EXHIBIT 10.10
UNITED STATIONERS SUPPLY CO.
$150,000,000 Senior Subordinated Notes due 2005
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Purchase Agreement
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April 26, 1995
Chase Securities, Inc.
One Chase Manhattan Plaza
New York, New York 10081
Ladies and Gentlemen:
United Stationers Supply Co., an Illinois corporation (the "Company"),
a wholly-owned subsidiary of United Stationers Inc., a Delaware corporation (the
"Guarantor"), proposes to issue and sell to you (the "Initial Purchaser") an
aggregate of $150,000,000 principal amount of its 12 3/4% Senior Subordinated
Notes due 2005 (the "Securities"). The securities will be unconditionally
guaranteed by the Guarantor (the "Guarantee"). The Securities are to be issued
pursuant to an indenture to be dated as of May 3, 1995 (the "Indenture") among
the Company, the Guarantor, and The Bank of New York, as trustee (the
"Trustee"). The Securities and the Indenture are more fully described in the
Offering Memorandum referred to below. Capitalized terms used herein and not
otherwise defined herein have the respective meanings specified in the Offering
Memorandum.
The Securities will be offered and sold to you without being
registered under the Securities Act of 1933, as amended (the "1933 Act"), in
reliance on an exemption therefrom. The Company has prepared a preliminary
offering memorandum, dated April 5, 1995 (such preliminary offering memorandum
being hereinafter referred to as the
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"Preliminary Offering Memorandum"), and an offering memorandum, dated April 26,
1995 (such offering memorandum, in the form first furnished to the Initial
Purchaser for use in connection with the offering of the Securities, being
hereinafter referred to as the "Offering Memorandum"), setting forth information
regarding the Company and the Securities. The Company hereby confirms that it
has authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities to such
potential purchasers as specified therein.
The Company understands that you propose to make an offering of the
Securities on the terms set forth in the Offering Memorandum, as soon as you
deem advisable after this Agreement has been executed and delivered only (i) to
persons in the United States whom you reasonably believe to be qualified
institutional buyers ("Qualified Institutional Buyers") as defined in Rule 144A
under the 1933 Act, as such rule may be amended from time to time ("Rule 144A"),
in transactions under Rule 144A, (ii) to a limited number of other institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under
Regulation D of the 1933 Act ("Accredited Investors")) in private sales exempt
from registration under the 1933 Act and/or (iii) to non-U.S. persons outside
the United States to whom offers and sales of the Securities may be made in
reliance upon Regulation S under the 1933 Act.
The holders of the Securities will be entitled to the benefits of a
Registration Rights Agreement, in substantially the form attached hereto as
Exhibit A with such changes as shall be agreed to by the parties hereto (the
"Registration Rights Agreement"), pursuant to which the Company has agreed to
use its best efforts to file within 30 days of the date of original issue of the
Securities a registration statement (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") registering the Securities
or the Exchange Securities referred to in the Registration Rights Agreement
under the 1933 Act.
Section 1. Representations and Warranties. (a) The Company
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represents and warrants to, and agrees with, the Initial Purchaser that:
(i) As of the date of each of the Preliminary Offering Memorandum and
the Offering Memorandum, and at all times subsequent thereto up to the Time
of Delivery, none of the Preliminary Offering Memorandum, the Offering
Memorandum nor any amendment or supplement thereto prepared by the Company
and delivered to the Initial Purchaser for use prior to the Time of
Delivery included or will include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
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warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by the Initial Purchaser expressly for use therein.
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(ii) The Preliminary Offering Memorandum, the Offering Memorandum
and the amendments or supplements thereto prepared by the Company and
delivered to the Initial Purchaser for use prior to the Time of Delivery,
as of their respective dates, collectively contain all the information
specified in, and meet the requirements of, Rule 144A(d)(4).
(iii) Arthur Andersen LLP, who are reporting upon the audited
financial statements included in the Registration Statement, are
independent public accountants as required by the 1933 Act and the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations").
(iv) This Agreement has been duly authorized, executed and delivered
by each of the Company and the Guarantor.
(v) The consolidated financial statements included in the Offering
Memorandum present fairly the consolidated financial position of each of
the Guarantor and its subsidiaries and Associated Holdings, Inc.
("Associated") and its subsidiaries as of the dates indicated and the
consolidated results of operations and the consolidated cash flows of the
Guarantor and its subsidiaries and Associated and its subsidiaries for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved other than the change in
accounting for inventories to the LIFO method effective January 1, 1995.
The selected financial data included in the Offering Memorandum present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited consolidated financial statements
included in the Offering Memorandum. The pro forma financial statements
and other pro forma financial information included in the Offering
Memorandum present fairly the information shown therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements, have been properly compiled on the pro
forma bases described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein.
(vi) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Illinois with corporate
power and authority under such laws to own, lease and operate its
properties and conduct its business as described in the Offering
Memorandum; and the Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction in
which it owns or leases property of a nature, or transacts business of a
type, that would make such qualification necessary, except to the extent
that the failure to so qualify or be in good standing would not have a
material adverse effect
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on the Company, the Guarantor and the Subsidiaries (as defined herein),
considered as one enterprise.
(vii) The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with
corporate power and authority under such laws to own, lease and operate its
properties and conduct its business as described in the Offering
Memorandum; and the Guarantor is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction in
which it owns or leases property of a nature, or transacts business of a
type, that would make such qualification necessary, except to the extent
that the failure to so qualify or be in good standing would not have a
material adverse effect on the Company, the Guarantor and the Subsidiaries,
considered as one enterprise.
(viii) The Guarantor's only direct subsidiary is the Company. The
Company's only subsidiaries are United Business Computers, Inc. ("UBC"),
United Stationers Hong Kong Limited ("USHK"), United Worldwide Limited
("UW"), CJS/GT Corporation ("CJS") and 4303 Pleasantville Road Associates,
L.P. ("4303" and, together with UBC, USHK, UW and CJS, the "Subsidiaries").
Each Subsidiary is a corporation or limited partnership, as applicable,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation with corporate power and authority under
such laws to own, lease and operate its properties and conduct its
business; and each Subsidiary is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction in
which it owns or leases property of a nature, or transacts business of a
type, that would make such qualification necessary, except to the extent
that the failure to so qualify or be in good standing would not have a
material adverse effect on the Company, the Guarantor and the Subsidiaries,
considered as one enterprise. All of the outstanding shares of capital
stock of each Subsidiary have been duly authorized and validly issued and
are fully paid and non-assessable. All of the outstanding shares of
capital stock of the Company are owned by the Guarantor free and clear of
any pledge, lien, security interest, charge, claim, equity or encumbrance
of any kind, except as disclosed in the Preliminary Offering Memorandum and
the Offering Memorandum. Schedule 1(a)(viii) attached hereto sets forth
the Company's ownership of capital stock of each Subsidiary. The Company
owns such capital stock of each such Subsidiary free and clear of any
pledge, lien, security interest, charge, claim, equity or encumbrance of
any kind, except as disclosed in the Preliminary Offering Memorandum and
the Offering Memorandum or as set forth in Schedule 1(a)(viii) attached
hereto.
(ix) The table in the Offering Memorandum under the caption
"Capitalization," under "Pro Forma at December 31, 1994," sets forth the
pro forma
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consolidated capitalization of the Guarantor as of the date indicated
therein, as adjusted to give effect to the consummation of the Mergers.
(x) The Indenture has been duly authorized by the Company and by
the Guarantor, will be substantially in the form heretofore delivered to
you and, when duly executed and delivered by the Company, the Guarantor and
the Trustee, will constitute a valid and binding obligation of the Company
and the Guarantor, enforceable against the Company and the Guarantor in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent conveyances or transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
and the Indenture conforms in all material respects to the description
thereof in the Offering Memorandum.
(xi) The Securities have been duly authorized by the Company, and
the Guarantee has been duly authorized by the Guarantor. When executed,
authenticated, issued and delivered by the Company in the manner provided
for in the Indenture and sold and paid for as provided in this Agreement,
the Securities 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, except as enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent conveyances or transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and the Guarantee, when the Indenture has
been duly executed and delivered by the Guarantor, will constitute a valid
and binding obligation of the Guarantor enforceable against the Guarantor
in accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent conveyances or transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law); and each of the Securities and the Guarantee conforms in all
material respects to the descriptions thereof in the Offering Memorandum.
(xii) The Registration Rights Agreement has been duly authorized by
the Company and the Guarantor, will be substantially in the form heretofore
delivered to you and, when duly executed and delivered by the Company, the
Guarantor and the Initial Purchaser, will constitute a valid and binding
obligation of the Company and
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the Guarantor, enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent conveyances or
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law); and the
Registration Rights Agreement conforms in all material respects to the
description thereof in the Offering Memorandum.
(xiii) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and non-
assessable; all of the outstanding shares of capital stock of the Guarantor
have been duly authorized and validly issued and are fully paid and non-
assessable; no holder thereof is or will be subject to personal liability
by reason of being such a holder; and none of the outstanding shares of
capital stock of the Guarantor was issued in violation of the preemptive
rights of any stockholder of the Guarantor.
(xiv) Since the respective dates as of which information is given in
the Offering Memorandum, except as otherwise stated therein or contemplated
thereby, there has not been (A) any material adverse change in the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company, the Guarantor and the Subsidiaries, considered as
one enterprise, (B) any transaction entered into by the Company, the
Guarantor or any Subsidiary, other than in the ordinary course of business,
that is material to the Company, the Guarantor and the Subsidiaries,
considered as one enterprise, or (C) any dividend or distribution of any
kind declared, paid or made by the Company or the Guarantor on their
capital stock except for dividends declared on the Guarantor's Series A, B
and C Preferred Stock effective April 30, 1995.
(xv) None of the Company, the Guarantor nor any Subsidiary is in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which it is a
party or by which it may be bound or to which any of its properties may be
subject, except for such defaults that are disclosed in the Offering
Memorandum or that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company, the Guarantor and the Subsidiaries, considered as
one enterprise. The execution and delivery of the Indenture by the Company
and the Guarantor, the execution and delivery of this Agreement by the
Company and the Guarantor, the issuance and delivery by the Company of the
Securities, the consummation by each of the Company, the Guarantor and each
Subsidiary of the transactions contemplated in this Agreement and in the
Offering Memorandum, and the compliance by each of the
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Company and the Guarantor with the terms of the Indenture have been duly
authorized by all necessary corporate action on the part of each of the
Company and the Guarantor and do not and will not result in any violation
of the charter or by-laws of the Company, the Guarantor or any Subsidiary,
and do not and will not conflict with, or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company, the Guarantor or any Subsidiary under (A) any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company, the Guarantor or any
Subsidiary is a party or by which it may be bound or to which any of its
properties may be subject (except for such violations, conflicts, breaches
or defaults or liens, charges or encumbrances that would not have a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company, the
Guarantor and the Subsidiaries, considered as one enterprise) or (B) any
existing applicable law, rule, regulation (other than the securities or
blue sky laws of any states), judgment, order or decree of any government,
governmental authority or court, domestic or foreign, having jurisdiction
over the Company, the Guarantor or any Subsidiary or any of their
respective properties (except for such violations, conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a material
adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company, the Guarantor and
the Subsidiaries, considered as one enterprise).
(xvi) No authorization, approval, consent, order, registration or
qualification of or with any government, governmental instrumentality or
court, domestic or foreign (other than under the securities or blue sky
laws of the various states), except such authorizations, approvals,
consents, orders, registrations or qualifications as have already been
obtained, is required for the consummation by the Company, the Guarantor or
any Subsidiary of the transactions contemplated in this Agreement and in
the Offering Memorandum, and the valid authorization, issuance, sale and
delivery of the Securities by the Company, or for the execution, delivery
or performance of the Indenture by the Company and the Guarantor.
(xvii) Except as disclosed in the Offering Memorandum, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company, threatened against or affecting the Company, the
Guarantor or any Subsidiary that is required to be disclosed in the
Offering Memorandum or that could reasonably be expected to result in any
material adverse change in the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company, the
Guarantor and the Subsidiaries, considered as one enterprise, or that could
reasonably be expected to materially and adversely affect the properties or
assets of the
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Company, the Guarantor and the Subsidiaries, considered as one enterprise,
or that could reasonably be expected to adversely affect the consummation
of the transactions contemplated by this Agreement, or that seeks to
enjoin, invalidate or obtain any award or damages in respect of, the
Acquisition; the aggregate of all pending legal or governmental proceedings
that are not described in the Offering Memorandum to which the Company, the
Guarantor or any Subsidiary is a party or which affect any of their
respective properties, including ordinary routine litigation incidental to
the business of the Company, the Guarantor or any Subsidiary, would not
have a material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company, the
Guarantor and the Subsidiaries, considered as one enterprise.
(xviii) The Company, the Guarantor and the Subsidiaries each have
good and marketable title to all properties and assets described in the
Offering Memorandum as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as (A) are described in the
Offering Memorandum or (B) are neither material in amount nor materially
significant in relation to the business of the Company, the Guarantor and
the Subsidiaries, considered as one enterprise; all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company, the Guarantor
and the Subsidiaries hold properties described in the Offering Memorandum,
are in full force and effect, and none of the Company, the Guarantor nor
any Subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company, the Guarantor
or any Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of such corporation to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xix) The Company, the Guarantor and the Subsidiaries each owns,
possesses or has obtained all material governmental licenses, permits,
certificates, consents, orders, approvals and other authorizations
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as presently conducted, and none of
the Company, the Guarantor nor any Subsidiary has received any notice of
proceedings relating to revocation or modification of any such licenses,
permits, certificates, consents, orders, approvals or authorizations.
(xx) The Company, the Guarantor and the Subsidiaries each owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
licenses, trademarks, service marks and trade names necessary to carry on
its business as presently conducted, and none of the Company, the Guarantor
nor any Subsidiary has received any notice of infringement of or conflict
with asserted rights of others with respect to any patents, patent
licenses, trademarks, service marks or trade names that
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in the aggregate, if the subject of an unfavorable decision, ruling or
finding, could materially adversely affect the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company, the Guarantor and the Subsidiaries, considered as one enterprise.
(xxi) To the best knowledge of the Company, no labor problem exists
with its employees or with employees of the Subsidiaries or is imminent
that could reasonably be expected to adversely affect the Company, the
Guarantor and the Subsidiaries, considered as one enterprise, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or the Subsidiaries' principal suppliers,
contractors or customers that could reasonably be expected to materially
adversely affect the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company, the Guarantor and the
Subsidiaries, considered as one enterprise.
(xxii) The Company has not taken and will not 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
Securities.
(xxiii) All United States federal income tax returns of the Company,
the Guarantor and the Subsidiaries required by law to be filed have been
filed and all taxes shown by such returns or otherwise assessed, which are
due and payable, have been paid, except assessments against which appeals
have been or will be promptly taken and as to which adequate reserves have
been provided. The United States federal income tax returns of the Company
through the fiscal year ended August 31, 1990 and of Stationers
Distributing Company, Inc. through December 31, 1991 have been settled and
no assessment in connection therewith has been made against the Company.
The Company, the Guarantor and the Subsidiaries each has filed all other
tax returns that are required to have been filed by it pursuant to
applicable foreign, state, local or other law except insofar as the failure
to file such returns would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company, the Guarantor and the Subsidiaries, considered as
one enterprise, and has paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Company, the Guarantor and the
Subsidiaries, except for such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided. The charges,
accruals and reserves on the books of the Company in respect of any income
and corporation tax liability for any years not finally determined are
adequate to meet any assessments or re-assessments for additional income
tax for any years not finally determined, except to the extent of any
inadequacy that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business prospects
of the Company, the Guarantor and the Subsidiaries, considered as one
enterprise.
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(xxiv) The Company, the Guarantor and the Subsidiaries each maintains
a system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxv) No event of default exists under any material contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument constituting Senior Indebtedness (as defined in the Indenture).
(xxvi) The Company is, and immediately after the Closing Time will
be, Solvent. As used herein, the term "Solvent" means, with respect to the
Company on a particular date, that on such date (A) the fair market value
of the assets of the Company is greater than the total amount of
liabilities (including contingent liabilities) of the Company, (B) the
present fair salable value of the assets of the Company is greater than the
amount that will be required to pay the probable liabilities of the Company
on its debts as they become absolute and matured, (C) the Company is able
to pay its debts and other liabilities, including contingent obligations,
as they mature and (D) the Company does not have an unreasonably small
capital.
(xxvii) Except as would not individually or in the aggregate have a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company, the
Guarantor and the Subsidiaries, considered as one enterprise, (A) each of
the Company, the Guarantor and each Subsidiary is in material compliance
with all applicable Environmental Laws, (B) each of the Company, the
Guarantor and each Subsidiary has all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or, to the knowledge of
the Company, threatened Environmental Claims against the Company, the
Guarantor or any Subsidiary, and (D) there are no conditions with respect
to any property or operations of the Company, the Guarantor or any
Subsidiary that could reasonably be expected to form the basis of an
Environmental Claim against the Company, the Guarantor or any Subsidiary.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any applicable United States
(or other applicable jurisdiction's) federal, state, provincial, local or
municipal statute, law, rule, regulation, ordinance, code, legally binding
policy or rule of common law and
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any applicable judicial or administrative interpretation thereof including
any applicable and binding judicial or administrative order, consent decree
or judgment, relating to the environment, health, safety or any hazardous
chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority. "Environmental Claims" means
any and all administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating in any way to any Environmental Law.
(xxviii) Assuming the accuracy of your representations contained in
Section 2(d) hereof, it is not necessary in connection with the offer, sale
and delivery of the Securities to the Initial Purchaser under, or in
connection with the initial resale of such Securities by the Initial
Purchaser in accordance with, this Agreement and the Offering Memorandum to
register the Securities under the 1933 Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act").
(xxix) None of the Company or any affiliate (as such term is defined
in Rule 501(b) of Regulation D under the 1933 Act) of the Company, or any
person acting on behalf thereof (other than you, as to whom the Company
makes no representation), has engaged in any directed selling efforts (as
such term is defined in Regulation S ("Regulation S") under the 1933 Act)
with respect to any Securities offered and sold in reliance on Rule 903 of
Regulation S, and the Company and such affiliates, and such other persons
acting on behalf thereof (other than you and any initial purchasers of the
Securities from you), have complied with the offering restrictions
requirement of Regulation S with respect to such Securities if any are
imposed prior to the Time of Delivery.
(xxx) The Company has complied and will comply with all the
provisions of Florida H.B. 1771, codified as Section 517.075 of the Florida
statutes, and all regulations promulgated thereunder relating to issuers
doing business in Cuba.
(xxi) The Company and each Subsidiary maintain reasonably adequate
insurance covering their respective properties, operations, personnel and
business.
(xxxii) Neither the Company nor the Guarantor is an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(b) Any certificate signed by any officer of the Company, the
Guarantor or any Subsidiary and delivered to the Initial Purchaser or to counsel
for the Initial Purchaser
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shall be deemed a representation and warranty by the Company to the Initial
Purchaser as to the matters covered thereby.
Section 2. Sale and Delivery to the Initial Purchaser; Closing. (a)
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On the basis of the representations and warranties herein contained and subject
to the terms and conditions herein set forth, the Company agrees to issue and
sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase from
the Company, at a purchase price of 97% of the principal amount thereof, plus
accrued interest, if any, from May 3, 1995 to the Time of Delivery hereunder,
$150,000,000 aggregate principal amount of Securities.
(b) Securities to be purchased by the Initial Purchaser hereunder, in
such authorized denominations and registered in such names as the Initial
Purchaser may request upon at least forty-eight hours prior notice to the
Company, shall be delivered by or on behalf of the Company to you for the
account of the Initial Purchaser, against payment by the Initial Purchaser or on
its behalf of the purchase price therefor by wire transfer to the Company's
account at The Chase Manhattan Bank (National Association), all at the office of
Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, at 10:00
a.m., New York time, on May 3, 1995 or at such other time and date as the
Initial Purchaser and the Company may agree upon in writing, such time and date
being herein called the "Time of Delivery." Such certificates will be made
available for checking and packaging at least twenty-four hours prior to the
Time of Delivery.
