EXHIBIT 1.1
PRODUCTION RESOURCE GROUP, L.L.C
PRG FINANCE CORPORATION
$100,000,000
11 1/2% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
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December 19, 1997
New York, New York
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
BT ALEX. BROWN INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
BNY CAPITAL MARKETS, INC.
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies & Gentlemen:
Production Resource Group, L.L.C, a Delaware limited liability company (the
"Company"), and PRG Finance Corporation, a Delaware corporation ("Finance" and,
together with the Company, the "Issuers"), as joint and several obligors,
propose to issue and sell to Bear, ▇▇▇▇▇▇▇ & Co. Inc., BT ▇▇▇▇. ▇▇▇▇▇
Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and BNY Capital Markets, Inc.
(collectively, the "Initial Purchasers") $100,000,000 in aggregate principal
amount of 11 1/2% Series A Senior Subordinated Notes due 2007 (the "Series A
Notes"), subject to the terms and conditions set forth herein. The Series A
Notes will be issued pursuant to an indenture (the "Indenture"), to be dated the
Closing Date (as defined), among the Issuers, the Guarantors (as defined) and
First Union National Bank, as trustee (the "Trustee"). The Notes (as defined)
will be fully and unconditionally guaranteed (the "Guarantees") as to payment of
principal, interest, liquidated damages and premium, if any, on an unsecured
senior subordinated basis, jointly and severally, by each entity listed on
Exhibit A hereto (collectively, the "Guarantors"). Capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the
Indenture.
In connection with the offering of the Series A Notes, the Company will
transfer certain real estate and the related mortgage debt obligations to a
member of the Company as payment for redemption of such member's equity
interests in the Company. Such member will subsequently lease such real estate
back to the Company. The transfer of real estate and the subsequent lease back
is referred to herein as the "Real Estate Transaction."
1. Issuance of Securities. The Issuers propose, upon the terms and subject
to the conditions set forth herein, to issue and sell to the Initial Purchasers
an aggregate of $100,000,000 in principal amount of Series A Notes. The Series A
Notes and the Series B Notes (as defined) issuable in exchange therefor are
collectively referred to herein as the "Notes."
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Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Act"), the Series A Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) OR (C) IT IS
NOT A U.S. PERSON AND IS NOT ACQUIRING THIS SECURITY FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO
REQUEST), (2) TO THE ISSUERS, (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
2. Offering. The Series A Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Act. The Issuers have prepared a preliminary offering memorandum, dated December
3, 1997 (the "Preliminary Offering Memorandum"), and a final offering
memorandum, dated December 19, 1997 (the "Offering Memorandum"), relating to the
Company, its subsidiaries and the Series A Notes.
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The Initial Purchasers have advised the Issuers that the Initial Purchasers
will make offers (the "Exempt Resales") of the Series A Notes 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)
non-U.S. persons outside the United States in reliance upon Regulation S
("Regulation S") under the Act (each, a "Reg S Investor"). The QIBs and Reg S
Investors are collectively referred to herein as the "Eligible Purchasers." The
Initial Purchasers will offer the Series A Notes to such Eligible Purchasers
initially at a price equal to 100% 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 relating
thereto (the "Registration Rights Agreement"), to be dated the Closing Date, 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 Issuers and the Guarantors 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 the 11 1/2% Series B Notes due 2007
(the "Series B Notes") to be offered in exchange for the Series A Notes (the
"Exchange Offer") 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 their best
efforts to cause such Registration Statements to be declared effective and to
consummate the Exchange Offer. This Agreement, the Notes, the Guarantees, the
Indenture, the Registration Rights Agreement and the Amended Credit Facility (as
defined in the Offering Memorandum) are hereinafter referred to collectively as
the "Operative Documents."
3. Purchase, Sale and Delivery. (a) On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to its terms
and conditions, the Issuers agree to issue and sell to the Initial Purchasers,
and the Initial Purchasers agree to purchase from the Issuers, the principal
amount of Series A Notes set forth opposite its name on Schedule I hereto. The
purchase price for the Series A Notes will be $970 per $1,000 principal amount
Series A Note.
(b) Delivery of the Series A Notes shall be made, against payment of the
purchase price therefor, at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, New York, New York
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 December 24, 1997 or at such
other time as shall be agreed upon by the Initial Purchasers and the Issuers.
The time and date of such delivery and payment are herein called the "Closing
Date."
(c) On the Closing Date, one or more Series A Notes in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), having an aggregate amount corresponding to the aggregate amount of the
Series A Notes sold pursuant to Exempt Resales to Eligible Purchasers (the
"Global Notes") shall be delivered by the Issuers to the Initial Purchasers (or
as the Initial Purchasers direct), against payment by the Initial Purchasers of
the purchase price therefor, by wire transfer of same day funds, to an account
designated by the Issuers, provided that the Issuers shall give at least two
business days' prior written notice to the Initial Purchasers of the information
required to effect such wire transfer. The Global Notes shall be made available
to the Initial Purchasers for inspection not later than 9:30 a.m. on the
business day immediately preceding the Closing Date.
4. Agreements of the Issuers and the Guarantors. The Issuers and the
Guarantors, jointly
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and severally, covenant and agree with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, 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 Notes for offering or
sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory authority
and (ii) of the happening of any event that makes any statement of a
material fact made in the Preliminary Offering Memorandum or the Offering
Memorandum untrue or that requires the addition of any material fact in the
Preliminary Offering Memorandum or the Offering Memorandum necessary in
order to make the statements therein, in the light of the circumstances
under which they are made, not misleading. The Issuers and the Guarantors
shall use their reasonable best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption of any Notes under
any state securities or Blue Sky laws and, if at any time any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption of any Notes or Guarantees of
Notes under any state securities or Blue Sky laws, the Issuers and the
Guarantors shall use their reasonable 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 Issuers, without charge, 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. The Issuers and the Guarantors consent 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) Not to amend or supplement the Preliminary Offering Memorandum or
the Offering Memorandum prior to the Closing Date unless the Initial
Purchasers shall previously have been advised thereof and shall not have
objected thereto in writing within a reasonable time after being furnished
a copy thereof. The Issuers and the Guarantors shall promptly prepare, upon
the Initial Purchasers' request, any amendment or supplement to the
Preliminary Offering Memorandum or the Offering Memorandum that may be
necessary or advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any Exempt
Resale, any event shall occur as a result of which, in the judgment of the
Issuers and the Guarantors or in the reasonable opinion of counsel for the
Issuers and the Guarantors or counsel for the Initial Purchasers, it
becomes necessary or advisable to amend or supplement the Preliminary
Offering Memorandum or 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 which is a prospective
purchaser, not misleading, or if it is necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or the Offering Memorandum
to comply with applicable law, (i) to notify the Initial Purchasers and
(ii) forthwith to prepare an appropriate amendment or supplement to such
Preliminary Offering Memorandum or 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
Preliminary Offering Memorandum or Offering Memorandum will comply with
applicable law.
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(e) To cooperate with the Initial Purchasers and counsel for the
Initial Purchasers in connection with the qualification or registration of
the Series A Notes under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may reasonably request and to
continue such qualification in effect so long as required for the Exempt
Resales; provided, however, that none of the Issuers or the Guarantors
shall be required in connection therewith to register or qualify as a
foreign corporation where it is not now so qualified or to take any action
that would subject it to taxation or service of process.
(f) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, to pay
all costs, expenses, fees and taxes incident to the performance of the
obligations of the Issuers and the Guarantors hereunder, including in
connection with: (i) the preparation, printing, filing and distribution of
the Preliminary Offering Memorandum and the Offering Memorandum (including,
without limitation, financial statements) and all amendments and
supplements thereto required pursuant hereto, (ii) the preparation
(including, without limitation, duplication costs) and delivery of all
agreements, correspondence and all other documents prepared and delivered
in connection herewith and with the Exempt Resales, (iii) the issuance,
transfer and delivery of the Series A Notes and the Guarantees to the
Initial Purchasers, (iv) the qualification or registration of the Notes and
the Guarantees for offer and sale under the securities or Blue Sky laws of
the several states (including, without limitation, the cost of printing and
mailing a preliminary and final Blue Sky Memorandum and the reasonable fees
and disbursements of counsel for the Initial Purchasers relating thereto,
which fees and disbursements shall in no event exceed $7,000 in the
aggregate), (v) furnishing such copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and all amendments and supplements
thereto, as may be requested for use in connection with Exempt Resales,
(vi) the preparation of certificates for the Notes and the Guarantees
(including, without limitation, printing and engraving thereof), (vii) the
fees, disbursements and expenses of the Issuers' and the Guarantors'
counsel and accountants, (viii) all fees and expenses (including fees and
expenses of counsel) of the Issuers in connection with the approval of the
Notes by DTC for "book-entry" transfer, (ix) rating the Notes by rating
agencies, (x) the reasonable fees and expenses of the Trustee and its
counsel, (xi) the performance by the Issuers and the Guarantors of their
other obligations under this Agreement and the other Operative Documents
and (xii) "roadshow" travel and other expenses incurred by the Issuers in
connection with the marketing and sale of the Notes; provided that the
Issuers and the Guarantors shall pay one-half of all the costs, expenses,
fees and taxes related to "roadshow" travel in a private airplane.
Notwithstanding the foregoing, except in the case of clause (iv), the
Issuers and the Guarantors shall not be obligated to pay costs, expenses,
fees and taxes of the Initial Purchasers and their counsel.
(g) To use the proceeds from the sale of the Series A Notes in the
manner described in the Offering Memorandum under the caption "Use of
Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts to
claim, the benefit of any usury laws against the holders of any Notes.
(i) To do and perform in all material respects all things required to
be done and performed under this Agreement by them prior to or after the
Closing Date and to satisfy in all material respects all conditions
precedent on their part to the delivery of the Series A Notes and
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the Guarantees.
(j) 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 in a manner that would
require the registration under the Act of the sale to the Initial
Purchasers or the Eligible Purchasers of the Series A Notes or to take any
other action that would result in the Exempt Resales not being exempt from
registration under the Act.
(k) For so long as any of the Notes remain outstanding and during any
period in which the Issuers and the Guarantors are not subject to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available to any holder or beneficial owner of
Series A Notes in connection with any sale thereof and any prospective
purchaser of such Notes from such holder or beneficial owner, upon request
of such holder, the information required by Rule 144A(d)(4) under the Act.
(l) To use their best efforts to cause the Exchange Offer to be made
in the appropriate form to permit registered Series B Notes to be offered
in exchange for the Series A Notes and to comply with all applicable
federal and state securities laws in connection with the Exchange Offer.
(m) To comply in all material respects with all of their agreements
set forth in the Registration Rights Agreement and all agreements set forth
in the representation letters of the Issuers to DTC relating to the
approval of the Notes by DTC for "book-entry" transfer.
(n) To effect the inclusion of the Notes in PORTAL and to obtain
approval of the Series A Notes by DTC for "book-entry" transfer.
(o) During a period of five years following the Closing Date, to
deliver without charge to the Initial Purchasers, as they may reasonably
request, promptly upon their becoming available, copies of (i) all reports
or other publicly available information that such Issuer shall mail or
otherwise make available to its securityholders generally and (ii) all
reports, financial statements and proxy or information statements filed by
such Issuer with the Commission or any national securities exchange and
such other publicly available information concerning such Issuer or any of
its subsidiaries, including without limitation, press releases.
(p) Prior to the Closing Date, to furnish to the Initial Purchasers,
as soon as they have been prepared in the ordinary course by any of the
Issuers and the Guarantors, copies of any unaudited quarterly interim
financial statements for any period subsequent to the periods covered by
the financial statements appearing in the Offering Memorandum.
(q) Not to take, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of either of the Issuers or any
of the Guarantors to facilitate the sale or resale of the Notes. Except as
permitted by the Act, none of the Issuers or the Guarantors will distribute
any (i) preliminary offering memorandum, including, without limitation, the
Preliminary Offering Memorandum, (ii) offering memorandum, including,
without limitation, the Offering Memorandum, or (iii) other offering
material in connection with the offering and sale of the Notes.
(r) At such time that the Company makes a distribution to its members
pursuant to clause
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(ix) under the caption "Description of Notes--Certain Covenants--Restricted
Payments" contained in the Offering Memorandum, the Company shall deliver
an officers' certificate to the Trustee, in form and substance satisfactory
to the Trustee, as to the solvency of the Company following such
distribution.
(s) To use their best efforts to do and perform all things required or
necessary to be done and performed under this Agreement prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Series A Notes and the Guarantees.
5. Representations and Warranties. (a) The Issuers and the Guarantors,
jointly and severally, represent and warrant to the Initial Purchasers that:
(i) The Preliminary Offering Memorandum as of its date does not, and
the Offering Memorandum as of its date and as of the Closing Date does not
and will not, and any supplement or amendment thereto will not, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties contained in
this paragraph shall not apply to statements in or omissions from the
Preliminary Offering Memorandum and the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in conformity
with information relating to the Initial Purchasers furnished to the
Issuers in writing by the Initial Purchasers expressly for use therein. 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.
(ii) The Company (A) is a Delaware limited liability company duly
formed, validly existing and in good standing under the laws of Delaware,
(B) has all requisite power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its properties, and
(C) is duly qualified and is in good standing as a foreign limited
liability company, 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 (x) result, individually or in the aggregate, in
a material adverse effect on the properties, business, results of
operations, condition (financial or otherwise) or affairs of the Company
and its subsidiaries, taken as a whole, (y) interfere with or adversely
affect the issuance or marketability of the Notes or the issuance of the
Guarantees pursuant hereto or (z) in any manner draw into question the
validity of this Agreement or any other Operative Document or the
transactions described in the Offering Memorandum under the caption "Use of
Proceeds" (any of the events set forth in clauses (x), (y) or (z), a
"Material Adverse Effect").
(iii) Each of the Company's subsidiaries (A) is a corporation or
limited liability company, as applicable, duly formed, validly existing and
in good standing under the laws of its jurisdiction of organization, (B)
has all requisite power and authority to carry on its business as it is
currently being conducted and as described in the Offering Memorandum and
to own, lease and operate its properties, and (C) is duly qualified and in
good standing as a foreign corporation or limited liability company, as
applicable, authorized to do business in each jurisdiction in which the
nature
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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.
(iv) The Company has no material subsidiaries other than Finance and
the Guarantors.
(v) All of the outstanding capital stock of each material subsidiary
of the Company other than PRG Planning and Development Group, L.L.C. is
owned, directly or indirectly, by the Company and 99% of the outstanding
capital stock of PRG Planning and Development Group, L.L.C. is owned,
directly or indirectly, by the Company, in each case, free and clear of any
security interest, claim, lien, limitation on voting rights or encumbrance,
except for any such security interest, claim, lien, limitation on voting
rights or encumbrance pursuant to the Amended Credit Facility; and all such
securities have been duly authorized, validly issued, and are fully paid
and nonassessable and were not issued in violation of any preemptive or
similar rights.
(vi) There are not currently any outstanding subscriptions, rights,
warrants, calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any capital stock or other equity
interest of the Company's subsidiaries.
(vii) When the Series A Notes and the Guarantees are issued and
delivered pursuant to this Agreement, no Series A Note or Guarantee will be
of the same class (within the meaning of Rule 144A under the Act) as
securities of either of the Issuers or of any of the Guarantors that are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that are quoted in a United States automated inter-dealer
quotation system.
(viii) Each of the Issuers and the Guarantors has all requisite
corporate or limited liability company power and authority, as applicable,
to execute, deliver and perform its obligations under this Agreement and
each of the other Operative Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby, including,
without limitation, the corporate or limited liability company power and
authority, as applicable, to issue, sell and deliver the Notes and to issue
and deliver the Guarantees as provided herein and therein.
(ix) This Agreement has been duly and validly authorized, executed and
delivered by each of the Issuers and the Guarantors and is the legal, valid
and binding agreement of each of the Issuers and the Guarantors,
enforceable against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity.
(x) The Indenture has been duly and validly authorized by each of the
Issuers and the Guarantors and, when duly executed and delivered by each of
the Issuers and the Guarantors, will be the legal, valid and binding
obligation of each of them, enforceable against each of them in accordance
with its terms, (A) subject to (1) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the rights
of creditors generally and (2) general principles of equity and (B) except
to the extent that the waiver contained in Section 4.06 of the Indenture
may be deemed enforceable. 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 "Trust Indenture Act"), and the rules and regulations
of the Commission applicable to an indenture which is qualified thereunder.
The Offering Memorandum contains a summary of the terms of the Indenture,
which is accurate in all material respects.
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(xi) The Registration Rights Agreement has been duly and validly
authorized by each of the Issuers and the Guarantors and, when duly
executed and delivered by each of the Issuers and the Guarantors, will be
the legal, valid and binding obligation of each of the Issuers and the
Guarantors, enforceable against each of them in accordance with its terms,
(A) subject to (1) applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and (2) general principles of equity and (B) except to
the extent that the enforceability of indemnification and contribution
provisions may be limited by Federal and state securities laws and the
policies underlying such laws. The Offering Memorandum contains a summary
of the terms of the Registration Rights Agreement, which is accurate in all
material respects.
(xii) The Amended Credit Facility has been duly and validly authorized
by each of the Company and its subsidiaries party thereto and, when duly
executed and delivered by each of the Company and such subsidiaries, will
be the legal, valid and binding obligation of each of the Company and such
subsidiaries, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity. The Offering Memorandum
contains a summary of the terms of the Amended Credit Facility, which is
accurate in all material respects.
(xiii) The Series A Notes have been duly and validly authorized by
each of the Issuers for issuance and sale to the Initial Purchasers
pursuant to this Agreement and, when issued and authenticated in accordance
with the terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid and
binding obligations of each of the Issuers, enforceable against each of
them in accordance with their terms and entitled to the benefits of the
Indenture, (A) subject to (1) applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and (2) general principles of equity and (B) except to
the extent that the waiver contained in Section 4.06 of the Indenture may
be deemed enforceable. The Offering Memorandum contains a summary of the
terms of the Notes, which is accurate in all material respects.
(xiv) The Series B Notes have been duly and validly authorized for
issuance by each of the Issuers and, when issued and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, will be
the legal, valid and binding obligations of the each of Issuers,
enforceable against each of them in accordance with their terms and
entitled to the benefits of the Indenture, (A) subject to (1) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar
laws affecting the rights of creditors generally and (2) general principles
of equity and (B) except to the extent that the waiver contained in Section
4.06 of the Indenture may be deemed enforceable.
(xv) The Guarantees of the Series A Notes have been duly and validly
authorized by each of the Guarantors and, when executed and delivered in
accordance with the terms of the Indenture and when the Series A Notes have
been issued and authenticated in accordance with the terms of the Indenture
and delivered against payment therefor in accordance with the terms hereof
and thereof, will be the legal, valid and binding obligations of each of
the Guarantors, enforceable against each of them in accordance with their
terms and entitled to the benefits of the Indenture,
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(A) subject to (1) applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and (2) general principles of equity and (B) except to
the extent that the enforceability of indemnification and contribution
provisions may be limited by Federal and state securities laws and the
policies underlying such laws. The Offering Memorandum contains a summary
of the terms of the Guarantees, which is accurate in all material respects.
(xvi) The Guarantees of the Series B Notes have been duly and validly
authorized by each of the Guarantors and, when executed and delivered in
accordance with the terms of the Indenture and when the Series B Notes have
been issued and authenticated in accordance with the terms of the Exchange
Offer and the Indenture, will be the legal, valid and binding obligations
of each of the Guarantors, enforceable against each of them in accordance
with their terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity.
(xvii) The industry and market-related data included in the Offering
Memorandum are based on or derived from sources which the Company believes
to be reliable and accurate in all material respects.
(xviii) Each of the Company and its subsidiaries is not (A) in
violation of its charter or bylaws or other organizational documents, as
applicable, (B) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties is subject, which default, singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or (C) in
violation of any local, state, federal or foreign law, statute, ordinance,
rule, regulation, requirement, judgment or court decree (including, without
limitation, environmental laws, statutes, ordinances, rules, regulations,
judgments or court decrees) applicable to it or any of its subsidiaries or
any of its or their assets or properties (whether owned or leased), which
violation, singly or in the aggregate, could reasonably be expected to have
a Material Adverse Effect. To the best knowledge of the Issuers and the
Guarantors, there exists no condition that, with notice, the passage of
time or otherwise, would constitute a default under (x) any bond,
debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which it is a party or by which it is bound or to which any
of its properties is subject, which default could reasonably be expected to
have a Material Adverse Effect or (y) its charter or bylaws or other
organizational documents, as applicable.
(xix) None of (A) the execution, delivery or performance by either of
the Issuers or any of the Guarantors of this Agreement or any of the other
Operative Documents to which it is a party, (B) the consummation of the
Real Estate Transaction, (C) the issuance and sale of the Notes and the
issuance of the Guarantees and (D) consummation by the Issuers of the
transactions described in the Offering Memorandum under the caption "Use of
Proceeds," violates, conflicts with or constitutes a breach of any of the
terms or provisions of, conflicts with or constitutes a breach of any of
the terms or provisions of, or a default under (or an event that with
notice or the lapse of time, or both, would constitute a default), or
require consent under, or result in the imposition of a lien or encumbrance
on any properties of the Company or any of its subsidiaries, or an
acceleration of any indebtedness of the Company or any of its subsidiaries
pursuant to, (1) the charter or bylaws or other organizational documents,
as applicable, of the Company or any of
10
its subsidiaries, (2) any bond, debenture, note, indenture, mortgage, deed
of trust or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which any of them or their property is or
may be bound, which violation, conflict, breach, default, lien,
encumbrance, acceleration or failure, singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect (3) any statute,
rule or regulation applicable to the Company or any of its subsidiaries or
any of their assets or properties, which violation, conflict, breach,
default, lien, encumbrance, acceleration or failure, singly or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
or (4) any judgment, order or decree of any court or governmental agency or
authority having jurisdiction over the Company or any of its subsidiaries
or any of their assets or properties, which violation, conflict, breach,
default, lien, encumbrance, acceleration or failure, singly or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
No consent, approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, (A) any court or governmental
agency, body or administrative agency or (B) any other person is required
for (1) the execution, delivery and performance by either of the Issuers or
any of the Guarantors of this Agreement or any of the other Operative
Documents to which it is a party, (2) the Real Estate Transaction or (3)
the issuance and sale of the Notes and the issuance of the Guarantees and
the transactions contemplated hereby and thereby, except such may be
required (A) in connection with the registration under the Act of the
Series B Notes and the guarantees thereof under the Registration Rights
Agreement (including any filing with the National Association of Securities
Dealers), (B) in order to qualify the Indenture under the Trust Indenture
Act or (C) by state securities or "blue sky" laws in connection with the
offer and sale of the Notes and the guarantees thereof or the registration
pursuant to the Registration Rights Agreement and except such as have been
or will be obtained and made on or prior to the Closing Date.
(xx) There is (A) no action, suit, investigation or proceeding before
or by any court, arbitrator or governmental agency, body or official,
domestic or foreign, now pending or, to the best knowledge of the Issuers
and the Guarantors, threatened to which the Company or any of its
subsidiaries is or may be a party or to which the business or property of
the Company or any of its subsidiaries, is or may be subject, (B) no
statute, rule, regulation or order that has been enacted, adopted or issued
by any governmental agency or, to the best knowledge of the Issuers and the
Guarantors, that has been proposed by any governmental body and (C) no
injunction, restraining order or order of any nature by a federal or state
court or foreign court of competent jurisdiction to which the Company or
any of its subsidiaries is or may be subject or to which the business,
assets or property of the Company or any of its subsidiaries is or may be
subject, that, in the case of clauses (A), (B) and (C) above, (1) is
required to be disclosed in the Preliminary Offering Memorandum and the
Offering Memorandum and that is not so disclosed, or (2) could reasonably
be expected to result in a Material Adverse Effect.
(xxi) No action has been taken and, to the best knowledge of the
Issuers and the Guarantors, no statute, rule, regulation or order has been
enacted, adopted or issued by any governmental agency that prevents the
issuance of the Notes or the Guarantees or prevents or suspends the use of
the Offering Memorandum; no injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction has been
issued that prevents the issuance of the Notes or the Guarantees or
prevents or suspends the sale of the Notes in any jurisdiction referred to
in Section 4(e) hereof; and every request received by the Issuers of any
securities authority or agency of any jurisdiction for additional
information has been complied
11
with in all material respects.
(xxii) The Issuers have delivered to the Initial Purchasers true and
correct copies of all documents and agreements related to the Real Estate
Transaction and the Amended Credit Facility, including all amendments,
alterations, modifications or waivers thereto and all exhibits or schedules
thereto.
(xxiii) There is (A) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries nor, to the best
knowledge of the Issuers and the Guarantors, threatened against any of
them, before the National Labor Relations Board, any state or local labor
relations board or any foreign labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or any of
its subsidiaries or, to the best knowledge of the Issuers and the
Guarantors, threatened against any of them, (B) no significant strike,
labor dispute, slowdown or stoppage pending against the Company or any of
its subsidiaries nor, to the best knowledge of the Issuers and the
Guarantors, threatened against the Company or any of its subsidiaries and
(C) to the best knowledge of the Issuers and the Guarantors, no union
representation question existing with respect to the employees of the
Company or any of its subsidiaries. To the best knowledge of the Issuers
and the Guarantors, no collective bargaining organizing activities are
taking place with respect to the Company or any of its subsidiaries. None
of the Company or any of its subsidiaries has violated (A) any federal,
state or local law or foreign law relating to discrimination in hiring,
promotion or pay of employees, (B) any applicable wage or hour laws or (C)
any provision of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the rules and regulations thereunder, except those
violations that could not reasonably be expected to have a Material Adverse
Effect.
(xxiv) None of the Company or any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), which violation could reasonably be expected to have a Material
Adverse Effect.
(xxv) There is no alleged liability, or to the best knowledge of the
Issuers and the Guarantors, potential liability (including, without
limitation, alleged or potential liability or investigatory costs, cleanup
costs, governmental response costs, natural resource damages, property
damages, personal injuries or penalties) of the Company or any of its
subsidiaries arising out of, based on or resulting from (A) the presence or
release into the environment of any Hazardous Material (as defined) at any
location leased or owned by the Company or such subsidiary, as the case may
be, or (B) any violation or alleged violation of any Environmental Law,
which alleged or potential liability is required to be disclosed in the
Offering Memorandum, other than as disclosed therein, or could reasonably
be expected to have a Material Adverse Effect. The term "Hazardous
Material" means (i) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (ii) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (iii) any petroleum or petroleum
product, (iv) any polychlorinated biphenyl and (v) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any other law relating
to protection of human health or the environment or imposing liability or
standards of conduct concerning any such chemical
12
material, waste or substance.
(xxvi) Each of the Company and its subsidiaries has and, after giving
effect to the Real Estate Transaction, will have such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate their
respective properties and to conduct their businesses except where the
failure to have such permits could not reasonably be expected to have a
Material Adverse Effect; each of the Company and its subsidiaries has
fulfilled and performed all of its obligations with respect to such permits
and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
impairment of the rights of the holder of any such permit, except where
such failure to fulfill or perform, or such revocation, termination or
impairment could not reasonably be expected to have a Material Adverse
Effect; and such permits contain no restrictions that could reasonably be
expected to be more burdensome to the Company or such subsidiary, as the
case may be.
(xxvii) Each of the Company and its subsidiaries has and, after giving
effect to the Real Estate Transaction, will have (A) good and marketable
title to all of the properties and assets described in the Offering
Memorandum as owned by it, free and clear of all liens, charges,
encumbrances and restrictions (except for Permitted Liens (as defined in
the Indenture) and taxes not yet payable), (B) peaceful and undisturbed
possession under all material leases to which any of them is a party as
lessee and each of which lease is valid and binding and no default exists
thereunder, except for defaults that could not reasonably be expected to
have a Material Adverse Effect, (C) all material licenses, certificates,
permits, authorizations, approvals, franchises and other rights from, and
has made all declarations and filings with, all federal, state and local
authorities, all self-regulatory authorities and all courts and other
tribunals (each, an "Authorization") necessary to engage in the business
conducted by any of them in the manner described in the Offering Memorandum
and (D) received no notice that any governmental body or agency is
considering limiting, suspending or revoking any such Authorization. All
such Authorizations are and, after giving effect to the Real Estate
Transaction, will be valid and in full force and effect and each of the
Company and its subsidiaries is in compliance in all material respects with
the terms and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with respect
thereto. All material leases to which the Company or any of its
subsidiaries is a party are valid and binding and no default by the Company
or such subsidiary, as the case may be, has occurred and is continuing
thereunder and, to the best knowledge of the Issuers and the Guarantors, no
material defaults by the landlord are existing under any such lease, except
those defaults that could not reasonably be expected to have a Material
Adverse Effect.
(xxviii) Each of the Company and its subsidiaries owns, possesses or
has the right to employ all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, software, systems or
procedures), trademarks, service marks and trade names, inventions,
computer programs, technical data and information (collectively, the
"Intellectual Property") presently employed by it in connection with the
businesses now operated by it or that are proposed to be operated by it
free and clear of and without violating any right, claimed right, charge,
encumbrance, pledge, security interest, restriction or lien of any kind of
any other person,
13
and none of the Company or any of its subsidiaries has received any notice
of infringement of or conflict with asserted rights of others with respect
to any of the foregoing. To the best knowledge of the Issuers and the
Guarantors, the use of the Intellectual Property in connection with the
business and operations of the Company or any of its subsidiaries does not
infringe on the rights of any person, except as could not reasonably be
expected to have a Material Adverse Effect.
(xxix) All material tax returns required to be filed by the Company or
any of its subsidiaries in all jurisdictions have been so filed. All taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges shown on such returns as due from such entities that are due
and payable have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently
payable without penalty or interest. To the knowledge of the Issuers and
the Guarantors, there are no material proposed additional tax assessments
against the Company or any of its subsidiaries, or the assets or property
of the Company or any of its subsidiaries, except those tax assessments for
which adequate reserves have been established.
(xxx) None of the Company or any of its subsidiaries is an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(xxxi) There are no holders of securities of the Company or any of its
subsidiaries who, by reason of the execution by the Issuers and the
Guarantors of this Agreement or any other Operative Document or the
consummation by the Issuers and the Guarantors of the transactions
contemplated hereby and thereby, have the right to request or demand that
the Company or any of its subsidiaries register under the Act or analogous
foreign laws and regulations securities held by them other than pursuant to
the Registration Rights Agreement and other than as described in the
Offering Memorandum.
(xxxii) Each of the Company and its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that: (A) transactions are executed in accordance with management's general
or specific authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(xxxiii) Each of the Company and its subsidiaries maintains insurance
covering its properties, operations, personnel and businesses, insuring
against such losses and risks as are consistent with industry practice to
protect the Company and its subsidiaries and their respective businesses.
None of the Company or any of its subsidiaries has received notice from any
insurer or agent of such insurer that substantial capital improvements or
other expenditures will have to be made in order to continue such
insurance.
(xxxiv) None of the Company or any of its subsidiaries has (A) taken,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price
of any security of the Company or any of its subsidiaries to facilitate the
sale or resale of the Notes or (B) since the date of the Preliminary
Offering
14
Memorandum (1) sold, bid for, purchased or paid any person (other than the
Initial Purchasers pursuant to the terms herein) any compensation for
soliciting purchases of the Notes or (2) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company or any of its subsidiaries.
(xxxv) 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 hereby or for the Exempt Resales assuming (A) that the
purchasers who buy the Series A Notes in the Exempt Resales are Eligible
Purchasers and (B) the accuracy of the Initial Purchasers' representations
regarding the absence of general solicitation in connection with the sale
of Series A Notes to the Initial Purchasers and the Exempt Resales
contained herein. No form of general solicitation or general advertising
(as defined in Regulation D under the Act) was used by either of the
Issuers, any of the Guarantors or any of their respective representatives
(other than the Initial Purchasers, as to which the Issuers and the
Guarantors make no representation or warranty) in connection with the offer
and sale of any of the Series A Notes or in connection with Exempt Resales,
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 Notes or the Guarantees have been issued and sold
by the Company or any of its subsidiaries within the six-month period
immediately prior to the date hereof.
(xxxvi) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Series A Notes to be purchased by
Eligible Purchasers will not involve any prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue
Code of 1986. The representation made by the Issuers and the Guarantors in
the preceding sentence is made in reliance upon and subject to the accuracy
of, and compliance with, the representations and covenants made or deemed
made by Eligible Purchasers as set forth in the Offering Memorandum under
the caption "Notice to Investors."
(xxxvii) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as of
its date, contains the information specified in, and meets the requirements
of, Rule 144A(d)(4) under the Act.
(xxxviii) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the Trust Indenture
Act.
(xxxix) None of the Issuers, the Guarantors or any of their respective
affiliates or any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Issuers and the Guarantors make no
representation) 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 Guarantees.
(xl) The Issuers have not taken, or omitted to take any action to
cause the Series A Notes offered and sold in reliance on Regulation S to be
offered and sold in transactions other than in offshore transactions.
(xli) 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.
15
(xlii) The Issuers, the Guarantors and their respective affiliates and
all persons acting on their behalf (other than the Initial Purchasers, as
to whom the Issuers and the Guarantors make no representation) have
complied with and will comply with the offering restrictions requirements
of Regulation S applicable to them and their activities in connection with
the offering of the Series A Notes outside the United States and, in
connection therewith, the Preliminary Offering Memorandum and the Offering
Memorandum contains or will contain the disclosure required by Rule 902(h).
(xliii) The Series A Notes sold in reliance on Regulation S will be
represented upon issuance by a temporary global security that may not be
exchanged for definitive securities until the expiration of the 40-day
restricted period referred to in Rule 903(c)(3) of 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.
(xliv) Subsequent to the respective dates as of which information is
given in the Offering Memorandum and up to the Closing Date, except as
described in the Offering Memorandum, (A) none of the Company or any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, which are or, after giving effect to the Real Estate
Transaction, will be material, individually or in the aggregate, to the
Company and its subsidiaries, taken as a whole, nor entered into any
transaction not in the ordinary course of business, (B) there has not been
any change or development which, singly or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and (C) there
has been no dividend or distribution of any kind declared, paid or made by
the Issuers on any class of their capital stock.
(xlv) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Notes, the issuance of the
Guarantees, the application of the proceeds from the issuance and sale of
the Notes and the consummation of the transactions contemplated thereby as
set forth in the Offering Memorandum, will violate Regulations G, T, U or X
promulgated by the Board of Governors of the Federal Reserve System or
analogous applicable foreign laws and regulations.
(xlvi) The accountants who have certified or will certify the
financial statements included or to be included as part of the Offering
Memorandum are independent accountants as required by the Act. The
historical financial statements, together with related schedules and notes
thereto, comply as to form in all material respects with the requirements
applicable to registration statements on Form S-1 under the Act and present
fairly in all material respects the financial position and results of
operations of the Company and its subsidiaries and Bash Theatrical
Lighting, Inc. and its affiliates ("Bash") at the dates and for the periods
indicated. Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods presented. The pro forma financial statements
included in the Offering Memorandum have been prepared on a basis
consistent with (i) such historical statements of the Company and Bash and
(ii) the historical financial statements of Design Dynamics, Inc. ("Design
Dynamics") and Pro-Mix Inc. ("Pro-Mix"), except for the pro forma
adjustments specified therein, and give effect to assumptions made on a
reasonable basis and present fairly in all material respects the historical
and proposed transactions contemplated by this Agreement and the other
Operative Documents; and such pro forma financial statements
16
comply as to form in all material respects with the requirements applicable
to pro forma financial statements included in registration statements on
Form S-1 under the Act, except as expressly stated therein. The other
financial and statistical information and data included in the Offering
Memorandum derived from the historical and pro forma financial statements,
are accurately presented in all material respects and prepared on a basis
consistent with the financial statements, historical and pro forma,
included in the Offering Memorandum and the books and records of the
Company and its subsidiaries.
(xlvii) None of the Issuers or any of the Guarantors intends to, nor
does it believe that it will, incur debts beyond its ability to pay such
debts as they mature. The present fair saleable value of the assets of each
of the Issuers and the Guarantors exceeds the amount that will be required
to be paid on or in respect of its existing debts and other liabilities
(including contingent liabilities) as they become absolute and matured. The
assets of each of the Issuers and the Guarantors do not constitute
unreasonably small capital to carry out its business as conducted or as
proposed to be conducted. Upon the issuance of the Notes and consummation
of the Real Estate Transaction, the present fair saleable value of the
assets of each of the Issuers and the Guarantors will exceed the amount
that will be required to be paid on or in respect of its existing debts and
other liabilities (including contingent liabilities) as they become
absolute and matured. Upon the issuance of the Notes and the consummation
of the Real Estate Transaction, the assets of each of the Issuers and the
Guarantors will not constitute unreasonably small capital to carry out its
business as now conducted, including the capital needs of each of the
Issuers and the Guarantors, taking into account the projected capital
requirements and capital availability.
(xlviii) Except pursuant to this Agreement, there are no contracts,
agreements or understandings between the Company and its subsidiaries and
any other person that would give rise to a valid claim against the Company
or any of its subsidiaries or the Initial Purchasers for a brokerage
commission, finder's fee or like payment in connection with the issuance,
purchase and sale of the Notes or the issuance of the Guarantees.
(xlix) There exist no conditions that would constitute a default (or
an event which with notice or the lapse of time, or both, would constitute
a default) under any of the Operative Documents.
(l) Each certificate signed by any officer of the Issuers or any of
the Guarantors and delivered to the Initial Purchasers or counsel for the
Initial Purchasers shall be deemed to be a representation and warranty by
such Issuer or such Guarantor, as the case may be, to the Initial
Purchasers as to the matters covered thereby.
The Issuers and the Guarantors acknowledge that the Initial Purchasers and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Section 8 hereof, counsel for the Issuers and the Guarantors and counsel for
the Initial Purchasers, will rely upon the accuracy and truth of the foregoing
representations and hereby consent to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly, represents,
warrants and covenants to the Issuers and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and
17
business matters as are necessary in order to evaluate the merits and risks
of an investment in the Series A Notes.
(ii) Such Initial Purchaser (A) is not acquiring the Series A Notes
with a view to any distribution thereof 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 QIBs in reliance on the exemption from the registration
requirements of the Act provided by Rule 144A.
(iii) 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 any of the Series A Notes, 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.
(iv) Each of the Initial Purchasers agrees that, in connection with
the Exempt Resales, it will solicit offers to buy the Series A Notes only
from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Each of the Initial Purchasers further (A) agrees that it will
offer to sell the Series A Notes only to, and will solicit offers to buy
the Series A Notes only from (1) Eligible Purchasers that the Initial
Purchasers reasonably believe are QIBs and (2) Reg S Investors, (B)
acknowledges and agrees that, in the case of such QIBs and such Reg S
Investors, such Series A Notes will not have been registered under the Act
and may be resold, pledged or otherwise transferred by such QIBs and Reg S
Investors only (x)(I) 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, (II) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the requirements
of Rule 904 under the Act, (III) in a transaction meeting the requirements
of Rule 144 under the Act, (IV) to an Accredited Investor 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 Issuers that such transfer is in compliance with
the Act or (V) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel if the
Issuers so request), (y) to the Issuers, (z) pursuant to an effective
registration statement under the Act and, in each case, in accordance with
any applicable securities laws of any state of the United States or any
other applicable jurisdiction and (C) acknowledges that it will, and each
subsequent holder is required to, notify any purchaser of the security
evidenced thereby of the resale restrictions set forth in (B) above.
(v) Such Initial Purchaser agrees that it has offered the Series A
Notes and will offer and sell the Series A Notes (A) as part of its
distribution at any time and (B) otherwise until 40 days after the later of
the commencement of the offering of the Series A Notes pursuant hereto 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 are permitted
by and include the statements required by Regulation S.
18
(vi) Such Initial Purchaser agrees that it has not offered or sold and
will not offer or sell the Series A Notes sold pursuant hereto in reliance
on Regulation S (A) as part of its distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the offering
of the Series A Notes pursuant hereto and the Closing Date, to a U.S.
person (as defined in Rule 902 of the Act) or for the account or benefit of
a U.S. person (other than a distributor (as defined in Rule 902 of the
Act)).
(vii) 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 Act (or Rule 144A or to Accredited Investors in
transactions that are exempt from the registration requirements
of the Act), and in connection with any subsequent sale by you of
the Series A 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 to substantially the foregoing effect.
Terms used above have the meanings assigned to them in Regulation
S."
(viii) Such Initial Purchaser agrees that the Series A 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) of 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.
The Initial Purchasers acknowledge that the Issuers and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Section 8
hereof, counsel for the Issuers and the Guarantors and counsel for the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
6. Indemnification.
(a) The Issuers and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each of the Initial Purchasers, (ii) each
person, if any, who controls each of the Initial Purchasers within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act and (iii) the
respective officers, directors, partners, employees, representatives and agents
of each of the Initial Purchasers or any controlling person to the fullest
extent lawful, from and against any
19
and all losses, liabilities, claims, damages and expenses whatsoever (including
but not limited to reasonable attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
investigation or litigation, commenced or threatened, or any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the omission or
alleged omission to state therein a 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; provided, however, that the Issuers
and the Guarantors will not be liable in any such case to the extent, but only
to the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with information relating to any Initial Purchaser furnished to the Issuers in
writing by or on behalf of such Initial Purchaser expressly for use therein;
provided, further, that such indemnity with respect to the Preliminary Offering
Memorandum shall not inure to the benefit of any Initial Purchaser (or any
persons controlling such Initial Purchaser) from whom the person asserting such
loss, claim, damage or liability purchased the Notes which are the subject
thereof if such person did not receive a copy of the Offering Memorandum (or the
Offering Memorandum as amended or supplemented) at or prior to the confirmation
of the sale of such Notes to such person (and the Offering Memorandum or any
such amended or supplemented Offering Memorandum, as applicable, shall have been
delivered by the Company to such Initial Purchaser a reasonable amount of time
prior to the mailing or delivery, as applicable, of such confirmation) and any
such untrue statement or omission or alleged untrue statement or omission of a
material fact contained in such Preliminary Offering Memorandum was corrected in
the Offering Memorandum (or the Offering Memorandum as amended or supplemented).
This indemnity agreement will be in addition to any liability which the Issuers
and the Guarantors may otherwise have, including under this Agreement.
(b) Each of the Initial Purchasers, severally and not jointly, agrees to
indemnify and hold harmless (i) the Issuers and the Guarantors, (ii) each
person, if any, who controls any of the Issuers and the Guarantors within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and (iii)
the respective officers, advisors, directors, partners, employees,
representatives and agents of the Issuers and the Guarantors, against any
losses, liabilities, claims, damages and expenses whatsoever (including but not
limited to reasonable attorneys' fees and expenses incurred in investigating,
preparing or defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Offering Memorandum or the
Offering Memorandum, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
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, in each case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
untrue statement
20
or alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Issuers in writing by or on behalf of such Initial
Purchaser expressly for use therein; provided, however, that in no case shall
any of the Initial Purchasers be liable or responsible for any amount in excess
of the discounts and commissions received by such Initial Purchaser, as set
forth on the cover page of the Offering Memorandum. This indemnity will be in
addition to any liability which the Initial Purchasers may otherwise have,
including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the defense of such
action, (ii) the indemnifying parties shall not have employed counsel to take
charge of the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses of counsel
shall be borne by the indemnifying parties; provided, however, that the
indemnifying party under subsection (a) or (b) above shall only be liable for
the legal expenses of one counsel (in addition to any local counsel) for all
indemnified parties in each jurisdiction in which any claim or action is
brought. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or action
effected without its prior written consent, provided that such consent was not
unreasonably withheld.
7. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 6 is for any reason held to be
unavailable from the Issuers and the Guarantors or is insufficient to hold
harmless a party indemnified thereunder, the Issuers and the Guarantors, on the
one hand, and each Initial Purchaser, on the other hand, shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any reasonable
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Issuers and the Guarantors, any
contribution received by the Issuers and the Guarantors from persons, other than
the Initial Purchasers, who may also be liable for contribution, including
persons who control
21
the Issuers and the Guarantors within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) to which the Issuers, the Guarantors and the
Initial Purchasers may be subject, in such proportion as is appropriate to
reflect the relative benefits received by the Issuers and the Guarantors, on one
hand, and such Initial Purchaser, on the other hand, from the offering of the
Series A Notes or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 6, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Issuers and the Guarantors, on one hand, and each
Initial Purchaser, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Issuers and the Guarantors, on one hand, and such
Initial Purchaser, on the other hand, shall be deemed to be in the same
proportion as (i) the total proceeds from the offering of Series A Notes (net of
discounts but before deducting expenses) received by the Issuers and the
Guarantors and (ii) the discounts and commissions received by such Initial
Purchaser, respectively, in each case as set forth in the table on the cover
page of the Offering Memorandum. The relative fault of the Issuers and the
Guarantors, on one hand, and of each Initial Purchaser, 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 Issuers, the Guarantors
or such Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Issuers, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7, (i) in no case shall any of the Initial Purchasers
be required to contribute any amount in excess of the amount by which the
discounts and commissions applicable to the Series A Notes purchased by such
Initial Purchaser pursuant to this Agreement exceeds the amount of any damages
which such Initial Purchaser has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) 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. For purposes of this Section 7, (A)
each person, if any, who controls any of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B)
the respective officers, directors, partners, employees, representatives and
agents of each of the Initial Purchasers or any controlling person shall have
the same rights to contribution as the Initial Purchasers, and (A) each person,
if any, who controls any of the Issuers and the Guarantors within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and (B) the
respective officers, advisors, directors, partners, employees, representatives
and agents of the Issuers and the Guarantors shall have the same rights to
contribution as the Issuers and the Guarantors, subject in each case to clauses
(i) and (ii) of this Section 7. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 7, notify such party
or parties from whom contribution may be sought, but the failure to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 7 or otherwise. No party shall be liable for contribution with respect
to any action or claim settled without its prior written consent, provided that
such written consent was not unreasonably withheld.
8. Conditions of Initial Purchasers' Obligations. The obligations of the
Initial Purchasers to purchase and pay for the Series A Notes, as provided
herein, shall be subject to the satisfaction of the following conditions:
22
(a) All of the representations and warranties of the Issuers and the
Guarantors contained in this Agreement shall be true and correct in all
material respects on the date hereof and on the Closing Date with the same
force and effect as if made on and as of the date hereof and the Closing
Date, respectively. Each of the Issuers and the Guarantors shall have
performed or complied in all material respects with all of the agreements
herein contained and required to be performed or complied with by it at or
prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New York
City time, on the day following the date of this Agreement or at such later
date and time as to which the Initial Purchasers may agree, and no stop
order suspending the qualification or exemption from qualification of the
Series A Notes in any jurisdiction referred to in Section 4(e) or
preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, which could reasonably be expected to have a Material
Adverse Effect shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency which would, as of the Closing Date, prevent the issuance of the
Series A Notes or the Guarantees or the consummation of the Real Estate
Transaction; no action, suit or proceeding shall have been commenced and be
pending against or affecting or, to the best knowledge of the Issuers and
the Guarantors, threatened against, the Company or any of its subsidiaries
before any court or arbitrator or any governmental body, agency or official
that, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect.
(d) Since the dates as of which information is given in the Offering
Memorandum, (i) there shall not have been any material adverse change, or
any development that is reasonably likely to result in a material adverse
change, in the capital stock or the long-term debt, or material increase in
the short-term debt, of the Company or any of its subsidiaries from that
set forth in the Offering Memorandum, (ii) no dividend or distribution of
any kind shall have been declared, paid or made by the Company or any of
its subsidiaries on any class of its capital stock and (iii) none of the
Company or any of its subsidiaries shall have incurred any liabilities or
obligations, direct or contingent, that are or, after giving effect to the
Real Estate Transaction, will be material, individually or in the
aggregate, to the Company and its subsidiaries, taken as a whole, and that
are required to be disclosed on a balance sheet or notes thereto in
accordance with generally accepted accounting principles and are not
disclosed on the latest balance sheet or notes thereto included in the
Offering Memorandum. Since the date hereof and since the dates as of which
information is given in the Offering Memorandum, there shall not have
occurred any material adverse change in the business, prospects, financial
condition or results of operation of the Company and its subsidiaries,
taken as a whole.
(e) The Initial Purchasers shall have received certificates, dated the
Closing Date, signed on behalf of the Issuers and the Guarantors, in form
and substance satisfactory to the Initial Purchasers, confirming, as of the
Closing Date, the matters set forth in paragraphs (a), (b), (c) and (d) of
this Section 8 and that, as of the Closing Date, the obligations of the
Issuers and the Guarantors to be performed hereunder on or prior thereto
have been duly performed.
23
(f) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, L.L.P. and ▇▇▇▇ & ▇▇▇▇▇▇, counsel for
the Issuers and the Guarantors, to the effect set forth in Exhibit B
hereto.
(g) At the time this Agreement is executed and at the Closing Date,
the Initial Purchasers shall have received from Ernst & ▇▇▇▇▇, Band
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., and ▇▇▇▇▇, Cavouto & Company, each independent
public accountants, dated as of the date of this Agreement and as of the
Closing Date, customary comfort letters addressed to the Initial Purchasers
and in form and substance satisfactory to the Initial Purchasers and
counsel for the Initial Purchasers with respect to the financial statements
and certain financial information of the Company and its subsidiaries,
Bash, Design Dynamics and Pro-Mix contained in the Offering Memorandum.
(h) The Initial Purchasers shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchasers,
covering such matters as are customarily covered in such opinions.
(i) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have been furnished with such documents, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
this Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations,
warranties or conditions herein contained.
(j) Prior to the Closing Date, the Issuers and the Guarantors shall
have furnished to the Initial Purchasers such further information,
certificates and documents as the Initial Purchasers may reasonably
request.
(k) The Issuers, the Guarantors and the Trustee shall have entered
into the Indenture and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(l) The Issuers and the Guarantors shall have entered into the
Registration Rights Agreement and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
(m) The Company and its members shall have entered into the Tax
Payment Agreement and the initial Purchasers shall have received
counterparts conformed as executed, thereof.
(n) The Real Estate Transaction shall be consummated prior to, or
simultaneously with, the Closing of the Offering on substantially the terms
described in the Offering Memorandum and the Initial Purchasers shall have
received counterparts, conformed as executed, of such documentation as they
deem necessary to evidence the consummation thereof.
(o) The Amended Credit Facility shall be consummated prior to, or
simultaneously with, the Closing of the Offering on substantially the terms
described in the Offering Memorandum and the Initial Purchasers shall have
received counterparts, conformed as executed, of the Amended Credit
Facility and such other documentation as they deem necessary to evidence
the consummation thereof.
24
(p) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of
Rule 463(g) under the Act, that (i) it is downgrading its rating assigned
to any class of securities of the Issuers or (ii) it is reviewing its
ratings assigned to any class of securities of the Issuers with a view to
possible downgrading, or with negative implications, or direction not
determined.
(q) The Notes shall have been approved for trading on PORTAL.
All opinions, certificates, letters and other documents required by this
Section 8 to be delivered by the Issuers and the Guarantors will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Initial Purchasers. The Issuers and the Guarantors
shall furnish the Initial Purchasers with such conformed copies of such
opinions, certificates, letters and other documents as they shall reasonably
request.
9. Initial Purchasers' Information. The Issuers and the Guarantors
acknowledge that the statements with respect to the offering of the Series A
Notes set forth in the last paragraph of the cover page and the third paragraph
and the third sentence of the fourth paragraph under the caption "Plan of
Distribution" in the Offering Memorandum constitute the only information
relating to the Initial Purchasers furnished to the Issuers in writing by or on
behalf of the Initial Purchasers expressly for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchasers, the Issuers and
the Guarantors contained in this Agreement, including the agreements contained
in Sections 4(f) and 11(d), the indemnity agreements contained in Section 6 and
the contribution agreements contained in Section 7, shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
the Initial Purchasers, any controlling person thereof, or by or on behalf of
the Issuers and the Guarantors or any controlling person thereof, and shall
survive delivery of and payment for the Series A Notes to and by the Initial
Purchasers. The representations contained in Section 5 and the agreements
contained in Sections 4(f), 6, 7 and 11(d) shall survive the termination of this
Agreement, including any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and delivery
of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Issuers
from the Initial Purchasers, without liability (other than with respect to
Sections 6 and 7) on the Initial Purchasers' part to either of the Issuers
or any of the Guarantors if, on or prior to such date, (i) either of the
Issuers or any of the Guarantors shall have failed, refused or been unable
to perform in any material respect any agreement on their part to be
performed hereunder, (ii) any other condition to the obligations of the
Initial Purchasers hereunder as provided in Section 8 is not fulfilled when
and as required in any material respect, (iii) in the reasonable judgment
of the Initial Purchasers, any material adverse change shall have occurred
since the respective dates as of which information is given in the Offering
Memorandum in the condition (financial or otherwise), business, properties,
assets,
25
liabilities, prospects, net worth, results of operations or cash flows of
the Company and its subsidiaries, taken as a whole, other than as set forth
in the Offering Memorandum, or (iv)(A) any domestic or international event
or act or occurrence has materially disrupted, or in the opinion of the
Initial Purchasers will in the immediate future materially disrupt, the
market for the Issuers' securities or for securities in general; or (B)
trading in securities generally on the New York or American Stock Exchange
shall have been suspended or materially limited, or minimum or maximum
prices for trading shall have been established, or maximum ranges for
prices for securities shall have been required, on such exchange, or by
such exchange or other regulatory body or governmental authority having
jurisdiction; or (C) a banking moratorium shall have been declared by
federal or state authorities, or a moratorium in foreign exchange trading
by major international banks shall have been declared; or (D) there is an
outbreak or escalation of armed hostilities involving the United States on
or after the date hereof, or if there has been a declaration by the United
States of a national emergency or war, the effect of any of which shall be,
in the Initial Purchasers' judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Series A
Notes on the terms and in the manner contemplated in the Offering
Memorandum; or (E) there shall have been such a material adverse change in
general economic, political or financial conditions or if the effect of
international conditions on the financial markets in the United States
shall be such as, in the Initial Purchasers' judgment, makes it inadvisable
or impracticable to proceed with the delivery of the Series A Notes as
contemplated hereby.
(c) Any notice of termination pursuant to this Section 11 shall be by
telephone or telephonic facsimile and, in either case, confirmed in writing
by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to clause (iv) of Section 11(b),
in which case each party will be responsible for its own expenses), or if
the sale of the Series A Notes provided for herein is not consummated
because any condition to the obligations of the Initial Purchasers set
forth herein is not satisfied or because of any refusal, inability or
failure on the part of either of the Issuers or any of the Guarantors to
perform any agreement herein or comply with any provision hereof, the
Issuers and the Guarantors shall reimburse the Initial Purchasers for all
out-of-pocket expenses (including the reasonable fees and expenses of the
Initial Purchasers' counsel), incurred by the Initial Purchasers in
connection herewith.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, telecopied and confirmed in writing or
sent by a nationally recognized overnight courier service guaranteeing delivery
on the next business day to Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department, telecopy number: (212)
272-3092, with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, telecopy number: (212)
751-4864; and if sent to either of the Issuers or any of the Guarantors, shall
be mailed, delivered, telecopied and confirmed in writing or sent by a
nationally recognized overnight courier service guaranteeing delivery on the
next business day to Production Resource Group, L.L.C., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer, telecopy
number: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇.
13. Parties. This Agreement shall inure solely to the benefit of, and shall
be binding upon, the Initial Purchasers, the Issuers and the Guarantors and the
controlling persons and agents referred to in
26
Sections 6 and 7, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Notes from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance with the
internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are included solely
for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various counterparts
which together shall constitute one and the same instrument.
[Signature page to follow]
27
If the foregoing correctly sets forth the understanding among the Initial
Purchasers, the Issuers and the Guarantors please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
PRODUCTION RESOURCE GROUP, L.L.C.
By:
-------------------------------------
Name:
Title:
PRG FINANCE CORPORATION
By:
-------------------------------------
Name:
Title:
PRG PLANNING & DEVELOPMENT GROUP LLC
By:
-------------------------------------
Name:
Title:
ECTS, A SCENIC TECHNOLOGY COMPANY, INC.
By:
-------------------------------------
Name:
Title:
SHOWPAY, L.L.C.
By:
-------------------------------------
Name:
Title:
28
ATTRACTION MANAGEMENT LLC
By:
-------------------------------------
Name:
Title:
Accepted and agreed to as of the date first above written:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
-------------------------------
Name:
Title:
BT ALEX. BROWN INCORPORATED
By:
-------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By:
-------------------------------
Name:
Title:
BNY CAPITAL MARKETS, INC.
By:
-------------------------------
Name:
Title:
29
SCHEDULE I
Principal Amount
Initial Purchaser of Series A Notes
Bear, ▇▇▇▇▇▇▇ & Co. Inc. $ 55,000,000
BT ▇▇▇▇.▇▇▇▇▇ Incorporated 20,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 20,000,000
BNY Capital Markets, Inc. 5,000,000
-------------
Total $ 100,000,000
=============
30
EXHIBIT A
List of Guarantors
PRG Planning & Development Group LLC., a Delaware limited liability company.
ECTS, A Scenic Technology Company, Inc., a Delaware corporation.
▇▇▇▇▇▇▇, ▇.▇.▇., a Delaware limited liability company.
Attraction Management LLC, a Delaware limited liability company.
A-1
EXHIBIT B
Form of Opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, L.L.P.
1. The Company (a) is a Delaware limited liability company duly formed,
validly existing and in good standing under the laws of Delaware, (b) has all
requisite power and authority to carry on its business as it is currently being
conducted and to own, lease and operate its properties, and (c) is duly
qualified and is in good standing as a foreign limited liability company,
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.
2. Each of the Company's subsidiaries (a) is a corporation or limited
liability company, as applicable, duly formed, validly existing and in good
standing under the laws of its jurisdiction of organization, (b) has all
requisite power and authority to carry on its business as it is currently being
conducted and as described in the Offering Memorandum and to own, lease and
operate its properties, and (c) is duly qualified and in good standing as a
foreign corporation or limited liability company, as applicable, 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.
3. Each of the Issuers and the Guarantors has all requisite corporate or
limited liability company power and authority, as applicable, to execute,
deliver and perform its obligations under this Agreement and each of the other
Operative Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the corporate
and limited liability company power and authority, as applicable, to issue, sell
and deliver the Notes and to issue and deliver the Guarantees as provided
herein.
4. All of the outstanding capital stock of each material subsidiary of the
Company is owned by the Company, free and clear of any security interest, claim,
lien, limitation on voting rights or encumbrance; and all such securities have
been duly authorized, validly issued, and are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights.
5. This Agreement has been duly and validly authorized, executed and
delivered by each of the Issuers and the Guarantors.
6. The Registration Rights Agreement has been duly and validly authorized,
executed and delivered by each of the Issuers and the Guarantors, and is the
valid and binding obligation of each of the Issuers and the Guarantors,
enforceable against each of them in accordance with its terms, except to the
extent that (a) enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity); and (b) the enforceability of indemnification and
contribution provisions may be limited by Federal and state securities laws and
the policies underlying such laws.
7. The Indenture has been duly and validly authorized, executed and
delivered by each of the Issuers and
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the Guarantors, and is the valid and binding obligation of each of the Issuers
and the Guarantors, enforceable against each of them in accordance with its
terms (assuming the due authorization, execution and delivery of the Indenture
by the Trustee), except to the extent that (a) enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity); and (b) the waiver contained in
Section 4.06 of the Indenture may be deemed unenforceable.
8. The Amended Credit Facility has been duly and validly authorized,
executed and delivered by each of the Company and the subsidiaries party
thereto, and is the valid and binding obligation of each of the Company and such
subsidiaries, enforceable against each of them in accordance with its terms,
except to the extent that (a) enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) and (b) the waiver contained in Section __ of
the Amended Credit Facility may be deemed unenforceable.
9. The Series A Notes have been duly and validly authorized and executed by
each of the Issuers for issuance and sale to the Initial Purchasers pursuant to
this Agreement, and, when authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with the terms
hereof and thereof, the Series A Notes will be the valid and binding obligations
of the Issuers, enforceable against each of them in accordance with their terms
and entitled to the benefits of the Indenture, except to the extent that (a)
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity); and (b) the waiver contained in Section 4.06 of the Indenture may be
deemed unenforceable. The Offering Memorandum contains a summary of the terms of
the Series A Notes, which is accurate in all material respects.
10. The Series B Notes have been duly and validly authorized for issuance
by each of the Issuers, and, when issued and authenticated in accordance with
the terms of the Exchange Offer and the Indenture, the Series B Notes will be
the valid and binding obligations of each of the Issuers, enforceable against
each of them in accordance with their terms and entitled to the benefits of the
Indenture, except to the extent that (a) enforcement thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity); and (b) the waiver contained in Section 4.06 of
the Indenture may be deemed unenforceable. The Offering Memorandum contains a
summary of the terms of the Series B Notes, which is accurate in all material
respects.
11. The Guarantees of the Series A Notes have been duly and validly
authorized and executed by each of the Guarantors, and when the Series A Notes
have been issued and authenticated in accordance with the terms of the Indenture
and delivered against payment therefor in accordance with the terms hereof and
thereof, the Guarantees of the Series A Notes will be the valid and binding
obligations of each of the Guarantors, enforceable against each of
B-2
them in accordance with their terms and entitled to the benefits of the
Indenture, except to the extent that (a) enforcement thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity); and (b) the waiver contained in Section 4.06 of
the Indenture may be deemed unenforceable. The Offering Memorandum contains a
summary of the terms of the Guarantees of the Series A Notes, which is accurate
in all material respects.
12. The Guarantees of the Series B Notes have been duly and validly
authorized by each of the Guarantors, and when executed and delivered in
accordance with the terms of the Indenture, and when the Series B Notes have
been issued and authenticated in accordance with the terms of the Exchange Offer
and the Indenture, the Guarantees of the Series B Notes will be the valid and
binding obligations of each of the Guarantors, enforceable against each of them
in accordance with their terms and entitled to the benefits of the Indenture,
except to the extent that (a) enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity); and (b) the waiver contained in Section 4.06 of
the Indenture may be deemed unenforceable. The Offering Memorandum contains a
summary of the terms of the Guarantees of the Series B Notes, which is accurate
in all material respects.
13. The Offering Memorandum contains a summary of the terms of each of the
Indenture, the Registration Rights Agreement, the Real Estate Transaction and
the Amended Credit Facility which, in each case, is accurate in all material
respects. The statements under the captions "Description of Notes," "Notice to
Investors" and "Plan of Distribution" in the Offering Memorandum, insofar as
such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, present fairly in all material respects, such
legal matters, documents and proceedings.
14. To the best of such counsel's knowledge, neither the Company nor any of
its subsidiaries is (a) in violation of its charter or bylaws or other
organizational documents, as applicable, or (b) in default in the performance of
any bond, debenture, note, indenture, mortgage, deed of trust or other agreement
or instrument to which it is a party or by which it is bound or to which any of
its properties is subject, which, in the case of clause (b), singly or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
15. 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 hereby or
for the Exempt Resales assuming (a) that each Initial Purchaser is a QIB, (b)
that the purchasers who buy the Series A Notes in the Exempt Resales are either
QIBs or Reg S Investors, (c) the accuracy of the Initial Purchasers'
representations regarding the absence of general solicitation in connection with
the sale of Series A Notes to the Initial Purchasers and the Exempt Resales
contained herein and (d) the accuracy of the Issuers' and the Guarantors'
representations in Sections 5(a)(vii) and (xxxv) (other than with respect to the
first sentence).
16. Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as of its
date (except for the financial
B-3
statements and related notes, the financial statement schedules and other
financial and statistical data included therein or omitted therefrom, as to
which no opinion need be expressed), contains the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
17. When the Series A Notes and the Guarantees are issued and delivered
pursuant to this Agreement, no Series A Note or Guarantee will be of the same
class (within the meaning of Rule 144A under the Act) as securities of the
Issuers or of any of the Guarantors that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are quoted in a
United States automated inter-dealer quotation system.
18. None of (a) the execution, delivery or performance by either of the
Issuers or any of the Guarantors of this Agreement or any of the other Operative
Documents to which it is a party, (b) the consummation of the Real Estate
Transaction, (c) the issuance and sale of the Notes and the issuance of the
Guarantees and (d) consummation by the Issuers of the transactions described in
the Offering Memorandum under the caption "Use of Proceeds," violates, conflicts
with or constitutes a breach of any of the terms or provisions of, or a default
under (or an event that with notice or the lapse of time, or both, would
constitute a default), or requires consent under, or results in the imposition
of a lien or encumbrance on any properties of the Company or any of its
subsidiaries, or an acceleration of any indebtedness of the Company or any of
its subsidiaries pursuant to, (i) the charter or bylaws or other organizational
documents, as applicable, of the Company or any of its subsidiaries, (ii) any
bond, debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which any of them or their property is or may be bound that has been filed or
incorporated by reference as an exhibit to any filing by the Company or any of
its subsidiaries with the Commission, (iii) any statute, rule or regulation
applicable to the Company or any its subsidiaries or any of their assets or
properties or (iv) to the best of such counsel's knowledge, any judgment, order
or decree of any court or governmental agency or authority having jurisdiction
over the Company or any of its subsidiaries or any of their assets or
properties. Assuming compliance with applicable state securities and Blue Sky
laws, as to which such counsel need express no opinion, and except for the
filing of a registration statement under the Act and qualification of the
Indenture under the Trust Indenture Act, or in connection with the Registration
Rights Agreement, no consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, (a) any court or
governmental agency, body or administrative agency or (b) any other person is
required for (i) the execution, delivery and performance by either of the
Issuers or any of the Guarantors of this Agreement or any of the other Operative
Documents to which it is a party, (ii) the Real Estate Transaction or (iii) the
issuance and sale of the Notes and the issuance of the Guarantees and the
transactions contemplated hereby and thereby, except such as have been obtained
and made or have been disclosed in the Offering Memorandum.
19. To the best of such counsel's knowledge, there is (a) no action, suit,
investigation or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or threatened or
contemplated to which the Company or any of its subsidiaries is or may be a
party or to which the business or property of the Company or any of its
subsidiaries, is or may be subject, (b) no statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency or that has
been proposed by any governmental body and (c) no injunction, restraining order
or order of any nature by a federal or state court or foreign court of competent
jurisdiction to which the Company or any of its
B-4
subsidiaries is or may be subject or to which the business, assets, or property
of the Company or any of its subsidiaries is or may be subject, that, in the
case of clauses (a), (b) and (c) above, is required to be disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum and that is not so
disclosed.
20. None of the Company or any of its subsidiaries is an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act.
21. To the best of such counsel's knowledge, there are no holders of
securities of the Company or any of its subsidiaries who, by reason of the
execution by the Issuers and the Guarantors of this Agreement or any other
Operative Document to which it is a party or the consummation by the Issuers and
the Guarantors of the transactions contemplated hereby and thereby, have the
right to request or demand that the Company or any of its subsidiaries register
under the Act or analogous foreign laws and regulations securities held by them.
22. To the best of such counsel's knowledge, there are not currently any
outstanding subscriptions, rights, warrants, calls, commitments of sale or
options to acquire, or instruments convertible into or exchangeable for, any
capital stock or other equity interest of any subsidiary of the Company.
23. To the best of such counsel's knowledge, 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.
24. The Indenture complies as to form in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder. Prior to
the Exchange Offer or the effectiveness of the Shelf Registration Statement, the
Indenture is not required to be qualified under the Trust Indenture Act.
In addition, such counsel shall state that it has participated in conferences
with officers and other representatives of the Issuers and the Guarantors,
representatives of the independent certified public accountants of the Issuers
and the Guarantors and the Initial Purchasers and their representatives at which
the contents of the Preliminary Offering Memorandum and the Offering Memorandum
and related matters were discussed and, although it has not undertaken to
investigate or verify independently, and does not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Preliminary Offering Memorandum or the Offering Memorandum (except as indicated
above), on the basis of the foregoing (relying as to materiality to the extent
such counsel deems appropriate upon facts provided to such counsel by officers
or other representatives of the Issuers and the Guarantors and without
independent verification of such facts), no facts have come to its attention
which led it to believe that the Preliminary Offering Memorandum or the Offering
Memorandum, as of its date or the Closing Date, contained an untrue statement of
a material fact or omitted to state any 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 as to financial statements
and related notes, the
B-5
financial statement schedules and other financial and statistical data included
therein).