EXHIBIT 4.2
EXECUTION COPY
AMERICAN BUILDERS & CONTRACTORS
SUPPLY CO., INC.
$100,000,000
10 5/8% SENIOR SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
May 2, 1997
NationsBanc Capital Markets, Inc.
First Chicago Capital Markets, Inc.
c/o NationsBanc Capital Markets, Inc.
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Ladies and Gentlemen:
American Builders & Contractors Supply Co., Inc., a Delaware
corporation (the "Company"), proposes to issue and sell to you (the "Initial
Purchasers") $100,000,000 principal amount of its 10 5/8% Senior Subordinated
Notes due 2007 (the "Notes"). The Notes will be fully and unconditionally
guaranteed (the "Guarantees" and collectively with the Notes, the "Securities")
on a senior subordinated basis by each subsidiary of the Company (the
"Guarantors" and collectively with the Company, the "Issuers"). The Notes are to
be issued under an indenture (the "Indenture") dated as of May 7, 1997 among the
Issuers and Norwest Bank Minnesota, National Association, as trustee (the
"Trustee").
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Issuers
that you will offer and sell the Securities purchased by you hereunder in
accordance with Section 3 hereof as soon as you deem advisable.
In connection with the sale of the Securities, the Issuers have
prepared a preliminary offering memorandum, dated April 15, 1997 (the
"Preliminary Memorandum") and a final offering memorandum, dated May 2, 1997
(the "Final Memorandum"). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Issuers and the
Securities. The Issuers hereby confirm that they have authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Securities by the Initial
Purchasers. Unless stated to the contrary, all references herein to the Final
Memorandum are to the Final Memorandum at the time of execution and delivery of
this Agreement (the
"Execution Time") and are not meant to include any amendment or supplement, or
any information incorporated by reference therein, subsequent to the Execution
Time.
The Initial Purchasers and their direct and indirect transferees will
be entitled to the benefits of the Registration Rights Agreement, substantially
in the form attached hereto as Exhibit A (the "Registration Rights Agreement"),
pursuant to which the Issuers will agree to use their best efforts to commence
an offer to exchange the Securities for securities (the "Exchange Securities")
that have been registered under the Securities Act, and that otherwise are
identical in all respects to the Securities, or to cause a shelf registration
statement to become effective under the Securities Act and to remain effective
for the period designated in such Registration Rights Agreement.
1. Representations and Warranties. The Issuers jointly and severally
represent and warrant to each Initial Purchaser as follows:
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Final Memorandum, at the
date hereof, does not, and at the Closing Date (as defined below) will not
(and any amendment or supplement thereto, at the date thereof and at the
Closing Date, will not), contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Issuers make no representation or
warranty as to the information contained in or omitted from the Preliminary
Memorandum or the Final Memorandum, or any amendment or supplement thereto,
in reliance upon and in conformity with information furnished in writing to
the Issuers by or on behalf of the Initial Purchasers specifically for
inclusion therein. The Issuers acknowledge that the statements set forth in
the last paragraph of the cover page and in the third, fifth and sixth
paragraphs under the heading "Plan of Distribution" in the Preliminary
Memorandum and the Final Memorandum constitute the only such information.
(b) Neither the Issuers, nor any of their Affiliates (as defined in
Rule 501(b) of Regulation D under the Securities Act ("Regulation D")), nor
any person acting on their behalf has, directly or indirectly, made offers
or sales of any security, or solicited offers to buy any security, under
Circumstances that would require the registration of the Securities under
the Securities Act. Neither the Issuers, nor any of their Affiliates, nor
any person acting on their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities. The Securities satisfy
the eligibility requirements of Rule 144A(d)(3) under the Securities Act.
The Final Memorandum and each amendment or supplement thereto, as of its
date, contains the information specified in Rule 144A(d)(4) under the Act.
The Issuers have been advised by the National Association of Securities
Dealers, Inc. Private Offerings, Resales and Trading through the Automated
Linkages Market ("PORTAL") that the Securities have been designated PORTAL
eligible
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securities in accordance with the rules and regulations of the National
Association of Securities Dealers, Inc.
(c) Neither the Company nor any of its subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), without taking account of any
exemption arising out of the number of holders of any Issuer's securities.
(d) Assuming (i) that the representations and warranties and
covenants of the Initial Purchasers contained in Section 3 hereof are true,
correct and complete and (ii) that the Initial Purchasers comply with their
covenants in Section 3 hereof, (A) registration under the Securities Act of
the Securities and qualification of the Indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), is not required in
connection with the offer and sale of the Securities to the Initial
Purchasers in the manner contemplated by the Final Memorandum or this
Agreement and (B) initial resales of the Securities by the Initial
Purchasers on the terms and in the manner set forth in the Final Memorandum
and Section 3 hereof are exempt from the registration requirements of the
Securities Act.
(e) Since the respective dates as of which information is given in
the Preliminary Memorandum and the Final Memorandum, except as otherwise
stated therein, (i) there has been no material adverse change in or effect
on the condition (financial or otherwise), earnings, affairs or business
prospects of the Company and its subsidiaries considered as a whole,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect") and (ii) there have been no material transactions entered
into by the Company or any of its subsidiaries.