(c) Upon the authorization by the Initial Purchaser of the release of
the Securities, the Initial Purchaser proposes to offer the Securities for sale
only upon the terms and conditions set forth in the Offering Memorandum.
(d) The Initial Purchaser represents and warrants that it is an
Accredited Investor. The Initial Purchaser agrees with the Company that it (a)
will not solicit offers for, or offer or sell, the Securities by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) and (b) will offer and sell the
Securities only upon the terms and conditions set forth in the Offering
Memorandum. The Initial Purchaser represents and warrants to and agrees with
the Company that the Securities have been and will be offered for sale and will
be sold by the Initial Purchaser solely to (i) persons reasonably believed by it
to be "qualified institutional buyers" within the meaning of Rule 144A under the
Act and/or (ii) a limited number of persons who are institutional "accredited
investors" within the meaning of Rule 501(a) (1), (2), (3) or (7) under the Act,
and that the Initial Purchaser has not and will not offer the Securities for
sale by means of any general solicitation or general advertising within the
meaning of Rule 502(c) under the Act. The Initial Purchaser agrees that, prior
to or simultaneously with the confirmation of sale by the Initial Purchaser to
any purchaser of any of the Securities purchased by it from the Company pursuant
hereto, it shall furnish to that purchaser a copy of the Offering
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Memorandum (and any amendment thereof or supplement thereto that the Company
shall have furnished to you prior to the date of such confirmation of sale).
Section 3. Certain Covenants of the Company. The Company covenants
--------------------------------
with the Initial Purchaser as follows:
(a) to furnish the Initial Purchaser with copies of the Offering
Memorandum in such quantities as the Initial Purchaser may from time to time
reasonably request, and if at any time prior to the completion of the sale of
the Securities by the Initial Purchaser to third parties any event shall have
occurred as a result of which the Offering Memorandum as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made when such Offering
Memorandum is delivered, not misleading, to promptly inform the Initial
Purchaser and prepare and furnish without charge to the Initial Purchaser and to
any dealer in securities as many copies as the Initial Purchaser may from time
to time reasonably request of an amended Offering Memorandum or a supplement to
the Offering Memorandum which will correct such statement or omission or effect
such compliance and to which the Initial Purchaser shall not have reasonably
objected after being furnished copies thereof;
(b) before amending or supplementing either the Preliminary Offering
Memorandum or the Offering Memorandum, to furnish to you a copy of each such
proposed amendment and not to use any such proposed amendment or supplement to
which you reasonably object.
(c) promptly from time to time to take such action as the Initial
Purchaser may reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as the Initial Purchaser may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the placement of the Securities, provided that in connection therewith
--------
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(d) none of the Company or any of its affiliates (as such term is
defined in Rule 501(b) of Regulation D under the 1933 Act) will offer, sell or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the 1933 Act) which could be integrated with the sale of the
Securities in a manner that would require the registration of any of the
Securities under the 1933 Act;
(e) during the period from the Time of Delivery to the earlier of (i)
three years after the Time of Delivery or (ii) the date of effectiveness of the
Registration Statement, the Company will not, and will not permit any of its
affiliates (as such term is
14
defined in Rule 144 under the 1933 Act) to, resell any of the Securities that
have been reacquired thereby, except for Securities purchased by the Company or
any of its affiliates and resold in a transaction registered under the 1933 Act;
(f) the Company will, so long as any Securities issued by it are
outstanding, file on a timely basis with the Commission, to the extent such
filings are accepted by the Commission and whether or not the Company has a
class of securities registered under the 1934 Act, the annual reports, quarterly
reports and other documents that the Company would be required to file if it
were subject to Section 13 or Section 15 of the 1934 Act. For a period of five
years after the Time of Delivery, the Company will furnish to you copies of all
such reports and information, together with such other documents, reports and
information as shall be furnished by the Company to the holders of the
Securities issued by it;
(g) each Security will bear the following legend until, in the opinion
of counsel for the Company, such legend shall no longer be necessary or
advisable because such Security is no longer subject to the restrictions on
transfer described therein:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER
THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE ISSUER OF THIS SECURITY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
15
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (A)(2), (A)(3) OR (A)(7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT
OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT
TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO THE
COMPANY AND THE TRUSTEE AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE;
(h) except following the effectiveness of the Registration Statement,
none of the Company or any affiliate (as such term is defined in Rule 501(b) of
Regulation D under the 1933 Act) of the Company, or any person acting on behalf
thereof (other than you), will engage in any directed selling efforts (as such
term is defined under Regulation S) with respect to any Security, and each of
the Company and such affiliates, and such other persons acting on behalf
thereof, will comply with the offering restrictions requirement of Regulation S,
if any have been imposed;
(i) not to solicit any offer to buy or offer or sell any Securities by
means of any form of general solicitation or general advertising (as those terms
are used in Regulation D under the 1933 Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the 1933 Act;
(j) for a period of five years following the date hereof, to furnish
promptly to the Initial Purchaser copies of each report provided by the Company
to the holders of the Securities;
16
(k) to comply with all of its agreements set forth in the Registration
Rights Agreement and all of its agreements set forth in the representation
letter of the Company to DTC relating to the approval of the Securities by DTC
for book-entry transfer;
(l) to use its reasonable best efforts to effect the inclusion of the
Securities in PORTAL;
(m) until completion of the Exchange Offer, to furnish at its expense,
upon the request of holders of Securities and prospective purchasers of
Securities, information satisfying the requirement of Rule 144A(d)(4);
(n) The Company has complied and will comply with all the provisions
of Florida H.B. 1771, codified as Section 517.075 of the Florida statutes, and
all regulations promulgated thereunder relating to issuers doing business in
Cuba.
(o) neither it nor the Guarantor will be or become, at any time prior
to the expiration of three years after the Time of Delivery, an open-end
investment company, unit investment trust or face-amount certificate company
that is or is required to be registered under the Investment Company Act;
(p) to apply the net proceeds from the sale of the Securities for the
purposes set forth in the Offering Memorandum; and
(q) to supply to the Initial Purchaser a solvency letter from
Valuation Research Corp. to the effect of Section 1(a)(xxvi) hereof in form and
substance reasonably satisfactory to the Initial Purchaser.
Section 4. Payment of Expenses. The Company and Guarantor will
-------------------
jointly and severally pay and bear all costs and expenses incident to the
performance of their obligations under this Agreement, including (a) the
preparation and printing of the Preliminary Offering Memorandum and the Offering
Memorandum and any amendments or supplements thereto, and the cost of furnishing
copies thereof to the Initial Purchaser, (b) the preparation, printing and
distribution of this Agreement, the Indenture, the Registration Rights
Agreement, the Securities, the Blue Sky Survey and the Legal Investment Survey,
(c) the delivery of the Securities to the Initial Purchaser, (d) the fees and
disbursements of the Company's counsel and accountants, (e) the qualification of
the Securities under the applicable securities laws in accordance with Section
3(b) and any filing for review of the offering with the National Association of
Securities Dealers, Inc., including filing fees and fees and disbursements of
counsel for the Initial Purchaser in connection therewith and in connection with
the Blue Sky Survey and the Legal Investment Survey, (f) any fees charged by
rating agencies for rating the Securities, (g) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee, in
connection with the
17
Indenture and the Securities, (h) all fees and expenses in connection with the
registration of the Securities in accordance with the Registration Rights
Agreement, (i) all fees and expenses in connection with the designation of the
Securities as PORTAL securities, (j) fees and disbursements of Valuation
Research Corp. in connection with the solvency letter required by Section 5(g),
and (k) all other costs and expenses incident to the performance of their
obligations hereunder which are not otherwise specifically provided for in this
Section.
If this Agreement is terminated by the Initial Purchaser in accordance
with the provisions of Section 5 or 9(a)(i), the Company shall reimburse the
Initial Purchaser for all its out-of-pocket expenses, including the fees and
disbursements of counsel for the Initial Purchaser.
Section 5. Conditions of Initial Purchaser's Obligations. The
---------------------------------------------
obligations of the Initial Purchaser to purchase and pay for the Securities that
it has agreed to purchase hereunder are subject to the accuracy of the
representations and warranties of the Company contained herein or in
certificates of any officer of the Company, the Guarantor or any Subsidiary
delivered pursuant to the provisions hereof, to the performance by the Company
and the Guarantor of their respective obligations hereunder, and to the
following further conditions:
(a) At the Closing Time, you shall have received a signed opinion of
Weil, Gotshal & Manges, counsel for the Company and the Guarantor, dated as
of the Closing Time, in form and substance satisfactory to counsel for the
Initial Purchaser, to the effect that:
(i) The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being
conducted.
(ii) All of the outstanding shares of the Guarantor's capital
stock are duly authorized, validly issued, fully paid and
nonassessable, with no personal liability attaching to the ownership
thereof, and have not been issued in violation of any preemptive
rights of any stockholder of the Guarantor.
(iii) The execution, delivery and performance of the Indenture,
the Registration Rights Agreement and this Agreement by the Guarantor
have been duly authorized by all necessary corporate action on the
part of the Guarantor. Each of the Indenture, the Registration Rights
Agreement and this Agreement has been duly and validly executed and
delivered by the Guarantor and (assuming the due authorization,
execution and delivery thereof by each of the other parties thereto,
including the Company) constitutes the legal, valid and
18
binding obligation of the Guarantor and the Company, as applicable,
enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors rights
and remedies generally, and subject as to enforceability to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except
that rights to indemnification and contribution under this Agreement
and the Registration Rights Agreement may be limited by federal or
state securities laws or public policy relating thereto and subject to
the qualification that such counsel expresses no opinion as to the
effect on the Indenture or this Agreement of the laws of any
jurisdiction other than federal law and the laws of the States of New
York and Texas wherein any purchaser of the Securities may be located
or wherein enforcement of the Indenture or the Purchase Agreement may
be sought which limits the rate of interest legally chargeable or
collectible.
(iv) Assuming the due authorization and execution of the
Securities by the Company, the Securities, when duly authenticated by
the Trustee in accordance with the terms of the Indenture and duly
delivered against receipt of payment therefor in accordance with the
terms of this Agreement, will constitute the legal, valid and binding
obligation of the Company, enforceable against it in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity)
and subject to the qualification that such counsel expresses no
opinion as to the effect on the Securities of the laws of any
jurisdiction other than federal law and the laws of the States of New
York and Texas wherein any purchaser of the Securities may be located
or wherein enforcement may be sought which limits the rate of interest
legally chargeable or collectible.
(v) The execution and delivery of this Agreement, the Indenture
and the Registration Rights Agreement by the Company and the
Guarantor, the issuance and delivery of the Securities by the Company
and the consummation by the Company and the Guarantor of the
transactions contemplated thereby and compliance by the Company and
the Guarantor with any of the provisions thereof will not (a) conflict
with, constitute a default under or violate (i) any of the terms,
conditions or provisions of the certificate of incorporation or by-
laws of the Guarantor, United Business Computers, Inc. or the
Subsidiaries,
19
(ii) any of the terms, conditions or provisions of any document,
agreement or other instrument to which the Guarantor, the Company or
any Subsidiary is a party or by which it is bound of which we are
aware (except for such conflicts, defaults or violations that would
not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company, the Guarantor and the Subsidiaries, considered as one
enterprise), (iii) any New York, Delaware corporate or federal law or
regulation (other than federal and state securities or blue sky laws,
as to which such counsel expresses no opinion) or (iv) any judgment,
writ, injunction, decree, order or ruling of any court or government
authority binding on the Company, the Guarantor or any Subsidiary of
which such counsel is aware or (b) result in the creation of any lien
on any of the material assets or properties of the Company, the
Guarantor or any Subsidiary pursuant to any material agreement to
which the Company, the Guarantor or any Subsidiary is a party of which
we are aware.
(vi) The Indenture, the Securities, the Registration Rights
Agreement, the Credit Agreement, dated as of March 30, 1995, among the
Company, the Guarantor, The Chase Manhattan Bank (National
Association), and the lenders party thereto, and Article Fourth of the
Restated Certificate of Incorporation of the Guarantor, as amended to
the date hereof, conform in all material respects to the descriptions
thereof in the Offering Memorandum.
(vii) No consent, approval, waiver, license or authorization or
other action by or filing with any New York, Delaware corporate or
federal governmental authority is required in connection with the
execution and delivery by the Company of the Securities or for the
execution, delivery or performance of the Indenture by the Company and
the Guarantor, except for federal and state securities or blue sky
laws, as to which such counsel expresses no opinion in this paragraph
(vii).
(viii) Except as disclosed in the Offering Memorandum, to our
knowledge, there is no litigation, proceeding or governmental
investigation pending or overtly threatened against the Company or the
Guarantor or any of the Subsidiaries that relates to any of the
transactions contemplated by the Agreement, the Indenture, the
Securities and the Registration Rights Agreement or which, if
adversely determined, would have a material adverse effect on the
business, assets or financial condition of the Guarantor, the Company
and the Subsidiaries taken as a whole or on the ability of either the
Guarantor or the Company to perform its respective obligations under
the Agreement, the Indenture, the Securities and the Registration
Rights
20
Agreement to which it is a party or to consummate the transactions
contemplated by the Offering Memorandum.
(ix) Such counsel has participated in conferences with officers
and other representatives of the Guarantor and the Company and
representatives of the independent public accountants for the
Guarantor and the Company in connection with the preparation of the
Offering Memorandum and although such counsel has not independently
verified and is not passing upon and assumes no responsibility for the
accuracy, completeness or fairness of the statements contained in the
Offering Memorandum (except to the extent specified in the foregoing
opinion) no facts have come to such counsel's attention which lead
such counsel to believe that the Offering Memorandum, at any time from
the date thereof through the Time of Delivery, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel expresses
no view with respect to the financial statements and related notes,
the projections and the other financial, statistical and accounting
data included in or appended as exhibits to the Offering Memorandum).
Such opinion shall be to such further effect with respect to other legal
matters relating to this Agreement and the sale of the Securities pursuant
to this Agreement as counsel for the Initial Purchaser may reasonably
request no less than two business days prior to the Time of Delivery. Such
counsel may also state that, insofar as such opinion involves factual
matters, such counsel has relied, to the extent such counsel deems proper,
upon certificates of officers of the Company, the Guarantor and the
Subsidiaries and certificates of public officials; provided that copies of
such certificates have been delivered to the Initial Purchaser.
(b) At the Closing Time, you shall have received a signed opinion of
Altheimer & Gray, local counsel for the Company and the Guarantor, dated as
of the Closing Time, in form and substance satisfactory to counsel for the
Initial Purchaser, to the effect that:
(i) The Company is a corporation organized, validly existing, and
in good standing under the laws of the State of Illinois with the
corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Offering Memorandum.
(ii) The Company is qualified to transact business as a foreign
corporation in good standing in the states listed on Schedule 1
thereto.
21
(iii) All of the outstanding shares of stock of the Company are
held by the Guarantor and have been duly authorized, validly issued,
fully paid and non-assessable.
(iv) Each of the Indenture, the Securities, the Registration
Rights Agreement and this Agreement have been duly authorized and
executed by the Company.
(v) No authorization, approval, consent or license of any
government or government instrumentality (other than under any
securities or blue sky laws) is required for the valid authorization,
issuance, sale and delivery of the Securities.
(vi) The execution and delivery of this Agreement, the Indenture
and the Registration Rights Agreement by the Company, the issuance and
delivery of the Securities, the consummation by the Company of the
transactions contemplated thereby in the Offering Memorandum and
compliance by the Company with the terms of this Agreement, the
Indenture and the Registration Rights Agreement do not and will not
result in any violation of the charter or by-laws of the Company.
(c) At the Closing Time, you shall have received the favorable
opinion of Shearman & Sterling, counsel for the Initial Purchaser, dated as
of the Closing Time, to the effect that the opinion delivered pursuant to
Sections 5(a) appears on its face to be appropriately responsive to the
requirements of this Agreement except, specifying the same, to the extent
waived by you, and with respect to the incorporation and legal existence of
the Company, the incorporation and legal existence of the Guarantor, the
Securities, this Agreement, the Indenture, the Registration Rights
Agreement, the Preliminary Offering Memorandum, the Offering Memorandum and
such other related matters as you may require. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York, the federal law of the United
States and the General Corporation Law of the State of Delaware, upon the
opinions of counsel satisfactory to you. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company, the
Guarantor and the Subsidiaries and certificates of public officials;
provided that such certificates have been delivered to the Initial
Purchaser.
(d) At the Closing Time, (i) the Offering Memorandum, as it may then
be amended or supplemented, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
(ii) there shall not have been, since the respective
22
dates as of which information is given in the Offering Memorandum, any
material adverse change in the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company, the
Guarantor and the Subsidiaries, considered as one enterprise, whether or
not arising in the ordinary course of business, (iii) no action, suit or
proceeding shall be pending or, to the knowledge of the Company,
threatened against the Company, the Guarantor or any Subsidiary that could
reasonably be expected to result in any material adverse change in the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company, the Guarantor and the Subsidiaries, considered as
one enterprise other than as set forth in the Offering Memorandum and no
proceedings shall be pending or, to the knowledge of the Company,
threatened against the Company, the Guarantor or any Subsidiary before or
by any government, governmental instrumentality or court, domestic or
foreign, that could reasonably be expected to result in any material
adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company, the Guarantor and
the Subsidiaries, considered as one enterprise, other than as set forth in
the Offering Memorandum, (iv) the Company and the Guarantor shall have
complied with all agreements and satisfied all conditions on their
respective parts to be performed or satisfied at or prior to the Closing
Time, (v) no event of default shall exist under any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
constituting Senior Indebtedness (as defined in the Indenture) and (vi) the
other representations and warranties of the Company set forth in Section
1(a) shall be accurate as though expressly made at and as of the Closing
Time. At the Closing Time, you shall have received a certificate of the
President or a Vice President, and the Chief Financial Officer, Treasurer
or Controller, of the Company and the Guarantor, dated as of the Closing
Time, to such effect.
(e) You shall have received on each of the date hereof and the Closing
Date a letter, dated the date hereof or the Closing Date, as the case may
be, in form and substance satisfactory to you, from Arthur Andersen LLP,
the Company's independent public accountants, containing statements and
information of the type ordinarily included in accountants "comfort
letters" to underwriters with respect to the financial statements and
certain financial information (other than pro forma financial information)
contained in the Offering Memorandum;
(f) You shall have received on each of the date hereof and the Closing
Date a letter, dated the date hereof or the Closing Date, as the case may
be, in form and substance satisfactory to you, from Ernst & Young LLP, the
Company's independent public accountants, containing statements and
information of the type ordinarily included in accountants "comfort
letters" to underwriters with respect to the pro forma financial
information contained in the Offering Memorandum;
23
(g) You shall have received a solvency letter from Valuation Research
Corp. to the effect of Section 1(a)(xxvi) hereof in form and substance
reasonably satisfactory to you.
(h) at the Time of Delivery, the Registration Rights Agreement shall
have been duly executed and delivered by the Company and the Guarantor.
(i) At the Closing Time, counsel for the Initial Purchaser shall have
been furnished with all such documents, certificates and opinions as they
may reasonably request for the purpose of enabling them to pass upon the
issuance and sale of the Securities as contemplated in this Agreement and
the matters referred to in Section 5(d) and in order to evidence the
accuracy and completeness of any of the representations, warranties or
statements of the Company, the performance of any of the covenants of the
Company, or the fulfillment of any of the conditions herein contained; and
all proceedings taken by the Company at or prior to the Closing Time in
connection with the authorization, issuance and sale of the Securities as
contemplated in this Agreement shall be reasonably satisfactory in form and
substance to the Initial Purchaser and to counsel for the Initial
Purchaser.
Section 6. Indemnification. (a) The Company and the Guarantor
---------------
each agree jointly and severally to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser within the
meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of or based upon an untrue statement
or alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company or the Guarantor; and
(iii) against any and all expense whatsoever, as incurred (including
fees and disbursements of counsel chosen by you), reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any
24
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Initial Purchaser expressly for use in the Preliminary Offering Memorandum or
the Offering Memorandum (or any amendment or supplement thereto); and provided,
--------
further, that the Company will not be liable to the Initial Purchaser or any
- -------
person controlling the Initial Purchaser with respect to any such untrue
statement or omission made in any preliminary prospectus that is corrected in
the Prospectus (or any amendment or supplement thereto) if the person asserting
any such loss, claim, damage or liability purchased Securities from the Initial
Purchaser in reliance upon a preliminary prospectus but was not sent or given a
copy of the Prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person in any case where
such delivery of the Prospectus (as so amended or supplemented) is required by
the 1933 Act, unless such failure to deliver the Prospectus (as amended or
supplemented) was a result of noncompliance by the Company with Section 3 of
this Agreement.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company and the Guarantor, and each person, if any, who controls the Company or
the Guarantor within the meaning of Section 15 of the 1933 Act, against any and
all loss, liability, claim, damage and expense described in the indemnity
agreement in Section (a), as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in any
preliminary offering memorandum or the Offering Memorandum (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by the Initial Purchaser expressly for use in such
preliminary offering memorandum or the Offering Memorandum (or any amendment or
supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement. An indemnifying party may participate
at its own expense in the defense of such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
Section 7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances under which the indemnity provided for in Section
6 is for any
25
reason held to be unenforceable by the indemnified parties although applicable
in accordance with its terms, the Company and the Guarantor on the one hand and
the Initial Purchaser on the other shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity incurred by the Company and the Initial Purchaser, as incurred, in
such proportions that the Initial Purchaser is responsible for that portion
represented by the percentage that the Initial Purchaser's discount appearing on
the cover page of the Offering Memorandum bears to the price to investors
appearing thereon, and the Company and the Guarantor are responsible for the
balance; provided, however, that no person guilty of fraudulent
-------- -------
misrepresentation (within the meaning of Section 1(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls the Initial Purchaser within the meaning of Section 5 of the 1933 Act
shall have the same rights to contribution as the Initial Purchaser, and each
person, if any, who controls the Company or the Guarantor within the meaning of
Section 5 of the 1933 Act shall have the same rights to contribution as the
Company and the Guarantor.
Section 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. The representations, warranties, indemnities, agreements and other
- --------
statements of the Company, the Guarantor, the Initial Purchaser, or their
respective officers set forth in or made pursuant to this Agreement will remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Company, the Guarantor, the Initial Purchaser or any person
who controls the Company, the Guarantor or the Initial Purchaser within the
meaning of Section 5 of the 1933 Act and will survive delivery of and payment
for the Securities.
Section 9. Termination of Agreement. (a) The Initial Purchaser may
------------------------
terminate this Agreement, by notice to the Company, at any time at or prior to
the Closing Time (i) if there has been, since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition (financial or otherwise), earnings, business affairs or business
prospects of the Company, the Guarantor and the Subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or any outbreak of hostilities or escalation thereof or other
calamity or crisis the effect of which on the financial markets of the United
States is such as to make it, in the Initial Purchaser's judgment, impracticable
to market the Securities or enforce contracts for the sale of the Securities or
(iii) if trading in any securities of the Company or the Guarantor has been
suspended by the Commission or the National Association of Securities Dealers,
Inc., or if trading generally on either the American Stock Exchange or the New
York Stock Exchange or in the over-the-counter market has been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by such exchange or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority or (iv) if a banking moratorium has been declared by
either federal, New York or Illinois authorities.
26
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4. Notwithstanding any such termination, the
provisions of Sections 6, 7 and 8 shall remain in effect.
Section 10. Notices. All statements, requests, notices, and
-------
agreements hereunder shall be in writing, and if to the Initial Purchaser shall
be delivered or sent by mail, telex or facsimile transmission to Chase
Securities, Inc., at One Chase Manhattan Plaza, New York, New York 10081,
Attention: Syndicate Desk; if to the Company or the Guarantor shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company and the Guarantor set forth in the Offering Memorandum, Attention:
Secretary.
Section 11. Parties. This Agreement is made solely for the benefit
-------
of the Initial Purchaser, the Company, the Guarantor and, to the extent
expressed, any person who controls the Company, the Guarantor or the Initial
Purchaser within the meaning of Section 15 of the 1933 Act, and their respective
executors, administrators, successors and assigns and no other person shall
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser, as such purchaser,
from the Initial Purchaser of the Securities.
Section 12. Governing Law and Time. This Agreement shall be governed
----------------------
by the laws of the State of New York. Specified times of the day refer to New
York City time.
Section 13. Counterparts. This Agreement may be executed in one or
------------
more counterparts and when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
27
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon the acceptance hereof by
the Initial Purchaser, this instrument will become a binding agreement among the
Company, the Guarantor and the Initial Purchaser in accordance with its terms.
Very truly yours,
UNITED STATIONERS SUPPLY CO.
By:
-------------------------------
Name:
Title:
UNITED STATIONERS INC.
By:
-------------------------------
Name:
Title:
Accepted as of the date hereof:
CHASE SECURITIES, INC.
By:
--------------------------------
Name:
Title:
Schedule 1(a)(viii)
The Company owns all of the outstanding capital stock of each of USHK,
UWL and CJS. The Company owns 55 shares of UBC common stock directly of record,
as well as 22 shares of UBC common stock subject to the right of T.J. Crayne,
the other holder of UBC common stock, to receive such shares in the event that
UBC meets certain performance criteria. As of April 26, 1995, 122 shares of UBC
common stock were outstanding. CJS owns an 83% interest in 4303.
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
----------------------------------------------------------------------
Registration Rights Agreement
Dated as of ____________, 1995
among
United Stationers Inc.,
United Stationers Supply Co.
and
Chase Securities, Inc.
----------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into May 3, 1995 among UNITED STATIONERS SUPPLY CO., an Illinois corporation
(the "Company"), UNITED STATIONERS INC. ("United"), a Delaware corporation, and
CHASE SECURITIES, INC. (the "Initial Purchaser").
This Agreement is made in connection with the Purchase Agreement dated
April 26, 1995 among the Company, United and the Initial Purchaser (the
"Purchase Agreement"), which provides for the sale by the Company to the Initial
Purchaser of an aggregate of $150,000,000 principal amount of the Company's
12 3/4% Senior Subordinated Notes due 2005 (the "Securities"). In order to
induce the Initial Purchaser to enter into the Purchase Agreement, the Company
has agreed to provide to the Initial Purchaser and its direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
-----------
defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
--------
to time.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
--------
from time to time.
"Closing Date" shall mean the Closing Date as defined in the Purchase
------------
Agreement.
"Company" shall have the meaning set forth in the preamble and also
-------
includes the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
----------
depositary appointed by the Company; provided, however, that such
-------- -------
depositary must have an address in the Borough of Manhattan, in the City of
New York.
"Exchange Offer" shall mean the exchange offer by the Company of
--------------
Exchange Securities for Registrable Securities pursuant to Section 2(a)
hereof.
"Exchange Offer Registration" shall mean a registration under the 1933
---------------------------
Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
-------------------------------------
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case
2
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchange Securities" shall mean ___% Senior Subordinated Notes due
-------------------
2005 issued by the Company under the Indenture containing terms identical
to the Securities (except that (i) interest thereon shall accrue from the
last date on which interest was paid on the Securities or, if no such
interest has been paid, from the date of their original issue, (ii) the
transfer restrictions thereon shall be eliminated and (iii) certain
provisions relating to an increase in the stated rate of interest thereon
shall be eliminated), to be offered to Holders of Securities in exchange
for Securities pursuant to the Exchange Offer.
"Holders" shall mean the Initial Purchaser, for so long as it owns any
-------
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture.
"Indenture" shall mean the Indenture relating to the Securities dated
---------
as of April ___, 1995 between the Company, United and The Bank of New York,
as trustee, as the same may be amended from time to time in accordance with
the terms thereof.
"Initial Purchaser" shall have the meaning set forth in the preamble.
-----------------
"Majority Holders" shall mean the Holders of a majority of the
----------------
aggregate principal amount of outstanding Registrable Securities; provided
--------
that whenever the consent or approval of Holders of a specified percentage
of Registrable Securities is required hereunder, Registrable Securities
held by the Company shall be disregarded in determining whether such
consent or approval was given by the Holders of such required percentage or
amount.
"Person" shall mean an individual, partnership, corporation, trust or
------
unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
----------
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble.
------------------
"Registrable Securities" shall mean the Securities; provided, however,
---------------------- -------- -------
that Securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Securities shall have been
declared effective under the 1933 Act
3
and such Securities shall have been disposed of pursuant to such
Registration Statement, (ii) such Securities shall be entitled to be sold
to the public pursuant to Rule 144(k) (or any similar provision then in
force, but not Rule 144A) under the 1933 Act, (iii) such Securities shall
have ceased to be outstanding or (iv) such Securities have been exchanged
for Exchange Securities upon consummation of the Exchange Offer.
"Registration Expenses" shall mean any and all expenses incident to
---------------------
performance of or compliance by the Company and United with this Agreement,
including without limitation: (i) all SEC, stock exchange or National
Association of Securities Dealers, Inc. ("NASD") registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance
with state securities or blue sky laws and compliance with the rules of the
NASD (including reasonable fees and disbursements of one counsel for any
underwriters or Holders in connection with blue sky qualification of any of
the Exchange Securities or Registrable Securities), (iii) all printers'
fees and expenses with respect to word processing, printing and
distributing any Registration Statement, any Prospectus and any amendments
or supplements thereto, (iv) all rating agency fees, (v) all fees and
disbursements relating to the qualification of the Indenture under
applicable securities laws; (vi) the fees and disbursements of the Trustee
and its counsel and any escrow agent or custodian; (vii) all fees and
expenses incurred in connection with the listing, if any, of any of the
Registrable Securities on any securities exchange or exchanges, (viii) the
fees and disbursements of counsel for the Company and, in the case of a
Shelf Registration statement required to be filed under Section 2(b)(i),
(ii) or (iii), the reasonable fees and disbursements of one counsel for the
Holders (which counsel shall be selected by the Majority Holders and which
counsel may also be counsel for the Initial Purchaser); (ix) the fees and
disbursements of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, and (x) in the
case of a Shelf Registration statement required to be filed under Section
2(b)(i), (ii) or (iii), any reasonable disbursements of the underwriters
customarily required to be paid by issuers or sellers of securities and the
reasonable fees and expenses of any special experts retained by the Company
in connection with any Registration Statement, but excluding fees of
counsel to the underwriters (other than fees and expenses set forth in
clause (ii) above) or the Holders (other than fees and expenses set forth
in clause (viii) above) and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder.
"Registration Statement" shall mean any registration statement of the
----------------------
Company which covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement, and all amendments
and supplements to any such Registration Statement, including post-
effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
---
4
"Shelf Registration" shall mean a registration effected pursuant to
------------------
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
----------------------------
statement of the Company pursuant to the provisions of Section 2(b) hereof
which covers all of the Registrable Securities on an appropriate form under
Rule 415 under the 1933 Act, or any similar rule that may be adopted by the
SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Trustee" shall mean the trustee with respect to the Securities under
-------
the Indenture.
2. Registration Under the 1933 Act. (a) Exchange Offer
------------------------------- --------------
Registration. To the extent not prohibited by any applicable law or applicable
- ------------
interpretation of the Staff of the SEC, the Company shall use its best efforts
(i) to file within 30 days after the Closing Date an Exchange Offer Registration
Statement covering the offer by the Company to the Holders to exchange all of
the Registrable Securities for Exchange Securities, (ii) to cause such Exchange
Offer Registration Statement to be declared effective by the SEC within 120 days
after the Closing Date, (iii) to cause such Registration Statement to remain
effective until the closing of the Exchange Offer and (iv) to consummate the
Exchange Offer within 150 days following the Closing Date. The Exchange
Securities will be issued under the Indenture. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company shall promptly commence the
Exchange Offer, it being the objective of such Exchange Offer to enable each
Holder (other than Participating Broker-Dealers (as defined in Section 3(f)
hereof) eligible and electing to exchange Registrable Securities for Exchange
Securities (assuming that such Holder is not an affiliate of the Company within
the meaning of Rule 405 under the 1933 Act, acquires the Exchange Securities in
the ordinary course of such Holder's business and has no arrangements or
understandings with any person to participate in the Exchange Offer for the
purpose of distributing the Exchange Securities) to trade such Exchange
Securities from and after their receipt without any limitations or restrictions
under the 1933 Act.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder, at its address reflected on the security
register, a copy of the Prospectus forming part of the Exchange Offer
Registration Statement, together with an appropriate letter of transmittal
(a "Letter of Transmittal") and related documents;
(ii) keep the Exchange Offer open for not less than 30 calendar days
after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(iii) permit Holders to withdraw tendered Registrable Securities at
any time prior to the close of business, New York City time, on the last
business day on which
5
the Exchange Offer shall remain open, by sending to the institution
specified in the notice, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of
Registrable Securities delivered for exchange, and a statement that such
Holder is withdrawing his election to have such Securities exchanged; and
(iv) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(i) accept for exchange Registrable Securities duly tendered and
not validly withdrawn pursuant to the Exchange Offer in accordance with the
terms of the Exchange Offer Registration Statement and the Letter of
Transmittal;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities so accepted for exchange by the
Company; and
(iii) cause the Trustee promptly to authenticate and deliver Exchange
Securities to, or upon the instructions of, each Holder of Registrable
Securities equal in principal amount to the Registrable Securities of such
Holder so accepted for exchange.
Interest on each Exchange Security will accrue from the last date on
which interest was paid on the Registrable Securities surrendered in exchange
therefor or, if no interest has been paid on the Registrable Securities, from
the date of its original issue. The Exchange Offer shall not be subject to any
conditions, other than that the Exchange Offer, or the making of any exchange by
a Holder, does not violate applicable law or any applicable interpretation of
the Staff of the SEC. Each Holder of Registrable Securities (other than
Participating Broker-Dealers) who wishes to exchange such Registrable Securities
for Exchange Securities in the Exchange Offer will be required to represent that
(i) it is not an affiliate of United or the Company, (ii) any Exchange
Securities to be received by it were acquired in the ordinary course of its
business and (iii) at the time of the commencement of the Exchange Offer, it has
no arrangement with any person to participate in the distribution (within the
meaning of the 1933 Act) of the Exchange Securities. The Company shall inform
the Initial Purchaser of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Initial Purchaser shall have the right to
contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.
(b) Shelf Registration. (i) If, because of any change in law or
------------------
applicable interpretations thereof by the Staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
(ii) upon the request of the Initial Purchaser (with respect to any Registrable
Securities which it acquired directly from the Company) within 30 calendar days
after the Closing Date if the Initial Purchaser shall hold Registrable
Securities which it acquired directly from the Company and if the Initial
Purchaser is not permitted, in the opinion of counsel to the Initial Purchaser
addressed to the
6
Company (which counsel shall be reasonably acceptable to the Company), pursuant
to applicable law or applicable interpretation of the Staff of the SEC to
participate in the Exchange Offer, or (iii) if any Holder other than the Initial
Purchaser is not eligible to participate in the exchange offer due to a change
in law or the applicable interpretation of the staff of the Commission and such
holder so notifies the Company, the Company shall, at its cost,
(A) as promptly as practicable, file with the SEC a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities
(limited solely to the Initial Purchaser if clause (ii) alone applies) by
the Holders from time to time in accordance with the methods of
distribution elected by the Majority Holders of such Registrable Securities
and set forth in such Shelf Registration Statement, and use its best
efforts to cause such Shelf Registration Statement to be declared effective
by the SEC by the later of (1) 120 days after the Closing Date and (2) 45
days after publication of the change in law or interpretation. In the
event that the Company is required to file a Shelf Registration Statement
upon the request of the Initial Purchaser pursuant to clause (ii) above,
the Company shall file and have declared effective by the SEC both an
Exchange Offer Registration Statement pursuant to Section 2(a) hereof with
respect to all Registrable Securities and a Shelf Registration Statement
(which may be a combined Registration Statement with the Exchange Offer
Registration Statement) with respect to offers and sales of Registrable
Securities held by the Initial Purchaser after completion of the Exchange
Offer;
(B) use its best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming part
thereof to be usable by Holders for a period of (i), in the case of clause
2(b)(i) above, three years from the date the Shelf Registration Statement
is declared effective by the SEC, or (ii) in the case of clauses 2(b)(ii)
and 2(b)(iii) above, three years after the closing date, or in any case
such shorter period which will terminate when all of the Registrable
Securities covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement or cease to be outstanding;
and
(C) notwithstanding any other provisions hereof, use its best efforts
to ensure that (i) any Shelf Registration Statement complies in all
material respects with the 1933 Act and the rules and regulations
thereunder, (ii) any Shelf Registration Statement does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any Prospectus forming part of
any Shelf Registration Statement, and any supplement to such Prospectus (as
amended or supplemented from time to time), does not include 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.
The Company further agrees, if necessary, to supplement or amend the
Shelf Registration Statement if reasonably requested by the Majority Holders
with respect to information relating to the Holders and otherwise as required by
Section 3(b) below, to use all reasonable efforts to cause any such amendment to
become effective and such Shelf
7
Registration to become usable as soon as thereafter practicable and to furnish
to the Holders of Registrable Securities copies of any such supplement or
amendment promptly after its being used or filed with the SEC.
(c) Expenses. The Company shall pay all Registration Expenses in
--------
connection with the registration pursuant to Section 2(a) or 2(b).
(d) Effective Registration Statement. An Exchange Offer Registration
--------------------------------
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
-------- -------
after it has been declared effective, the offering of Registrable Securities
pursuant to a Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, such Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of
Registrable Securities pursuant to such Registration Statement may legally
resume.
(e) Increase in Interest Rate. In the event that (i) the Exchange
-------------------------
Offer Registration Statement is not filed with the SEC on or prior to the 30th
calendar day after the Closing Date (unless changes in law or the applicable
interpretation of the staff of the Commission do not permit the Company to
effect the Exchange Offer, in which case clause (iv) shall apply), (ii) the
Exchange Offer Registration Statement is not initially declared effective on or
prior to the 120th calendar day after the Closing Date (unless changes in law or
the applicable interpretation of the staff of the Commission do not permit the
Company to effect the Exchange Offer, in which case clause (iv) shall apply) or
(iii) the Exchange Offer is not consummated on or prior to the 150th day after
the Closing Date (unless changes in law or the applicable interpretation of the
staff of the Commission do not permit the Company to effect the Exchange Offer,
in which case clause (iv) shall apply) or (iv) a Shelf Registration Statement
required under Section 2(b)(i) hereof with respect to the Registrable Securities
is not initially declared effective on or prior to the later of 120th calendar
day after the Closing Date or the 45th calendar day after the publication of the
change in law or interpretation, the interest rate borne by the Securities shall
be increased by one-half of one percent per annum following such 30-day period
in the case of clause (i) above, such 120-day period in the case of clause (ii)
above, such 150-day period in the case of clause (iii) above or such 120-day or
45-day period in the case of clause (iv) above (as applicable); provided that
--------
the aggregate increase in such interest rate will in no event exceed one-half of
one percent per annum. Immediately upon (A) the filing of the Exchange Offer
Registration Statement after the 30-day period described in clause (i) above,
(B) the effectiveness of the Exchange Offer Registration Statement after the
120-day period described in clause (ii) above, (C) the consummation of the
Exchange Offer after the 150-day period described in clause (iii) above or (D)
the effectiveness of a Shelf Registration Statement after such 120-day or 45-day
period described in clause (iv) above (as applicable), the interest rate borne
by the Securities from the date of such filing, effectiveness or consummation,
as the case may be, will be reduced to the original interest rate.
(f) Specific Enforcement. Without limiting the remedies available to
--------------------
the Initial Purchaser and the Holders, the Company acknowledges that any failure
by the
8
Company to comply with its obligations under Section 2(a) and Sections 2(b)
hereof may result in material irreparable injury to the Initial Purchaser or the
Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchaser or any Holder may obtain such relief
as may be required to specifically enforce the Company's obligations under
Section 2(a) and Section 2(b) hereof.
(g) Acknowledgment of Holders. Each Holder shall be deemed to have
-------------------------
agreed that any broker-dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the Exchange
Offer must comply with the registration and prospectus delivery requirements of
the 1933 Act in connection with secondary resale transactions and that such
secondary resale transactions should be covered by an effective registration
statement.
3. Registration Procedures. In connection with the obligations of
-----------------------
the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement, within the
time period specified in Section 2 hereof, on the appropriate form under the
1933 Act, which form (i) shall be selected by the Company, (ii) shall, in the
case of a Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and (iii) shall comply as to form in
all material respects with the requirements of the applicable form and include
or incorporate by reference all financial statements required by the SEC to be
filed therewith, and use its best efforts to cause such Registration Statement
to become effective and remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under applicable
law to keep such Registration Statement effective for the applicable period;
cause each Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed if required pursuant to Rule 424 under the
1933 Act; comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by each Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the selling Holders thereof; and keep each Prospectus current
during the period described under Section 4(3) and Rule 174 under the 1933 Act
that is applicable to transactions by brokers or dealers with respect to
Exchange Securities or Registrable Securities;
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Securities is being filed
and advising such Holders that the distribution of Registrable Securities will
be made in accordance with the method elected by the Majority Holders; and (ii)
furnish to each Holder of Registrable Securities, to counsel for the Initial
Purchaser, to counsel for the Holders and to each underwriter of an underwritten
offering of Registrable Securities, if any, without charge, as many copies of
each Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other
9
documents as such Holder or underwriter may reasonably request, including
financial statements and schedules and, if the Holder so requests, all exhibits
(including those incorporated by reference) in order to facilitate the public
sale or other disposition of the Registrable Securities; and (iii) subject to
the last paragraph of Section 3 hereof, hereby consent to the use of the
Prospectus or any amendment or supplement thereto by each of the selling Holders
of Registrable Securities in connection with the offering and sale in accordance
with applicable law of the Registrable Securities covered by the Prospectus or
any amendment or supplement thereto;
(d) use its best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of Registrable
Securities shall reasonably request in writing by the time the applicable
Registration Statement is declared effective by the SEC, to cooperate with the
Holders in connection with any filings required to be made with the NASD, and do
any and all other acts and things which may be reasonably necessary or advisable
to enable such Holder to consummate the disposition in each such jurisdiction of
such Registrable Securities owned by such Holder; provided, however, that the
-------- -------
Company shall not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d) or (ii) take any action which
would subject it to general service of process or taxation in any such
jurisdiction if it is not then so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Securities and counsel for the Initial Purchaser promptly and, if
requested by such Holder or counsel, confirm such advice in writing promptly (i)
when a Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments and
supplements to a Registration Statement and Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (iv) if, between the effective date of a
Registration Statement and the closing of any sale of Registrable Securities
covered thereby, the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to such offering cease to be true and correct in all
material respects, (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose, (vi) of the happening of any event or the discovery of any facts
during the period a Shelf Registration Statement is effective which makes any
statement made in such Registration Statement or the related Prospectus untrue
in any material respect or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements therein not
misleading and (vii) of any determination by the Company that a post-effective
amendment to a Registration Statement would be appropriate;
(f) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a
10
Prospectus or any document which is to be incorporated by reference into a
Registration Statement or a Prospectus after initial filing of a Registration
Statement, provide copies of such document to the Initial Purchaser and its
counsel (and, in the case of a Shelf Registration Statement, the Holders and
their counsel) and make representatives of the Company as shall be reasonably
requested by the Initial Purchaser and their counsel (and, in the case of a
Shelf Registration Statement, the Holders or their counsel) available for
discussion of such document and shall not at any time file or make any amendment
to the Registration Statement, any Prospectus or any amendment of or supplement
to a Registration Statement or a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus, of
which the Initial Purchaser and its counsel (and, in the case of a Shelf
Registration Statement, the Holders and their counsel) shall not have previously
been advised and furnished a copy or to which the Initial Purchaser or its
counsel (and, in the case of a Shelf Registration Statement, the Holders or
their counsel) shall reasonably object unless counsel for the Company advises
the Company that such filing by the Company is required under applicable law;
(g) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchaser and (ii) in the case of a Shelf Registration, furnish counsel
for the Holders of Registrable Securities copies of any request by the SEC or
any state securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement as soon as practicable
and provide immediate notice to each Holder of the withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, without charge, at least one conformed copy of each
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and cause such Registrable Securities to be in
such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders or the underwriters, if any, may
reasonably request at least two business days prior to the closing of any sale
of Registrable Securities;
(k) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Section 3(e)(vi)
hereof, use its best efforts to prepare a supplement or post-effective amendment
to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain at the time of such delivery any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Company
11
agrees to notify each Holder to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and each Holder hereby agrees
to suspend use of the Prospectus until the Company has amended or supplemented
the Prospectus to correct such misstatement or omission. At such time as such
public disclosure is otherwise made or the Company determines that such
disclosure is not necessary, in each case to correct any misstatement of a
material fact or to include any omitted material fact, the Company agrees
promptly to notify each Holder of such determination and to furnish each Holder
such numbers of copies of the Prospectus, as amended or supplemented, as such
Holder may reasonably request;
(l) obtain a CUSIP number for all Exchange Securities, or Registrable
Securities, as the case may be, not later than the effective date of a
Registration Statement, and provide the Trustee with printed certificates for
the Exchange Securities or the Registrable Securities, as the case may be, in a
form eligible for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), in connection with the registration of the
Exchange Securities, or Registrable Securities, as the case may be,
(ii) cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in accordance
with the terms of the TIA and (iii) execute, and use its best efforts to cause
the Trustee to execute, all documents as may be required to effect such changes,
and all other forms and documents required to be filed with the SEC to enable
the Indenture to be so qualified in a timely manner;
(n) in the case of a Shelf Registration, enter into agreements
(including customary underwriting agreements) and take all other customary and
appropriate actions (including those reasonably requested by the Majority
Holders) in order to expedite or facilitate the disposition of such Registrable
Securities and in such connection whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten
registration:
(i) to the extent possible, make such representations and warranties
to the Holders of such Registrable Securities and the underwriters, if any,
in form, substance and scope as are customarily made by issuers to
underwriters in similar underwritten offerings as may be reasonably
requested by them;
(ii) obtain opinions of counsel to the Company and, subject to the
proviso in the first sentence of the last paragraph of this clause (n),
updates thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, if any, and
the Majority Holders of the Registrable Securities being sold) addressed to
each selling Holder and the underwriters, if any, covering the matters
customarily covered in opinions requested in sales of securities or
underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters;
(iii) obtain "cold comfort" letters and, subject to the proviso in
the first sentence of the last paragraph of this clause (n), updates
thereof from the Company's
12
independent certified public accountants addressed to the underwriters, if
any, and use reasonable best efforts to have such letter addressed to the
selling Holders of Registrable Securities, such letters to be in customary
form and covering matters of the type customarily covered in "cold comfort"
letters to underwriters in connection with similar underwritten offerings;
(iv) enter into a securities sales agreement with the Holders and an
agent of the Holders providing for, among other things, the appointment of
such agent for the selling Holders for the purpose of soliciting purchases
of Registrable Securities, which agreement shall be in form, substance and
scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause the same to
set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth in
Section 6 hereof with respect to the underwriters and all other parties to
be indemnified pursuant to said Section; and
(vi) deliver such other documents and certificates as may be
reasonably requested and as are customarily delivered in similar offerings.
The above shall be done at (i) the effectiveness of such Registration Statement
(and, if appropriate, each post-effective amendment thereto) and (ii) each
closing under any underwriting or similar agreement as and to the extent
required thereunder; provided that the updates referred to in clauses (ii) and
--------
(iii) of this paragraph (n) shall only be required in the case of (A) any
closing with respect to sales under such Shelf Registration Statement of
Securities having a principal amount of $7.5 million or more or, if the Initial
Purchaser shall waive such updates under clause (A), then (B) in the case of up
to three such closings. In the case of any underwritten offering, the Company
shall provide written notice to the Holders of all Registrable Securities of
such underwritten offering at least 30 days prior to the filing of a prospectus
supplement for such underwritten offering. Such notice shall (x) offer each
such Holder the right to participate in such underwritten offering, (y) specify
a date, which shall be no earlier than 10 days following the date of such
notice, by which such Holder must inform the Company of its intent to
participate in such underwritten offering and (z) include the instructions such
Holder must follow in order to participate in such underwritten offering;
(o) in the case of a Shelf Registration, make available for inspection
by one representative appointed by the Majority Holders of the Registrable
Securities and any underwriters participating in any disposition pursuant to a
Shelf Registration Statement and one counsel or accountant retained by such
Holders or underwriters, all financial and other records, pertinent corporate
documents and properties of the Company reasonably requested by any such
persons, and cause the respective officers, directors, employees, and any other
agents of the Company to supply all information reasonably requested by any such
representative, underwriter, special counsel or accountant in connection with a
Registration Statement; provided, however, that any records, information or
-------- -------
documents that are designated by the Company as confidential at the time of
delivery of such records, information or documents shall be kept confidential by
such persons, unless (i) such records, information or documents are in the
public domain or otherwise publicly available;
13
(ii) disclosure of such records, information or documents is required by court
or administrative order, provided that such person will, promptly upon learning
that disclosure of such information is sought in a court of competent
jurisdiction, give notice to the Company so that the Company may at its expense
undertake appropriate action to prevent disclosure of the information deemed to
be confidential, (iii) disclosure of such records, information or documents, in
the opinion of counsel to such person, is otherwise required by law (including,
without limitation, pursuant to the requirements of the 1933 Act) or (iv) upon
the advice of counsel, disclosure of such records, information or documents is
necessary to avoid or correct a misstatement or omission in the Registration
Statement;
(p) in the case of a Shelf Registration, use its best efforts to cause
all Registrable Securities to be listed on any securities exchange on which
similar debt securities issued by the Company are then listed if requested in
writing by the Majority Holders or by the underwriter or underwriters of an
underwritten offering of Registrable Securities, if any;
(q) in the case of a Shelf Registration, use its best efforts to cause
the Registrable Securities to be rated with the appropriate rating agencies, if
so requested by the Majority Holders or by the underwriter or underwriters of an
underwritten offering of Registrable Securities, if any, unless the Registrable
Securities are already so rated;
(r) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC and make available to its security holders, as soon
as reasonably practicable, an earnings statement covering at least 12 months
which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158
thereunder; and
(s) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
underwriter and its counsel.
In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Registrable Securities to furnish to the Company such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company of the happening of any event
or the discovery of any facts, each of the kind described in
Section 3(e)(ii)-(vi) hereof, such Holder will forthwith discontinue disposition
of Registrable Securities pursuant to a Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(k) hereof, and, if so directed by the Company, such
Holder will deliver to the Company (at its expense) all copies in its possession
or certify in writing that such copies have been destroyed, in each case other
than permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. If the Company shall give any such notice to suspend the disposition of
Registrable Securities pursuant to a Shelf Registration Statement as a result of
the happening of any event or the discovery of any facts, each of the kind
described in Section 3(e)(vi) hereof, the Company shall be deemed to have used
its best
14
efforts to keep the Shelf Registration Statement effective during such period of
suspension provided that the Company shall use its best efforts to file and have
declared effective (if an amendment) as soon as practicable an amendment or
supplement to the Shelf Registration Statement and shall extend the period
during which the Registration Statement shall be maintained effective pursuant
to this Agreement by the number of days during the period from and including the
date of the giving of such notice to and including the date when the Holders
shall have received copies of the supplemented or amended Prospectus necessary
to resume such dispositions.
4. Underwritten Registrations. If any of the Registrable Securities
--------------------------
covered by any Shelf Registration are to be sold in an underwritten offering as
contemplated by Section 3 hereof, the investment banker or investment bankers
and manager or managers (and their counsel) that will manage the offering will
be agreed to by the Company and the Majority Holders of such Registrable
Securities included in such offering.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes, executes and delivers all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents required
of such Holder under the terms of such underwriting arrangements.
5. Participation of Broker-Dealers in Exchange Offer
-------------------------------------------------
(a) The Staff of the SEC has taken the position that any broker-dealer
that receives Exchange Securities for its own account in the Exchange Offer in
exchange for Registrable Securities that were acquired by such broker-dealer as
a result of market-making or other trading activities (a "Participating Broker-
Dealer") may be deemed to be an "underwriter" within the meaning of the 1933 Act
in connection with any resale of such Exchange Notes.
The Company understands that it is the Staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means by
which Participating Broker-Dealers may resell the Exchange Securities owned by
them, such Prospectus may be delivered by Participating Broker-Dealers to
satisfy their prospectus delivery obligations under the 1933 Act in connection
with resales of Exchange Securities for their own accounts, so long as the
Prospectus otherwise meets the requirements of the 1933 Act.
(b) In light of the above, notwithstanding any other provision of this
Agreement, the Company agrees (x) that the provisions of this Agreement as they
relate to a Shelf Registration shall also apply to an Exchange Offer
Registration to the extent, and with such modifications thereto as may be,
reasonably requested by the Initial Purchaser or one or more Participating
Broker-Dealers, in each case as provided in clause (ii) below, in order to
expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers consistent with the positions of the Staff recited
in Section 5(a) above and (y) without limiting the preceding clause (x), to
maintain the effectiveness of the Registration Statement
15
for such purposes for the earlier of one year or until such Participating Broker
Dealers have sold all Exchange Securities (as determined in accordance with FIFO
accounting), but in any event only if applicable interpretations of the Staff
continue to require Prospectus delivery; provided that:
--------
(i) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement, as would
otherwise be contemplated by Section 3(k), for a period exceeding 180 days
after the last Exchange Date (as such period may be extended pursuant to
the last paragraph of Section 3 of this Agreement) and Participating
Broker-Dealers shall not be authorized by the Company to deliver and shall
not deliver such Prospectus after such period in connection with the
resales contemplated by this Section 5; and
(ii) the application of the Shelf Registration procedures set forth in
Section 3 of this Agreement to an Exchange Offer Registration, to the
extent not required by the positions of the Staff of the SEC or the 1933
Act and the rules and regulations thereunder, will be in conformity with
the reasonable request to the Company by the Initial Purchaser or with the
reasonable request in writing to the Company by one or more broker-dealers
who certify to the Initial Purchaser and the Company in writing that they
anticipate that they will be Participating Broker-Dealers; and provided
--------
further that, in connection with such application of the Shelf Registration
-------
procedures set forth in Section 3 to an Exchange Offer Registration, the
Company shall be obligated (x) to deal only with one entity representing
the Participating Broker-Dealers, which shall be the Initial Purchaser
unless it elects not to act as such representative, (y) to pay the fees and
expenses of only one counsel representing the Participating Broker-Dealers,
which shall be counsel to the Initial Purchaser unless such counsel elects
not to so act and (z) to cause to be delivered only one, if any, "cold
comfort" letter with respect to the Prospectus in the form existing on the
last Exchange Date and with respect to each subsequent amendment or
supplement, if any, effected during the period specified in clause (i)
above.
(c) The Initial Purchaser shall have no liability to the Company or
any Holder with respect to any request that it may make pursuant to this Section
5.
Section 6. Indemnification. (a) The Company and United each agree
---------------
jointly and severally to indemnify and hold harmless the Initial Purchaser, each
Holder, including Participating Broker Dealers, each underwriter who
participated in an offering of the Registrable Securities and each person, if
any, who controls such parties within the meaning of Section 15 of the 1933 Act
as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto) or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of an untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto)
16
or the omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
fees and disbursements of counsel chosen by you), reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that this indemnity agreement does not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company or
United by the Initial Purchaser expressly for use in the Registration Statement
(or any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto); and provided, further, that the Company
-------- -------
will not be liable to the Initial Purchaser or any person controlling the
Initial Purchaser with respect to any such untrue statement or omission made in
any preliminary prospectus that is corrected in the Prospectus (or any amendment
or supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Securities from the Initial Purchaser in reliance upon a
preliminary prospectus but was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written confirmation of the sale of
such Securities to such person in any case where such delivery of the Prospectus
(as so amended or supplemented) is required by the 1933 Act, unless such failure
to deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 3 of this Agreement.
(b) The Initial Purchaser agrees to indemnify and hold harmless each
of the Company, United and each person, if any, who controls the Company or
United within the meaning of Section 15 of the 1933 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity agreement
in Section (a), as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company or United by the
Initial Purchaser expressly for use in the Registration Statement (or any
amendment thereto), or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
17
(c) In the case of a Shelf Registration, each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, United,
the Initial Purchaser, each underwriter who participates in an offering of
Registrable Securities and the other selling Holders and each person, if any,
who controls such persons within the meaning of Section 15 of the 1933 Act,
against any and all losses, liabilities, claims, damages and expenses described
in the indemnity contained in (a) hereof, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company or United by such Holder, expressly
for use in the Registration Statement (or any amendment thereto), or the
Prospectus (or any amendment or supplement thereto); provided, however, that no
-------- -------
such Holder shall be liable for any claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement.
(d) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement. An indemnifying party may participate
at its own expense in the defense of such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
(e) In order to provide for just and equitable contribution in
circumstances under which the indemnity provided for in this Section 6 is for
any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company, United and the Initial
Purchaser shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity incurred by the
Company, United and the Initial Purchaser, as incurred, in such proportions that
the Initial Purchaser is responsible for that portion represented by the
percentage that the initial purchaser's discount appearing on the cover page of
the Prospectus bears to the price to investors appearing thereon, and the
Company and United are responsible for the balance; provided, however, that no
-------- -------
person guilty of fraudulent misrepresentation (within the meaning of Section
1(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section,
each person, if any, who controls the Initial Purchaser within the meaning of
Section 5 of the 1933 Act shall have the same rights to contribution as the
Initial Purchaser, and each director of the Company or United, each officer of
the Company or United who signed the Registration Statement, and each person, if
any, who controls the Company or United within the meaning of Section 5 of the
1933 Act shall have the same rights to contribution as the Company or United.
7. Miscellaneous. (a) Rule 144 and Rule 144A. Regardless of
------------- ----------------------
whether the Company is subject to the reporting requirements of Section 13 or 15
of the 1934 Act, the Company covenants that it will file the reports that would
be required to be filed by it
18
under Section 13(a) or 15(d) of the 1934 Act and the rules and regulations
adopted by the SEC thereunder if such Sections were applicable to it, and that
if it ceases to be permitted to file such reports, it will upon the request of
any Holder of Registrable Securities (i) make publicly available such
information as is necessary to permit sales pursuant to Rule 144 under the 1933
Act and (ii) deliver such information to a prospective purchaser as is
reasonably necessary to permit sales pursuant to Rule 144A under the 1933 Act,
in each case, to the extent required from time to time to enable such Holder to
sell its Registrable Securities without registration under the 1933 Act within
the limitation of the exemptions provided by (x) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time, (y) Rule 144A under the 1993 Act, as
such Rule may be amended from time to time, or (z) any similar rules or
regulations hereafter adopted by the SEC. Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. Neither the Company or United has
--------------------------
entered into nor will the Company or United on or after the date of this
Agreement enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The Company and United represent and
warrant that the rights granted to the Holders hereunder do not conflict with
and are not inconsistent with the rights granted to the holders of the Company's
other issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure; provided, however, that no amendment, modification,
-------- -------
supplement or waiver or consent to any departure from the provisions of Section
6 hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder.
(d) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to the
Company by means of a notice given in accordance with the provisions of this
Section 7(d), which address initially is, with respect to the Initial Purchaser,
the address set forth in the Purchase Agreement and (ii) if to the Company,
initially at the Company's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
19
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee, at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
--------
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms hereof or of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities, such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. The Initial Purchaser shall be third
-----------------------
party beneficiary to the agreements made hereunder between the Company, on the
one hand, and the Holders, on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
PERFORMED ENTIRELY IN THAT STATE.
(j) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
20
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
UNITED STATIONERS INC.
By:
---------------------------------------
Name:
Title:
UNITED STATIONERS SUPPLY CO.
By:
---------------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above
written:
CHASE SECURITIES, INC.
By:
------------------------------------
Name:
Title: