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Exhibit 1
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FEDDERS NORTH AMERICA, INC.
FEDDERS CORPORATION
as Guarantor
$100,000,000
9 3/8% Senior Subordinated Notes due 2007
Purchase Agreement
August 11, 1997
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
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$100,000,000
9 3/8% Senior Subordinated Notes due 2007
of Fedders North America, Inc.
PURCHASE AGREEMENT
August 11, 1997
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10005
Dear Sirs:
Fedders North America, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to Donaldson, Lufkin & Jenrette
Securities Corporation and Goldman, Sachs & Co. (each, an "Initial Purchaser"
and, collectively, the "Initial Purchasers") an aggregate of $100,000,000 in
principal amount of its 9 3/8% Senior Subordinated Notes due 2007 (the "Series A
Notes"), subject to the terms and conditions set forth herein. The Series A
Notes are to be issued pursuant to the provisions of an indenture (the
"Indenture"), to be dated as of the Closing Date (as defined below), among the
Company, the Guarantor (as defined below) and State Street Bank and Trust
Company, as trustee (the "Trustee"). The Series A Notes and the Exchange Notes
(as defined below) issuable in exchange therefor are collectively referred to
herein as the "Notes." The Notes will be guaranteed (the "Guarantee") by Fedders
Corporation ("Fedders Corporation" or the "Guarantor"). Capitalized terms used
but not defined herein shall have the meanings given to such terms in the
Indenture.
1. OFFERING MEMORANDUM. The Series A Notes will be offered and
sold to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"Act"). The Company and
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the Guarantor have prepared a preliminary offering memorandum, dated July 29,
1997 (the "Preliminary Offering Memorandum"), and a final offering memorandum,
dated August 12, 1997 (the "Offering Memorandum"), relating to the Series A
Notes and the Guarantee.
Upon original issuance thereof, and until such time as the
same is no longer required pursuant to the Indenture, the Series A Notes (and
all securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE
HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR
(B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT
RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY
OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION
D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN
BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
EFFEC-
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TIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers agree,
severally and not jointly, to purchase from the Company, the principal amounts
of Series A Notes set forth opposite the name of such Initial Purchaser on
Schedule A hereto at a purchase price equal to 97% of the principal amount
thereof (the "Purchase Price").
3. TERMS OF OFFERING. The Initial Purchasers have advised the
Company that the Initial Purchasers will make offers and sales (the "Exempt
Resales") of the Notes purchased hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely to (i) persons whom the
Initial Purchasers reasonably believe to be "qualified institutional buyers" as
defined in Rule 144A under the Act ("QIBs") and (ii) to persons permitted to
purchase the Series A Notes in offshore transactions in reliance upon Regulation
S under the Act (each, a "Regulation S Purchaser") (such persons specified in
clauses (i) and (ii) being referred to herein as the "Eligible Purchasers"). The
Initial Purchasers will offer the Series A Notes to Eligible Purchasers
initially at a price equal to 99.52% of the principal amount thereof. Such price
may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A
Notes will have the registration rights set forth in the registration rights
agreement (the "Registration Rights Agreement"), to be dated as of the Closing
Date, in substantially the form of Exhibit A hereto, for so long as such Series
A Notes constitute "Transfer Restricted Securities" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company and the Guarantor will agree to file with the Securities and
Exchange Commission (the "Commission") under the circumstances set forth
therein, (i) a registration statement under the Act (the "Exchange Offer
Registration Statement") relating to securities of the Company substantially
similar to the Notes (the "Exchange Notes"), to be offered in exchange for the
Series A Notes (such offer to exchange being referred to as the "Exchange
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Offer") and the Guarantee thereof and (ii) a shelf registration statement
pursuant to Rule 415 under the Act (the "Shelf Registration Statement" and,
together with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the Series A Notes and
to use its best efforts to cause such Registration Statements to be declared and
remain effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. This Agreement, the Indenture,
the Notes, the Guarantee and the Registration Rights Agreement are hereinafter
sometimes referred to collectively as the "Operative Documents."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the
Series A Notes shall be made at the offices of Cahill Gordon & Reindel at 80
Pine Street, New York, New York 10005, or such other location as may be mutually
acceptable. Such delivery and payment shall be made at 9:00 a.m. New York City
time, on August 18, 1997 or at such other time as shall be agreed upon by the
Initial Purchasers and the Company. The time and date of such delivery and the
payment are herein called the "Closing Date."
(b) One or more of the Series A Notes in definitive global
form, registered in the name of Cede & Co., as nominee of the Depository Trust
Company ("DTC"), having an aggregate principal amount corresponding to the
aggregate principal amount of the Series A Notes sold to QIBs and Regulation S
Purchasers (collectively, the "Global Note"), shall be delivered by the Company
to the Initial Purchasers (or as the Initial Purchasers direct) in each case
with any transfer taxes thereon duly paid by the Company against payment by the
Initial Purchasers of the Purchase Price therefor by wire transfer in same day
funds to the order of the Company. The Global Note shall be made available to
the Initial Purchasers for inspection not later than 9:30 a.m., New York City
time, on the business day immediately preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY AND THE GUARANTOR. Each of the
Company and the Guarantor hereby jointly and severally agrees with the Initial
Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, to confirm such advice in writing,
(i) of the issuance by any state securities commission of any stop
order suspending the qualification or exemption from qualification of
any Series A Notes for offering or sale in any jurisdiction designated
by the Initial Purchasers pursuant to Section 5(e) hereof, or the
initiation of any proceeding by any state securities commission or any
other federal or state regulatory authority for such purpose and (ii)
of the happening of any event during the period referred to in Section
5(c) below that makes any statement of a material fact made in the
Preliminary Offering Memorandum or the Offering Memorandum untrue or
that requires any additions to or changes in the Preliminary Offering
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Memorandum or the Offering Memorandum in order to make the statements
therein not misleading. The Company shall use its best efforts to
prevent the issuance of any stop order or order suspending the
qualification or exemption of any Series A Notes under any state
securities or Blue Sky laws and, if at any time any state securities
commission or other federal or state regulatory authority shall issue
an order suspending the qualification or exemption of any Series A
Notes under any state securities or Blue Sky laws, the Company shall
use its best efforts to obtain the withdrawal or lifting of such order
at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company as many copies of
the Preliminary Offering Memorandum and the Offering Memorandum, and
any amendments or supplements thereto, as the Initial Purchasers may
reasonably request. Subject to the Initial Purchasers' compliance with
their representations and warranties and agreements set forth in
Section 7 hereof, the Company consents to the use of the Preliminary
Offering Memorandum and the Offering Memorandum, and any amendments and
supplements thereto required pursuant hereto, by the Initial Purchasers
in connection with Exempt Resales.
(c) During such period as in the opinion of counsel for the
Initial Purchasers an Offering Memorandum is required by law to be
delivered in connection with Exempt Resales by the Initial Purchasers
and in connection with market-making activities of the Initial
Purchasers for so long as any Series A Notes are outstanding, (i) not
to make any amendment or supplement to the Offering Memorandum of which
the Initial Purchasers shall not previously have been advised or to
which the Initial Purchasers shall reasonably object after being so
advised and (ii) to prepare promptly upon the Initial Purchasers'
reasonable request, any amendment or supplement to the Offering
Memorandum which may be necessary or advisable in connection with such
Exempt Resales or such market-making activities.
(d) If, during the period referred to in Section 5(c) above,
any event shall occur or condition shall exist as a result of which, in
the opinion of counsel to the Initial Purchasers, it becomes necessary
to amend or supplement the Offering Memorandum in order to make the
statements therein, in the light of the circumstances when such
Offering Memorandum is delivered to an Eligible Purchaser, not
misleading, or if, in the opinion of counsel to the Initial Purchasers,
it is necessary to amend or supplement the Offering Memorandum to
comply with any applicable law, forthwith to prepare an appropriate
amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the
light of the circumstances when it is so delivered, be misleading, or
so that such Offering Memorandum will comply with applicable law, and
to furnish to the Initial Purchasers and such other persons as the
Initial Purchasers may designate such number of copies thereof as the
Initial Purchasers may reasonably request.
