchaser, for so long as such Warrants and Warrant Shares constitute
Transfer Restricted Securities.
Pursuant to the Debt Registration Rights Agreement, the Company and the
Guarantor will agree to file with the Securities and Exchange Commission (the
"COMMISSION") under the circumstances set forth therein, (i) a registration
statement under the Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT")
relating to the Company's 133/8% Senior Subordinated Notes due 2009 (the
"EXCHANGE NOTES"), to be offered in exchange for the Series A Notes (such offer
to exchange being referred to as the "EXCHANGE OFFER") and the Subsidiary
Guarantee thereof and, if necessary, (ii) a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "SHELF REGISTRATION
STATEMENT" and, together with the Exchange Offer Registration Statement, the
"DEBT REGISTRATION STATEMENTS") relating to the resale by certain holders of the
Series A Notes and to use their commercially reasonable best efforts to cause
such Debt Registration Statements to be declared and remain effective and usable
for the periods specified in the Debt Registration Rights Agreement and to
consummate the Exchange Offer.
Pursuant to the Equity Registration Rights Agreement, Holdings will
agree to file a registration statement upon exercise of certain demand and
"piggy-back" registration rights of the holders of the Warrants (an "EQUITY
REGISTRATION STATEMENT") covering the resale of the Warrants and the resale of
the shares of Common Stock and Preferred Stock issuable upon exercise of the
Warrants by the holder thereof and to use all commercially reasonable best
efforts to cause such Equity Registration Statement to be declared effective and
to remain effective for the period specified in the Equity Registration Rights
Agreement. In addition, pursuant to a stockholders agreement (the "STOCKHOLDERS
AGREEMENT"), dated as of the Closing Date, among Holdings, Bruckmann, Xxxxxx,
Xxxxxxxx & Co., II, L.P. ("BRS"), the BRS Investors (as defined therein), the
Executives (as defined therein) and the Initial Purchaser, holders of the
Warrants and shares of Common Stock and Preferred Stock issuable upon exercise
of the Warrants shall also have certain "tag-along" rights and will be subject
to certain "drag-along" rights with respect to sales of Holdings' capital stock
by BRS and its affiliates to third parties.
Holders of Warrants will be required to deliver certain information to
be used in connection with the Equity Registration Statement within the time
periods specified in the Equity Registration Rights Agreement in order to have
their Warrants or related shares of capital stock included in the Equity
Registration Statement.
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This Agreement, the Indenture, the Notes, the Subsidiary Guarantee, the
Warrant Agreements, the Warrants, the Unit Agreement, the Units, the
Registration Rights Agreements and the Senior Credit Facilities (as defined in
the Offering Memorandum) are hereinafter sometimes referred to collectively as
the "OPERATIVE DOCUMENTS."
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE ISSUERS AND THE
GUARANTOR. The Issuers and the Guarantor represent, warrant and agree that:
(a) The Preliminary Offering Memorandum with respect to the
Notes and Offering Memorandum with respect to the Units have been prepared by
the Issuers and the Guarantor for use by the Initial Purchaser in connection
with the Exempt Resales. No order or decree preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum (or any supplement or
amendment thereto), or any order asserting that the transactions contemplated by
this Agreement are subject to the registration requirements of the Securities
Act has been issued and no proceeding for that purpose has commenced or is
pending or, to the knowledge of any Issuer or the Guarantor, is contemplated.
(b) The Preliminary Offering Memorandum and the Offering
Memorandum as of their respective dates and the Offering Memorandum as of the
Closing Date (together with any supplement or amendment thereto), did not and
will not contain an untrue statement of a material fact or omit to state a
material fact necessary, in order to make the statements, in light of the
circumstances under which they were made, not misleading, except that this
representation and warranty does not apply to statements in or omissions from
the Preliminary Offering Memorandum and the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in conformity with
information relating to the Initial Purchaser furnished to the Issuers in
writing by or on behalf of the Initial Purchaser expressly for use therein.
(c) The market-related and customer-related data and estimates
included in the Preliminary Offering Memorandum and the Offering Memorandum (or
any supplement or amendment thereto) are based on or derived from sources which
the Issuers believe to be reliable and accurate.
(d) Each of the Issuers and their subsidiaries (as defined in
Section 14 hereof) have been and, after giving effect to the Recapitalization in
accordance with the terms of the Recapitalization Documents, will be duly
incorporated and are and, after giving effect to the Recapitalization in
accordance with the terms of the Recapitalization Documents, will be validly
existing as corporations in good standing under the laws of their respective
jurisdictions of incorporation, duly qualified to do business and in good
standing as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses
requires such qualification, except where the failure to so register or qualify
or to be in good standing would not be reasonably expected, singly or in the
aggregate, to have a material adverse effect on the condition (financial or
otherwise), results of operation, assets, liabilities, management, prospects or
value of the Issuers and their subsidiaries, taken as a whole (a "MATERIAL
ADVERSE EFFECT"), and have and, after giving effect to the Recapitalization
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in accordance with the terms of the Recapitalization Documents, will have all
power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged.
(e) Each of the Issuers has an authorized capitalization as
set forth in the Offering Memorandum, and all of the issued shares of capital
stock of each of the Issuers have been and, after giving effect to the
Recapitalization in accordance with the terms of the Recapitalization Documents,
will be duly and validly authorized and issued, are and, after giving effect to
the Recapitalization in accordance with the terms of the Recapitalization
Documents, will be fully paid and non-assessable and conform and, after giving
effect to the Recapitalization in accordance with the terms of the
Recapitalization Documents, will conform to the description thereof contained in
the Offering Memorandum; and all of the issued shares of capital stock of each
subsidiary of the Issuers have been and, after giving effect to the
Recapitalization in accordance with the terms of the Recapitalization Documents,
will be duly and validly authorized and issued and are and, after giving effect
to the Recapitalization in accordance with the terms of the Recapitalization
Documents, will be fully paid and non-assessable and (except for directors'
qualifying shares) are and, after giving effect to the Recapitalization in
accordance with the terms of the Recapitalization Documents, will be owned
directly or indirectly by the Issuers, free and clear of all liens,
encumbrances, equities or claims, except pursuant to the Senior Credit
Facilities.
(f) The Warrants, when issued on the Closing Date, will
provide for the right to purchase 6.0% of the fully-diluted Common Stock and
6.0% of the fully-diluted junior preferred stock of Holdings.
(g) Each of the Issuers and the Guarantor has all requisite
power and authority to execute, deliver and perform its obligations under the
Operative Documents.
(h) This Agreement has been duly authorized, executed and
delivered by the Issuers and the Guarantor.
(i) The Indenture has been duly and validly authorized by the
Company and the Guarantor and upon its due execution and delivery and, assuming
due authorization, execution and delivery by the Trustee, will constitute the
valid and binding agreement of the Company and the Guarantor, enforceable
against the Company and the Guarantor 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 general equitable principles (whether considered in a proceeding
in equity or at law). On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "TIA"), and the rules and regulations of the Commission applicable
to an indenture which is qualified thereunder. The Offering Memorandum contains
an accurate summary, in all material respects, of the terms of the Indenture.
(j) Each of the Issuers has duly and validly authorized the
issuance of the Series A Notes and the Warrants as a Unit. When the Units are
issued and delivered to and
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paid for by the Initial Purchaser in accordance with the terms of this
Agreement, the Units will be valid and binding obligations of the Issuers,
enforceable against the Issuers 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 general equitable principles (whether considered in a proceeding
in equity or at law). The Offering Memorandum contains an accurate summary, in
all material respects, of the terms of the Units.
(k) The Series A Notes have been duly and validly authorized
by the Company and when duly executed by the Company in accordance with the
terms of the Indenture and, assuming due authentication of the Notes by the
Trustee, upon delivery to the Initial Purchaser against payment therefor in
accordance with the terms hereof, will have been validly issued and delivered,
and will constitute 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 general equitable principles (whether
considered in a proceeding in equity or at law). On the Closing Date, the Series
A Notes will conform, in all material respects, to the description thereof
contained in the Offering Memorandum.
(l) The Exchange Notes have been duly and validly authorized
by the Company and if and when duly issued and authenticated in accordance with
the terms of the Indenture and delivered in accordance with the Exchange Offer
provided for in the Debt Registration Rights Agreement, will constitute valid
and binding obligations of the Company entitled to the benefits of the
Indenture, 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 general equitable principles (whether considered
in a proceeding in equity or at law).
(m) The Warrants have been duly authorized by Holdings, and
will have been validly delivered by Holdings as of the Closing Date. When the
Warrants are issued, the Warrants will be the valid and binding obligations of
Holdings, enforceable against Holdings 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 general equitable principles (whether considered in a proceeding
in equity or at law). The Offering Memorandum contains an accurate summary, in
all material respects, of the terms of the Warrants.
(n) The Stockholders Agreement has been duly and validly
authorized by Holdings, and when duly executed and delivered by each of
Holdings, BRS, the BRS Investors and the Executives (assuming due execution and
delivery by the Initial Purchaser) will be the valid and binding obligation of
each of Holdings, BRS, the BRS Investors and the Executives, enforceable against
each of Holdings, BRS, the BRS Investors and the Executives in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
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conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law). The Offering Memorandum
contains an accurate summary, in all material respects, of the terms of the
Stockholders Agreement.
(o) The Warrant Shares have been duly and validly authorized
for issuance by Holdings, and when issued in accordance with the terms of the
Warrant Agreements will be fully paid and nonassessable and will not be subject
to any preemptive or similar rights. The Offering Memorandum contains an
accurate summary, in all material respects, of the terms of the Warrant Shares.
(p) The Subsidiary Guarantee to be endorsed on the Series A
Notes by the Guarantor has been duly and validly authorized by the Guarantor and
when duly executed and delivered by the Guarantor in accordance with the terms
of the Indenture and upon the due execution, authentication and delivery of the
Series A Notes in accordance with the Indenture and the issuance of the Series A
Notes in the sale to the Initial Purchaser contemplated by this Agreement, will
constitute valid and binding obligations of the Guarantor, enforceable against
the Guarantor 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
general equitable principles (whether considered in a proceeding in equity or at
law). The Offering Memorandum contains an accurate summary, in all material
respects, of the terms of the Subsidiary Guarantee to be endorsed on the Series
A Notes by the Guarantor.
(q) The Subsidiary Guarantee to be endorsed on the Exchange
Notes by the Guarantor has been duly and validly authorized by the Guarantor and
if and when duly executed and delivered by the Guarantor in accordance with the
terms of the Indenture and upon the due execution, authentication and delivery
of the Exchange Notes in accordance with the Indenture and the issuance of the
Exchange Notes in the Exchange Offer contemplated by the Debt Registration
Rights Agreement, will constitute valid and binding obligations of the
Guarantor, enforceable against the Guarantor 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 general equitable principles (whether considered
in a proceeding in equity or at law). The Offering Memorandum contains an
accurate summary, in all material respects, of the terms of the Subsidiary
Guarantee to be endorsed on the Exchange Notes by the Guarantor.
(r) Each of the Warrant Agreements has been duly and validly
authorized by Holdings, and when duly executed and delivered by Holdings, and
(assuming due execution and delivery by the Warrant Agent) will be the valid and
binding obligation of Holdings, enforceable against Holdings 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 general equitable principles (whether
considered in a proceeding in equity or at law). The Offering Memorandum
contains an accurate summary, in all material respects, of the terms of the
Warrant Agreements.
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(s) The Equity Registration Rights Agreement has been duly
authorized by Holdings and, when executed by each of Holdings, BRS, the BRS
Investors and the Executives in accordance with the terms hereof, will be
validly executed and delivered and (assuming the due execution and delivery
thereof by the Initial Purchaser) will be the valid and binding obligation of
each of Holdings, BRS, the BRS Investors and the Executives, enforceable against
each of Holdings, BRS, the BRS Investors and the Executives in accordance with
its terms, subject to the effects of bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law), and as to rights of
indemnification, by Federal or state securities laws or principles of public
policy. The Offering Memorandum contains an accurate summary, in all material
respects, of the terms of the Equity Registration Rights Agreement.
(t) The Debt Registration Rights Agreement has been duly
authorized by the Company and the Guarantor and, when executed by the Company
and the Guarantor in accordance with the terms hereof, will be validly executed
and delivered and (assuming the due execution and delivery thereof by the
Initial Purchaser) will be the valid and binding obligation of the Company and
the Guarantor, enforceable against the Company and the Guarantor in accordance
with its terms, subject to the effects of bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law). The Offering Memorandum
contains an accurate summary, in all material respects, of the terms of the Debt
Registration Rights Agreement.
(u) The Unit Agreement has been duly and validly authorized by
the Issuers and the Guarantor, and when duly executed and delivered by the
Issuers and the Guarantor, and (assuming due execution and delivery by the Unit
Agent) will be the valid and binding obligation of the Issuers and the
Guarantor, enforceable against the Issuers and the Guarantor 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 general equitable principles (whether
considered in a proceeding in equity or at law), and as to rights of
indemnification, by Federal or state securities laws or principles of public
policy. The Offering Memorandum contains an accurate summary, in all material
respects, of the terms of the Unit Agreement.
(v) The Agreement and Plan of Merger has been duly and validly
authorized executed and delivered by Holdings and OSI and is the valid and
binding obligation of Holdings and OSI enforceable against Holdings and OSI 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 general equitable
principles (whether considered in a proceeding in equity or at law). The
Offering Memorandum contains an accurate summary, in all material respects, of
the terms of the Agreement and Plan of Merger.
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(w) The Senior Credit Facilities have been duly and validly
authorized by the Issuers, and when duly executed and delivered by the Issuers,
and (assuming due execution and delivery by the other parties thereto) will be
the valid and binding obligation of each of the Issuers, enforceable against the
Issuers 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 general equitable
principles (whether considered in a proceeding in equity or at law). The
Offering Memorandum contains an accurate summary, in all material respects, of
the terms of the Senior Credit Facilities.
(x) Neither of the Issuers nor any of their subsidiaries is
or, after giving effect to the Recapitalization in accordance with the terms of
the Recapitalization Documents, will be (i) in violation of its charter or
by-laws or other organizational document, as the case may be, (ii) in default in
any material respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any 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 its properties or
assets is subject or (iii) in violation of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets may be
subject or has failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business except, in the case
of clauses (ii) and (iii) for such defaults which would not, singly or in the
aggregate, have a Material Adverse Effect.
(y) The execution, delivery and performance of this Agreement,
the other Operative Documents and the Agreement and Plan of Merger by the
Issuers and the Guarantor (as applicable), compliance by the Issuers and the
Guarantor (as applicable) with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby and the
consummation of the Recapitalization will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or a constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which any Issuer or any of their subsidiaries is a
party or by which any Issuer or any of their subsidiaries is bound or to which
any of the property or assets of the Issuers or any of their subsidiaries is
subject, that would have, singly or in the aggregate, a Material Adverse Effect,
(ii) result in any violation of the provisions of the charter or by-laws of the
Issuers or any of their subsidiaries, (iii) result in the violation of any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over any Issuer or any of their subsidiaries or any of
their respective properties or assets, that would have, singly or in the
aggregate, a Material Adverse Effect, (iv) result in the imposition of or
creation of (or the obligation to create or impose) a lien, encumbrance, equity
or claim under, any agreement or instrument to which any Issuer or any of their
subsidiaries is a party or by which any Issuer or any of their subsidiaries or
any of their respective property is bound, except where such lien, encumbrance,
equity or claim would not have a Material Adverse Effect or (v) result in the
termination, suspension or revocation of any Authorization (as defined below) of
the Issuers or any of their subsidiaries or result in any other impairment of
the rights of the holder of any such Authorization; and except as and as have
been or will be obtained by the Closing Date and as
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may be required in connection with the registration of the Exchange Notes under
the Securities Act, qualification of the Indenture under the TIA and compliance
with the securities and Blue Sky laws of various jurisdictions, 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 this Agreement, the other Operative Documents and the Agreement
and Plan of Merger by the Issuers and the Guarantor (as applicable), compliance
by the Issuers and Guarantors (as applicable) with all provisions hereof and
thereof and the consummation of the transactions contemplated hereby and thereby
and the consummation of the Recapitalization.
(z) Except as described in the Offering Memorandum, there are
and, immediately after giving effect to the Recapitalization in accordance with
the terms of the Recapitalization Documents, will be no legal or governmental
proceedings pending or to the knowledge of the Issuers threatened to which any
Issuer or any of their subsidiaries is or to the knowledge of the Issuers could
be a party or of which any property or assets of the Issuers or any of their
subsidiaries is or could be the subject which, if determined adversely to the
Issuers or any of their subsidiaries, would, singly or in the aggregate, have a
Material Adverse Effect; and to the best of the Issuers' knowledge, no such
proceedings are and, after giving effect to the Recapitalization in accordance
with the terms of the Recapitalization Documents, will be threatened or
contemplated by governmental authorities or threatened by others.
(aa) Except as would not, singly or in the aggregate, have a
Material Adverse Effect, there has and, immediately after giving effect to the
Recapitalization in accordance with the terms of the Recapitalization Documents,
and will have been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, medical wastes, hazardous
wastes or hazardous substances by the Issuers or any of their subsidiaries (or,
to the knowledge of the Issuers, any of their predecessors in interest) at, upon
or from any of the property now or previously owned or leased by the Issuers or
their subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require remedial
action under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which would not
have, or could not be reasonably likely to have, singly or in the aggregate with
all such violations and remedial actions, a Material Adverse Effect; there has
and, immediately after giving effect to the Recapitalization in accordance with
the terms of the Recapitalization Documents, and will have been no material
spill, discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Issuers or any of their subsidiaries or with
respect to which the Issuers or any of their subsidiaries has knowledge, except
for any such spill, discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely to have, singly
or in the aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse Effect; and the
terms "hazardous wastes," "toxic wastes," "hazardous substances" and "medical
wastes" shall have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to environmental
protection.
11
(bb) The Issuers are and, immediately after giving effect to
the Recapitalization in accordance with the terms of the Recapitalization
Documents, and will be 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 and, immediately
after giving effect to the Recapitalization in accordance with the terms of the
Recapitalization Documents, and will have occurred with respect to any "pension
plan" (as defined in ERISA) for which the Issuers would have any liability; the
Issuers have and, immediately after giving effect to the Recapitalization in
accordance with the terms of the Recapitalization Documents, and will have not
incurred and do not expect to incur liability 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 Issuers would have any liability that is intended
to be qualified under Section 401(a) of the Code is and, immediately after
giving effect to the Recapitalization in accordance with the terms of the
Recapitalization Documents, and will be so qualified in all material respects
and nothing has or will have occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(cc) Each of the Issuers and their subsidiaries has and, after
giving effect to the Recapitalization in accordance with the terms of the
Recapitalization Documents, will have such permits, licenses, consents,
exemptions, franchises, authorizations and other approvals (each, an
"AUTHORIZATION") of, and has and, after giving effect to the Recapitalization in
accordance with the terms of the Recapitalization Documents, will have made all
filings with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals, including
without limitation, under any applicable environmental laws, as are necessary to
own, lease, license and operate its respective properties and to conduct its
business, except where the failure to have any such Authorization or to make any
such filing or notice would not, singly or in the aggregate, have a Material
Adverse Effect. Each such Authorization is and, after giving effect to the
Recapitalization in accordance with the terms of the Recapitalization Documents,
will be valid and in full force and effect, and each of the Issuers and their
subsidiaries is and, after giving effect to the Recapitalization in accordance
with the terms of the Recapitalization Documents, will be in compliance with all
the terms and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect thereto; and
no event has occurred (including, without limitation, the receipt of any notice
from any authority or governing body) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
and such Authorizations contain and, after giving effect to the Recapitalization
in accordance with the terms of the Recapitalization Documents, will contain, no
restrictions that are burdensome to the Issuers or any of their subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
12
(dd) Each of the Issuers and their subsidiaries has and, after
giving effect to the Recapitalization in accordance with the terms of the
Recapitalization Documents, will have good and marketable title in fee simple to
all real property and good and marketable title to all personal property owned
by them, in each case free and clear of all liens, encumbrances and defects,
except such as are described in the Offering Memorandum, such as are in favor of
the lenders under the Senior Credit Facilities, or such as would not, singly or
in the aggregate, have a Material Adverse Effect; and all the real property and
buildings held under lease by the Issuers and their subsidiaries are and, after
giving effect to the Recapitalization in accordance with the terms of the
Recapitalization Documents, will be held by them under valid, subsisting and
enforceable leases, with only such exceptions as would not, singly or in the
aggregate, have a Material Adverse Effect.
(ee) Each of the Issuers and their subsidiaries owns or
possesses and, after giving effect to the Recapitalization in accordance with
the terms of the Recapitalization Documents, will own and possess adequate
rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights and licenses necessary for the conduct of their respective
businesses, and has and, after giving effect to the Recapitalization in
accordance with the terms of the Recapitalization Documents, will have no reason
to believe that the conduct of their respective business will conflict with, and
has and, after giving effect to the Recapitalization in accordance with the
terms of the Recapitalization Documents, will have not received any notice of
any claim of conflict with, any such rights of others, except as would not,
singly or in the aggregate, have a Material Adverse Effect.
(ff) PricewaterhouseCoopers LLP, who have certified certain
financial statements included in the Preliminary Offering Memorandum and the
Offering Memorandum, whose report appears therein and who have delivered the
letter referred to in Section 7(g) hereof, are independent public accountants
under Rule 101 of the American Institute of Certified Public Accountants' Code
of Professional Conduct and its interpretations and rulings thereunder.
(gg) The historical financial statements (including the
related notes and schedules) included or incorporated by reference in the
Offering Memorandum (and any amendment or supplement thereto) present fairly the
financial condition and results of operations of the 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 of the
United States applied on a consistent basis throughout the periods involved; and
the other financial and statistical information and data set forth in the
Offering Memorandum (and any amendment or supplement thereto) are, in all
material respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Issuers and the
Guarantor.
(hh) The pro forma financial statements included or
incorporated by reference in the Offering Memorandum (and any amendment or
supplement thereto) have been prepared on a basis consistent with the historical
financial statements included in the Offering
13
Memorandum and give effect to assumptions used in the preparation thereof on a
reasonable basis and in good faith and present fairly the historical and
proposed transactions contemplated by the Offering Memorandum, and such pro
forma financial statements include all material adjustments to the historical
financial information required by Rule 11-02 of Regulation S-X under the
Securities Act to reflect the transactions described in the Offering Memorandum.
The other pro forma financial and statistical information and data included in
the Offering Memorandum are, in all material respects, accurately presented and
prepared on a basis consistent with the pro forma financial statements.
(ii) Neither of the Issuers nor any of their subsidiaries is
and, after giving effect to the Recapitalization in accordance with the
Recapitalization Documents and the offering and sale of the Units and the
application of the net proceeds thereof as described in the Offering Memorandum,
will be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder.
(jj) Except as described in the Offering Memorandum, there are
and, after giving effect to the Recapitalization in accordance with the
Recapitalization Documents, will be no contracts, agreements or understandings
between the Issuers and any person granting such person the right to require the
Issuers to file a registration statement under the Securities Act with respect
to any securities of the Issuers owned or to be owned by such person or to
require the Issuers to include such securities in the securities registered
pursuant to the Registration Statements or in any securities being registered
pursuant to any other registration statement filed by the Issuers under the
Securities Act.
(kk) Neither the Issuers nor any of their subsidiaries, nor
any agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Securities to violate Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R.
Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System.
(ll) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act (i) has imposed (or has informed the Issuers that it is
considering imposing) any condition (financial or otherwise) on any Issuer's
retaining any rating assigned to the Issuers, any securities of any Issuer or
(ii) has indicated to any Issuer that it is considering (a) the downgrading,
suspension, or withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so assigned or (b)
any change in the outlook for any rating of any Issuer or any securities of any
Issuer.
(mm) Neither of the Issuers nor any of their subsidiaries has
sustained, since the date of the latest audited financial statements included or
incorporated by reference in the Offering Memorandum, any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Offering
Memorandum that would, singly or in the aggregate, have a Material Adverse
Effect; and, since such date, otherwise than as set forth or contemplated in the
14
Offering Memorandum, there has not been any change in the capital stock or
long-term debt of the Issuers or any of their subsidiaries or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Issuers and their subsidiaries that would, singly or in the aggregate, have
a Material Adverse Effect.
(nn) Since the date as of which information is given in the
Preliminary Offering Memorandum through the date hereof, and except as may
otherwise be disclosed in the Offering Memorandum, (i) the Issuers have not
issued or granted any securities, other than those issued or granted under
employee stock option plans disclosed in the Offering Memorandum; (ii) neither
of the Issuers nor any of their subsidiaries have incurred any liability or
obligation, direct or contingent, other than liabilities and obligations that
were incurred in the ordinary course of business; (iii) neither of the Issuers
nor any of their subsidiaries has entered into any transaction not in the
ordinary course of business; and (iv) the Issuers have not declared or paid any
dividend on their capital stock.
(oo) Holdings has delivered to the Initial Purchaser true and
corrected conformed copies of the Agreement and Plan of Merger, including all
schedules and exhibits thereto, and there have been no amendments, alterations,
modifications or waivers thereto or in the exhibits or schedules thereto, except
as have been delivered to the Initial Purchaser.
(pp) No labor disturbance by the employees of the Issuers or
any of their subsidiaries exists and, after giving effect to the
Recapitalization in accordance with the Recapitalization Documents, will exist
or, to the knowledge of the Issuers, is and, after giving effect to the
Recapitalization in accordance with the Recapitalization Documents, will be
imminent which might be expected to have a Material Adverse Effect. To the best
knowledge of the Issuers, no collective bargaining organizing activities are
taking place with respect to the Issuers or any of their subsidiaries which
might be expected to have a Material Adverse Effect.
(qq) Each of the Issuers and their subsidiaries (i) makes and
keeps and, after giving effect to the Recapitalization in accordance with the
Recapitalization Documents, will make and keep accurate books and records and
(ii) maintains and, after giving effect to the Recapitalization in accordance
with the Recapitalization Documents, will maintain 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 its assets is compared with existing assets at reasonable intervals.
(rr) The Issuers and their subsidiaries have and, immediately
after giving effect to the Recapitalization in accordance with the
Recapitalization Documents, will have filed all material federal, state and
local income and franchise tax returns required to be filed
15
through the date hereof and have and, after giving effect to the
Recapitalization in accordance with the Recapitalization Documents, will have
paid all material taxes due thereon, and no tax deficiency has and, immediately
after giving effect to the Recapitalization in accordance with the
Recapitalization Documents, will have been determined adversely to the Issuers
or any of their subsidiaries which has and, immediately after giving effect to
the Recapitalization in accordance with the Recapitalization Documents, will
have had (nor to the actual knowledge of the Issuers, has any deficiency been
asserted which, if determined adversely to the Issuers or any of their
subsidiaries, might have) a Material Adverse Effect.
(ss) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information specified in,
and meeting the requirements of, Rule 144A(d)(4) under the Securities Act.
(tt) When the Securities and the Subsidiary Guarantee are
issued and delivered pursuant to this Agreement, such Securities and Subsidiary
Guarantee will not be of the same class (within the meaning of Rule 144A under
the Securities Act) as securities of any Issuer or the Guarantor that are listed
on a national securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or that are quoted in a
United States automated inter-dealer quotation system.
(uu) Assuming (i) that your representations and warranties in
Section 2 are true, (ii) compliance by you with your covenants set forth in
Section 2 and (iii) that each of the Eligible Purchasers is a QIB or a person
who acquires the Units in an "offshore transaction" and is not a "U.S. Person"
(within the meaning of Regulation S under the Securities Act), the purchase of
the Units by pursuant hereto and the resale of the Units pursuant hereto
pursuant to Exempt Resales is exempt from the registration requirements of the
Securities Act. No form of general solicitation or general advertising was used
by any Issuer or the Guarantor or any of their representatives (other than you,
as to whom the Issuers and the Guarantor make no representation) in connection
with the offer and sale of the Units, including, but not limited to, articles,
notices or other communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
(vv) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA.
(ww) None of the Issuers, the Guarantor nor any of their
respective affiliates or any person acting on their behalf (other than the
Initial Purchaser, as to whom the Issuers and the Guarantor make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S with respect to the Units.
(xx) The Units offered and sold in reliance on Regulation S
have been and will be offered and sold only in offshore transactions.
(yy) The sale of the Units pursuant to Regulation S is not
part of a plan or scheme to evade the registration provisions of the Securities
Act.
16
(zz) The Issuers, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial
Purchaser, as to whom the Issuers and the Guarantor make no representation) have
complied with and, after giving effect to the Recapitalization in accordance
with the terms of the Recapitalization Documents, will comply with the offering
restrictions requirements of Regulation S in connection with the offering of the
Securities outside the United States and, in connection therewith, the Offering
Memorandum will contain the disclosure required by Rule 902(g)(2).
(aaa) The Securities sold in reliance on Regulation S will be
represented upon issuance by a temporary global security that may not be
exchanged for definitive securities until the expiration of the distribution
compliance periods referred to in Rule 903(c)(3) of the Securities Act and only
upon certification of beneficial ownership of such Security by non-U.S. persons
or U.S. persons who purchased such Securities in transactions that were exempt
from the registration requirements of the Securities Act.
(bbb) No registration under the Securities Act of the
Securities or the Subsidiary Guarantee is required for the sale of the
Securities and the Subsidiary Guarantee to the Initial Purchaser as contemplated
hereby or for the Exempt Resales assuming the accuracy of the Initial
Purchaser's representations and warranties and agreements set forth in Section 2
hereof.
(ccc) Each certificate signed by any officer of any Issuer or
the Guarantor and delivered to the Initial Purchaser or counsel for the Initial
Purchaser shall be deemed to be a representation and warranty by such Issuer or
Guarantor to the Initial Purchaser as to the matters covered thereby.
(ddd) The Issuers and each of their subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as the Issuers
believe is reasonably adequate for the conduct of their respective businesses
and the value of their respective properties and as is customary for companies
engaged in similar businesses in similar industries.
(eee) There are no contracts or other documents which are
required to be described in the Offering Memorandum by the Securities Act or by
the rules and regulations thereunder which have not been described in the
Offering Memorandum or incorporated therein by reference as permitted by the
rules and regulations.
(fff) No material relationship, direct or indirect, exists
between or among the Issuers or any of their subsidiaries on the one hand, and
the directors, officers, stockholders, customers or suppliers of the Issuers or
any of their subsidiaries on the other hand, except as described in the Offering
Memorandum.
(ggg) Neither of the Issuers nor any of their subsidiaries,
nor any director, officer, agent, employee and, to the knowledge of the Issuers,
no other person associated with or acting on behalf of the Issuers or any of
their subsidiaries, 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
17
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.
(hhh) The statements set forth in the Offering Memorandum
under the captions "Description of Certain Indebtedness," "Description of
Units," "Description of Notes" and "Description of Warrants," insofar as they
describe the terms of the agreements and securities referred to therein, are
accurate and fairly present the information required to be shown in all material
respects.
(iii) The Offering Memorandum contains an accurate summary, in
all material respects, of the terms of the securities purchase agreement for the
senior notes of Holdings to be issued on the Closing Date (the "SECURITIES
PURCHASE AGREEMENT").
(jjj) The Offering Memorandum contains an accurate summary, in
all material respects, of the terms of the management services agreement between
BRS and the Company to be executed on the Closing Date (the "MANAGEMENT SERVICES
AGREEMENT").
2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE INITIAL PURCHASER.
The Initial Purchaser represents and warrants with respect to itself that:
(a) It is a QIB or an institutional accredited investor as
defined in Rule 501(a)(1), (2), (3) and (7) under the Securities Act (each, an
"ACCREDITED INSTITUTION"), in either case with such knowledge and experience in
financial and business matters as are necessary in order to evaluate the merits
and risks of an investment in the Units.
(b) It (i) is not acquiring the Units with a view to any
distribution thereof or with any present intention of offering or selling any of
the Units in a transaction that would violate the Securities Act or the
securities laws of any State of the United States or any other applicable
jurisdiction; (ii) in connection with the Exempt Resales, will solicit offers to
buy the Units only from, and will offer to sell Units only to, the Eligible
Purchasers in accordance with this Agreement and on the terms contemplated by
the Offering Memorandum; and (iii) will not offer or sell the Units pursuant to,
nor has it offered or sold the Units by, or otherwise engaged in, any form of
general solicitation or general advertising (within the meaning of Regulation D,
including, but not limited to, advertisements, articles, notices or other
communications published in any newspaper, magazine, or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising) in
connection with the offering of the Units.
(c) The Units have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. The Initial Purchaser
represents that it has not offered, sold or delivered the Units, and will not
offer, sell or deliver the Units (i) as part of its distribution at any time or
(ii) otherwise until one year after the later of the commencement of the
offering of the Units and the Closing Date or such longer period
18
as may then be applicable under Regulation S (such period, the "DISTRIBUTION
COMPLIANCE PERIOD"), within the United States or to, or for the account or
benefit of U.S. persons, except in accordance with Rule 144A under the
Securities Act. Accordingly, the Initial Purchaser represents and agrees that
neither it, its affiliates nor any persons acting on its or their behalf has
engaged or will engage in any directed selling efforts within the meaning of
Rule 901(b) of Regulation S with respect to the Units, and it, its affiliates
and all persons acting on its behalf have complied and will comply with the
offering restrictions requirements of Regulation S.
(d) It agrees that, at or prior to confirmation of a sale of
Units (other than a sale pursuant to Rule 144A in transactions that are exempt
from the registration requirements of the Securities Act), it will have sent to
each distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Units from it during the Restricted Period a
confirmation or notice substantially to the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered and sold within the United
States or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii)
otherwise until one year (in the case of equity securities) or
40 days (in the case of debt securities) after the later of
the commencement of the offering or the closing date, except
in either case in accordance with Regulation S (or Rule 144A
if available) under the Securities Act. Terms used above have
the meanings assigned to them in Regulation S."
(e) The Initial Purchaser further agrees that it has not
entered and will not enter into any contractual arrangement with respect to the
distribution or delivery of the Units, except with its affiliates or with the
prior written consent of the Issuers.
(f) The Initial Purchaser agrees not to cause any
advertisement of the Units to be published in any newspaper or periodical or
posted in any public place and not to issue any circular relating to the Units,
except such advertisements as include the statements required by Regulation S.
(g) The sales of the Units pursuant to Regulation S are
"offshore transactions" and are not part of a plan or scheme to evade the
registration provisions of the Securities Act.
(h) The Initial Purchaser understands that the Issuers and the
Guarantor and, for purposes of the opinions to be delivered to the Initial
Purchaser pursuant to Section 7 hereof, counsel to the Issuers and the Guarantor
and counsel to the Initial Purchaser, will rely upon the accuracy and truth of
the foregoing representations and the Initial Purchaser hereby consents to such
reliance.
The terms used in this Section 2 that have meanings assigned
to them in Regulation S are used herein as so defined.
19
3. PURCHASE OF THE UNITS BY THE INITIAL PURCHASER. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Issuers agree to sell the Units to the
Initial Purchaser and the Initial Purchaser agrees to purchase $100,000,000
aggregate principal amount of Units. The Initial Purchaser will purchase such
aggregate principal amount of Units at an aggregate purchase price equal to
$950.46 per Unit (the "PURCHASE PRICE").
(a) The Issuers shall not be obligated to deliver any of the
Units to be delivered on the Closing Date (as defined herein), except upon
payment for all the Units to be purchased on the Closing Date as provided
herein.
4. DELIVERY OF THE UNITS AND PAYMENT THEREFOR.
(a) Delivery to the Initial Purchaser of and payment for the
Units shall be made at the office of Xxxxxxxx & Xxxxx, 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, at 9:00 A.M., New York City time, on November 30, 1999 (the
"CLOSING DATE"). The place of closing for the Units and the Closing Date may be
varied by agreement between the Initial Purchaser and the Issuers.
(b) The Units will be delivered to the Initial Purchaser
against payment of the purchase price therefor in immediately available funds.
The Units will be evidenced by one or more global securities in definitive form
(the "GLOBAL UNIT") and/or by additional definitive securities, and will be
registered, in the case of the Global Unit, in the name of Cede & Co. as nominee
of The Depository Trust Company ("DTC"), and in the other cases, in such names
and in such denominations as the Initial Purchaser shall request prior to 9:30
A. M., New York City time, on the second business day preceding the Closing
Date. The Units to be delivered to the Initial Purchaser shall be made available
to the Initial Purchaser in New York City for inspection and packaging not later
than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date.
(c) 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 Purchaser hereunder.
5. FURTHER AGREEMENTS OF THE ISSUERS AND THE GUARANTOR. The Issuers and
the Guarantor agree with the Initial Purchaser as follows:
(a) The Issuers and the Guarantor will advise the Initial
Purchaser promptly and, if requested by the Initial Purchaser, to confirm such
advice in writing, of (i) the issuance by any state securities commission of any
stop order suspending the qualification or exemption from qualification of any
Securities for offering or sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose by the Commission or any state
securities commission or other regulatory authority, and (ii) the happening of
any event that makes any statement of a material fact made in the Offering
Memorandum untrue or which requires the making of any additions to or changes in
the Offering Memorandum in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
20
The Issuers and the Guarantor shall use all commercially reasonable efforts to
prevent the issuance of any stop order or order suspending the qualification or
exemption of any Securities under any state securities or Blue Sky laws and, if
at any time any state securities commission shall issue any stop order
suspending the qualification or exemption of any Securities under any state
securities or Blue Sky laws, the Issuers and the Guarantor shall use every
reasonable effort to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) The Issuers and the Guarantor will furnish to the Initial
Purchaser, without charge, as of the date of the Offering Memorandum, such
number of copies of the Offering Memorandum, and any amendments or supplements
thereto, as it may reasonably request.
(c) The Issuers and the Guarantor will not make any amendment
or supplement to the Preliminary Offering Memorandum or to the Offering
Memorandum of which the Initial Purchaser shall not previously have been advised
or to which it shall reasonably object after being so advised.
(d) Prior to the execution and delivery of this Agreement, the
Issuers and the Guarantor shall have delivered or will deliver to the Initial
Purchaser, without charge, in such quantities as the Initial Purchaser shall
have requested or may hereafter reasonably request, copies of the Preliminary
Offering Memorandum.
(e) The Company and the Guarantor consent to the use, in
accordance with the securities or Blue Sky laws of the jurisdictions in which
the Notes are offered by the Initial Purchaser and by dealers, prior to the date
of the Offering Memorandum, of each Preliminary Offering Memorandum so furnished
by them. The Issuers and the Guarantor consent to the use of the Offering
Memorandum in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Units are offered by the Initial Purchaser and by all
dealers to whom Units may be sold, in connection with the offering and sale of
the Units.
(f) If, at any time prior to completion of the distribution of
the Units by the Initial Purchaser to Eligible Purchasers, any event shall occur
that in the judgment of any Issuer or the Guarantor or in the opinion of counsel
for the Initial Purchaser should be set forth in the Offering Memorandum in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Offering Memorandum in order to comply with any law, the Issuers and
the Guarantor will forthwith prepare an appropriate supplement or amendment
thereto or such document, and will expeditiously furnish to the Initial
Purchaser and dealers a reasonable number of copies thereof.
(g) The Issuers and the Guarantor will cooperate with the
Initial Purchaser and with its counsel in connection with the qualification of
the Units for offering and sale by the Initial Purchaser and by dealers under
the securities or Blue Sky laws of such jurisdictions as the Initial Purchaser
may designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such qualification;
PROVIDED that in no event shall either of the Issuers or the Guarantor be
obligated to qualify to do business in any
21
jurisdiction where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Units, in any jurisdiction where it is not now so
subject.
(h) During the period beginning on the date hereof and
continuing to and including the date 180 days after the Closing Date, the
Issuers and the Guarantor will not offer, sell, contract to sell or otherwise
transfer or dispose of any debt or equity securities (except pursuant to the
Exchange Offer) of the Issuers or the Guarantor or any of their subsidiaries or
any warrants, rights or options to purchase or otherwise acquire debt or equity
securities of the Issuers or the Guarantor or any of their subsidiaries
substantially similar to the Securities and the Subsidiary Guarantee (other than
(i) the Securities and the Subsidiary Guarantee, (ii) debt to be incurred or
equity to be sold or issued in connection with the Recapitalization, as
described in the Offering Memorandum, and (iii) commercial paper issued in the
ordinary course of business), without the prior written consent of the Initial
Purchaser.
(i) So long as any of the Securities are outstanding, the
Issuers and the Guarantor will furnish to the Initial Purchaser (i) as soon as
available, a copy of each report of the Issuers mailed to stockholders generally
or filed with any stock exchange or regulatory body and (ii) from time to time
such other information concerning the Issuers and/or the Guarantor as the
Initial Purchaser may reasonably request.
(j) The Issuers and the Guarantor will apply the net proceeds
from the sale of the Units to be sold by it hereunder substantially in
accordance with the description set forth in the Offering Memorandum under the
caption "Use of Proceeds."
(k) Except as stated in this Agreement and in the Preliminary
Offering Memorandum and Offering Memorandum, the Issuers and the Guarantor have
not taken, nor will any of them 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 Units to facilitate the sale
or resale of the Units. Except as permitted by the Securities Act, the Issuers
and the Guarantor will not distribute any offering material in connection with
the Exempt Resales.
(l) The Issuers and the Guarantor will use their best efforts
to permit the Units, Series A Notes and Warrants to be designated Private
Offerings, Resales and Trading through Automated Linkages ("PORTAL") market
securities in accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. relating to trading in the PORTAL Market
and to permit the Units, Series A Notes and Warrants to be eligible for
clearance and settlement through DTC.
(m) From and after the Closing Date, so long as any of the
Securities are outstanding and are "restricted securities" within the meaning of
the Rule 144(a)(3) under the Securities Act or, if earlier, until two years
after the Closing Date, but only during any period in which the Company is not
subject to Section 13 or 15(d) of the Exchange Act, the Issuers and the
Guarantor will furnish to holders of the Securities and prospective purchasers
of Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant to
Rule 144A(d)(4) under the
22
Securities Act to permit compliance with Rule 144A in connection with resale of
the Securities.
(n) The Issuers and the Guarantor agree not to sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Securities Act) that would be integrated with the sale of the
Units in a manner that would require the registration under the Securities Act
of the sale to the Initial Purchaser or the Eligible Purchasers of the Units.
(o) The Issuers and the Guarantor (as applicable) agree to
comply with all the terms and conditions of the Registration Rights Agreements,
the Indenture, the Unit Agreement and the Warrant Agreements and all agreements
set forth in the representation letters of the Issuers and the Guarantor to DTC
relating to the approval of the Units, Notes and Warrants by DTC for "book
entry" transfer.
(p) The Company and the Guarantor agree to cause the Exchange
Offer to be made in the appropriate form, as contemplated by the Debt
Registration Rights Agreement, to permit registration of the Exchange Notes to
be offered in exchange for the Series A Notes, and to comply with all applicable
federal and state securities laws in connection with the Exchange Offer.
(q) The Company and the Guarantor agree that prior to any
registration of the Exchange Notes pursuant to the Debt Registration Rights
Agreement, or at such earlier time as may be required, the Indenture shall be
qualified under the 1939 Act and any necessary supplemental indentures will be
entered into in connection therewith.
(r) Holdings agrees to cause the filing of the Equity
Registration Statement to be made on the appropriate form, as contemplated by
the Equity Registration Rights Agreement.
(s) The Issuers and the Guarantor will not voluntarily claim,
and will resist actively all attempts to claim, the benefit of any usury laws
against holders of the Securities.
(t) The Issuers and the Guarantor will do and perform all
things required or necessary to be done and performed under this Agreement by
them prior to the Closing Date, and to satisfy all conditions precedent to the
Initial Purchaser's obligations hereunder to purchase the Units.
6. EXPENSES. The Issuers and the Guarantor agree to pay all costs,
expenses, fees and taxes incident to and in connection with: (i) the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation, financial
statements and exhibits) and all amendments and supplements thereto (but not,
however, legal fees and expenses of your counsel incurred in connection
therewith), (ii) the preparation, printing (including, without limitation, word
processing and duplication costs) and delivery of this Agreement, the other
Operative Documents, all Blue Sky Memoranda and all other agreements, memoranda,
correspondence
26
and other documents printed and delivered in connection wherewith and with the
Exempt Resales (but not, however, legal fees and expenses of your counsel
incurred connection with any of the foregoing other than fees of such counsel
plus reasonable disbursements incurred in connection with the preparation,
printing and delivery of such Blue Sky Memoranda), (iii) the authorization,
issuance, sale and delivery by the Issuers and the Guarantor of the Units and
the Subsidiary Guarantee, (iv) the qualification of the Units and the Subsidiary
Guarantee for offer and sale under the securities or Blue Sky laws of the
several states (including, without limitation, the reasonable fees and
disbursements of your counsel relating to such registration or qualification),
(v) furnishing such copies of the Preliminary Offering Memorandum and the
Offering Memorandum, and all amendments and supplements thereto, as may be
reasonably requested for use in connection with the Exempt Resales, (vi) the
preparation of certificates for the Securities and the Subsidiary Guarantee
(including, without limitation, printing and engraving thereof), (vii) the fee,
disbursements and expenses of the Issuers' and the Guarantor's counsel and
accountants, (viii) the fees, disbursements and expenses and listing fees in
connection with the application for quotation of the Securities in PORTAL, (ix)
all fees and expenses (including fees and expenses of counsel) of the Issuers
and the Guarantor in connection with approval of the Units, Notes and Warrants
by DTC for "book-entry" transfer, (x) any fees charged by securities rating
services for rating the Notes and (xi) the performance by the Issuers and the
Guarantor of their other obligations under this Agreement.
7. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The obligations of
the Initial Purchaser hereunder are subject to the accuracy, when made and on
the Closing Date, of the representations and warranties of the Issuers and the
Guarantor contained herein, to the performance by the Issuers and the Guarantor
of their obligations hereunder, and to each of the following additional terms
and conditions:
(a) The Offering Memorandum shall have been printed and copies
made available to you not later than 6:00 p.m., New York City time, on the
Business Day following the date of this Agreement, or at such later date and
time as you may approve in writing.
(b) The Initial Purchaser shall not 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 Xxxxxx & Xxxxxxx, counsel for the Initial
Purchaser, 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 not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the other Operative
Documents and the Offering Memorandum, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Initial Purchaser, and
the Issuers and the Guarantor shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters.
24
(d) Xxxxxxxx & Xxxxx shall have furnished to the Initial
Purchaser, its written opinion (based on the assumptions and subject to the
exclusions contained therein), as counsel to the Issuers and the Guarantor,
addressed to the Initial Purchaser and dated the Closing Date, substantially in
the form of Exhibit A hereto.
(e) Xxxxx & Xxxxxxx L.L.P. shall have furnished to the Initial
Purchaser, its written opinion, as special Virginia counsel to the Issuers and
the Guarantor, addressed to the Initial Purchaser and dated the Closing Date,
substantially in the form of Exhibit B hereto.
(f) The Initial Purchaser shall have received from Xxxxxx &
Xxxxxxx, counsel for the Initial Purchaser, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Units, the Offering
Memorandum and other related matters as the Initial Purchaser may reasonably
require, and the Issuers and the Guarantor shall have furnished to such counsel
such documents as they reasonably request for the purpose of enabling them to
pass upon such matters.
(g) At the time of execution of this Agreement, the Initial
Purchaser shall have received from PricewaterhouseCoopers LLP a letter, in form
and substance satisfactory to the Initial Purchaser, addressed to the Initial
Purchaser and dated the date hereof (i) confirming that they are independent
public accountants under Rule 101 of the American Institute of Certified Public
Accountants' Code of Professional Conduct and its interpretations and rulings
thereunder and (ii) stating, as of the date hereof (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as of a
date not more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information (including pro
forma financial information) and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with registered
public offerings.
(h) With respect to the letter of PricewaterhouseCoopers LLP
referred to in the preceding paragraph and delivered to the Initial Purchaser
concurrently with the execution of this Agreement (the "INITIAL LETTER"), the
Issuers and the Guarantor shall have furnished to the Initial Purchaser a letter
(the "BRING-DOWN LETTER") of such accountants, addressed to the Initial
Purchaser and dated the Closing Date (i) confirming that they are independent
public accountants under Rule 101 of the American Institute of Certified Public
Accountants' Code of Professional Conduct and its interpretations and rulings
thereunder, (ii) stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Offering Memorandum,
as of a date not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the financial
information (including pro forma 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.
25
(i) The Issuers and the Guarantor shall have furnished to the
Initial Purchaser a certificate, dated the Closing Date, of its Chief Executive
Officer, its President or a Vice President and its chief financial officer
stating that:
(j) The representations, warranties and agreements of the
Issuers and the Guarantor in Section 1 are true and correct in all material
respects, except for those representations and warranties qualified by
materiality, in which case such representations and warranties are true in all
respects as of the Closing Date; the Issuers and the Guarantor have complied
with all its agreements contained herein in all material respects; and the
conditions set forth in Sections 7(j) and 7(l) have been fulfilled in material
respects; and
(k) They have carefully examined the Offering Memorandum and,
in their opinion (A) as of its 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 not
misleading, and (B) since the date of such Offering Memorandum no event has
occurred which should have been set forth in a supplement or amendment to the
Offering Memorandum.
(l) Neither of the Issuers nor any of their subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Offering Memorandum any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Memorandum or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the Issuers or
any of their subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Issuers and their
subsidiaries, 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 judgment of the Initial Purchaser, so material and adverse as
to make it impracticable or inadvisable to proceed with the delivery of the
Units being delivered on the Closing Date on the terms and in the manner
contemplated in the Offering Memorandum.
(m) 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, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, 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
26
such) as to make it, in the judgment of the Initial Purchaser, impracticable or
inadvisable to proceed with the public offering or delivery of the Units being
delivered on the Closing Date on the terms and in the manner contemplated in the
Offering Memorandum.
(n) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded debt securities or
preferred stock of any Issuer or Guarantor by any "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 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 Issuers'
debt securities or preferred stock.
(o) Each of the Issuers and the Guarantor shall have furnished
a Secretary's Certificate in form and substance satisfactory to the Initial
Purchaser.
(p) The Initial Purchaser shall have received, addressed to
the Initial Purchaser a solvency certificate that is identical to the solvency
certificate required to be delivered to the lenders under the Senior Credit
Facilities.
(q) Xxxxxx & Xxxxxxx shall have been furnished with such other
documents and opinions, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Agreement and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(r) The issuance and sale of notes contemplated by the
Securities Purchase Agreement shall have been consummated on the terms described
in the Offering Memorandum.
(s) The Initial Purchaser shall have received an executed copy
of the Management Services Agreement in form and substance satisfactory to the
Initial Purchaser.
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 Purchaser.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuers and the Guarantor shall indemnify and hold
harmless the Initial Purchaser, its officers and employees and each person, if
any, who controls the Initial Purchaser within the meaning of the Securities
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 Units), to which
the Initial Purchaser, that officer, employee 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 (A) in the
Preliminary Offering Memorandum or the Offering Memorandum or in
27
any amendment or supplement thereto or (B) in any blue sky application or other
document prepared or executed by the Issuers (or based upon any written
information furnished by the Issuers) specifically for the purpose of qualifying
any or all of the Securities under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter
called a "BLUE SKY APPLICATION"), (ii) the omission or alleged omission to state
in the Preliminary Offering Memorandum or the Offering Memorandum, or in any
amendment or supplement thereto, or in any Blue Sky Application any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act or any alleged act or failure
to act by the Initial Purchaser in connection with, or relating in any manner
to, the Units 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
Issuers and the Guarantor 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 the Initial Purchaser through its gross negligence or willful misconduct),
and shall reimburse the Initial Purchaser and each such officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Initial Purchaser, that officer, employee 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 Issuers and the Guarantor
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 Offering Memorandum, or in any such amendment or supplement, or in any Blue
Sky Application, in reliance upon and in conformity with written information
concerning the Initial Purchaser furnished to the Issuers and the Guarantor by
or on behalf of the Initial Purchaser specifically for inclusion therein; and
PROVIDED FURTHER, that the foregoing indemnity agreement with respect to any
Preliminary Offering Memorandum shall not inure to the benefit of the Initial
Purchaser from whom the person asserting any such losses, claims, damages or
liabilities purchased Units, or any person controlling such Initial Purchaser,
if a copy of the Offering Memorandum (as then amended or supplemented if the
Issuers and the Guarantor shall have furnished any amendments or supplements
thereto) was not seen or given by or on behalf of such Initial Purchaser to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Units to such person, and if the Offering
Memorandum (as so amended or supplemented) would have corrected any such untrue
statement of a material fact contained in, and each omission or alleged omission
of material fact from, such Preliminary Offering Memorandum giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Issuers and the Guarantor with Section 5(b) hereof. The
foregoing indemnity agreement is in addition to any liability which the Issuers
and the Guarantor may otherwise have to the Initial Purchaser or to any officer,
employee or controlling person of the Initial Purchaser.
(b) The Initial Purchaser shall indemnify and hold harmless
the Issuers and the Guarantor, their officers and employees, each of their
directors, and each person, if any, who controls any Issuer or the Guarantor
within the meaning of the Securities Act, from and
28
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which any Issuer or the Guarantor 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 (A) in the Preliminary Offering Memorandum or the
Offering Memorandum or in any amendment or supplement thereto, or (B) in any
Blue Sky Application or (ii) the omission or alleged omission to state in the
Preliminary Offering Memorandum or the Offering Memorandum, or in any amendment
or supplement thereto, or in any Blue Sky Application any material fact required
to be stated therein or necessary to make the statements therein 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 concerning the Initial Purchaser furnished
to the Issuers and the Guarantor by or on behalf of the Initial Purchaser
specifically for inclusion therein, and shall reimburse the Issuers and the
Guarantor and any such director, officer or controlling person for any legal or
other expenses reasonably incurred by the Issuers and the Guarantor 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 the Initial Purchaser may otherwise have to the
Issuers and the Guarantor or any such director, officer, employee 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 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 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, 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 the 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
29
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 (in addition to one local counsel) at
any time for all such indemnified parties, which firm shall be designated in
writing by the Initial Purchaser, if the indemnified parties under this Section
8 consist of the Initial Purchaser or any of its officers, employees or
controlling persons, or by the Issuers and the Guarantor, if the indemnified
parties under this Section 8 consist of the Issuers, the Guarantor or any of
their directors, officers, employees or controlling persons. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding,
or (ii) 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 the consent of the indemnifying party or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(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 Issuers and the Guarantor, on the one hand, and the Initial
Purchaser, on the other, from the offering of the Units 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 Issuers and
the Guarantor, on the one hand, and the Initial Purchaser, 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 Issuers and the
Guarantor, on the one hand, and the Initial Purchaser, 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 Units purchased under this Agreement
(before deducting expenses) received by the Issuers and the Guarantor, on the
one hand, and the total discounts and commissions received by the Initial
Purchaser with respect to the Units purchased under this Agreement, on the other
hand, bear to the total gross
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proceeds from the offering of the Units 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 Issuers or the Guarantor or
the Initial Purchaser, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Issuers and the Guarantor and the Initial Purchaser 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), the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total price at which the Units purchased by it were resold to the
Eligible Purchasers exceeds the amount of any damages which the 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(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) The Initial Purchaser confirms and the Issuers and the
Guarantor acknowledge that the statements with respect to the offering of the
Units by the Initial Purchaser set forth in the first sentence of the second
paragraph, in the second to last sentence in the third paragraph, in the first
and second sentence of the fourth paragraph and in all of the sixth paragraph
under the caption "Plan of Distribution" in the Offering Memorandum are correct
and constitute the only information concerning the Initial Purchaser furnished
in writing to the Issuers and the Guarantor by or on behalf of the Initial
Purchaser specifically for inclusion in the Offering Memorandum.
9. TERMINATION. The obligations of the Initial Purchaser hereunder may
be terminated by the Initial Purchaser by notice given to and received by the
Issuers and the Guarantor prior to delivery of and payment for the Units if,
prior to that time, any of the events described in Sections 7(j), 7(k) or 7(l)
shall have occurred, or if the Initial Purchaser shall decline to purchase the
Units for any reason permitted under this Agreement.
10. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. If the Issuers and
the Guarantor shall fail to tender the Units for delivery to the Initial
Purchaser by reason of any failure, refusal or inability on the part of the
Issuers and the Guarantor to perform any agreement on their part to be
performed, or because any other condition of the obligations hereunder required
to be fulfilled by the Issuers and the Guarantor is not fulfilled, the Issuers
and the Guarantor will reimburse the Initial Purchaser for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Initial Purchaser in
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connection with this Agreement and the proposed purchase of the Units, and upon
demand the Issuers and the Guarantor shall pay the full amount thereof to the
Initial Purchaser.
11. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, 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 Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxxxxx (Fax: 000-000-0000) and, in
the case of any notice pursuant to Section 8(d), to the Director of Litigation,
Office of the General Counsel, Xxxxxx Brothers Inc., Three World Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000; and
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Offering Memorandum, Attention: Xxxxxxx X. Xxxxxx, III, Esq. (Fax:
000-000-0000), with a copy to Xxxxxxxx & Xxxxx, International Financial Centre,
Old Broad Street, London EC2N 1HQ, UK, Attention: X. Xxxxxx Xxxxx
(Fax: 00 000 000-0000).
Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof. The Issuers and the Guarantor shall
be entitled to act and rely upon any request, consent, notice or agreement given
by the Initial Purchaser.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchaser, the Issuers
and the Guarantor 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
Issuers and the Guarantor contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control the Initial
Purchaser within the meaning of Section 15 of the Securities Act and (B) the
indemnity agreement of the Initial Purchaser contained in Section 8(c) of this
Agreement shall be deemed to be for the benefit of directors of the Issuers and
the Guarantor and any person controlling any Issuer or the Guarantor within the
meaning of Section 15 of the Securities 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 Issuers and the Guarantor and the Initial Purchaser
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
Units 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.
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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 of the Commission
under the Securities Act.
15. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of New York without regard to principles of
conflicts of laws.
Each party irrevocably agrees that any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("RELATED PROCEEDINGS") may be instituted in the federal
courts of the United States of America located in the City of New York or the
courts of the State of New York in each case located in the Borough of Manhattan
in the City of New York (collectively, the "SPECIFIED COURTS"), and irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "RELATED
JUDGMENT"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. The parties further agree that service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any lawsuit, action or
other proceeding brought in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any lawsuit,
action or other proceeding in the Specified Courts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
16. PRIOR AGREEMENTS. The parties to this Agreement acknowledge and
agree that this Agreement supersedes Section 2 of that certain Interim Loan Fee
Letter, dated as of October 17, 1999, by and among the Initial Purchaser, OSI
and the other parties thereto (the "INTERIM LOAN FEE LETTER") and that from and
after the date hereof, the Interim Loan Commitment (as defined in that certain
Commitment Letter, dated as of October 17, 1999, by and among the Initial
Purchaser, OSI and the other parties thereto) and Section 2 of the Interim Loan
Fee Letter shall have no further force and effect.
17. 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.
18. 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.
(Signature Pages Follow)
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If the foregoing correctly sets forth the agreement between the Issuers
and the Guarantor and the Initial Purchaser, please indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
X'XXXXXXXX INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name:
Title:
X'XXXXXXXX INDUSTRIES HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name:
Title:
X'XXXXXXXX INDUSTRIES - VIRGINIA, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name:
Title:
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Accepted:
XXXXXX BROTHERS INC.
By: /s/ Xxxx X. Xxxxxxxx
-------------------------
AUTHORIZED REPRESENTATIVE
35