(f) Each of the Issuers has been duly organized and is validly
existing as a corporation in good standing under the laws of the state of
its incorporation, has corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Preliminary Memorandum and the Final Memorandum and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which it owns or leases properties or in which the conduct
of its business requires such qualification, except (i) to the extent that
the failure to be so qualified or be in good standing would not, singly or
in the aggregate, reasonably be expected to have a Material Adverse Effect
or (ii) to the extent that failure to be so qualified results from the
reincorporation of the Company from a Texas corporation to a Delaware
corporation.
(g) The authorized and outstanding capital stock of the Company at
December 31, 1996 was as set forth in Note 9 to the Combined Financial
Statements in the Preliminary Memorandum and the Final Memorandum. All of
the shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. All of the issued and
outstanding capital stock of each subsidiary has been duly authorized and
validly issued and is fully paid and nonassessable, and all such capital
stock of each subsidiary is owned by the Company,
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directly or through subsidiaries, free and clear of any mortgage, pledge,
lien, encumbrance, claim or equity.
(h) This Agreement has been duly authorized, executed and delivered
by the Issuers and constitutes the valid and binding agreement of the
Issuers, enforceable against the Issuers in accordance with its terms,
except as (i) enforcement hereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws now or hereafter in effect relating to or affecting creditors'
rights generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law)
and (ii) the enforceability of any indemnification or contribution
provisions hereof may be limited under applicable securities laws or the
public policies underlying such laws.
(i) The Notes have been duly authorized by the Company, and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial Purchasers in
accordance with this Agreement, will constitute the valid and binding
obligations of the Company enforceable against the Company in accordance
with the terms, and will be entitled to the benefits, of the Indenture,
except as enforcement thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(j) The Guarantees endorsed on the Notes have been duly authorized by
each Guarantor, and, when the Notes are executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid
for by the Initial Purchasers in accordance with this Agreement, the
Guarantees will constitute the valid and binding obligation of the
Guarantors enforceable against the Guarantors in accordance with their
terms and will be entitled to the benefits of the Indenture except as (i)
enforcement thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law) and (ii)
the enforceability of any indemnification or contribution provisions
thereof may be limited under applicable securities laws or the public
policies underlying such laws.
(k) The Indenture has been duly authorized, executed and delivered by
the Issuers and (assuming the due execution and delivery thereof by the
Trustee) is a legally valid and binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms except as
enforcement thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
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(l) The Exchange Securities have been duly authorized, and, when duly
executed, authenticated, issued and delivered, will be validly issued and
outstanding, and will constitute the valid and binding obligations of the
Issuers, entitled to the benefits of the Indenture and enforceable against
the Issuers in accordance with their terms except as enforcement thereof
may be subject to (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is considered in
a proceeding in equity or at law).
(m) The Registration Rights Agreement has been duly authorized by the
Issuers, and when duly executed and delivered by the Issuers (assuming the
due execution and delivery by the Initial Purchasers), will constitute a
valid and binding agreement of the Issuers, enforceable against the Issuers
in accordance with its terms except as (i) enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is considered in
a proceeding in equity or at law) and (ii) the enforceability of any
indemnification or contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying such laws.
(n) On the Closing Date, the Credit Agreement (as defined in the
Final Memorandum) (a) shall have been duly authorized, executed and
delivered by the Company and will constitute the valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms except as enforcement thereof may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law) and (b) shall be in full force and effect. On the Closing
Date, no event of default thereunder or event which, with the giving of
notice or passage of time or both, would constitute an event of default
thereunder shall have occurred and all conditions to the extension of
credit thereunder shall have been satisfied.
(o) Each of the Asset Purchase Agreement dated April 12, 1997 between
Viking Building Products, Inc. and the Company and the Asset Purchase
Agreement dated April 12, 1997 between Viking Aluminum Products, Inc. and
the Company (together, the "Asset Purchase Agreements") has been duly
authorized, executed and delivered by the Company and constitutes the valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms except as enforcement thereof may be subject to
(A) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law). The Asset Purchase Agreements are in full force and
effect and there exists
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no breach by the Company, or, to the knowledge of the Issuers, any other
party of any representation or covenant thereunder and the Company has no
reason to believe that the conditions to the consummation of the
transactions contemplated thereby will not be satisfied in accordance with
the terms thereof.
(p) The execution, delivery and performance of this Agreement, the
Indenture, the Registration Rights Agreement, the Credit Agreement and the
Asset Purchase Agreements by the Issuers (to the extent each is a party
thereto), the consummation of the transactions contemplated hereby and
thereby, and the issuance and sale of the Securities and Exchange
Securities by the Issuers will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan or credit agreement or
other agreement or instrument to which either the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the properties or assets of the Company or any
of its subsidiaries are subject, nor will any such action result in any
violation of any statute to which the Company or any of its subsidiaries
may be subject or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties or assets (except to the extent
any such conflict, breach, violation or default singly or in the aggregate,
would not reasonably expected to have a Material Adverse Effect), nor will
any such action result in any violation of the provisions of the charter or
by-laws of the Company or any of its subsidiaries; and except for such
consents, approvals, authorizations, registrations or qualifications as may
be required under applicable state securities and Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Initial Purchasers or as set forth in the Registration Rights Agreement or
as may be required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended (the "HSR Act") in connection with the consummation of
the transactions contemplated by the Asset Purchase Agreements, no consent,
approval, authorization or order of, or filing or registration with, any
such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Indenture, the Registration
Rights Agreement, the Credit Agreement and the Asset Purchase Agreements by
the Issuers (to the extent each is a party thereto), the consummation of
the transactions contemplated hereby and thereby, and the issuance and sale
of the Notes and Exchange Securities by the Issuers.
(q) Neither the Company nor any of its subsidiaries is in breach or
violation of any of the terms or provisions of any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the properties or
assets of the Company or any of its subsidiaries are subject, nor is the
Company or any of its subsidiaries in violation of the provisions of any
statute or any judgment, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, any of
its subsidiaries or any of their properties or assets (except to the extent
any such conflict, breach, violation or default is cured at or prior to the
Closing Date and within the grace period applicable
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thereto or would not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect), nor is the Company or any of its
subsidiaries in violation of the provisions of its respective charter or
by-laws.
(r) The Securities, the Indenture, the Registration Rights Agreement,
the Credit Agreement and the Asset Purchase Agreements conform in all
material respects to the descriptions thereof contained in the Final
Memorandum and such descriptions are accurate summaries of such documents
in all material respects.
(s) Except as set forth in the Registration Rights Agreement, there
are no contracts, agreements or understandings between the Company or any
of its subsidiaries and any person granting such person the right to
require the Company or any of its subsidiaries to file a registration
statement under the Securities Act with respect to any securities owned or
to be owned by such person or to require the Company or any of its
subsidiaries to include such securities in any securities being registered
pursuant to any registration statement filed by the Company or any of its
subsidiaries under the Securities Act.
(t) Except as set forth in the Preliminary Memorandum and the Final
Memorandum, there is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending or, to the
knowledge of the Issuers, threatened against or affecting the Company or
any of its subsidiaries, which could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the offering of the Securities.
(u) The Company and each of its subsidiaries has good and
indefeasible title in fee simple to all real property and good and
indefeasible title to all personal property owned by it, in each case free
and clear of all liens, encumbrances and defects except such as are
referred to in the Final Memorandum or (ii) such as do not degrade the
value of such property to the Company or such subsidiary, and do not
interfere with the use made and proposed to be made of such property by the
Company or such subsidiary to an extent that such interference or
degradation could, singly or aggregate, reasonably be expected to have a
Material Adverse Effect. All leases to which the Company or any of its
subsidiaries is a party are valid and binding, and no default has occurred
or is continuing thereunder which could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the offering of the Securities, and the Company and its
subsidiaries enjoy peaceful and undisturbed possession under all such
leases to which any of them is a party as lessee (with such exceptions as
do not materially interfere with the use made by the Company or such
subsidiary). The Company and its subsidiaries possess adequate
certificates, authorizations or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
which, if the subject of an unfavorable decision, ruling or finding, could,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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(v) To the best of the Company's knowledge, Ernst & Young L.L.P., who
have certified certain financial statements of the Company and its
subsidiaries, are independent public accountants within the meaning of the
Securities Act and the rules and regulations thereunder. The consolidated
financial statements included in the Preliminary Memorandum and the Final
Memorandum present fairly the financial position of the Issuers, on a
consolidated basis, as at the dates indicated and the results of their
operations and the changes in their consolidated financial position for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved, except as indicated therein.
The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(w) Neither the Company nor any of its subsidiaries is now or, after
giving effect to the issuance of the Securities and the application of the
proceeds thereof, will be (i) insolvent, (ii) left with unreasonably small
capital with which to engage in its anticipated businesses or (iii)
incurring debts beyond its ability to pay such debts as they become due.
(x) The Company and its subsidiaries own or otherwise possess the
right to use all patents, trademarks, service marks, trade names and
copyrights, all applications and registrations for each of the foregoing,
and all other proprietary rights and confidential information used in the
conduct of their respective businesses as currently conducted; and neither
the Company nor any of its subsidiaries has received any notice, or is
otherwise aware, of any infringement of or conflict with the rights of any
third party with respect to any of the foregoing which, if the subject of
an unfavorable decision, ruling or finding, could, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(y) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals could not, singly or in
the aggregate, reasonably be expected to have a Material Adverse Effect. In
the ordinary course of its business, the Company conducts
8
a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably concluded
that such associated costs and liabilities could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(z) Except as described in the Final Memorandum, no labor problem or
disturbance with the employees of the Company or any of its subsidiaries
exists or, to the knowledge of the Issuers, is threatened which, singly or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(aa) Neither the Company nor any of its subsidiaries, nor, to any
Issuer's knowledge, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its
subsidiaries, has used any corporate funds during the last five years for
any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any unlawful payment to any foreign or
domestic government official or employee from corporate funds; violated or
is in violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, payoff, influence payment, kickback or other
unlawful payment.
(ab) Neither the Company nor any of its subsidiaries has taken, and
none of them will take, any action that would cause this Agreement or the
issuance or sale of the Securities and Exchange Securities to violate
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System or analogous foreign laws and regulations.
(ac) The Issuers have complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing
business with the Government of Cuba or with persons or affiliates located
in Cuba.
(ad) The Issuers maintain reasonably adequate insurance.
(ae) Except as disclosed in the Final Memorandum, there are no
business relationships or related party transactions which would be
required to be disclosed by Item 404 of Regulation S-K under the Securities
Act.
(af) Set forth on Schedule A hereto is a list of each employee pension
or benefit plan with respect to which any of the Issuers or any corporation
considered an affiliate (an "Affiliate") of any of the Issuers within the
meaning of Section 407(d)(7) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") is a party in interest or disqualified
person. The execution and delivery of this Agreement, the Securities, the
Exchange Securities and the Registration Rights Agreement will not involve
any prohibited transaction within the meaning of Section
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406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended. The representation made by the Issuers 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 the Eligible
Purchasers (as defined below) as set forth in the Final Memorandum under
the Section entitled "Notice to Investors."
(ag) Other than as set forth on Schedule B hereto, no Issuer is a
party to any contract or agreement that would be required to be filed with
the Commission as an exhibit to a registration statement on Form S-1
pursuant to entries (2), (4) and (10) of the Exhibit Table of Item 601 of
Regulation S-K under the Securities Act after giving effect to the
transactions contemplated in Section 7(s) hereof.
(ah) No Issuer or Affiliate of any Issuer has sold, offered for sale
or solicited offers to buy or otherwise negotiated in respect of any
security (as defined in the Securities Act) in a transaction that could be
integrated with the sale of the Securities in a manner which would require
the registration under the Securities Act of the Securities.
(ai) No Issuer is a "holding company" or a "subsidiary company" or an
"affiliate" of a holding company within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
2. Purchase and Sale. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this
Agreement, the Issuers agree to sell to the Initial Purchasers, and each of the
Initial Purchasers, severally but not jointly, agrees to purchase the aggregate
principal amount of Securities set forth opposite its name as shown in Schedule
C hereto, at a purchase price equal to 97% of such principal amount thereof.
The Issuers shall not be obligated to deliver any of the Securities to be
delivered except upon payment for all the Securities to be purchased as provided
herein.
3. Sale and Resale of the Securities by the Initial Purchasers. Each
Initial Purchaser represents and warrants to the Issuers that it will offer the
Securities to be purchased hereunder for resale only upon the terms and
conditions set forth in this Agreement and in the Final Memorandum. Each of the
Initial Purchasers hereby represents and warrants to, and agrees with, the
Issuers that such Initial Purchaser (i) will not solicit offers for, or offer or
sell, the Notes by means of any form of general solicitation or general
advertising within the meaning of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act and
(ii) will solicit offers for the Notes only from, and will offer, sell or
deliver the Notes, as part of its initial offering, only to the following
persons (each an "Eligible Purchaser") (A) persons in the United States whom
such Initial Purchaser reasonably believes to be qualified institutional buyers
("Qualified Institutional Buyers") as defined in Rule 144A under the Securities
Act, as such rule may be amended from time to time ("Rule 144A") or, if any such
person is buying for one or more institutional accounts for which such person is
acting as fiduciary or agent, only when such person has represented to such
Initial Purchaser that each such account is a Qualified Institutional Buyer, to
whom notice has
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been given that such sale or delivery is being made in reliance on Rule 144A,
and (B) to a limited number of institutional accredited investors as defined in
Rule 501(a) (1), (2), (3) or (7) under Regulation D ("Accredited Investors")
that, prior to their purchase of the Securities, executes and delivers a letter
containing certain representations and agreements in the form attached as Annex
A to the Final Memorandum, and in each case, in transactions under Rule 144A or
Regulation D in private sales exempt from registration under the Securities Act.
4. Delivery of and Payment for the Notes. Delivery of and payment for the
Securities shall be made at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 9:00 A.M., New York City time, on the third full business
day following the date of this Agreement or at such other date or place as shall
be determined by agreement between the Initial Purchasers and the Company. This
date and time are sometimes referred to as the "Closing Date." On the Closing
Date, the Issuers shall deliver or cause to be delivered the Securities to the
Initial Purchasers for the account of the Initial Purchasers against payment to
or upon the order of the Company of the purchase price by wire transfer in
federal (same-day) funds. Time shall be of the essence, and delivery at the time
and place specified pursuant to this Agreement is a further condition of the
obligation of the Initial Purchasers hereunder. Upon delivery, the Securities
shall be in definitive fully registered form and registered in the name of Cede
& Co., as nominee of The Depository Trust Company ("DTC"), or such other name or
names and in such denominations as the Initial Purchasers shall request in
writing not less than one business day prior to the Closing Date. For the
purpose of expediting the checking and packaging of the Securities, the Issuers
shall make the Securities available for inspection by the Initial Purchasers in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Closing Date.
5. Further Agreements of the Issuers. The Issuers jointly and severally
agree with each Initial Purchaser as set forth below in this Section 5:
(a) The Issuers will furnish to the Initial Purchasers, without
charge, as many copies of the Preliminary Memorandum and Final Memorandum
and any supplements and amendments thereto as they may reasonably request.
(b) Prior to making any amendment or supplement to the Final
Memorandum, the Issuers shall furnish a copy thereof to the Initial
Purchasers and counsel to the Initial Purchasers, and the Issuers will not
effect any such amendment or supplement to which the Initial Purchasers
shall reasonably object by notice to the Company after a reasonable period
of review.
(c) If, at any time prior to completion of the distribution of the
Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Initial Purchasers or counsel for the Issuers, to amend or supplement
the Final Memorandum in order that the Final Memorandum will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in light
of the circumstances existing at the time it is delivered to a purchaser,
or if it is necessary to amend or supplement the Final Memorandum to comply
with applicable
11
law, the Issuers will promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the Final
Memorandum, as so amended or supplemented, will comply with applicable law and
furnish to the Initial Purchasers such number of copies of such amendment or
supplement as they may reasonably request.
(d) So long as any Securities are outstanding and are "Restricted
Securities" within the meaning of Rule 144(a)(3) under the Securities Act,
and during any period in which the Issuers are not subject to Section 13 or
15(d) of the Securities Exchange Act, of 1934, as amended (the "Exchange
Act"), the Issuers will furnish to holders of the Securities and
prospective purchasers of Securities designated by such holders, upon
request of such holders or such prospective purchasers, the information, if
any, required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(e) So long as the Securities and Exchange Securities are
outstanding, the Issuers will furnish to the Initial Purchasers copies of
any annual reports, quarterly reports and current reports filed with the
Securities and Exchange Commission ("SEC") on Forms 10-K, 10-Q and 8-K, or
such other similar forms as may be designated by the SEC, and such other
documents, reports and information as shall be required to be furnished by
the Issuers to the Trustee or to the holders of the Securities and Exchange
Securities pursuant to the Indenture.
(f) The Issuers will use their best efforts to qualify the Securities
for sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers reasonably designate and to continue such qualifications
in effect so long as is reasonably required for the distribution of the
Securities. The Issuers will also arrange for the determination of the
eligibility for investment of the Securities under the laws of such
jurisdictions as the Initial Purchasers reasonably request. Notwithstanding
the foregoing, the Issuers shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified (or, in the
case of the Company, in which it was not so qualified immediately prior to
its reincorporation as a Delaware corporation) or to file a general consent
to service of process or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise subject.
(g) The Issuers will use their best efforts to permit the Securities
to be designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
relating to trading in the PORTAL market and to permit the Securities to be
eligible for clearance and settlement through DTC.
(h) The Issuers will not, and will cause their Affiliates not to,
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) in a transaction
that could be integrated with the sale of the Securities in a manner which
would require the registration under the Securities Act of the Securities.
12
(i) Except following the effectiveness of any Registration Statement
(as defined in the Registration Rights Agreement) and except for such
offers as may be made as a result of, or subsequent to, filing such
Registration Statement or amendments thereto prior to the effectiveness
thereof, the Issuers will not, and will cause their affiliates not to,
solicit any offer to buy or offer to sell the Securities by means of any
form of general solicitation or general advertising (as those terms are
used in Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act.
(j) The Company will apply the net proceeds from the sale of the
Securities as set forth in the Final Memorandum.
(k) The Issuers will take such steps as shall be necessary to ensure
that neither the Company nor any of its subsidiaries shall become an
"investment company" within the meaning of the Investment Company Act, or
(ii) a "holding company" or a "subsidiary company" or an "affiliate" of a
holding company within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
(l) The Issuers will not, and will cause their Affiliates not to,
take any actions which would require the registration under the Securities
Act of the Securities (other than pursuant to the Registration Rights
Agreement).
(m) Prior to the consummation of the Exchange Offer or the
effectiveness of an applicable shelf registration statement, if, in the
reasonable judgment of the Initial Purchasers, the Initial Purchasers or
any of their Affiliates are required to deliver an offering memorandum in
connection with sales of, or market-making activities with respect to, the
Securities, (A) the Issuers will periodically amend or supplement the Final
Memorandum so that the information contained in the Final Memorandum
complies with the requirements of Rule 144A of the Securities Act, (B) the
Issuers will amend or supplement the Final Memorandum when necessary to
reflect any material changes in the information provided therein so that
the Final Memorandum will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances existing as of the date
the Final Memorandum is so delivered, not misleading and (C) the Issuers
will provide the Initial Purchasers with copies of each such amended or
supplemented Final Memorandum, as the Initial Purchasers may reasonably
request.
The Issuers hereby expressly acknowledge that the indemnification and
contribution provisions of Section 8 hereof are specifically applicable and
relate to each offering memorandum, registration statement, prospectus,
amendment or supplement referred to in this Section 5(m).
(n) If, as a result of its reincorporation as a Delaware corporation,
the Company has ceased to be qualified to do business as a foreign
corporation in any jurisdiction in which it owns or leases properties or in
which the conduct of its business
13
requires such qualification, the Company will promptly seek to so qualify
to do business in such jurisdictions.
(o) The Issuers will do all things necessary to satisfy the closing
conditions set forth in Section 7 hereof.
6. Expenses. The Issuers, jointly and severally, agree to pay (a) the
costs incident to the authorization, issuance, sale and delivery of the
Securities and Exchange Securities and any issue or stamp taxes payable in
connection therewith; (b) the costs incident to the preparation and printing of
the Preliminary Memorandum, the Final Memorandum and any amendments, supplements
and exhibits thereto; (c) the costs of distributing the Preliminary Memorandum,
the Final Memorandum and any amendment or supplement thereto; (d) the fees and
expenses of qualifying the Securities and Exchange Securities under the
securities laws of the several jurisdictions as provided in Section 5(f) and of
preparing, printing and distributing a Blue Sky Memorandum (including related
fees and expenses of counsel to the Initial Purchasers); (e) the cost of
printing the Securities and the Exchange Securities; (f) the fees and expenses
of the Trustee and any agent of the Trustee and the fees and disbursements of
any counsel for the Trustee in connection with the Indenture and the Securities
and Exchange Securities; (g) any fees paid to rating agencies in connection with
the rating of the Securities and Exchange Securities; (h) the costs and expenses
of DTC and its nominee, including its book-entry system; (i) all expenses and
listing fees incurred in connection with the application for quotation of the
Securities on the PORTAL market; and (j) all other costs and expenses incidental
to the performance of the obligations of the Issuers under this Agreement.
7. Conditions of Initial Purchasers' Obligations. The obligations of the
Initial Purchasers to purchase the Securities shall be subject to the accuracy
of the representations and warranties on the part of the Issuers contained
herein at the Execution Time and the Closing Date, to the accuracy of the
statements of the Issuers made in any certificates delivered pursuant to the
provisions hereof, to the performance by the Issuers of their obligations
hereunder and to the following additional conditions:
(a) The Initial Purchasers shall not have discovered and disclosed to
the Company on or prior to the Closing Date that the Final Memorandum or
any amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial
Purchasers, is material or omits to state a fact which, in the opinion of
such counsel, is material and is necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(b) The Final Memorandum shall have been printed and copies
distributed to the Initial Purchasers on the next Business Day following
the date of this Agreement or at such later date and time as to which the
Initial Purchasers may agree, and no stop order suspending the
qualification or exemption from qualification of the Securities in any
jurisdiction referred to in Section 5(f) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending
or threatened.
14
(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 could, as of the Closing Date, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect; no action, suit
or proceeding shall have been commenced and be pending against or affecting
or, to the knowledge of the Issuers, threatened against, the Company or any
of its subsidiaries before any court or arbitrator or any governmental
body, agency or official that, singly or in the aggregate, if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect; and no stop order shall have been issued by the SEC or any
governmental agency of any jurisdiction referred to in Section 5(f)
preventing the use of the Final Memorandum, or any amendment or supplement
thereto, or which could reasonably be expected to have a Material Adverse
Effect.
(d) Since the dates as of which information is given in the Final
Memorandum and other than as set forth in the Final Memorandum (including
the description of the Distribution), (i) there shall not have been any
Material Adverse Effect, or any development that is reasonably likely to
result in a Material Adverse Effect, or any material change in the long-
term debt or material increase in the short-term debt of the Company and
the Guarantors from that set forth in the Final Memorandum, and there shall
have been no material transactions entered into by the Company or any of
its subsidiaries, (ii) no dividend or distribution of any kind shall have
been declared, paid or made by the Company on any class of its capital
stock and (iii) the Company and its subsidiaries shall not have incurred
any liabilities or obligations, direct or contingent, that are 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 Final Memorandum.
(e) The Initial Purchasers shall have received a certificate, dated
the Closing Date, signed on behalf of the Company by (i) ▇▇▇ ▇▇▇▇▇▇▇▇▇,
Chief Executive Officer and (ii) ▇▇▇▇▇▇ Story, Chief Financial Officer,
confirming that (A) such officers have participated in conferences with
other officers and representatives of the Issuers, representatives of the
independent public accountants of the Issuers and representatives of
counsel to the Issuers at which the contents of the Final Memorandum and
related matters were discussed and (B) the matters set forth in paragraphs
(b), (c), (d) and clauses (i) and (ii) of paragraph (m) of this Section 7
are true and correct as of the Closing Date.
(f) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Securities and
Exchange Securities, the Indenture, the Registration Rights Agreement, the
Final Memorandum, the Credit Agreement, the Asset Purchase Agreements and
all other legal matters relating to this Agreement and the transactions
contemplated hereby and thereby shall be satisfactory in all material
respects to counsel for the Initial Purchasers, and the
15
issuers shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(g) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ and ▇▇▇ and Associates, counsel for the Issuers,
shall have furnished to the Initial Purchasers their respective written
opinions, addressed to the Initial Purchasers and dated the Closing Date,
in form and substance reasonably satisfactory to the Initial Purchasers,
substantially in the form attached hereto as Schedule D and Schedule E,
respectively:
(h) The Initial Purchasers shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchasers, dated the
Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Initial Purchasers.
(i) The Issuers and the Trustee shall have entered into the Indenture
and the Initial Purchasers shall have received counterparts, conformed as
executed, thereof.
(j) The Issuers and the Initial Purchasers shall have entered into the
Registration Rights Agreement and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
(k) The Issuers shall have amended the Credit Agreement (the form and
substance of which amendment shall be reasonably acceptable to the Initial
Purchasers) and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof and of all other documents and agreements
entered into in connection therewith. There shall exist at and as of the
Closing Date no conditions that would constitute an event of default (or an
event that with notice or the lapse of time, or both, would constitute an
event of default) under the Credit Agreement. On the Closing Date, the
Credit Agreement shall be in full force and effect and shall not have been
modified since the date of the Final Memorandum, except as provided in the
Ninth Amendment to the Credit Agreement which has been approved in form and
substance by the Initial Purchasers.
(l) (i) At the Execution Time and at the Closing Date, Ernst & Young
L.L.P. shall have furnished to the Initial Purchasers a letter or letters,
dated respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Initial Purchasers confirming that
they are independent accountants within the meaning of the Securities Act
and the Exchange Act and the applicable rules and regulations thereunder
and Rule 101 of the Code of Professional Conduct of the American Institute
of Certified Public Accountants (the "AICPA") and otherwise satisfactory in
form and substance to the Initial Purchasers and their counsel and (ii) at
the Execution Time, ▇▇▇▇▇▇▇▇, ▇▇▇▇ & Company, P.C. shall have furnished to
the Initial Purchasers a letter in form and substance satisfactory to the
Initial Purchasers, confirming that they have compiled the balance sheet of
Viking Building Products, Incorporated as at February 29, 1996 and February
28, 1995, and the related
16
statements of income and retained earnings, and cash flows for the years
then ended in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public
Accountants.
(m) (i) Neither the Company nor its subsidiaries shall have sustained
since the date of the latest audited financial statements included in the
Final Memorandum losses or interferences with their businesses, taken as a
whole, from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Final Memorandum and (ii) since such date there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholder's equity or results of operations of the Company or
its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Final Memorandum, the effect of which, in any such case
described in clause (i) or (ii), is, in the reasonable judgment of the
Initial Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities
being delivered on the Closing Date on the terms and in the manner
contemplated herein and in the Final Memorandum.
(n) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or The Nasdaq Stock Market's
National Market or in the over-the-counter market shall have been suspended
or materially limited, or minimum prices shall have been established on
such exchange by the SEC or by such exchange or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities, (iii)
the United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or there
shall have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the reasonable judgment of the Initial
Purchasers, impracticable or inadvisable to proceed with the offering or
delivery of the Securities being delivered on the Closing Date on the terms
and in the manner contemplated herein and in the Final Memorandum.
(o) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ 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 7 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations,
warranties or conditions herein contained.
(p) The Tax Allocation Agreement and the Employment Agreement referred
to in the Final Memorandum shall have been duly authorized, executed and
17
delivered and shall be in full force and effect, and the Issuers shall have
delivered to the Initial Purchasers and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the
Initial Purchasers, a secretary's certificate certifying that true, correct
and complete copies of the Tax Allocation Agreement and the Employment
Agreement are attached thereto.
(q) The Related Party Leases referred to under the heading "Certain
Transactions" in the Final Memorandum shall have been amended as so
described in the Final Memorandum and the Issuers shall have delivered to
the Initial Purchasers or ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial
Purchasers, a secretary's certificate certifying that true, complete and
correct copies of such leases are attached thereto.
(r) The Issuers shall have delivered to the Initial Purchasers or
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchasers, a secretary's
certificate certifying that true, correct and complete copies of all
Existing Guarantees (as defined in the Final Memorandum) are attached
thereto.
(s) The Initial Purchasers shall have received evidence reasonably
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers that: (1) American Builders & Contractors Supply Co., Inc., a
Texas corporation, shall have been merged with and into the Company in
accordance with the General Corporation Law of the State of Delaware, (ii)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ shall have contributed to the Company all of the
capital stock of Amcraft Building Products Co., Inc. and Mule-Hide Products
Co., Inc. in accordance with the General Corporation Law of the State of
Delaware and (iii) the merger of ▇▇▇▇▇▇▇▇▇ Real Estate Properties, Inc.
with and into the Company shall have become effective in accordance with
the General Corporation Law of the State of Delaware.
(t) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ shall have delivered a letter agreement to
the Initial Purchasers in form and substance reasonably satisfactory to the
Initial Purchasers, wherein he will agree to use $8.2 million of the
Distribution to repay all amounts owed by him to the Company as described
under the caption "Use of Proceeds" in the Final Memorandum.
(u) The Company shall have delivered letters from ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇ confirming that they have agreed to serve as directors of the
Company as described in the Final Memorandum.
(v) Prior to the Closing Date, the Issuers shall have furnished to
the Initial Purchasers such further information, certificates and documents
as the Initial Purchasers may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
18
8. Indemnification and Contribution. (a) The Issuers jointly and
severally agree to indemnify and hold harmless each Initial Purchaser, the
directors, officers, employees and agents of each Initial Purchaser and each
person who controls any Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act against any and all losses, claims, damages,
liabilities, joint or several, or judgments (including, without limitation, the
reasonable legal and other expenses incurred in connection with any action, suit
or proceeding or any claim asserted) to which they or any of them may become
subject under the Securities Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities judgments (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 Memorandum, the Final Memorandum or
any information provided by the Issuers to any holder or prospective purchaser
of Notes pursuant to Section 5(d), 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, and agree to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action: provided, however, that the Issuers will not be liable in
any such case to any Initial Purchaser to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Issuers by or on behalf of such Initial Purchaser specifically for
inclusion therein. The Issuers acknowledge that the statements set forth in the
last paragraph of the cover page and in the third, fifth and sixth paragraphs
under the heading "Plan of Distribution" in the Preliminary Memorandum and the
Final Memorandum constitute the only such information. This indemnity agreement
will be in addition to any liability which the Company may otherwise have to the
persons referred to above in this Section 8(a).
(b) Each Initial Purchaser severally and not jointly agrees to
indemnify and hold harmless the Issuers, their directors, officers, and each
person who controls the Issuers within the meaning of either the Securities Act
or the Exchange Act to the same extent as the foregoing indemnity from the
Issuers to each Initial Purchaser, but only with respect to written information
relating to such Initial Purchaser furnished to the Issuers by or on behalf of
such Initial Purchaser specifically for inclusion in the Preliminary Memorandum
or the Final Memorandum (or in any amendment or supplement thereto). The Issuers
acknowledge that the statements set forth in the last paragraph of the cover
page and in the third, fifth and sixth paragraphs under the heading "Plan of
Distribution" in the Preliminary Memorandum and the Final Memorandum constitute
the only information furnished in writing by or on behalf of the Initial
Purchasers for inclusion in the Preliminary Memorandum or the Final Memorandum
(or any amendment or supplement thereto). This indemnity agreement will be in
addition to any liability which any Initial Purchaser may otherwise have to the
persons referred to above in this Section 8(b).
19
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof,
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would, in the opinion of legal counsel to the indemnified party, present
such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have been informed in
writing by legal counsel that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) (a "Settlement") unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
An indemnifying party shall be liable for any Settlement effected with the prior
written consent of the indemnifying party, which consent shall not be
unreasonably withheld or delayed, and an indemnifying party shall indemnify and
hold harmless any indemnified party from and against any loss, claim, damage,
liability or expense by reason of any Settlement effected with its written
consent.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Issuers and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending the same) (collectively "Losses") to which the
Issuers and one or more of the Initial Purchasers may be subject in such
proportion as is appropriate to reflect
20
the relative benefits received by the Issuers and by the Initial Purchasers from
the offering of the Securities; provided, however that in no case shall any
Initial Purchaser (except as may be provided in any agreement among the Initial
Purchasers relating to the offering of the Securities) be responsible for any
amount in excess of the purchase discount or commission applicable to the
Securities purchased by such Initial Purchaser hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Issuers and the Initial Purchasers shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Issuers and of the Initial Purchasers in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Issuers shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses), and benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions received by the Initial
Purchasers from the Issuers in connection with the purchase of the Securities
hereunder. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Issuers or the Initial Purchasers. The Issuers and the Initial Purchasers agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act and each director, officer, employee and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser,
and each person who controls the Issuers within the meaning of either the
Securities Act or the Exchange Act and each officer and director of the Issuers
shall have the same rights to contribution as the Issuers, subject in each case
to the applicable terms and conditions of this paragraph (d).
9. Termination. The obligations of the Initial Purchasers hereunder may
be terminated by the Initial Purchasers by notice given to and received by the
Company prior to delivery of and payment for the Securities if, prior to that
time, any of the events described in Sections 7(m) or 7(n) shall have occurred
or if the Initial Purchasers shall decline to purchase the Securities for any
reason permitted under this Agreement.
10. Reimbursement of Initial Purchasers' Expenses. If (a) the Issuers
shall fail to tender the Securities for delivery to the Initial Purchasers
otherwise than for any reason permitted under this Agreement or (b) the Initial
Purchasers shall decline to purchase the Securities for any reason permitted
under this Agreement (other than pursuant to Section 7(n) hereof), the Issuers
shall reimburse the Initial Purchasers for the reasonable fees and expenses of
their counsel and for such other out-of-pocket expenses as shall have been
incurred by them in connection with this Agreement and the proposed purchase of
the Securities, and upon demand the Issuers shall pay the full amount thereof to
the Initial Purchasers.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
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(a) if to the Initial Purchasers, shall be delivered or sent by mail,
telex or facsimile transmission to NationsBanc Capital Markets, Inc., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
J. ▇▇▇▇▇ ▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇▇▇▇▇), and to First Chicago Capital Markets,
Inc., Suite 0595, One First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇) with a copy to ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇); and
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Final
Memorandum, Attention: ▇▇▇▇▇▇ Story (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy to
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C. (Fax: ▇▇▇-▇▇▇-▇▇▇▇) and to ▇▇▇ and
Associates, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Issuers shall be entitled to act and rely upon any
request, consent, notice or agreement given or made by the Initial Purchasers.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Initial Purchasers, the Issuers and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Issuers contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control an Initial Purchaser within the meaning of Section
15 of the Securities Act and (B) the indemnity agreement of the Initial
Purchasers contained in Section 8(b) of this Agreement shall be deemed to be for
the benefit of directors of the Issuers, officers of the Issuers and any person
controlling any of the Issuers within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 12, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
13. Survival. The respective indemnities, representations, warranties and
agreements of the Issuers and the Initial Purchasers contained in this Agreement
or made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Securities and shall remain in full
force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.
14. Definition of "Business Day". For purposes of this Agreement,
"business day" means each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in The City of New York, New York are
authorized or obligated by law, executive order or regulation to close.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York, without regard to the conflict of law
rules thereof.
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16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original and all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature pages follow]
23
If the foregoing correctly sets forth the agreement between the Issuers and
the Initial Purchasers, please indicate your acceptance in the space provided
for that purpose below.
Very truly yours,
AMERICAN BUILDERS & CONTRACTORS
SUPPLY CO., INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and CEO
AMCRAFT BUILDING PRODUCTS CO., INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and CEO
MUL-HIDE PRODUCTS CO., INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and CEO
-24-
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
NATIONSBANC CAPITAL MARKETS, INC.
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
FIRST CHICAGO CAPITAL MARKETS, INC.
By:
-----------------------------
Name:
Title:
25
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
NATIONSBANC CAPITAL MARKETS, INC.
By:
----------------------------
Name:
Title:
FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
26
If the foregoing correctly sets forth the agreement between the
Issuers and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
AMERICAN BUILDERS & CONTRACTORS
SUPPLY CO., INC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Name:
Title:
AMCRAFT BUILDING PRODUCTS CO., INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Name:
Title:
MULE-HIDE PRODUCTS CO., INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Name:
Title:
27
EXHIBIT A
Registration Rights Agreement
28