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(e) Prior to the sale of all Series A Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial
Purchasers and counsel to the Initial Purchasers in connection with the
registration or qualification of the Series A Notes for offer and sale
to the Initial Purchasers and pursuant to Exempt Resales under the
securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may request and to continue such qualification in effect so
long as required for Exempt Resales and to file such consents to
service of process or other documents as may be necessary in order to
effect such registration or qualification; provided, however, that
neither the Company nor the Guarantor shall be required in connection
therewith to register or qualify as a foreign corporation in any
jurisdiction in which it is not now so qualified or to take any action
that would subject it to general service of process or taxation other
than as to matters and transactions relating to the Preliminary
Offering Memorandum, the Offering Memorandum or Exempt Resales, in any
jurisdiction in which it is not now so subject.
(f) So long as the Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal
year to the record holders of the Notes a financial report of the
Guarantor and its subsidiaries on a consolidated basis (and, to the
extent the Company becomes subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), a
similar financial report of the Company), all such financial reports to
include a consolidated balance sheet, a consolidated statement of
operations, a consolidated statement of cash flows and a consolidated
statement of shareholders' equity as of the end of and for such fiscal
year, together with comparable information as of the end of and for the
preceding year, certified by the Guarantor's independent public
accountants (and, to the extent the Company becomes subject to Section
13 or 15(d) of the Exchange Act, by the Company's independent public
accountants) and (ii) to mail and make generally available as soon as
practicable after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated
balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows of the Guarantor and its
subsidiaries (and, to the extent the Company becomes subject to Section
13 or 15(d) of the Exchange Act, similar financial reports of the
Company), as of the end of and for such period, and for the period from
the beginning of such year to the close of such quarterly period,
together with comparable information for the corresponding periods of
the preceding year.
(g) So long as the Notes are outstanding, to furnish to the
Initial Purchasers as soon as available copies of all reports or other
communications furnished by the Guarantor (and, to the extent the
Company becomes subject to Section 13 or 15(d) of the Exchange Act, by
the Company) to security holders generally or furnished to or filed
with the Commission or any national securities exchange on which any
class of securities of the Guarantor (and, to the extent applicable,
the Company)
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is listed and such other publicly available information concerning the
Guarantor and/or its subsidiaries as the Initial Purchasers may
reasonably request.
(h) So long as any of the Series A Notes remain outstanding
and, to the extent the Company becomes subject to Section 13 or 15(d)
of the Exchange Act, during any period in which the Company or the
Guarantor are not subject to Section 13 or 15(d) of the Exchange Act,
to make available to any holder of Series A Notes in connection with
any sale thereof and any prospective purchaser of such Series A Notes
from such holder, the information ("Rule 144A Information") required by
Rule 144A(d)(4) under the Act.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of the
obligations of the Company and the Guarantor under this Agreement,
including: (i) the fees, disbursements and expenses of counsel to the
Company and the Guarantor and accountants of the Company and the
Guarantor in connection with the sale and delivery of the Series A
Notes to the Initial Purchasers and pursuant to Exempt Resales, and all
other fees or expenses in connection with the preparation, printing,
filing and distribution of the Preliminary Offering Memorandum, the
Offering Memorandum and all amendments and supplements to any of the
foregoing (including financial statements) specified in Section 5(b)
and 5(c) prior to or during the period specified in Section 5(c),
including the mailing and delivering of copies thereof to the Initial
Purchasers and persons designated by them in the quantities specified
herein, (ii) all costs and expenses related to the transfer and
delivery of the Series A Notes to the Initial Purchasers and pursuant
to Exempt Resales, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement, the
other Operative Documents, the Preliminary Offering Memorandum and the
Offering Memorandum in connection with the offering, purchase, sale or
delivery of the Series A Notes, (iv) all expenses in connection with
the registration or qualification of the Series A Notes and the
Guarantee for offer and sale under the securities or Blue Sky laws of
the several states and all costs of printing or producing any
preliminary and supplemental Blue Sky memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for
the Initial Purchasers in connection with such registration or
qualification and memoranda relating thereto) in an estimated amount of
$5,000, (v) the cost of printing certificates representing the Series A
Notes and the Guarantee, (vi) all expenses and listing fees in
connection with the application for quotation of the Series A Notes in
the National Association of Securities Dealers, Inc. ("NASD")
Automated Quotation System - PORTAL ("PORTAL"), (vii) the fees and
expenses of the Trustee and the Trustee's counsel in connection
with the Indenture, the Notes and the Guarantee, (viii) the costs and
charges of any transfer agent, registrar and/or depositary (including
DTC), (ix) any fees charged by rating agencies for the rating of the
Notes, (x) all costs and expenses of the Exchange Offer and any
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Registration Statement, as set forth in the Registration Rights
Agreement, and (xi) and all other costs and expenses incident to the
performance of the obligations of the Company and the Guarantor
hereunder for which provision is not otherwise made in this Section.
(j) To use its best efforts to effect the inclusion of the
Series A Notes in PORTAL and to maintain the listing of the Series A
Notes on PORTAL for so long as the Series A Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of
the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company and the Guarantor to DTC relating
to the approval of the Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise transfer or dispose of any debt
securities of the Company or the Guarantor or any warrants, rights or
options to purchase or otherwise acquire debt securities of the Company
or the Guarantor substantially similar to the Notes and the Guarantee,
without the prior written consent of the Initial Purchasers.
(m) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Series A Notes to the
Initial Purchasers or pursuant to Exempt Resales in a manner that would
require the registration of any such sale of the Series A Notes under
the Act.
(n) Not to claim voluntarily, and to resist actively any
attempts to claim, the benefit of any usury laws against the holders of
any Notes.
(o) To cause the Exchange Offer to be made in the appropriate
form to permit Exchange Notes and the Guarantee thereof by the
Guarantor registered pursuant to the Act to be offered in exchange for
the Series A Notes and the Guarantee and to comply with all applicable
federal and state securities laws in connection with the Exchange
Offer.
(p) To use the proceeds from the sale of the Notes in the
manner specified in the Offering Memorandum under the caption "Use of
Proceeds."
(q) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(r) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
it prior to the Closing Date
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and to satisfy all conditions precedent to the delivery of the Series A
Notes and the Guarantee.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY
AND THE GUARANTOR. As of the date hereof, each of the Company and the Guarantor
jointly and severally represents and warrants to, and agrees with, the Initial
Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties contained in this paragraph (a) shall not apply to
statements in or omissions from the Preliminary Offering Memorandum or
the Offering Memorandum (or any supplement or amendment thereto) based
upon information relating to the Initial Purchasers furnished to the
Company in writing by the Initial Purchasers expressly for use therein
(the "Furnished Information"). No stop order preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, or any
amendment or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued. As of the date
of this Agreement, the Furnished Information is comprised of the
following portions of the Offering Memorandum: (i) the paragraph
concerning overallotment and stabilization on page (iii), and (ii) the
text of the third, fourth, sixth and last paragraphs under the caption
"Plan of Distribution;"
(b) Each of the Guarantor and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in
the Preliminary Offering Memorandum and the Offering Memorandum and to
own, lease and operate its properties, and each is duly qualified and
is in good standing as a foreign corporation authorized to do business
in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the business, financial condition or results of operations of
the Guarantor and its subsidiaries, taken as a whole (a "Material
Adverse Effect");
(c) The entities listed on Schedule B hereto are the only
subsidiaries, direct or indirect, of the Guarantor. Except as described
in the Preliminary Offering Memorandum and Offering Memorandum, all of
the outstanding shares of capital stock of each of the Guarantor's
subsidiaries are owned by the Guarantor, directly or indirectly through
one or more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature (each, a
"Lien");
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(d) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantor, and is a valid and binding
agreement of the Company and the Guarantor, enforceable against the
Company and the Guarantor in accordance with its terms except as (i)
the enforceability hereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(e) The Indenture has been duly authorized by the Company and
the Guarantor and, on the Closing Date, will have been validly executed
and delivered by the Company and the Guarantor. When the Indenture has
been duly executed and delivered by the Company and the Guarantor, the
Indenture will be a valid and binding agreement of the Company and the
Guarantor, enforceable against the Company and the Guarantor in
accordance with its terms except as (i) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability. On the Closing Date, the Indenture
will conform in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the "TIA" or "Trust Indenture Act"),
and the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder;
(f) The Series A Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the
Company. When the Series A Notes have been issued, executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, the Notes will be entitled to the benefits
of the Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability. On the Closing Date,
the Series A Notes will conform as to legal matters to the description
thereof contained in the Offering Memorandum;
(g) On the Closing Date, the Exchange Notes will have been
duly authorized by the Company. When the Exchange Notes are issued,
executed and authenticated in accordance with the terms of the Exchange
Offer and the Indenture, the Exchange Notes will be entitled to the
benefits of the Indenture and will be the valid and binding obligations
of the Company, enforceable against the Company in accordance with
their terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and
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(ii) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability;
(h) The Guarantee to be endorsed on the Series A Notes by the
Guarantor has been duly authorized by the Guarantor and, on the Closing
Date, will have been duly executed and delivered by the Guarantor. When
the Series A Notes have been issued, executed and authenticated in
accordance with the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, the
Guarantee of the Guarantor endorsed thereon will be entitled to the
benefits of the Indenture and will be the valid and binding obligation
of the Guarantor, enforceable against the Guarantor in accordance with
its terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Guarantee to be endorsed on the
Series A Notes will conform as to legal matters to the description
thereof contained in the Offering Memorandum;
(i) The Guarantee to be endorsed on the Exchange Notes by the
Guarantor has been duly authorized by the Guarantor and, when issued,
will have been duly executed and delivered by the Guarantor. When the
Exchange Notes have been issued, executed and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, the
Guarantee of the Guarantor endorsed thereon will be entitled to the
benefits of the Indenture and will be the valid and binding obligation
of the Guarantor, enforceable against the Guarantor in accordance with
its terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. When the Exchange Notes are issued, authenticated and
delivered, the Guarantee to be endorsed on the Exchange Notes will
conform as to legal matters to the description thereof in the Offering
Memorandum;
(j) The Registration Rights Agreement has been duly authorized
by the Company and the Guarantor and, on the Closing Date, will have
been duly executed and delivered by the Company and the Guarantor. When
the Registration Rights Agreement has been duly executed and delivered,
the Registration Rights Agreement will be a valid and binding agreement
of the Company and the Guarantor, enforceable against the Company and
the Guarantor in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability. On the Closing Date,
the Registration Rights Agreement will conform as to legal matters to
the description thereof in the Offering Memorandum;
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(k) Neither the Guarantor nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Guarantor and its
subsidiaries, taken as a whole, to which the Guarantor or any of its
subsidiaries is a party or by which the Guarantor or any of its
subsidiaries or their respective property is bound;
(l) The execution, delivery and performance of this Agreement
and the other Operative Documents by the Company and the Guarantor,
compliance by the Company and the Guarantor with all provisions hereof
and thereof and the consummation of the transactions contemplated
hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states or under the Act),
(ii) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the
Guarantor or any of its subsidiaries or any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to
the Guarantor and its subsidiaries, taken as a whole, to which the
Guarantor or any of its subsidiaries is a party or by which the
Guarantor or any of its subsidiaries or their respective property is
bound, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over the Guarantor, any of its
subsidiaries or their respective property, (iv) result in the
imposition or creation of (or the obligation to create or impose) a
Lien under, any agreement or instrument to which the Guarantor or any
of its subsidiaries is a party or by which the Guarantor or any of its
subsidiaries or their respective property is bound, or (v) result in
the termination or revocation of any Authorization (as defined below)
of the Guarantor or any of its subsidiaries or result in any other
impairment of the rights of the holder of any such Authorization which
could reasonably be expected, singly or in the aggregate, to have a
Material Adverse Effect;
(m) There are no legal or governmental proceedings pending or,
to the knowledge of the Guarantor, threatened to which the Guarantor or
any of its subsidiaries is or could be a party or to which any of their
respective property is or could be subject, which if decided adversely
to the Guarantor or any of its subsidiaries, could reasonably be
expected, singly or in the aggregate, to have a Material Adverse
Effect;
(n) Neither the Guarantor nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation or the
common law relating to the protection of human health and safety, the
environment or hazardous or toxic substances, constituents, or wastes,
crude oil, pollutants or contaminants
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("Environmental Laws") or any provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or the rules and
regulations promulgated thereunder, except for such violations which,
singly or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect;
(o) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
facilities or compliance with Environmental Laws or any Authorization,
any related constraints on operating activities and any potential
liabilities to third parties) which could reasonably be expected,
singly or in the aggregate, to have a Material Adverse Effect;
(p) Each of the Guarantor and its subsidiaries has such
permits, licenses, consents, exemptions, franchises, authorizations and
other approvals (each, an "Authorization") of, and has made all filings
with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including without limitation, under any applicable Environmental Laws,
as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice could
not reasonably be expected, singly or in the aggregate, to have a
Material Adverse Effect. Each such Authorization is valid and in full
force and effect and each of the Guarantor and its subsidiaries is in
material compliance with all the terms and conditions thereof and with
the rules and regulations of the authorities and governing bodies
having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of
time or both, would allow for revocation, suspension or termination of
any such Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Guarantor or any of its
subsidiaries; except where such failure to be valid and in full force
and effect or to be in compliance, the occurrence of any such event or
the presence of any such restriction could not reasonably be expected,
singly or in the aggregate, to have a Material Adverse Effect;
(q) BDO Seidman, LLP, who has certified certain financial
statements and supporting schedules included in or incorporated by
reference into the Preliminary Offering Memorandum and the Offering
Memorandum, are independent public accountants with respect to the
Company and the Guarantor, as required by the Act and the Exchange Act.
The historical financial statements, together with related schedules
and notes, set forth in or incorporated by reference into the
Preliminary Offering Memorandum and the Offering Memorandum comply as
to form in all
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material respects with the applicable requirements under the Act and
the Exchange Act;
(r) The historical financial statements, together with related
schedules and notes forming part of the Offering Memorandum (and any
amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and changes in financial
position of the Guarantor and its subsidiaries on the basis stated in
the Offering Memorandum at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and
statistical information and data set forth in or incorporated by
reference into the Offering Memorandum (and any amendment or supplement
thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements of the
Guarantor and the books and records of the Company and the Guarantor;
(s) The pro forma financial statements included in the
Preliminary Offering Memorandum and the Offering Memorandum have been
prepared on a basis consistent with the historical financial statements
of the Guarantor and its subsidiaries and give effect to assumptions
used in the preparation thereof on a reasonable basis and in good faith
and present fairly the historical and proposed transactions
contemplated by the Preliminary Offering Memorandum and the Offering
Memorandum; and such pro forma financial statements comply as to form
in all material respects with the requirements applicable to pro forma
financial statements under the Act and the Exchange Act. The other pro
forma financial and statistical information and data included in the
Offering Memorandum are, in all material respects, accurately presented
and prepared on a basis consistent with the pro forma financial
statements;
(t) To the best knowledge of the Company and the Guarantor,
neither the Company, the Guarantor nor any subsidiary, nor any
director, officer or employee of the Company or the Guarantor has,
directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses
relating to political activity, made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic
political parties or campaigns from corporate funds, violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended, or
made any unlawful bribe, rebate, payoff, influence payment, kickback,
or other unlawful payment;
(u) The Guarantor and its subsidiaries have good and
marketable title in fee simple to all real property and good title to
all personal property owned by them which is material to the business
of the Guarantor and its subsidiaries, taken as a
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whole, in each case free and clear of all Liens and defects, except
such as are described in the Offering Memorandum or such as do not
materially affect the value of such property, taken as a whole, and do
not interfere with the use made and proposed to be made of such
property, taken as a whole, by the Guarantor and its subsidiaries; and
any material real property and buildings held under lease by the
Guarantor and its subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do
not interfere with the use made of such property and buildings by the
Guarantor and its subsidiaries, in each case except as described in the
Offering Memorandum;
(v) The Guarantor and its subsidiaries own or possess, or can
acquire on reasonable terms, all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
("Intellectual Property") currently employed by them in connection with
the business now operated by them except where the failure to own or
possess or otherwise be able to acquire such Intellectual Property
could not reasonably be expected, singly or in the aggregate, to have a
Material Adverse Effect; and neither the Guarantor nor any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of such Intellectual
Property which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could reasonably be expected
to have a Material Adverse Effect;
(w) Except as disclosed in the Offering Memorandum, no
relationship, direct or indirect, exists between or among the Guarantor
or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Guarantor or any
of its subsidiaries or the Guarantor on the other hand, which would be
required by the Act to be described in the Offering Memorandum if the
Offering Memorandum were a prospectus included in a registration
statement on Form S-1 filed with the Commission;
(x) There is no (i) significant unfair labor practice
complaint, grievance or arbitration proceeding pending or threatened
against the Guarantor or any of its subsidiaries before the National
Labor Relations Board or any state or local labor relations board, (ii)
strike, labor dispute, slowdown or stoppage pending or, to the
knowledge of the Guarantor, threatened against the Guarantor or any of
its subsidiaries or (iii) union representation question existing with
respect to the employees of the Guarantor or any of its subsidiaries,
except in the case of clauses (i), (ii) and (iii) for such actions
which, singly or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. To the best knowledge of the Company
and the Guarantor, no collective bargaining organizing activities are
taking place with respect to the Guarantor or any of its subsidiaries;
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(y) Each of the Guarantor and its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(z) All material tax returns required to be filed by the
Guarantor and each of its subsidiaries in any jurisdiction have been
filed, other than those filings being contested in good faith, and all
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Guarantor or any of its
subsidiaries, have been paid, other than those being contested in good
faith and for which reasonable reserves have been provided;
(aa) All indebtedness of the Company and the Guarantor that
will be repaid with the proceeds of the issuance and sale of the Series
A Notes was incurred, and the indebtedness represented by the Series A
Notes is being incurred, for proper purposes and in good faith and each
of the Company and the Guarantor was, at the time of the incurrence of
such indebtedness that will be repaid with the proceeds of the issuance
and sale of the Series A Notes, and will be on the Closing Date (after
giving effect to the application of the proceeds from the issuance of
the Series A Notes) solvent, and had at the time of the incurrence of
such indebtedness that will be repaid with the proceeds of the issuance
and sale of the Series A Notes and will have on the Closing Date (after
giving effect to the application of the proceeds from the issuance of
the Series A Notes) sufficient capital for carrying on its respective
business and was, at the time of the incurrence of such indebtedness
that will be repaid with the proceeds of the issuance and sale of the
Series A Notes, and will be on the Closing Date (after giving effect to
the application of the proceeds from the issuance of the Notes) able to
pay its respective debts as they mature;
(bb) Neither the Company nor the Guarantor is and, after
giving effect to the offering and sale of the Notes and the application
of the net proceeds thereof as described in the Offering Memorandum,
neither will be an "investment company," as such term is defined in the
Investment Company Act of 1940, as amended;
(cc) There are no contracts, agreements or understandings
between the Company or the Guarantor and any person granting such
person the right to require the Company or the Guarantor to include any
securities of the Company or the
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Guarantor with the Notes and Guarantee registered pursuant to the
Registration Rights Agreement;
(dd) Neither the Guarantor nor any of its subsidiaries nor any
agent thereof acting on their behalf has taken, and none of them will
take, any action that might cause this Agreement or the issuance or
sale of the Series A Notes to violate Regulation G (12 C.F.R. Part
207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part
221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of
the Federal Reserve System;
(ee) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the
Offering Memorandum (exclusive of information upon which any amendments
or supplements subsequent to the date of this Agreement is based), (i)
there has not occurred any material adverse change or any development
involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, business, management or
operations of the Guarantor and its subsidiaries, taken as a whole,
(ii) there has not been any material adverse change or any development
involving a prospective material adverse change in the capital stock or
in the long-term debt of the Guarantor or any of its subsidiaries and
(iii) neither the Guarantor nor any of its subsidiaries has incurred
any material liability or obligation, direct or contingent;
(ff) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information
specified in, and meeting the requirements of, Rule 144A(d)(4) under
the Act;
(gg) Neither the Series A Notes nor the Guarantee, when issued
and delivered pursuant to this Agreement, will be of the same class
(within the meaning of Rule 144A under the Act) as any security of the
Company or the Guarantor that is listed on a national securities
exchange registered under Section 6 of the Exchange Act or that is
quoted in a United States automated inter-dealer quotation system;
(hh) No form of general solicitation or general advertising
(as defined in Regulation D under the Act) was used by the Company, the
Guarantor or any of their respective representatives (other than the
Initial Purchasers, as to whom the Company and the Guarantor make no
representation) in connection with the offer and sale of the Series A
Notes contemplated hereby, including, but not limited to, articles,
notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar
or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as
the Series A Notes have been issued and sold by the Company within the
six-month period immediately prior to the date hereof;
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(ii) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA;
(jj) None of the Company, the Guarantor or any of their
respective affiliates or any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Company and the
Guarantor make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S under the
Act ("Regulation S") with respect to the Notes or the Guarantee;
(kk) The sale of the Series A Notes pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of
the Act;
(ll) The Company, the Guarantor and their respective
affiliates and all persons acting on their behalf (other than the
Initial Purchasers, as to whom the Company and the Guarantor make no
representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the
offering of the Series A Notes outside the United States;
(mm) No registration under the Act of the Series A Notes or
the Guarantee is required for the sale of the Series A Notes and the
Guarantee to the Initial Purchasers as contemplated hereby assuming the
accuracy of the Initial Purchasers' representations and warranties and
agreements set forth in Section 7 hereof;
(nn) No "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Act, (i) has imposed (or has informed the Company or the
Guarantor that it is considering imposing) any condition (financial or
otherwise) on the Company's or the Guarantor's retaining any rating
assigned to the Company, the Guarantor or any securities of the Company
or the Guarantor or (ii) has indicated to the Company or the Guarantor
that it is considering (a) the downgrading, suspension or withdrawal
of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any
change in the outlook for any rating of the Company or the Guarantor;
and
(oo) The repurchase by the Guarantor of its common stock,
class A stock and convertible preferred stock, in an aggregate amount
not to exceed $50.0 million, and the redemption of the Guarantor's 8.5%
Convertible Subordinated Debentures due 2012 have each been duly and
validly authorized by the Guarantor.
The Company and the Guarantor acknowledge that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 9 hereof, counsel to the Company and the
Guarantor and counsel to the Initial Purchasers will
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rely upon the accuracy and truth of the foregoing representations and hereby
consent to such reliance.
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each of
the Initial Purchasers, severally and not jointly, represents and warrants to
the Company and the Guarantor, and agrees that:
(a) Such Initial Purchaser is either a QIB or an institutional
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7)
under the Act (an "Accredited Institution"), in either case, with such
knowledge and experience in financial and business matters as is
necessary in order to evaluate the merits and risks of an investment in
the Series A Notes.
(b) Such Initial Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof or with any present
intention of offering or selling any of the Series A Notes in a
transaction that would violate the Act or the securities laws of any
state of the United States or any other applicable jurisdiction and (B)
will be reoffering and reselling the Series A Notes only to (x) QIBs in
compliance with the exemption from the registration requirements of the
Act provided by Rule 144A or (y) in offshore transactions in compliance
with Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D
under the Act) has been or will be used by such Initial Purchaser or
any of its representatives in connection with the offer and sale of the
Series A Notes pursuant hereto, including, but not limited to,
articles, notices or other communications published in any newspaper,
magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with
Exempt Resales, such Initial Purchaser will solicit offers to buy the
Series A Notes only from, and will offer to sell and sell the Series A
Notes only to (A) Eligible Purchasers that such Initial Purchaser
reasonably believes are QIBs and (B) Regulation S Purchasers that, in
each case, agree that (x) the Series A Notes purchased by them may be
resold, pledged or otherwise transferred within the time period
referred to under Rule 144(k) under the Act, as in effect on the date
of the transfer of such Series A Notes, (taking into account the
provisions of Rule 144(d) under the Act, if applicable) only (I) to the
Company or any of its subsidiaries, (II) to a person whom the seller
reasonably believes is a QIB purchasing for its own account or for the
account of a QIB in a transaction meeting the requirements of Rule 144A
under the Act, (III) in an offshore transaction (as defined in Rule 902
under the Act) meeting the requirements of Rule 904 of the Act, (IV) in
a transaction meeting the requirements of Rule 144
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under the Act, (V) to an Accredited Institution that, prior to such
transfer, furnishes the Trustee a signed letter containing certain
representations and agreements relating to the registration of transfer
of such Series A Notes and, if such transfer is in respect of an
aggregate principal amount of Series A Notes less than $250,000, an
opinion of counsel acceptable to the Company that such transfer is in
compliance with the Act, (VI) in accordance with another exemption from
the registration requirements of the Act (and based upon an opinion of
counsel acceptable to the Company) or (VII) pursuant to an effective
registration statement and, in each case, in accordance with the
applicable securities laws of any state of the United States or any
other applicable jurisdiction and (y) they will deliver to each person
to whom such Series A Notes or an interest therein is transferred a
notice substantially to the effect of the foregoing.
(e) Neither of such Initial Purchasers nor any of such Initial
Purchaser's affiliates or any persons acting on such Initial
Purchaser's behalf has engaged or will engage in any directed selling
efforts within the meaning of Regulation S with respect to the Series A
Notes or the Guarantee.
(f) The Series A Notes offered and sold by such Initial
Purchaser in reliance on Regulation S have been and will be offered and
sold only in offshore transactions (as defined in Rule 902 under the
Act).
(g) The sale of the Series A Notes offered and sold by such
Initial Purchaser in reliance on Regulation S is not part of a plan or
scheme to evade the registration provisions of the Act.
(h) Such Initial Purchaser agrees that it has offered the
Series A Notes and will offer and sell the Series A Notes (i) as part
of its distribution at any time and (ii) otherwise until 40 days after
the later of the commencement of the offering of the Series A Notes and
the Closing Date, only in accordance with Rule 903 of Regulation S or
another exemption from the registration requirements of the Act. Such
Initial Purchaser agrees that, during such 40-day restricted period, it
will not cause any advertisement with respect to the Series A Notes
(including any "tombstone" advertisement) to be published in any
newspaper or periodical or posted in any public place and will not
issue any circular relating to the Series A Notes, except such
advertisements as permitted by and which include the statements
required by Regulation S.
(i) Such Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Series A Notes in reliance on
Regulation S (i) as part of its distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the
offering of the Series A Notes and the Closing Date, to a U.S.
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person (as defined in Rule 902 under the Act) or for the account or
benefit of a U.S. person (other than a distributor (as defined in Rule
902 under the Act)).
(j) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Notes by it to any distributor,
dealer or person receiving a selling concession, fee or other
remuneration during the 40-day restricted period referred to in Rule
903(c)(3) under the Act, it will send to such distributor, dealer or
person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:
The Series A Notes covered hereby have not been
registered under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and may not be offered and sold within
the United States or to, or for the account or benefit of,
U.S. persons (i) as part of your distribution at any time or
(ii) otherwise until 40 days after the later of the
commencement of the offering and the closing date, except in
either case in accordance with Regulation S under the
Securities Act (or Rule 144A or to accredited institutions in
transactions that are exempt from the registration
requirements of the Securities Act), and in connection with
any subsequent sale by you of the Notes covered hereby in
reliance on Regulation S during the period referred to above
to any distributor, dealer or person receiving a selling
concession, fee or other remuneration, you must deliver a
notice substantially to the foregoing effect. Terms used above
have the meanings assigned to them in Regulation S.
(k) Such Initial Purchaser agrees that the Notes offered and
sold in reliance on Regulation S will be represented upon issuance by a
global security that may not be exchanged for definitive securities
until the expiration of the 40-day restricted period referred to in
Rule 903(c)(3) under the Act and only upon certification of beneficial
ownership of such Series A Notes by non-U.S. persons or U.S. persons
who purchased such Series A Notes in transactions that were exempt from
the registration requirements of the Act.
(l) Such Initial Purchaser further represents and agrees that
(i) it has not offered or sold and will not offer or sell any Series A
Notes to persons in the United Kingdom prior to the expiration of the
period of six months from the issue date of the Series A Notes, except
to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent)
for the purposes of their business or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995, (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with re-
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spect to anything done by it in relation to the Series A Notes in, from
or otherwise involving the United Kingdom and (iii) it has only issued
or passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the issuance of the Series A
Notes to a person who is of a kind described in Article 11(3) of the
Financial Services Act of 1986 (Investment Advertisements) (Exemptions)
Order 1996 or is a person to whom the document may otherwise lawfully
be issued or passed on.
(m) Such Initial Purchaser agrees that it will not offer, sell
or deliver any of the Series A Notes in any jurisdiction outside the
United States except under circumstances that will result in compliance
with the applicable laws thereof, and that it will take at its own
expense whatever action is required to permit its resale of the Series
A Notes in such jurisdictions. Such Initial Purchaser understands that
no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required
for such purpose.
(n) Such Initial Purchaser acknowledges that the Company and
the Guarantor and, for purposes of the opinions to be delivered to each
Initial Purchaser pursuant to Section 9 hereof, counsel to the Company
and the Guarantor and counsel to the Initial Purchasers will rely upon
the accuracy and truth of the foregoing representations and such
Initial Purchaser hereby consents to such reliance.
8. INDEMNIFICATION.
(a) The Company and the Guarantor agree, jointly and
severally, to indemnify and hold harmless the Initial Purchasers, their
directors, officers and each person, if any, who controls either of the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any legal or other expenses
incurred by the Initial Purchasers, their directors, officers or control persons
in connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), the Preliminary Offering Memorandum or any Rule 144A
Information provided by the Company or the Guarantor to any holder or
prospective purchaser of Series A Notes pursuant to Section 5(h) or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon the Furnished Information.
(b) The Initial Purchasers agree to indemnify and hold
harmless the Company and the Guarantor, and their respective directors and
officers and each person, if
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any, who controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) the Company or the Guarantor, to the same extent as the
foregoing indemnity from the Company and the Guarantor to the Initial Purchasers
but only with reference to the Furnished Information.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers shall not
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Initial Purchasers). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by Donaldson, Lufkin & Jenrette Securities
Corporation, in the case of the parties indemnified pursuant to Section 8(a),
and by the Company and the Guarantor, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with the indemnifying party's written consent or (ii) effected without
the indemnifying party's written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received
notice setting forth the terms of such proposed settlement and a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior
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to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 8 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages, liabilities or judgments
referred to therein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities and
judgments (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantor, on the one hand, and the
Initial Purchasers, on the other hand, from the offering of the Series A Notes
or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company and the Guarantor, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Guarantor, on the one hand, and the Initial
Purchasers, on the other hand, shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Series A Notes (before deducting
expenses) received by the Company, and the total discounts and commissions
received by the Initial Purchasers bear to the total price to investors of the
Series A Notes, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault of the Company and the Guarantor, on the
one hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Guarantor, on the one
hand, or the Initial Purchasers, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, the Guarantor, and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this Section
8(d) were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or
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payable by an indemnified party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such indemnified party in connection with
investigating or defending any matter, including any action that could have
given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 8, the Initial Purchasers shall
not be required to contribute any amount in excess of the amount by which the
total price (less the Initial Purchasers' discount shown on the cover page of
the Offering Memorandum) of the Series A Notes purchased by it were sold to
investors in Exempt Resales exceeds the amount of any damages which the Initial
Purchasers have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Series A Notes purchased by each of the Initial Purchasers
hereunder and are not joint.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the Initial Purchasers to purchase the Series A Notes under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and
the Guarantor contained in this Agreement shall be true and correct in
all material respects on the Closing Date with the same force and
effect as if made on and as of the Closing Date.
(b) On or after the date hereof (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any
notice have been given of any potential or intended downgrading,
suspension or withdrawal of, or of any review (or of any potential or
intended review) for a possible change that does not indicate the
direction of the possible change in any rating of the Company or the
Guarantor, or any securities of the Company or the Guarantor
(including, without limitation, the placing of any of the foregoing
ratings on credit watch with negative or developing implications or
under review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any
change, nor shall any notice have been given of any potential or
intended change, in the outlook for any rating of the Company or the
Guarantor or any securities of the Company or the Guarantor by any such
rating organization and (iii) no such rating
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organization shall have given notice that it has assigned (or is
considering assigning) a lower rating to the Notes than that on which
the Notes were marketed.
(c) The Initial Purchasers shall have received on the Closing
Date a certificate dated the Closing Date, signed by the President and
the Chief Financial Officer of the Company and the Guarantor,
confirming the matters set forth in Sections 9(a), 9(b) and 9(d).
(d) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there shall not have
occurred any change or any development involving a prospective change
in the condition, financial or otherwise, or the earnings, business,
management or operations of the Guarantor and its subsidiaries, taken
as a whole, (ii) there shall not have been any change or any
development involving a prospective change in the capital stock or in
the long-term debt of the Guarantor or any of its subsidiaries and
(iii) neither the Guarantor nor any of its subsidiaries shall have
incurred any liability or obligation, direct or contingent, the effect
of which, in any such case described in clause 9(d)(i), 9(d)(ii) or
9(d)(iii), in the judgment of the Initial Purchasers, is material and
adverse and, in the judgment of the Initial Purchasers, makes it
impracticable to market the Series A Notes on the terms and in the
manner contemplated in the Offering Memorandum.
(e) The Initial Purchasers shall have received on the Closing
Date an opinion (satisfactory to the Initial Purchasers and counsel for
the Initial Purchasers), dated the Closing Date, of Cummings and
Lockwood, counsel for the Company and the Guarantor, to the effect
that:
(i) each of the Guarantor, the Company and the
Company's domestic subsidiaries has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as
described in the Offering Memorandum and to own, lease and
operate its properties as described in the Offering
Memorandum;
(ii) all the outstanding shares of capital stock of
the Company are owned by the Guarantor;
(iii) the Series A Notes have been duly authorized
and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Initial Purchasers in accordance with the terms of this
Agreement, and assuming due authentication by the Trustee will
be entitled to the benefits of the Indenture and will be valid
and binding obli-
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gations of the Company, enforceable in accordance with their
terms except as (x) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(iv) the Guarantee has been duly authorized and, when
the Series A Notes are executed and authenticated in
accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, the Guarantee endorsed thereon
will be entitled to the benefits of the Indenture and will be
the valid and binding obligation of the Guarantor, enforceable
in accordance with its terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(v) the Indenture has been duly authorized, executed
and delivered by the Company and the Guarantor and is a valid
and binding agreement of the Company and the Guarantor,
enforceable against the Company and the Guarantor in
accordance with its terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(vi) the Indenture complies as to form in all
material respects with the requirements of the TIA, and the
rules and regulations of the Commission applicable to an
indenture which is qualified thereunder. It is not necessary
in connection with the offer, sale and delivery of the Series
A Notes to the Initial Purchasers in the manner contemplated
by this Agreement or in connection with the Exempt Resales to
qualify the Indenture under the TIA;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor and is
a valid and binding agreement of the Company and the
Guarantor, enforceable against the Company and the Guarantor
in accordance with its terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (y) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
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(viii) the Registration Rights Agreement has been
duly authorized, executed and delivered by the Company and the
Guarantor and is a valid and binding agreement of the Company
and the Guarantor, enforceable against the Company and the
Guarantor in accordance with its terms, except as (x) the
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(ix) the Exchange Notes have been duly authorized
and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered in exchange for
Series A Notes in accordance with the Indenture and the
Exchange Offer, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as
(x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(x) when the Exchange Notes are executed and
authenticated in accordance with the provisions of the
Indenture and delivered in exchange for Series A Notes in
accordance with the Indenture and the Exchange Offer, the
Guarantee endorsed thereon will be entitled to the benefits of
the Indenture and will be the valid and binding obligations of
the Guarantor, enforceable in accordance with its terms except
as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(xi) the statements under the captions "Description
of Notes" and "Plan of Distribution" (excluding the Furnished
Information) in the Offering Memorandum, insofar as such
statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present
in all material respects such legal matters, documents and
proceedings;
(xii) neither the Guarantor, the Company nor any of
the Company's domestic subsidiaries is in violation of its
respective charter or by-laws and, to such counsel's
knowledge, neither the Guarantor nor any of its subsidiaries
is in material default in the performance of any obligation,
agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or
instrument that has been filed as an exhibit to the
Guarantor's Annual Report on Form 10-K for the fiscal year
ended August 31, 1996 and, as of the date of such counsel's
opinion, that would be
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30
required to be filed as an exhibit to the Guarantor's Annual
Report on Form 10-K for the fiscal year ended August 31, 1997;
(xiii) the execution, delivery and performance of
this Agreement and the other Operative Documents by the
Company and the Guarantor, compliance by the Company and the
Guarantor with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and
thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be
required under the securities or Blue Sky laws of the various
states or under federal securities laws), (ii) conflict with
or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Guarantor,
the Company or any of the Company's domestic subsidiaries,
(iii) conflict with or constitute a breach of any of the terms
of provisions of, or a default under, any indenture, loan
agreement, mortgage, lease or other agreement or instrument
that has been filed as an exhibit to the Guarantor's Annual
Report on Form 10-K for the fiscal year ended August 31, 1996
and, as of the date of such counsel's opinion, that would be
required to be filed as an exhibit to the Guarantor's Annual
Report on Form 10-K for the fiscal year ended August 31, 1997,
(iv) violate or conflict with any applicable law or any rule,
regulation, or, to such counsel's knowledge, judgment, order
or decree of any court or any governmental body or agency
having jurisdiction over the Guarantor, any of its
subsidiaries or their respective property, (v) result in the
imposition or creation of (or the obligation to create or
impose) a Lien under, any agreement or instrument which has
been filed as an exhibit to the Guarantor's Annual Report on
Form 10-K for the fiscal year ended August 31, 1996 and, as of
the date of such counsel's opinion, that would be required to
be filed as an exhibit to the Guarantor's Annual Report on
Form 10-K for the fiscal year ended August 31, 1997, or (vi)
result in the termination or revocation of any material
Authorization of the Guarantor or any of its subsidiaries or
result in any other impairment of the rights of the holder of
any such material Authorization;
(xiv) except as otherwise described in the Offering
Memorandum, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Guarantor or any of its subsidiaries is a party or to which
any of their respective property is or could be subject, which
could reasonably be expected to result, singly or in the
aggregate, in a Material Adverse Effect;
(xv) neither the Company nor the Guarantor is and,
after giving effect to the offering and sale of the Series A
Notes and the application of the net proceeds thereof as
described in the Offering Memorandum, neither will
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31
be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(xvi) neither the Guarantor nor any of its
subsidiaries nor any agent thereof acting on their behalf has
taken, and none of them will take, any action that might cause
this Agreement or the issuance or sale of the Series A Notes
to violate Regulation G (12 C.F.R. Part 207), Regulation T (12
C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of
the Federal Reserve System;
(xvii) no registration under the Act of the Series A
Notes is required for the sale of the Series A Notes to the
Initial Purchasers as contemplated by this Agreement or for
the Exempt Resales assuming that (i) each Initial Purchaser is
a QIB or an Accredited Institution, (ii) the accuracy of, and
compliance with, the Initial Purchasers' representations and
agreements contained in Section 7 of this Agreement and (iii)
the accuracy of the representations of the Company and the
Guarantor set forth in Sections 6(gg), (hh), (ii), (kk), (ll)
and (mm) of this Agreement;
(xviii) such counsel has no reason to believe that,
as of the date of the Offering Memorandum or as of the Closing
Date, the Offering Memorandum, as amended or supplemented, if
applicable (except for the financial statements and other
financial data included therein and the Furnished Information,
as to which such counsel need not express any belief) contains
any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; and
(xix) since the respective dates as of which
information is given in the Offering Memorandum other than as
set forth in the Offering Memorandum (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) to the knowledge of such counsel, (i) there
has not occurred any material adverse change in the condition,
financial or otherwise, or the earnings, business, management
or operations of the Guarantor and its subsidiaries, taken as
a whole, (ii) there has not been any material adverse change
in the capital stock or in the long-term debt of the
Guarantor, the Company or any of the Company's domestic
subsidiaries and (iii) neither the Guarantor, the Company nor
any of the Company's domestic subsidiaries has incurred any
material liability or obligation, direct or contingent.
The opinion of Cummings and Lockwood described in Section 9(e)
above shall be rendered to the Initial Purchasers at the request of the
Company and the Guarantor and shall so state therein. In giving such
opinion with respect to the
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matters covered by Section 9(e)(xix), Cummings and Lockwood may state
that their opinion and belief are based upon their participation in the
preparation of the Offering Memorandum and any amendments or
supplements thereto and review and discussion of the contents thereof,
but are without independent check or verification except as specified.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion (satisfactory to the Initial Purchasers and counsel for
the Initial Purchasers), dated the Closing Date, of Robert N. Edwards,
in his capacity as General Counsel for the Company and the Guarantor,
to the effect that:
(i) each of the Guarantor, the Company and the
Company's domestic subsidiaries is duly qualified and is in
good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified
could not reasonably be expected to have a Material Adverse
Effect;
(ii) neither the Guarantor nor any of its
subsidiaries has violated any Environmental Law or any
provisions of ERISA, or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, could not reasonably be expected, singly or in the
aggregate, to have a Material Adverse Effect;
(iii) each of the Guarantor and its subsidiaries has
such Authorizations of, and has made all filings with and
notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other
tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its
business, except where the failure to have any such
Authorization or to make any such filing or notice could not
reasonably be expected, singly or in the aggregate, to have a
Material Adverse Effect. Each such Authorization is valid and
in full force and effect and each of the Guarantor and its
subsidiaries is in material compliance with all the terms and
conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including the
receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would
allow for, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations
contain no restrictions that are burdensome to the Guarantor
or any of its subsidiaries; except where such failure to be
valid and in
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33
full force and effect or to be in compliance, the occurrence
of any such event or the presence of any such restriction
could not reasonably be expected, singly or in the aggregate,
to have a Material Adverse Effect;
(iv) after due inquiry, to the best knowledge of
counsel, based upon written representation of the Company's
employees, neither the Company, the Guarantor nor any
subsidiary, nor any director, officer or employee of the
Company or the Guarantor has, directly or indirectly, used any
corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to
political activity, made any unlawful payment to foreign or
domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds,
violated any provision of the Foreign Corrupt Practices Act of
1977, as amended;
(v) the Guarantor and its subsidiaries have good and
marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them
which is material to the business of the Guarantor and its
subsidiaries taken as a whole, in each case free and clear of
all Liens and defects, except such as are described in the
Offering Memorandum or such as do not materially affect the
value of such property taken as a whole and do not materially
interfere with the use made and proposed to be made of such
property taken as a whole by the Guarantor and its
subsidiaries; and any material real property and buildings
held under lease by the Guarantor and its subsidiaries are
held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere
with the use made of such property and buildings by the
Guarantor and its subsidiaries, in each case except as
described in the Offering Memorandum;
(vi) the Guarantor and its subsidiaries own or
possess, or can acquire on reasonable terms, all Intellectual
Property currently employed by them in connection with the
business now operated by them except where the failure to own
or possess or otherwise be able to acquire such Intellectual
Property could not reasonably be expected, singly or in the
aggregate, to have a Material Adverse Effect; and neither the
Guarantor nor any of its subsidiaries has received any notice
of infringement of or conflict with asserted rights of others
with respect to any of such Intellectual Property which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could reasonably be expected
singly or in the aggregate, to have a Material Adverse Effect;
(vii) except as disclosed in the Offering Memorandum,
no relationship, direct or indirect, exists between or among
the Guarantor or any of its
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subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Guarantor or any
of its subsidiaries on the other hand, which would be required
by the Act to be described in the Offering Memorandum if the
Offering Memorandum were a prospectus included in a
registration statement on Form S-1 filed with the Commission;
(viii) there is no (i) significant unfair labor
practice complaint, grievance or arbitration proceeding
pending or threatened against the Guarantor or any of its
subsidiaries before the National Labor Relations Board or any
state or local labor relations board, (ii) strike, labor
dispute, slowdown or stoppage pending or, to the knowledge of
the Guarantor, threatened against the Guarantor or any of its
subsidiaries or (iii) union representation question existing
with respect to the employees of the Guarantor or any of its
subsidiaries, except in the case of clauses (i), (ii) and
(iii) for such actions which, singly or in the aggregate,
could not reasonably be expected to have a Material Adverse
Effect. To the best of such counsel's knowledge after due
inquiry, no collective bargaining organizing activities are
taking place with respect to the Guarantor or any of its
subsidiaries;
(ix) all material tax returns required to be filed by
the Guarantor and each of its subsidiaries in any jurisdiction
have been filed, other than those filings being contested in
good faith, and all material taxes, including withholding
taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any
assessment received by the Guarantor or any of its
subsidiaries, have been paid, other than those being contested
in good faith and for which reasonable reserves have been
provided;
(x) all indebtedness of the Company and the Guarantor
that will be repaid with the proceeds of the issuance and sale
of the Series A Notes was incurred, and the indebtedness
represented by the Series A Notes is being incurred, for
proper purposes and in good faith and each of the Company and
the Guarantor was, at the time of the incurrence of such
indebtedness that will be repaid with the proceeds of the
issuance and sale of the Series A Notes, and will be on the
Closing Date (after giving effect to the application of the
proceeds from the issuance of the Series A Notes) solvent, and
had at the time of the incurrence of such indebtedness that
will be repaid with the proceeds of the issuance and sale of
the Series A Notes and will have on the Closing Date (after
giving effect to the application of the proceeds from the
issuance of the Series A Notes) sufficient capital for
carrying on its respective business and was, at the time of
the incurrence of such indebtedness that will be repaid with
the proceeds of the issuance and sale of the Series A Notes,
and will be on the Closing Date (after giving effect to the
application
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of the proceeds from the issuance of the Notes) able to pay
its respective debts as they mature;
(xi) to the best of such counsel's knowledge after
due inquiry, there are no contracts, agreements or
understandings between the Company or the Guarantor and any
person granting such person the right to require the Company
or the Guarantor to include any securities of the Company or
the Guarantor with the Notes and Guarantee registered pursuant
to the Registration Rights Agreement; and
(xii) such counsel has no reason to believe that, as
of the date of the Offering Memorandum or as of the Closing
Date, the Offering Memorandum, as amended or supplemented, if
applicable (except for the financial statements and other
financial data included therein, as to which such counsel need
not express any belief) contains any untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of Cahill Gordon & Reindel,
counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(h) The Initial Purchasers shall have received, at the time
this Agreement is executed and at the Closing Date, letters dated the
date hereof or the Closing Date, as the case may be, in form and
substance satisfactory to the Initial Purchasers from BDO Seidman LLP,
independent public accountant, containing the information and
statements of the type ordinarily included in accountants' "comfort
letters" to the Initial Purchasers with respect to the financial
statements and certain financial information contained in the Offering
Memorandum.
(i) The Series A Notes shall have been approved by the NASD
for trading and duly listed in PORTAL.
(j) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered
into by the Company, the Guarantor and the Trustee.
(k) The Company and the Guarantor shall have executed the
Registration Rights Agreement and the Initial Purchasers shall have
received an original copy thereof, duly executed by the Company and the
Guarantor.
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(l) The Company shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company
at or prior to the Closing Date.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time prior to the
Closing Date by the Initial Purchasers by written notice to the Company and the
Guarantor if any of the following has occurred: (i) any outbreak or escalation
of hostilities or other national or international calamity or crisis or change
in economic conditions or in the financial markets of the United States or
elsewhere that, in the Initial Purchasers' judgment, is material and adverse
and, in the Initial Purchasers' judgment, makes it impracticable to market the
Series A Notes on the terms and in the manner contemplated in the Offering
Memorandum, (ii) the suspension or material limitation of trading in securities
or other instruments on the New York Stock Exchange, the American Stock
Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange, the Chicago Board of Trade or the NASDAQ National Market or limitation
on prices for securities or other instruments on any such exchange or the NASDAQ
National Market, (iii) the suspension of trading of any securities of the
Guarantor on any exchange or in the over-the-counter market, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects, or will materially and adversely
affect, the business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
If on the Closing Date either or both of the Initial
Purchasers shall fail or refuse to purchase the Series A Notes which it or they
have agreed to purchase hereunder on such date and the aggregate principal
amount of the Series A Notes which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of the Series A Notes to
be purchased on such date by both Initial Purchasers, each non-defaulting
Initial Purchaser shall be obligated, in the proportion which the principal
amount of the Series A Notes set forth opposite its name in Schedule A bears to
the aggregate principal amount of the Series A Notes which the non-defaulting
Initial Purchaser has agreed to purchase, or in such other proportion as the
Initial Purchasers may specify, to purchase the Series A Notes which such
defaulting Initial Purchaser agreed but failed or refused to purchase on such
date; provided that in no event shall the aggregate principal amount of the
Series A Notes which any Initial Purchaser has agreed to purchase pursuant to
Section 2 hereof be in-
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creased pursuant to this Section 10 by an amount in excess of one-ninth of such
principal amount of the Series A Notes without the written consent of such
Initial Purchaser. If on the Closing Date either or both of the Initial
Purchasers shall fail or refuse to purchase the Series A Notes and the aggregate
principal amount of the Series A Notes with respect to which such default occurs
is more than one-tenth of the aggregate principal amount of the Series A Notes
to be purchased by both Initial Purchasers and arrangements satisfactory to the
Initial Purchasers and the Company for purchase of such Series A Notes are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Initial Purchaser, the Company or
the Guarantor. In any such case which does not result in termination of this
Agreement, either the Initial Purchasers, the Company or the Guarantor shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Offering
Memorandum or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of any such Initial Purchaser under
this Agreement.
11. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company or the
Guarantor, to Fedders Corporation, 505 Martinsville Road, P.O. Box 813, Liberty
Corner, New Jersey 07938, Attention: Robert N. Edwards, Esq. and (ii) if to the
Initial Purchasers, Donaldson, Lufkin & Jenrette Securities Corporation, 277
Park Avenue, New York, New York 10172, Attention: Syndicate Department, or in
any case to such other address as the person to be notified may have requested
in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, the Guarantor
and the Initial Purchasers set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Series A Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the Initial
Purchasers, the officers or directors of the Initial Purchasers, any person
controlling the Initial Purchasers, the Company, the Guarantor, the officers or
directors of the Company or the Guarantor, or any person controlling the Company
or the Guarantor, (ii) acceptance of the Series A Notes and payment for them
hereunder and (iii) termination of this Agreement.
If for any reason the Series A Notes are not delivered by or
on behalf of the Company as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Company and the
Guarantor, jointly and severally, agree to reimburse the Initial Purchasers for
all out-of-pocket expenses (including the fees and disbursements of counsel)
reasonably incurred by them. Notwithstanding any termination of this Agreement,
each of the Company and the Guarantor, jointly and severally, shall be liable
for all expenses which it has agreed to pay pursuant to Section 5(i) hereof. The
Company and the Guarantor also agree, jointly and severally, to reimburse the
Initial Purchasers and its officers, directors and each person, if any, who
controls such Initial Purchasers
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within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
for any and all fees and expenses (including without limitation the fees and
expenses of counsel) incurred by them in connection with enforcing their rights
under this Agreement (including without limitation its rights under this Section
8).
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Guarantor, the Initial Purchasers, the Initial Purchasers' directors and
officers, any controlling persons referred to herein, the directors of the
Company and the Guarantor and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Series A Notes from the
Initial Purchasers merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Guarantor and the Initial Purchasers.
Very truly yours,
FEDDERS NORTH AMERICA, INC.
By: /s/ Robert L. Laurent, Jr.
-------------------------------
Name: Robert L. Laurent, Jr.
Title: Executive Vice President
FEDDERS CORPORATION,
as Guarantor
By: /s/ Robert L. Laurent, Jr.
-------------------------------
Name: Robert L. Laurent, Jr.
Title: Executive Vice President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Daniel J. Mackell
-------------------------------
Name: Daniel J. Mackell
Title: Vice President
GOLDMAN, SACHS & CO.
By: Goldman Sachs & Co.
-------------------------------
(Goldman Sachs & Co.)
S-1
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SCHEDULE A
Principal Amount
Initial Purchaser of Notes
----------------- ----------------
Donaldson, Lufkin & Jenrette Securities Corporation................................. $ 60,000,000
Goldman, Sachs & Co.................................................................. $ 40,000,000
------------
Total $100,000,000
============
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SCHEDULE B
SUBSIDIARIES
Fedders North America, Inc.
Emerson Quiet Kool Corporation
Fedders de Mexico S.A. de CV
Fedders, Inc.
Columbia Specialties, Inc
Fedders International, Inc.
Fedders Asia PTE, Ltd.
Fedders Exporting, Inc.
Fedders Investment Corporation
Fedders Xinle Co. Ltd.
NYCOR North America, Inc.
Rotorex Company, Inc.
Melcor Corporation
Melcor International Sales, Inc.
Melcor International Sales Corp.
Rotorex International, Inc.
Rotorex Technologies, Inc.
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EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT