EXHIBIT 1.1
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VIALOG CORPORATION
75,000 Units
Consisting of
$75,000,000
12 3/4% Senior Notes due 2001
and
75,000 Common Stock Purchase Warrants
PURCHASE AGREEMENT
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November 6, 1997
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
VIALOG Corporation, a Massachusetts corporation (the "Company") and
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the Subsidiary Guarantors (as defined below) hereby confirm their agreement with
you (the "Initial Purchaser"), as set forth below.
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1. The Acquisitions. Each of Conference Source International, Inc.,
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a Georgia corporation, Call Points, Inc., a Delaware corporation, ▇▇▇▇▇▇▇ Square
Teleconferencing, Inc. d/b/a The Conference Center, a Massachusetts corporation,
American Conferencing Company, Inc. d/b/a ▇▇▇▇▇▇▇, a New Jersey corporation,
Telephone Business Meetings, Inc., a Delaware corporation and Communication
Development Corporation, a Connecticut corporation, (collectively, the "Founding
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Companies") have entered into an agreement and plan of reorganization or stock
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or asset purchase agreement (each an "Acquisition Agreement", collectively the
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"Acquisition Agreements") pursuant to which the Company, through six wholly-
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owned subsidiaries (the "Acquisition Subsidiaries"), will acquire (i) by merger,
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all of the issued and outstanding stock of five Founding Companies and (ii) by
purchase, the assets of one Founding Company, Call Points, Inc. The
transactions contemplated by the Acquisition Agreements are herein referred to
as the "Acquisitions." The term "Subsidiary Guarantors" means (i) prior to the
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effectiveness of the Acquisitions, the collective reference to the Acquisition
Subsidiaries, and (ii) following the effectiveness of the Acquisitions, the
collective reference to the surviving company of each Acquisition which is a
merger and the Acquisition Subsidiary which has acquired the assets of Call
Points, Inc.
2. The Securities. Subject to the terms and conditions herein
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contained, the Company proposes to issue and sell to the Initial Purchaser
75,000 Units (as defined below)
consisting of an aggregate of $75,000,000 aggregate principal amount of its 12
3/4% Senior Notes due 2001, Series A (the "Senior Notes") and 75,000 warrants
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(the "Warrants") to purchase initially an aggregate of 756,645 shares of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"). The
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Senior Notes are to be issued under an indenture (the "Indenture") to be dated
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as of November 12, 1997 by and among the Company, the Subsidiary Guarantors and
State Street Bank and Trust Company, as Trustee (the "Trustee"). The Senior
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Notes will be unconditionally guaranteed (the "Guarantees") on a joint and
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several basis by the Subsidiary Guarantors. The Warrants are to be issued under
a Warrant Agreement to be dated as of November 12, 1997 (the "Warrant
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Agreement") of the Company for the benefit of the holders from time to time of
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the certificates evidencing the Warrants. The shares of Common Stock issuable
upon exercise of the Warrants are herein referred to as the "Warrant Shares."
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The Senior Notes and the Warrants will initially be represented by 75,000 units
("Units"), each Unit consisting of one $1,000 principal amount of Senior Notes
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and one Warrant to purchase 10.0886 Warrant Shares at an initial exercise price
of $0.01 per Warrant Share. The Senior Notes, the Guarantees, the Warrants, the
Warrant Shares and the Units are collectively referred to herein as the
"Securities."
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The Securities will be offered and sold to the Initial Purchaser
without Registration under the Securities Act of 1933, as amended (the "Act"),
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in reliance on an exemption pursuant to Section 4(2) under the Act.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering circular dated October 20, 1997 (the
"Preliminary Circular"), and a final offering circular dated November 6, 1997
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(the "Final Circular"; the Preliminary Circular and the Final Circular each
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herein being referred to as a "Circular"), setting forth or including a
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description of the terms of the Securities, the terms of the offering of the
Securities, and a description of the business of the Company, the Subsidiary
Guarantors and the Founding Companies. Any references herein to the Preliminary
Circular and the Final Circular shall be deemed to include all amendments and
supplements thereto.
The Initial Purchaser and its direct and indirect transferees of the
Securities will be entitled to the benefits of (i) the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
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"Registration Rights Agreement"), pursuant to which the Company and the
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Subsidiary Guarantors shall agree, among other things, (i) to file a
registration statement (the "Registration Statement") with the Securities and
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Exchange Commission (the "Commission") registering the Senior Notes or the
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Exchange Notes (as defined in the Registration Rights Agreement) under the Act
and (ii) the Securityholders' and Registration Rights Agreement, substantially
in the form attached hereto as Exhibit B (the "Securityholders' Agreement" and,
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together with the Registration Rights Agreement, the "Rights Agreements").
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3. Representations and Warranties of the Company and the Subsidiary
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Guarantors. The Company and the Subsidiary Guarantors, jointly and severally,
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represent and warrant to and agree with the Initial Purchaser that:
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(a) The Preliminary Circular and Final Circular with respect to the
Securities have been prepared by the Company for use by the Initial Purchaser in
connection with resales of the Securities. No order or decree preventing the use
of the Preliminary Circular or the Final Circular, or any order asserting that
the transactions contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued and no proceeding for that purpose has
commenced or is pending or, to the knowledge of the Company and the Subsidiary
Guarantors, is contemplated.
(b) The Preliminary Circular and the Final Circular as of their
respective dates and the Final Circular as of the Closing Date (as defined in
Section 4 below) did not or will not at any time contain an untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this Section 3(b) do not apply to statements or omissions made in reliance
upon and in conformity with information relating to the Initial Purchaser
furnished to the Company or the Subsidiary Guarantors in writing by the Initial
Purchaser expressly for use in the Preliminary Circular or Final Circular
pursuant to Section 13 hereof.
(c) The Company has the authorized capitalization set forth in the
Final Circular; all of the outstanding shares of capital stock of the Company
and the Subsidiary Guarantors have been, and as of the Closing Date will be,
duly authorized and validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights; except as set forth
in the Final Circular, all of the outstanding shares of capital stock of each of
the Subsidiary Guarantors are, and as of the Closing Date will be, owned,
directly or indirectly, by the Company, free and clear of all liens,
encumbrances, equities and claims or restrictions on transferability (other than
those imposed by the Act and the securities or "Blue Sky" laws of certain
jurisdictions) or voting; except as set forth in the Final Circular (or, if the
Final Circular is not in existence, the most recent Circular), there are no
outstanding (i) options, warrants or other rights to purchase from the Company
or the Subsidiary Guarantors, (ii) agreements or other obligations of the
Company or any Subsidiary Guarantors to issue or (iii) other rights to convert
any obligation into, or exchange any securities for, in the case of each clause
(i)-(iii) shares of capital stock of the Company or any Subsidiary Guarantor.
The Company does not have any Subsidiaries (as defined in the Indenture) except
for the Subsidiary Guarantors; except for the capital stock of the Subsidiary
Guarantors and as otherwise disclosed in the Final Circular (or, if the Final
Circular is not in existence, the most recent Circular), the Company does not
own, directly or indirectly, any shares of capital stock or any other equity or
long-term debt securities or have any equity interest in any firm, partnership,
joint venture or other entity.
(d) Each of the Company, the Subsidiary Guarantors and the Founding
Companies has been duly incorporated, is validly existing and is in good
standing as a corporation under the laws of its jurisdiction of incorporation,
with all requisite corporate power and authority necessary to own its properties
and conduct its business as now conducted, and as described in the Preliminary
Circular and the Final Circular; each of the Company, the Subsidiary Guarantors
and the Founding Companies is duly qualified to do
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business as a foreign corporation in good standing in all other jurisdictions
where the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified would
not, individually or in the aggregate, have a material adverse effect on the
general affairs, management, business, condition (financial or otherwise),
prospects or results of operations of the Company, the Subsidiary Guarantors and
the Founding Companies, taken as a whole, both before and after giving effect to
the Acquisitions (any such event, a "Material Adverse Effect").
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(e) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Senior Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the Registration
Rights Agreement). The Senior Notes, the Exchange Notes and the Private
Exchange Notes have each been duly and validly authorized by the Company and,
when executed by the Company and authenticated by the Trustee in accordance with
the provisions of the Indenture and, in the case of the Senior Notes, when
delivered to and paid for by the Initial Purchaser in accordance with the terms
of this Agreement, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms.
(f) Each of the Subsidiary Guarantors is a wholly-owned subsidiary of
the Company and has all requisite corporate power and authority to execute,
deliver and perform each of its obligations under the Guarantees. The
Guarantees to be endorsed on each of the Senior Notes, the Exchange Notes and
the Private Exchange Notes have been duly and validly authorized by each of the
Subsidiary Guarantors and, when the Senior Notes, the Exchange Notes and the
Private Exchange Notes are executed by the Company and authenticated by the
Trustee in accordance with the provisions of the Indenture and, in the case of
the Senior Notes, delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement, will constitute a valid and legally
binding obligation of each of the Subsidiary Guarantors, entitled to the
benefits of the Indenture and enforceable against the Subsidiary Guarantors in
accordance with their terms.
(g) The Company and each of the Subsidiary Guarantors have all
requisite corporate power and authority to execute, deliver and perform each of
their obligations under the Indenture. The Indenture meets the requirements for
qualification under the Trust Indenture Act of 1939, as amended (the "TIA").
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The Indenture has been duly and validly authorized by the Company and each of
the Subsidiary Guarantors and, when executed and delivered by the Company and
each of the Subsidiary Guarantors a party thereto (assuming the due
authorization, execution and delivery by the Trustee if the Trustee is required
to execute any such document), each will constitute a valid and legally binding
agreement of the Company and each of the Subsidiary Guarantors, enforceable
against the Company and each of the Subsidiary Guarantors in accordance with its
terms.
(h) The Company and each of the Subsidiary Guarantors have all
requisite corporate power and authority to execute, deliver and perform each of
their obligations under the Rights Agreements to which they are a party. Each
of the Rights Agreements has been
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duly and validly authorized by the Company and each of the Subsidiary Guarantors
and, when executed and delivered by the Company and each of the Subsidiary
Guarantors a party thereto (assuming the due authorization, execution and
delivery by the Initial Purchaser), will constitute a valid and legally binding
agreement of the Company and each such Subsidiary Guarantor, enforceable against
the Company and each such Subsidiary Guarantor in accordance with its terms.
(i) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Warrant
Agreement. The Warrant Agreement has been duly and validly authorized by the
Company and, when executed and delivered by the Company, will constitute a valid
and legally binding agreement of the Company, enforceable against the Company in
accordance with its terms.
(j) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Warrants and the
Additional Warrants (as defined in Section 4 below). The Warrants and the
Additional Warrants have been duly and validly authorized by the Company and,
when executed by the Company and countersigned by the Warrant Agent in
accordance with the provisions of the Warrant Agreement and when delivered to
and paid for by the Initial Purchaser in accordance with the terms of this
Agreement, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Company, entitled to the
benefits of the Warrant Agreement and enforceable against the Company in
accordance with their terms.
(k) The Warrant Shares have been duly and validly authorized for
issuance by the Company and when issued in accordance with the terms and
conditions contained in the Warrant Agreement upon exercise of the Warrants, the
Warrant Shares will be duly authorized, validly issued, fully paid and non-
assessable and will not be subject to any preemptive or similar rights. The
Warrant Shares have been duly reserved for issuance in accordance with the terms
of the Warrants and the Warrant Agreement.
(1) Each of the Company and the Subsidiary Guarantors has all
requisite corporate power and authority to execute, deliver and perform each of
their obligations under this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly authorized,
executed and delivered by the Company and each of the Subsidiary Guarantors and
is a valid and legally binding agreement of each of the Company and the
Subsidiary Guarantors enforceable against each of the Company and the Subsidiary
Guarantors in accordance with its terms. No consent, approval, authorization or
order of any court or governmental agency or body, or third party is required
for the performance of this Agreement by the Company or the Subsidiary
Guarantors or the consummation by the Company or the Subsidiary Guarantors of
the transactions contemplated hereby, except such as have been obtained. The
execution, delivery and performance by each of the Company and the Subsidiary
Guarantors of this Agreement and the consummation by each of the Company and
Subsidiary Guarantors of the transactions contemplated hereby, and the
fulfillment of the terms hereof, will not conflict with or constitute or result
in a breach of or a default under (or an event which with notice or passage of
time or both would constitute as a default under) or
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violation of any of (i) the terms or provisions of any indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate, contract or other agreement or instrument to which any of
the Company or the Subsidiary Guarantors is a party or to which any of them or
their respective properties or assets is subject, (ii) the certificate of
incorporation or bylaws (or similar organizational document) of any of the
Company or the Subsidiary Guarantors, or (iii) (assuming the accuracy of the
representations and warranties of the Initial Purchaser in Section 9 hereof) any
statute, judgment, decree, order, rule or regulation applicable to any of the
Company or the Subsidiary Guarantors or any of their respective properties or
assets.
(m) None of the Company, the Subsidiary Guarantors or the Founding
Companies is (i) in violation of its certificate of incorporation or bylaws,
(ii) in breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their respective properties or
assets, except for any such breach or violation which would not, individually or
in the aggregate, have a Material Adverse Effect, or (iii) except as disclosed
in the Final Circular (or, if the Final Circular is not in existence, the most
recent Circular), in breach of or default under (nor has any event occurred
which, with notice or passage of time or both, would constitute a default under)
or in violation of any of the terms or provisions of any indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate, contract or other agreement or instrument to which any of
them is a party or to which any of them or their respective properties or assets
is subject, except for any such breach, default, violation or event which would
not, individually or in the aggregate, have a Material Adverse Effect.
(n) The audited historical financial statements of the Company and
the Founding Companies included in the Final Circular (or, if the Final Circular
is not in existence, the most recent Circular) present fairly in all material
respects the financial position, the results of their operations and their cash
flows at the dates and for the periods to which they relate and have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis, except as otherwise stated therein. The summary and selected
historical financial data in the Final Circular (or, if the Final Circular is
not in existence, the most recent Circular) present fairly in all material
respects the financial information shown therein and have been prepared and
compiled on a basis consistent with the audited financial statements included
therein, except as otherwise stated therein. KPMG Peat Marwick, LLP (the
"Independent Accountants") is an independent public accounting firm within the
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meaning of the Act and the rules and regulations promulgated thereunder.
(o) Except as described in the Final Circular (or, if the Final
Circular is not in existence, the most recent Circular), the pro forma financial
statements under the headings "Selected Unaudited Pro Forma and Projected
Consolidated Financial Data," "Selected Pro Forma Consolidated Financial Data,"
and "Unaudited Pro Forma and Projected Consolidated Financial Statements"
(including the notes thereto) and the other pro forma financial information (but
excluding all projected or forecasted financial information) included in the
Final Circular (or, if the Final Circular is not in existence, the most recent
Circular) (i) comply as to form in all material respects with the applicable
requirements of Regulation S-X
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promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
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Act"), (ii) have been prepared in accordance with the Commission's rules and
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guidelines with respect to pro forma financial statements, and (iii) have been
properly computed on the bases described therein; the assumptions used in the
preparation of the pro forma financial data and other pro forma and projected
financial information included in the Final Circular (or, if the Final Circular
is not in existence, the most recent Circular) are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein.
(p) Except as described in the Final Circular (or, if the Final
Circular is not in existence, the most recent Circular), there is not pending
or, to the best knowledge of the Company or any Subsidiary Guarantors,
threatened, any action, suit, proceeding, inquiry or investigation to which the
Company, any of the Subsidiary Guarantors or any Founding Company is a party, or
to which the property or assets of the Company, any of the Subsidiary Guarantors
or any Founding Company are subject, before or brought by any court or
governmental agency or body which, if determined adversely to the Company or the
Subsidiary Guarantors, would result, individually or in the aggregate, in any
material adverse change in the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the Company and
the Subsidiary Guarantors, taken as a whole, both before and after giving effect
to the Acquisitions (any such event, a "Material Adverse Change"), or which
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seeks to restrain, enjoin, prevent the consummation of or otherwise challenge
the issuance or sale of the Securities to be sold hereunder or the consummation
of the other transactions described in the Final Circular (or, if the Final
Circular is not in existence, the most recent Circular).
(q) As of the Closing Date (as defined in Section 4 below), each of
the Company and the Subsidiary Guarantors owns or possesses adequate licenses or
other rights to use all trademarks, service marks, trade names and know-how
necessary to conduct the businesses now or proposed to be operated by it as
described in the Final Circular (or, if the Final Circular is not in existence,
the most recent Circular), and since December 31, 1996, none of the Company, the
Subsidiary Guarantors or the Founding Companies has received any notice of
conflict with (or knows of any such conflict with) asserted rights of others
with respect to any trademarks, service marks, trade names or know-how which, if
such assertion of conflict were sustained, would, individually or in the
aggregate, have a Material Adverse Effect.
(r) As of the Closing Date (as defined in Section 4 below), each of
the Company and the Subsidiary Guarantors possesses all licenses, permits,
certificates, consents, orders, approvals and other authorizations from, and has
made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals, presently required or necessary to own or lease, as the case
may be, and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the Final Circular
(or, if the Final Circular is not in existence, the most recent Circular),
except where the failure to obtain such licenses, permits, certificates,
consents, orders, approvals and other authorizations, or to
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make all declarations and filings, would not, individually or in the aggregate,
have a Material Adverse Effect, and none of the Company or any of the Subsidiary
Guarantors or any of the Founding Companies has received any notice of any
proceeding relating to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization, except as
described in the Final Circular (or, if the Final Circular is not in existence,
the most recent Circular) and except where such revocation or modification would
not, individually or in the aggregate, have a Material Adverse Effect.
(s) Since the respective dates as of which information is given in
the Final Circular (or, if the Final Circular is not in existence, the most
recent Circular), except as described therein, (i) there has not been a Material
Adverse Change, (ii) none of the Company or any of the Subsidiary Guarantors or
any of the Founding Companies has incurred any liabilities or obligations,
direct or contingent, or entered into or agreed to enter into any transactions
or contracts (written or oral) not in the ordinary course of business, and (iii)
none of the Company, any of the Subsidiary Guarantors or any of the Founding
Companies has purchased any of its outstanding capital stock, nor declared, paid
or otherwise made any dividend or distribution of any kind on its capital stock
(other than with respect to any such Subsidiary Guarantor, the purchase of, or
dividend or distribution on, capital stock owned by the Company).
(t) Each of the Company, the Subsidiary Guarantors and the Founding
Companies has filed all necessary federal, state and foreign income and
franchise tax returns, except where the failure to so file such returns would
not, individually or in the aggregate, have a Material Adverse Effect, and has
paid all taxes shown as due thereon; and other than tax deficiencies which the
Company, any Subsidiary Guarantor or any Founding Company is contesting in good
faith and for which the Company, such Subsidiary Guarantor or such Founding
Company has provided adequate reserves, there is no tax deficiency that has been
asserted against the Company, any of the Subsidiary Guarantors or any of the
Founding Companies that would have, individually or in the aggregate, a Material
Adverse Effect.
(u) The projected financial and operating data and statements
included in the Final Circular (or, if the Final Circular is not in existence,
the most recent Circular) are based on assumptions which the Company and the
Subsidiary Guarantors believe to be reasonable in light of current
circumstances.
(v) None of the Company, the Subsidiary Guarantors or any agent
acting on their behalf has taken or will take any action that might cause this
Agreement or the Securities to violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, in each case as in effect, or as the
same may hereafter be in effect, on the Closing Date (as defined in Section 4
below).
(w) As of the Closing Date (as defined in Section 4 below), each of
the Company and the Subsidiary Guarantors has good and marketable title to all
real property and good and marketable title to all personal property described
in the Final Circular (or, if the Final Circular is not in existence, the most
recent Circular) as being owned by it and good and
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marketable title to a leasehold estate in the real and personal property
described in the Final Circular (or, if the Final Circular is not in existence,
the most recent Circular) as being leased by it, free and clear of all liens,
charges, encumbrances or restrictions, except as described in the Final Circular
(or, if the Final Circular is not in existence, the most recent Circular) or to
the extent the failure to have such title or the existence of such liens,
charges, encumbrances or restrictions would not, individually or in the
aggregate, have a Material Adverse Effect.
(x) There are no legal or governmental proceedings involving or
affecting the Company, any Subsidiary Guarantor or any Founding Company or any
of their respective properties or assets which would be required to be described
in a prospectus pursuant to the Act that are not described in the Final Circular
(or, if the Final Circular is not in existence, the most recent Circular), nor
are there any material contracts or other documents which would be required
to be described in a prospectus pursuant to the Act that are not described in
the Final Circular (or, if the Final Circular is not in existence, the most
recent Circular).
(y) To the best knowledge of the Company, except as described in the
Final Circular (or, if the Final Circular is not in existence, the most recent
Circular), each of the Company, the Subsidiary Guarantors and the Founding
Companies is in compliance in all respects with all laws, rules or regulations
relating to pollution or protection of public or employee health or the
environment ("Environmental Law") and with the terms and conditions of any
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permit, license or approval required thereunder in connection with the
ownership, operation or use of its business, property and assets except where
the failure to be in such compliance would not, individually or in the
aggregate, have a Material Adverse Effect; except as disclosed in the Final
Circular (or, if the Final Circular is not in existence, the most recent
Circular), none of the Company, the Subsidiary Guarantors or the Founding
Companies is subject to any liability, absolute or contingent, under any
Environmental Law except for any such liability which would not, individually or
in the aggregate, have a Material Adverse Effect; except as disclosed in the
Final Circular (or, if the Final Circular is not in existence, the most recent
Circular), there is no civil, criminal or administrative action, suit, demand,
hearing, notice of violation or deficiency, investigation, proceeding or notice
of potential responsibility or demand letter or request for information pending
or, to their knowledge, threatened against the Company, any of the Subsidiary
Guarantors or any Founding Company under any Environmental Law which, if
determined adversely to the Company or any such Subsidiary would, individually
or in the aggregate, result in a Material Adverse Effect.
(z) Each of the Company and its Subsidiary Guarantors carries
insurance (including self insurance) in such amounts and covering such risks as
in its reasonable determination is adequate for the conduct of its business and
the value of its properties.
(aa) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company, any of the Subsidiary Guarantors or any of the
Founding Companies which is pending or, to the best knowledge of the Company or
any Subsidiary Guarantor, threatened.
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(bb) None of the Company, the Subsidiary Guarantors or the Founding
Companies has any liability for any prohibited transaction or funding deficiency
or any complete or partial withdrawal liability with respect to any pension,
profit sharing or other plan which is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), to which the Company, any Subsidiary
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Guarantor or any Founding Company makes or ever has made a contribution and in
which any employee of the Company, any Subsidiary Guarantor or any Founding
Company is or has ever been a participant. With respect to such plans, the
Company, each Subsidiary Guarantor and each Founding Company is in compliance in
all material respects with all applicable provisions of ERISA.
(cc) After giving effect to the offering and sale of the Securities,
neither the Company nor any of the Subsidiary Guarantors will be an "investment
company" or "promoter" or "principal underwriter" for an "investment company,"
as such terms are defined in the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder (the "Investment Company Act").
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(dd) The Senior Notes, the Exchange Notes, the Warrants, the Warrant
Shares, the Common Stock, the Units, the Indenture, the Warrant Agreement, the
Additional Warrants (as defined in Section 4 below) and the Rights Agreements
will, and this Agreement does, conform in all material respects to the
descriptions thereof in the Final Circular (or, if the Final Circular is not in
existence, the most recent Circular).
(ee) Except as disclosed in the Final Circular (or, if the Final
Circular is not in existence, the most recent Circular), no holder of securities
of the Company or any Subsidiary Guarantor will be entitled to have such
securities registered under the registration statements required to be filed by
the Company pursuant to the Rights Agreements other than as expressly permitted
thereby.
(ff) Immediately after the consummation of the transactions
contemplated by this Agreement, the Company believes that the fair value and
current fair saleable value of the assets of each of the Company and the
Subsidiary Guarantors (each on a consolidated basis) will exceed the sum of its
stated liabilities and identified contingent liabilities; neither the Company
nor any of the Subsidiary Guarantors (each on a consolidated basis) is, nor will
either the Company or any of the Subsidiary Guarantors (each on a consolidated
basis) be, after giving effect to the execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby,
(a) left with unreasonably small capital with which to carry on its business as
it is proposed to be conducted, (b) unable to pay its debts (contingent or
otherwise) as they mature or (c) to the belief of the Company, otherwise
insolvent.
(gg) None of the Company nor any of its Affiliates (as defined in
Rule 501(b) of Regulation D under the Act ("Regulation D")) nor any person
------------
acting on its or their behalf has, directly or indirectly, offered or sold any
Security, or solicited offers to buy any Security under circumstances that would
require registration of the offer or sale of the Securities under the Act. None
of the Company, any of its Affiliates or any person acting on its or their
behalf
-10-
has engaged in any general solicitation or general advertising within the
meaning of Rule 502(c) under the Act or, with respect to Securities sold outside
the United States to non-U.S. persons (as defined in Rule 902 under the Act), by
means of any directed selling efforts within the meaning of Rule 902 under the
Act. The Company, any Affiliate of the Company and any person acting on its or
their behalf (other than the Initial Purchaser) has complied with and will
implement the "offering restriction" within the meaning of such Rule 902.
(hh) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(ii) Except as disclosed in the Circular, within the six months
preceding the date hereof, neither the Company nor any other person acting on
behalf of the Company (other than the Initial Purchaser) has offered or sold to
any person any Securities, or any securities of the same or a similar class as
the Securities, other than Securities offered or sold to the Initial Purchaser
hereunder; and the Company will take reasonable precautions designed to insure
that any offer or sale, direct or indirect, in the United States or to any U.S.
person (as defined in Rule 902 under the Act) of any Securities or any
substantially similar security issued by the Company, within six months
subsequent to the date on which the distribution of the Securities has been
completed (as notified to the Company by ▇▇▇▇▇▇▇▇▇ & Company, Inc.), is made
under restrictions and other circumstances reasonably designed not to affect the
status of the offer and sale of the Securities in the United States and to U.S.
persons contemplated by this Agreement as transactions exempt from the
registration provisions of the Act.
(jj) Assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 9 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchaser in
the manner contemplated by this Agreement to register any of the Securities
under the Act or to qualify the Indenture under the TIA.
(kk) No securities of the Company or any Subsidiary Guarantor are of
the same class (within the meaning of Rule 144A under the Act) as the Securities
and listed on a national securities exchange registered under Section 6 of the
Exchange Act, or quoted in a U.S. automated inter-dealer quotation system.
(ll) None of the Company or the Subsidiary Guarantors have taken, nor
will any of them take, directly or indirectly, any action designed to, or that
might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Securities.
(mm) None of the Company, any of the Subsidiary Guarantors, or any of
the Founding Companies, nor any director, officer, agent, employee or other
person associated with or acting on behalf of the Company, any of the Subsidiary
Guarantors, or any of the Founding Companies, has used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic governmental official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
-11-
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(nn) As of the date hereof, the Acquisitions have closed in escrow
and on the Closing Date (as defined in Section 4 below) the Acquisitions shall
have been finally consummated. On and as of the Closing Date, each merger
contemplated by the Acquisition Agreements shall have become effective pursuant
to the laws of the jurisdiction of organization of each applicable Founding
Company and corresponding Acquisition Subsidiary and the Company shall be the
sole record and beneficial owner of the equity of each surviving corporation of
each such merger, in each case as contemplated by the applicable Acquisition
Agreement. On and as of the Closing Date, Call Points Acquisition Corporation
shall have acquired all the assets of Call Points, Inc., as contemplated by the
applicable Acquisition Agreement. Other than the payment of the cash
consideration to be paid in the Acquisitions, all conditions precedent to the
Acquisitions have been satisfied (and not waived) and the Acquisition Agreements
have not been modified or amended in any way and are identical in all respects
to the Acquisition Agreements delivered to the Initial Purchaser on or prior to
the date hereof. The Acquisition Agreements will, on the Closing Date (as
defined in Section 4 below), conform in all material respects to the description
thereof contained in the Final Circular.
(oo) The Company has not paid or agreed to pay any person any
compensation for soliciting another to purchase any of the securities (except as
contemplated by this Agreement).
Any certificate signed by any authorized officer of the Company or any
Subsidiary Guarantor and delivered to the Initial Purchaser at the Closing or to
counsel for the Initial Purchaser shall be deemed a joint and several
representation and warranty by the Company and each of the Subsidiary Guarantors
to the Initial Purchaser as to the matters covered thereby.
4. Purchase, Sale and Delivery of the Securities. On the basis of
---------------------------------------------
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company and the
Subsidiary Guarantors agree to issue and sell to the Initial Purchaser, and the
Initial Purchaser agrees to purchase from the Company and the Subsidiary
Guarantors 75,000 Units at a purchase price of $960 per Unit. One or more
certificates in definitive form for the Securities that the Initial Purchaser
has agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as ▇▇▇▇▇▇▇▇▇ & Company, Inc. requests upon
notice to the Company at least 24 hours prior to the Closing Date, shall be
delivered by or on behalf of the Company and the Subsidiary Guarantors to the
Initial Purchaser, against payment by or on behalf of the Initial Purchaser of
the purchase price therefor by wire transfer (same day funds) to such account or
accounts as the Company shall specify prior to the Closing Date. Such delivery
of and payment for the Securities shall be made at 10:00 a.m., New York time, on
November 12, 1997, or at such other place, time or date as the Initial
Purchaser, on the one hand, and the Company, on the other hand, may agree upon,
such time and date of delivery against payment
-12-
being herein referred to as the "Closing Date." With respect to Securities to be
------------
delivered in definitive certificated form, the Company and the Subsidiary
Guarantors will make certificates for such Securities available for checking and
packaging by the Initial Purchaser at the offices of ▇▇▇▇▇▇▇▇▇ & Company, Inc.
in New York, New York, or at such other place as ▇▇▇▇▇▇▇▇▇ & Company, Inc. may
designate, at least 24 hours prior to the Closing Date. Securities to be
represented by one or more definitive global Securities in book-entry form will
be deposited on the Closing Date, by or on behalf of the Company, with The
Depository Trust Company ("DTC") or its designated custodian.
---
As additional compensation to the Initial Purchaser, the Company
agrees to issue to the Initial Purchaser (in such denomination or denominations
and registered in such name or names as the Initial Purchaser requests upon
notice to the Company at least 24 hours prior to the Closing Date) at the
Closing Date, for no additional consideration, 30,000 warrants to purchase
initially 302,658 shares of Common Stock at an initial exercise price of $.01
per share of Common Stock (the "Additional Warrants"). In addition to the
-------------------
foregoing, the Initial Purchaser will be paid by wire transfer (same day funds)
a fee for advisory services rendered of $1,000,000.
5. Offering by the Initial Purchaser. The Initial Purchaser
---------------------------------
proposes to make an offering of the Securities at the price and upon the terms
set forth in the Final Circular, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchaser is advisable.
6. Covenants of the Company and the Subsidiary Guarantors. Each of
------------------------------------------------------
the Company and the Subsidiary Guarantors jointly and severally covenants and
agrees with the Initial Purchaser that:
(a) The Company and the Subsidiary Guarantors will not amend or
supplement the Final Circular or any amendment or supplement thereto of which
the Initial Purchaser shall not previously have been advised and furnished a
copy for a reasonable period of time prior to the proposed amendment or
supplement and as to which the Initial Purchaser shall not have given their
consent. The Company and the Subsidiary Guarantors will promptly, upon the
reasonable request of the Initial Purchaser or counsel for the Initial
Purchaser, make any amendments or supplements to the Preliminary Circular or the
Final Circular that may be necessary or advisable in connection with the resale
of the Securities by the Initial Purchaser.
(b) The Company and the Subsidiary Guarantors will cooperate with the
Initial Purchaser in arranging for the qualification of the Securities for
offering and sale under the securities or "Blue Sky" laws of such jurisdictions
as the Initial Purchaser may designate and will continue such qualifications in
effect for as long as may be necessary to complete the resale of the Securities;
provided, however, that in connection therewith, neither of the Company nor any
-------- -------
Subsidiary Guarantors shall be required to qualify as a foreign corporation or
to execute a general consent to service of process in any jurisdiction or
subject itself to
-13-
taxation in excess of a nominal dollar amount in any such jurisdiction where it
is not then so subject.
(c) If, at any time prior to the completion of the initial resale by
the Initial Purchaser of the Securities to persons other than affiliates of the
Initial Purchaser (as determined by the Initial Purchaser), any event occurs as
a result of which the Final Circular as then amended or supplemented would
include any untrue statement of a material fact, or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other reason it is
necessary at any time to amend or supplement the Final Circular to comply with
applicable law, the Company and the Subsidiary Guarantors will promptly notify
the Initial Purchaser thereof and will prepare, at the expense of the Company
and the Subsidiary Guarantors, an amendment or supplement to the Final Circular
that corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of the
Preliminary Circular and the Final Circular or any amendment or supplement
thereto as the Initial Purchaser may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Circular.
(f) For and during the period ending on the date no Securities are
outstanding, the Company will furnish to the Initial Purchaser copies of all
reports and other communications (financial or otherwise) furnished by the
Company or the Subsidiary Guarantors to the Trustee, Warrant Agent or the
holders of the Securities and, as soon as available, copies of any reports or
financial statements furnished to or filed by the Company or the Subsidiary
Guarantors with the Commission or any national securities exchange on which any
class of securities of the Company or the Subsidiary Guarantors may be listed.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchaser, as soon as they have been prepared, a copy of any unaudited
interim financial statements of the Company for any period subsequent to the
period covered by the most recent financial statements appearing in the Final
Circular.
(h) From and after the date hereof until the second anniversary of
the date hereof, the Company will not, and will not permit any of its
"Affiliates" (as defined in Rule 144A under the Act) to, resell any Securities
which constitute "restricted securities" under Rule 144 that have been
reacquired by any of them.
(i) None of the Company, any of its Affiliates or any person acting
on its or their behalf will, directly or indirectly, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any "security" (as
defined in the Act) under circumstances which would require the registration
under the Act of the Securities.
-14-
(j) The Company and the Subsidiary Guarantors will not 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 Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act.
(k) For so long as any of the Securities remain outstanding, the
Company and the Subsidiary Guarantors will make available, upon request, to any
seller of such Securities the information specified in Rule 144A(d)(4) under the
Act, unless the Company is then subject to Section 13 or 15(d) of the Exchange
Act.
(l) Each of the Company and the Subsidiary Guarantors will use its
best efforts to (i) permit the Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the NASD relating to
trading in the Private Offerings, Resales and Trading through Automated Linkages
market (the "PORTAL Market") and (ii) permit the Securities to be eligible for
-------------
clearance and settlement through DTC.
(m) The Company and the Subsidiary Guarantors agree that prior to any
registration of the Securities pursuant to the Registration Rights Agreement, or
at such earlier time as may be required, the Indenture shall be qualified under
the TIA and will cause to be entered into any necessary supplemental indentures
in connection therewith.
(n) In connection with any disposition of Securities pursuant to a
transaction made in compliance with the transfer restrictions referred to in the
Final Circular, the Company will reissue certificates evidencing such Securities
without a restrictive legend (provided, if requested, that the legal opinion
referenced therein so permits).
(o) During the period of three years after the last date of original
issuance of the Securities, the Company will not be or become an "investment
company" under the Investment Company Act.
(p) Except as disclosed in the Final Circular prior to March 12,
1998, the Company will not, without the prior written consent of the Initial
Purchaser, directly or indirectly, issue, sell, offer or agree to sell, grant
any option for the sale of, or otherwise dispose of, or enter into an agreement
to sell Securities, any security convertible into, or exchangeable or
exerciseable for, Securities or any securities substantially similar to the
Securities (except for the Securities issued pursuant to this Agreement or
exchangeable therefor in accordance with the Rights Agreements).
7. Expenses. The Company and the Subsidiary Guarantors agree,
--------
jointly and severally, to pay all costs and expenses incident to the performance
of their obligations under this Agreement, whether or not the transactions
contemplated herein are consummated or this Agreement is terminated pursuant to
Section 12 hereof, including all costs and expenses incident to (i) the
printing, word processing or other production of documents with respect to the
transactions contemplated hereby, including any costs of printing the
Preliminary Circular and the Final Circular and any amendment or supplement
thereto, (ii) all arrangements relating to the delivery to the Initial Purchaser
of copies of the foregoing documents, (iii) the fees and
-15-
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company, (iv) preparation, issuance and delivery to the Initial
Purchaser of the Securities, (v) the qualification of the Securities under state
securities and "Blue Sky" laws, including filing fees and fees and disbursements
of counsel for the Initial Purchaser relating thereto, (vi) all out-of-pocket
expenses incurred by the Initial Purchaser in connection with its services
rendered or to be rendered hereunder, (vii) the fees and expenses of counsel to
the Initial Purchaser in connection with the transactions contemplated hereby,
(viii) expenses in connection with any meetings with prospective investors in
the Securities, (ix) fees and expenses of the Trustee, the Warrant Agent and the
transfer agent for the Common Stock including fees and expenses of their
respective counsel, (x) all expenses and listing fees incurred in connection
with the application for quotation of the Securities on the PORTAL Market, and
(xi) any fees charged by investment rating agencies for the rating of the
Securities. The Company and the Subsidiary Guarantors agree that they will pay
in full on the Closing Date the fees and expenses referred to in clause (vii) by
delivery to counsel for the Initial Purchaser on such date a wire transfer (same
day funds) payable to such counsel in the requisite amount.
8. Conditions of the Initial Purchaser's Obligations. The obligation
-------------------------------------------------
of the Initial Purchaser to purchase and pay for the Securities shall, in its
sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of ▇▇▇▇▇▇, ▇'▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel for the Company
and the Subsidiary Guarantors, in form and substance satisfactory to counsel for
the Initial Purchaser, to the effect that:
(i) Each of the Company, the Subsidiary Guarantors and the
Founding Companies is duly incorporated, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation and
has all requisite corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Final
Circular. Each of the Company, the Subsidiary Guarantors and the Founding
Companies is duly qualified as a foreign corporation and in good standing
in each jurisdiction where the ownership or leasing of its properties or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect.
(ii) To the knowledge of such counsel, each of the Company and
the Subsidiary Guarantors hold all material licenses, certificates and
permits from governmental authorities necessary for the conduct of its
business as described in the Final Circular. Other than the Subsidiary
Guarantors, there is no other subsidiary of the Company.
(iii) As of the date thereof, the Company and the Subsidiary
Guarantors have the authorized, issued and outstanding capitalization set
forth in the
-16-
Final Circular; all of the outstanding shares of capital stock of the
Subsidiary Guarantors have been duly and validly authorized and issued and
are fully paid and non-assessable and are directly owned by the Company,
and, to the knowledge of such counsel and except as set forth in the Final
Circular, free and clear of all liens, encumbrances, equities and claims or
restrictions on transferability or voting.
(iv) Except as set forth in the Final Circular, to the knowledge
of such counsel (A) no options, warrants or other rights to purchase from
the Company or any Subsidiary Guarantors shares of capital stock in the
Company or any Subsidiary Guarantors are outstanding, (B) no agreements or
other obligations of the Company or any Subsidiary Guarantors to issue, or
other rights to cause the Company or any Subsidiary Guarantors to convert,
any obligation into, or exchange any securities for, shares of capital
stock in the Company or any Subsidiary Guarantors are outstanding and (C)
no holder of securities of the Company or any Subsidiary Guarantors is
entitled to have such securities registered under a registration statement
filed by the Company or any Subsidiary Guarantors under the Act with
respect to the Securities or the Warrant Shares.
(v) Each merger contemplated by the Acquisition Agreements has
become effective pursuant to the laws of the jurisdiction of organization
of each applicable Founding Company and corresponding Acquisition
Subsidiary and the Company is the sole record owner of the shares of the
equity of each surviving corporation of each such merger. The transactions
contemplated in the Acquisition Agreement between Call Points, Inc. and
Call Points Acquisition Corporation have been consummated.
(vi) The Senior Notes have been duly and validly authorized and
executed by the Company and when delivered by the Company (assuming the due
authorization, execution, and delivery of the Indenture by the Trustee and
the due authentication of the Senior Notes by the Trustee in accordance
with the Indenture) and paid for by the Initial Purchaser in accordance
with the terms of this Agreement, will constitute the valid and legally
binding obligations of the Company enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, fraudulent conveyance and transfer,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought.
(vii) Each of the Subsidiary Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Guarantees. The Guarantees endorsed on each Senior
Note have been duly and validly authorized and executed by each of the
Subsidiary Guarantors and, when the Senior Notes are authenticated by the
Trustee in accordance with the provisions of the Indenture and delivered to
and paid for by the Initial Purchaser in accordance with the terms of this
Agreement, will constitute the valid and legally binding obligations of
-17-
each of the Subsidiary Guarantors, enforceable against each of the
Subsidiary Guarantors in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
fraudulent conveyance and transfer, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought.
(viii) Each of the Company and each of the Subsidiary Guarantors
has all requisite corporate power and authority to execute, deliver and
perform its respective obligations under the Indenture; the Indenture is in
sufficient form for qualification under the TIA; the Indenture has been
duly and validly authorized, executed and delivered by the Company and each
of the Subsidiary Guarantors and (assuming the due authorization, execution
and delivery thereof by the Trustee), constitutes the valid and legally
binding agreement of the Company and each of the Subsidiary Guarantors,
enforceable against the Company and the Subsidiary Guarantors in accordance
with its terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, fraudulent conveyance and transfer, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought.
(ix) Each of the Company and each of the Subsidiary Guarantors
has all requisite corporate power and authority to execute, deliver and
perform its obligations under the Registration Rights Agreements; the
Registration Rights Agreements have been duly and validly authorized,
executed and delivered by the Company and each of the Subsidiary Guarantors
(assuming the due authorization, execution and delivery thereof by the
Initial Purchaser), constitute the valid and legally binding agreement of
the Company and each such Subsidiary Guarantors, enforceable against the
Company and each such Subsidiary Guarantors in accordance with their terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, fraudulent conveyance and transfer, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity and the discretion
of the court before which any proceeding therefor may be brought, and
except that any agreement for indemnification contained therein may be
contrary to public policy as to which we express no opinion.
(x) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Warrant
Agreement. The Warrant Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, fraudulent conveyance and transfer,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be
-18-
brought, and except that any agreement for indemnification contained
therein may be contrary to public policy as to which we express no opinion.
(xi) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Warrants and the Additional Warrants. The Warrants and the Additional
Warrants have been duly and validly authorized and executed by the Company
and when countersigned by the Warrant Agent in accordance with the
provisions of the Warrant Agreement and delivered to and paid for by the
Initial Purchaser in accordance with the terms of this Agreement, will have
been duly issued and delivered and will constitute the valid and legally
binding obligations of the Company, entitled to the benefits of the Warrant
Agreement, and enforceable against the Company in accordance with their
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, fraudulent conveyance and transfer, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought.
(xii) When issued in accordance with the terms and conditions
contained in the Warrant Agreement, upon exercise of the Warrants and upon
exercise of the Additional Warrants, the Warrant Shares and the Additional
Warrant Shares, as the case may be, will be duly authorized, validly
issued, fully paid and non-assessable and will not be subject to any
preemptive or similar rights. The Warrant Shares and the Additional
Warrant Shares, as the case may be, have been duly reserved for issuance in
accordance with the terms of the Warrants, the Warrant Agreement and the
Additional Warrants, as the case may be.
(xiii) Each of the Company and the Subsidiary Guarantors has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby; the execution, delivery and performance of this
Agreement by each of the Company and the Subsidiary Guarantors and the
consummation by each of the Company and the Subsidiary Guarantors of the
transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of each of the Company and the
Subsidiary Guarantors. This Agreement has been duly executed and delivered
by each of the Company and the Subsidiary Guarantors.
(xiv) The Indenture, the Senior Notes, the Guarantees, the
Warrants, the Additional Warrants, the Warrant Shares, the Common Stock,
the Registration Rights Agreements and the Warrant Agreement conform in all
material respects to the descriptions thereof contained in the Final
Circular. The holders of the outstanding shares of capital stock of the
Company are not entitled to any preemptive or other rights to subscribe for
the Securities, pursuant to Massachusetts law or the Company's charter, and
to the knowledge of such counsel after due inquiry, such counsel is not
aware of the existence of such rights pursuant to any agreement.
-19-
(xv) To the knowledge of such counsel except as described in
the Final Circular, no legal or governmental proceedings are pending or
threatened to which any of the Company or any of its subsidiaries is a
party or to which the property or assets of the Company or any subsidiary
is subject which, if determined adversely to the Company or the subsidiary,
would result, individually or in the aggregate, in a Material Adverse
Effect, or which seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Securities to be sold
hereunder or the consummation of the other transactions described in the
Final Circular under the caption "Use of Proceeds."
(xvi) The execution and delivery of the Exchange Notes and the
Private Exchange Notes by the Company have been duly authorized by all
necessary corporate action of the Company, and when the Exchange Notes and
Private Exchange Notes have been duly executed and delivered by the Company
in accordance with the terms of the Registration Rights Agreement and the
Indenture, and assuming due authentication by the Trustee, the Exchange
Notes and the Private Exchange Notes will constitute the legal, valid,
binding and enforceable obligations of the Company, entitled to the
benefits of the Indenture, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, fraudulent conveyance and transfer,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought.
(xvii) The Guarantees to be endorsed on each of the Exchange
Notes and the Private Exchange Notes by the Subsidiary Guarantors have been
duly authorized by all necessary corporate action of the Subsidiary
Guarantors, and when the Exchange Notes and the Private Exchange Notes have
been duly executed and delivered by the Company and the Subsidiary
Guarantors in accordance with the terms of the Registration Rights
Agreement and the Indenture, and assuming due authentication by the
Trustee, the Guarantees will constitute the legal, valid, binding and
enforceable obligations of the Subsidiary Guarantors, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
fraudulent conveyance and transfer, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought.
(xviii) The execution and delivery of this Agreement, the
Indenture, the Warrant Agreement and the Registration Rights Agreements, as
applicable, and the consummation of the transactions contemplated hereby
and thereby (including, without limitation, the issuance and sale of the
Securities to the Initial Purchaser) will not conflict with or constitute
or result in a breach or violation of or a default under (or an event which
with notice or passage of time or both would constitute a default under) or
violation of any of (i) the terms or provisions of any indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate, contract or other agreement or instrument known to
such counsel (including in any
-20-
event any of the foregoing which have been filed by the Company with the
Commission) to which any of the Company or the Subsidiary Guarantors is a
party or to which any of them or their respective properties or assets is
subject, except for any such conflict, breach, violation, default or event
which would not, individually or in the aggregate, have a Material Adverse
Effect, (ii) the certificate of incorporation or bylaws of any of the
Company or the Subsidiary Guarantors, or (iii) (assuming the accuracy of
the representations and warranties of the Initial Purchaser in Section 9
hereof) any statute, judgment, decree, order, rule or regulation known to
such counsel to be applicable to the Company or the Subsidiary Guarantors
or any of their respective properties or assets, except for any such
conflict, breach or violation which would not, individually or in the
aggregate, have a Material Adverse Effect.
(xix) To the knowledge of such counsel, no consent, approval,
authorization or order of any governmental authority is required for the
issuance and sale by the Company and the Subsidiary Guarantors of the
Securities to the Initial Purchaser or the other transactions contemplated
hereby.
(xx) No registration under the Act of the Securities is
required in connection with the sale of the Securities to the Initial
Purchaser as contemplated by this Agreement and the Final Circular or in
connection with the initial resale of the Securities by the Initial
Purchaser in accordance with Section 9 of this Agreement, and prior to the
commencement of the Exchange Offer (as defined in the Registration Rights
Agreement) or the effectiveness of the Shelf Registration Statement (as
defined in the Registration Rights Agreement), the Indenture is not
required to be qualified under the TIA, in each case assuming (i) that the
purchasers who buy such Securities in the initial resale thereof are
qualified institutional buyers as defined in Rule 144A promulgated under
the Act ("QIBs" or "Qualified Institutional Buyers"), accredited investors
---- ------------------------------
asin Rule 501 (a)(1), (2), (3) or (7) promulgated under the Act
("Accredited Investors"), or foreign purchasers, (ii) the accuracy of the
--------------------
Initial Purchaser's representations in Section 9 and those of the Company
and the Subsidiary Guarantors contained in this Agreement regarding the
absence of a general solicitation in connection with the sale of such
Securities to the Initial Purchaser and the initial resale thereof and
(iii) the due performance by the Initial Purchaser of the agreements set
forth in Section 9 hereof.
(xxi) Neither the consummation of the transactions contemplated
by this Agreement nor the sale, issuance, execution or delivery of the
Securities will violate Regulation G, T, U or X of the Board of Governors
of the Federal Reserve System.
(xxii) Neither the Company nor any of the Subsidiary Guarantors
is an "investment company" or "promoter" or "principal underwriter" for an
"investment company" as such terms are defined in the Investment Company
Act.
-21-
(xxiii) The statements of legal matters, documents or
proceedings, and legal conclusions, if any, set forth in the Final Circular
under the headings "Description of Units," "Description of Notes,"
"Description of Warrants," "Exchange Offer; Registration Rights; Additional
Interest," and "Description of Capital Stock" fairly present the
information called for and fairly summarize the matters referred to
therein.
(xxiv) The statements made under the heading "Certain Federal
Income Tax Consequences" in the Final Circular, in so far as such
statements purport to summarize certain federal income tax laws of the
United States, constitute a fair and accurate summary of the principal
United States federal income tax consequences of an investment in the
Securities.
At the time the foregoing opinion is delivered, ▇▇▇▇▇▇, ▇'▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP shall additionally state that it has participated in
conferences with officers and other representatives of the Company and the
Subsidiary Guarantors, representatives of the independent public accountants for
the Company, representatives of the Initial Purchaser and counsel for the
Initial Purchaser, at which conferences the contents of the Final Circular and
related matters were discussed, and, although it has not independently verified
and is not passing upon and assumes no responsibility for the accuracy,
completeness or fairness of the statements contained in the Final Circular
(except to the extent specified in subsection 8(a)(iii) and (xiv)) and no facts
have come to its attention which lead it to believe that the Final Circular, on
the date thereof or at the Closing Date, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (except for the
financial statements, projections and other financial data included therein, as
to which such counsel expresses no opinion). The opinion of ▇▇▇▇▇▇, ▇'▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, described in this subsection (a) shall be rendered to
the Initial Purchaser at the request of the Company and the Subsidiary
Guarantors and shall so state therein.
(b) On the Closing Date, the Initial Purchaser shall have received
the opinion, in form and substance satisfactory to the Initial Purchaser, dated
as of the Closing Date and addressed to the Initial Purchaser, of Cadwalader,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, counsel for the Initial Purchaser, with respect to certain
legal matters relating to this Agreement and such other related matters as the
Initial Purchaser may require. In rendering such opinion, Cadwalader, ▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇ shall have received and may rely upon such certificates and other
documents and information as it may reasonably request to pass upon such
matters.
(c) The Initial Purchaser shall have received from the Independent
Accountant a comfort letter or letters dated the date hereof and the Closing
Date, in form and substance satisfactory to the Initial Purchaser, to the effect
set forth in Exhibit C hereto.
---------
(d) The representations and warranties of each of the Company and the
Subsidiary Guarantors contained in this Agreement and the representations of the
Founding
-22-
Companies contained in the Acquisition Agreements shall be true and correct in
all material respects on and as of the date hereof and on and as of the Closing
Date as if made on and as of the Closing Date; the statements of the Company's
and the Subsidiary Guarantors' officers made pursuant to any certificate
delivered in accordance with the provisions hereof shall be true and correct in
all material respects on and as of the date made and on and as of the Closing
Date; the Company and the Subsidiary Guarantors shall have complied in all
material respects with all agreements and satisfied hereunder at or prior to the
Closing Date; and, except as described in the Final Circular (exclusive of any
amendment or supplement thereto after the date hereof), subsequent to the date
of the most recent financial statements in such Final Circular, there shall have
been no Material Adverse Change or any development that, singly or in the
aggregate, is reasonably likely to cause a Material Adverse Change.
(e) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(f) Subsequent to the date of the most recent financial statements
contained in the Final Circular (exclusive of any amendment or supplement
thereto after the date hereof), there shall have not been (i) a change or
decrease specified in the accountants' letter or letters referred to in Section
8(c) hereof, or (ii) any change, or development involving a prospective change,
in or affecting the business or properties of the Company, the Subsidiary
Guarantors or the Founding Companies the effect of which, in any case referred
to in clause (i) or (ii) above, is, in the judgment of the Initial Purchaser, so
material and adverse as to make it impractical or inadvisable to proceed with
the offering or the delivery of the Securities as contemplated by the Final
Circular.
(g) The Initial Purchaser shall have received certificates of the
Company and each of the Subsidiary Guarantors, dated the Closing Date, signed on
behalf of the Company and each of the Subsidiary Guarantors by their respective
Chairman of the Board and Chief Executive Officer and the President and Chief
Operating Officer, to the effect that the signers of such certificate have
carefully examined the Final Circular, any amendment or supplement to the Final
Circular and this Agreement and that:
(i) the representations and warranties of the Company and each
of the Subsidiary Guarantors contained in this Agreement are true and
correct in all material respects as of the date hereof and as of the
Closing Date, and the Company and each of the Subsidiary Guarantors has
performed all covenants and agreements and satisfied hereunder all
conditions on their part to be performed or satisfied hereunder at or prior
to the Closing Date;
(ii) at the Closing Date, since the date hereof or since the date
of the most recent financial statements in the Final Circular (exclusive of
any amendment or supplement thereto after the date hereof), no event or
events have occurred, no information has become known nor does any
condition exist that, individually or in the aggregate, would have a
Material Adverse Effect;
-23-
(iii) since the date hereof or since the date of the most
recent financial statements in the Final Circular (exclusive of any
amendment or supplement thereto after the date hereof), none of the Company
or any of the Subsidiary Guarantors has incurred any liabilities or
obligations, direct or contingent (other than in the ordinary course of
business), that are material to the Company or the Subsidiary Guarantors or
entered into any transactions not in the ordinary course of business that
are material to the business, condition (financial or other) or results of
operations or prospects of the Company or the Subsidiary Guarantors, taken
as a whole, and there has not been any change in the capital stock or long-
term indebtedness of the Company or the Subsidiary Guarantors that is
material to the business, condition (financial or other) or results of
operations or prospects of the Company or the Subsidiary Guarantors, taken
as a whole (both before and after giving effect to the Acquisitions); and
(iv) the sale of the Securities hereunder has not been
enjoined (temporarily or permanently).
(h) On the Closing Date, the Initial Purchaser shall have received
the Rights Agreements, the Indenture and the Warrant Agreement, each duly
executed by the Company and the Subsidiary Guarantors and shall have received
the Additional Warrants and such agreements shall be in full force and effect at
all times from and after the Closing Date.
(i) The Trustee shall have furnished to the Initial Purchaser the
opinion of its counsel, dated the Closing Date, to the effect that:
(i) The Trustee has been duly incorporated and is validly
existing as a Massachusetts trust company under the laws of the
jurisdiction of its organization.
(ii) The Indenture has been duly and validly authorized,
executed and delivered by the Trustee and (assuming the due authorization,
execution and delivery thereof by the Company and the Subsidiary
Guarantors) constitutes the valid and legally binding agreement of the
Trustee, enforceable against the Trustee in accordance with its terms,
except that the enforcement thereof may be subject to (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 and the discretion of the court before which
any proceeding therefor may be brought.
(iii) No consent, approval, authorization or order of any
federal or Massachusetts banking authority is required for the consummation
of the transactions contemplated by the Indenture by the Trustee.
(iv) Neither the execution and delivery of the Indenture or
the Warrant Agreement, the consummation of the transactions contemplated
therein, nor the fulfillment of the terms thereof by the Trustee or the
Warrant Agent will conflict with, result in a breach of will not conflict
with or constitute or result in a breach or violation of, or a default
under (or an event which with notice or passage of time or
-24-
both would constitute a default under) or violation of any of (i) the terms
or provisions of any indenture, mortgage, deed of trust, loan agreement,
note, lease, license, franchise agreement, permit, certificate, contract or
other agreement or instrument known to such counsel to which the Trustee or
the Warrant Agent is a party or bound, (ii) the certificate of
incorporation or bylaws of the Trustee or the Warrant Agent, or (iii) any
statute, judgment, decree, order, rule or regulation known to such counsel
to be applicable to the Trustee or the Warrant Agent.
(j) On or before the Closing Date, the Initial Purchaser shall have
received a Stockholder Agreement, dated the closing date, between the Company
and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, duly executed by each of the Company and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in
form and substance satisfactory to the Initial Purchaser and its counsel.
(k) On or before the Closing Date, the Initial Purchaser shall have
received an opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of counsel for each of the Founding Companies with regard to the
applicable Acquisition, in form and substance satisfactory to the Initial
Purchaser and its counsel.
(l) On or before the Closing Date, the Initial Purchaser shall have
received a fully executed letter from each holder of any right to require
registration by the Company of the sale of such holder's securities which letter
shall provide for the waiver of certain registration rights and such other
matters as the Initial Purchaser may require, in each case in form and substance
satisfactory to the Initial Purchaser and its counsel.
(m) The Initial Purchaser shall have received evidence to its
satisfaction that: (i) on the Closing Date the Acquisitions shall have been
finally consummated; (ii) on and as of the Closing Date, each merger
contemplated by the Acquisition Agreements shall have become effective pursuant
to the laws of the jurisdiction of organization of each applicable Founding
Company and corresponding Acquisition Subsidiary and the Company shall be the
sole record and beneficial owner of the equity of each surviving corporation of
each such merger, in each case as contemplated by the applicable Acquisition
Agreement; (iii) on and as of the Closing Date, Call Points Acquisition
Corporation shall have acquired all the assets of Call Points, Inc., as
contemplated by the applicable Acquisition Agreement; (iv) other than the
payment of the cash consideration to be paid in the Acquisitions, all conditions
precedent to the Acquisitions shall have been satisfied (and not waived) and the
Acquisition Agreements shall not have been modified or amended in any way and
shall be identical in all respects to the Acquisition Agreements delivered to
the Initial Purchaser on or prior to the date hereof; and (v) the Acquisition
Agreements shall, on the Closing Date, conform in all material respects to the
description thereof contained in the Final Circular. Without limiting the
foregoing, on or prior to the Closing Date, the Initial Purchaser shall have
received evidence, to its and its counsel's satisfaction of the provision,
completion or satisfaction of each and every item which has not been identified
as "Completed" (or has otherwise been indicated to be incomplete) on the
letters, dated the date hereof, from ▇▇▇▇▇▇, ▇'▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
to the Company and each Founding Company, a copy of each of which has been
presented to the Initial Purchaser.
-25-
(n) On or before the Closing Date, the Initial Purchaser and counsel
for the Initial Purchaser shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiary
Guarantors as they shall have heretofore reasonably requested from the Company
and the Subsidiary Guarantors.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchaser and counsel for the Initial Purchaser. The Company and the
Subsidiary Guarantors shall furnish to the Initial Purchaser such conformed
copies of such documents, opinions, certificates, letters, schedules and
instruments in such quantities as the Initial Purchaser shall reasonably
request.
If any of the conditions specified in this Section 8 shall have not
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Initial Purchaser and counsel to the Initial Purchaser,
this Agreement and all obligations of the Initial Purchaser hereunder may be
canceled at, or at any time prior to, the Closing Date by the Initial Purchaser.
Notice of such cancellation shall be given to the Company in writing or by
telephone or confirmed telecopy.
9. Offering of Securities: Restrictions on Transfer. The Initial
------------------------------------------------
Purchaser represents and agrees (as to itself only) that it is a qualified
institutional buyer as defined in Rule 144A promulgated under the Act (a "QIB").
---
The Initial Purchaser agrees with the Company and the Subsidiary Guarantors that
(a) it has not and will not solicit offers for, or offer or sell, the Securities
by any form of general solicitation or general advertising (as those terms are
used in Regulation D under the Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Act; and (b) it has and will solicit
offers for the Securities only from, and will offer the Securities only to (i)
persons whom the Initial Purchaser reasonably believes to be QIBs, 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 the
Initial Purchaser that each such account is a QIB, to whom notice has been given
that such sale or delivery is being made in reliance on Rule 144A under the Act
("Rule 144A"), and, in each case, in transactions under Rule 144A or (ii) a
---------
limited number of other institutional investors reasonably believed by the
Initial Purchaser to be Accredited Investors that, prior to their purchase of
the Securities, deliver to the Initial Purchaser a letter containing the
representations and agreements set forth in Appendix A to the Final Circular
(or, if the Final Circular is not in existence, in the most recent Circular);
provided, however, that, in the case of this clause (b), in purchasing such
-------- -------
Securities such persons are deemed to have represented and agreed as provided
under the caption "Transfer Restrictions" contained in the Final Circular (or,
if the Final Circular is not in existence, in the most recent Circular).
10. Indemnification and Contribution. (a) The Company and the
--------------------------------
Subsidiary Guarantors, jointly and severally, agree to indemnify and hold
harmless the Initial Purchaser,
-26-
its directors, officers and each person, if any, who controls the Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act (collectively, an "Initial Purchaser Party"), against any losses,
-----------------------
claims, damages or liabilities to which any Initial Purchaser Party may become
subject under the Act, the Exchange Act or otherwise, insofar as any such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in any Circular or any amendment or supplement
thereto;
(ii) the omission or alleged omission to state, in any Circular
or any amendment or supplement thereto, a material fact required to be
stated therein or necessary to make the statements therein not misleading;
or
(iii) the breach of any representation, warranty or covenant of
any of the Company, the Subsidiary Guarantors or the Founding Companies,
and will reimburse, as incurred, the Initial Purchaser Party for any legal or
other expenses incurred by the Initial Purchaser Party in connection with
investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability or action in respect
thereof; provided, however, the Company and the Subsidiary Guarantors will not
-----------------
be liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any Circular or any amendment
or supplement thereto in reliance upon and in conformity with written
information concerning the Initial Purchaser furnished to the Company or the
Subsidiary Guarantors by the Initial Purchaser specifically for use therein.
This indemnity agreement will be in addition to any liability that the Company
or the Subsidiary Guarantors may otherwise have to the indemnified parties.
Neither the Company nor the Subsidiary Guarantors shall be liable under this
Section 10 for any settlement of any claim or action effected without their
prior written consent, which shall not be unreasonably withheld. The Initial
Purchaser shall not, without the prior written consent of the Company and the
Subsidiary Guarantors, as applicable, effect any settlement or compromise of any
pending or threatened proceeding in respect of which the Company or any such
Subsidiary Guarantor is or could have been a party, or indemnity could have been
sought hereunder by the Company or such Subsidiary Guarantor, unless such
settlement (A) includes an unconditional written release of the Company or such
Subsidiary Guarantor, in form and substance reasonably satisfactory to the
Company or such Subsidiary Guarantor, from all liability or claims that are the
subject matter of such proceeding and (B) does not include any statement as to
any admission of fault, culpability or failure to act by or on behalf of the
Company or such Subsidiary Guarantor.
(b) The Initial Purchaser agrees to indemnify and hold harmless each
of the Company, the Subsidiary Guarantors, their directors, officers and each
person, if any, who controls the Company or the Subsidiary Guarantors within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to
-27-
which the Company or the Subsidiary Guarantors or any such director, officer or
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any Circular or any
amendment or supplement thereto; (ii) the omission or the alleged omission to
state therein a material fact required to be stated in any Circular or any
amendment or supplement thereto or necessary to make the statements therein not
misleading and (iii) the breach of any representation, warranty or covenant of
the Initial Purchaser contained in this Agreement, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity with
written information concerning the Initial Purchaser, furnished to the Company
by the Initial Purchaser specifically for use therein; and subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses incurred by the Company or the Subsidiary
Guarantors or any such director, officer or controlling person in connection
with investigating or defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action in respect
thereof. This indemnity agreement will be in addition to any liability that the
Initial Purchaser may otherwise have to the indemnified parties. The Initial
Purchaser shall not be liable under this Section 10 for any settlement of any
claim or action effected without their consent, which shall not be unreasonably
withheld. None of the Company or any of the Subsidiary Guarantors shall, without
the prior written consent of the Initial Purchaser, effect any settlement or
compromise of any pending or threatened proceeding in respect of which the
Initial Purchaser is or could have been a party, or indemnity could have been
sought hereunder by the Initial Purchaser, unless such settlement (A) includes
an unconditional written release of the Initial Purchaser, in form and substance
reasonably satisfactory to the Initial Purchaser, from all liability on claims
that are the subject matter of such proceeding and (B) does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of the Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action for which such indemnified party
is entitled to indemnification under this Section 10, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 10, notify the indemnifying party of the commencement thereof
in writing; but the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to the
extent such failure results in the forfeiture by the indemnifying party or
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 paragraphs (a) and (b) above. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the indemnifying
-------- -------
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the defendants in any such action include both the
indemnified party and the indemnifying party
-28-
and the indemnified party shall have been advised by counsel that there may be
one or more legal defenses available to it and/or other indemnified parties that
are different from or additional to those available to the indemnifying party,
or (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 receipt by the indemnifying party of notice of the
institution of such action, then, in each such case, the indemnifying party
shall not have the right to direct the defense of such action on behalf of such
indemnified party or parties and such indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 10 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Initial Purchaser
in the case of paragraph (a) of this Section 10 or the Company and the
Subsidiary Guarantors in the case of paragraph (b) of this Section 10,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions) or (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the prior written consent of the
indemnifying party (which consent shall not be unreasonably withheld), unless
such indemnified party waived in writing its rights under this Section 10, in
which case the indemnified party may effect such a settlement without such
consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 10 is unavailable to, or insufficient
to hold harmless, an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof), each indemnifying party, in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect (i) the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only such
relative benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof). The relative benefits received by the Company and the Subsidiary
Guarantors, on the one hand, and the Initial Purchaser, on the other, shall be
-29-
deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company and the Subsidiary
Guarantors bear to the total discounts and commissions received by the Initial
Purchaser. The relative fault of the parties shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Subsidiary Guarantors, on
the one hand, or the Initial Purchaser, on the other, the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission or alleged statement or omission, and any other
equitable considerations appropriate in the circumstances.
(e) The Company, the Subsidiary Guarantors and the Initial Purchaser
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of the immediately preceding paragraph (d).
Notwithstanding the provisions of this Section 10, no Initial Purchaser shall be
obligated to make contributions hereunder that in the aggregate exceed the total
discounts, commissions and other compensation received by the Initial Purchaser
under this Agreement, less the aggregate amount of any damages that the Initial
Purchaser has otherwise been required to pay by reason of the untrue or alleged
untrue statements or the omissions or alleged omissions to state a material
fact, and 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 the
immediately preceding paragraph (d), each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act shall have the same rights to contribute as the Initial
Purchaser, and each director of the Company and the Subsidiary Guarantors, each
officer of the Company and the Subsidiary Guarantors and each person, if any,
who controls the Company and the Subsidiary Guarantors within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company and the Subsidiary Guarantors.
11. Survival Clause. The respective representations, warranties,
---------------
agreements, covenants, indemnities and other statements of the Company and the
Subsidiary Guarantors, their respective officers and the Initial Purchaser set
forth in this Agreement or made by or on behalf of them pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, the Subsidiary Guarantors and
the Founding Companies and any of their respective officers or directors, the
Initial Purchaser, its officers or directors or any controlling person referred
to in Section 10 hereof and (ii) delivery of and payment for the Securities.
The respective agreements, covenants, indemnities and other statements set forth
in Sections 7, 10 and 15 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
12. Termination. (a) This Agreement may be terminated in the sole
-----------
discretion of the Initial Purchaser by notice to the Company given prior to the
Closing Date in the event that the Company or any of the Subsidiary Guarantors
shall have failed, refused or
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been unable to perform all obligations and satisfy all conditions on their
respective part to be performed or satisfied hereunder at or prior thereto or,
if at or prior to the Closing Date:
(i) any of the Company, the Subsidiary Guarantors or the
Founding Companies shall have sustained any loss or interference with
respect to its businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any strike, labor dispute, slow down or work stoppage or any legal or
governmental proceeding, which loss or interference, in the sole judgment
of the Initial Purchaser, has had a Material Adverse Effect, or there shall
have been, in the sole judgment of the Initial Purchaser, any Material
Adverse Change, or any event or development involving or reasonably likely
to cause or result in a Material Adverse Change (including without
limitation a change in management or control of the Company or the
Subsidiary Guarantors), except in each case as described in the Final
Circular (exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the NASDAQ National Market shall have
been suspended or minimum or maximum prices shall have been established on
any such exchange or market;
(iii) a banking moratorium shall have been declared by New York
or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity
or emergency, or (C) any material change in the financial markets of the
United States which, in the case of (A), (B) or (C) above and in the sole
judgment of the Initial Purchaser, makes it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities as contemplated
by the Final Circular;
(v) any securities of the Company shall have been downgraded
or placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating agency; or
(vi) any of the Acquisition Agreements shall have terminated,
or in the reasonable view of the Initial Purchaser, any of the Acquisitions
will not be finally consummated on or prior to the Closing Date with no
material changes in form or substance to such Acquisition or Acquisition
Agreement from that described in the Final Circular (exclusive of any
amendment or supplement thereto).
(b) Termination of this Agreement pursuant to this Section 12 shall
be without liability of any party to any other party except as provided in
Section 11 hereof.
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13. Information Supplied by the Initial Purchaser. The statements
---------------------------------------------
set forth in the last paragraph on the front cover page and in the final two
sentences of the third paragraph under the heading "Private Placement" in the
Final Circular (to the extent such statements relate to the Initial Purchaser)
constitute the only information furnished by the Initial Purchaser to the
Company for the purposes of Sections 3(b) and 10 hereof.
14. Notices. All communications hereunder shall be in writing and,
-------
if sent to the Initial Purchaser, shall be mailed or delivered or telecopied and
confirmed in writing to (i) ▇▇▇▇▇▇▇▇▇ & Company, Inc., ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Telecopy No.:
(▇▇▇) ▇▇▇-▇▇▇▇; and if sent to the Company or the Subsidiary Guarantors, shall
be mailed or delivered or telecopied and confirmed in writing to the Company at
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇, Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier, if by overnight courier; and
when receipt is acknowledged by the addressee, if telecopied.
15. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the Initial Purchaser, the Company and the Subsidiary Guarantors
and their respective successors and legal representatives, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that (i) the indemnities of the Company and the Subsidiary Guarantors contained
in Section 10 of this Agreement shall also be for the benefit of any person or
persons who control the Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Initial Purchaser contained in Section 10 of this Agreement shall also be for
the benefit of the directors of the Company and the Subsidiary Guarantors, their
respective officers and any person or persons who control the Company or the
Subsidiary Guarantors within the meaning of Section 15 of the Act or Section 20
of the Exchange Act. No purchaser of Securities from the Initial Purchaser will
be deemed a successor because of such purchase.
16. Applicable Law. This Agreement shall be governed by and construed
--------------
in accordance with the laws of the State of New York.
17. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company,
the Subsidiary Guarantors and the Initial Purchaser.
Very truly yours,
VIALOG CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer and President
TBMA ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
CSII ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
CALL POINTS ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
KST ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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AMCS ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
CDC ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
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EXHIBIT C
Pursuant to Section 8(c) of the Purchase Agreement, KPMG Peat Marwick,
LLP shall furnish a letter to the Initial Purchaser to the effect that:
(i) They are independent public accountants with respect to the
Company within the meaning of the Securities Act of 1933, as amended (the
"Act"), and the applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements audited
by them and included in the Offering Circular comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the related
published rules and regulations;
(iii) The unaudited summary historical financial information with
respect to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Final Circular
agrees with the corresponding amounts (after restatements where applicable) in
the audited consolidated financial statements for such five fiscal years;
(iv) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements of the
Company included in the Final Circular, inquiries of officials of the Company
and its subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing came
to their attention that caused them to believe that:
(A) the unaudited consolidated statements of operations,
consolidated balance sheets, consolidated statements of shareholders'
equity and consolidated statements of cash flows included in the Offering
Circular are not in conformity with generally accepted accounting
principles applied on the basis substantially consistent with the basis for
the audited consolidated statements of operations, consolidated balance
sheets, consolidated statements of shareholders' equity and consolidated
statements of cash flows included in the Final Circular;
(B) any other unaudited income statement data and balance sheet
items of the Company included in the Final Circular do not agree with the
corresponding items in the unaudited consolidated financial statements from
which such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated financial
statements included in the Final Circular;
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(C) any unaudited pro forma consolidated financial statements
included in the Final Circular do not comply as to form in all material
respects with the applicable accounting requirements or the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of those statements;
(D) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options or warrants, in each case which were outstanding on the date of the
latest financial statements included in the Final Circular) or any increase
in the consolidated long-term debt of the Company and its subsidiaries, or
any decreases in consolidated net current assets or stockholders' equity or
other items specified by the Initial Purchaser, or any changes in any other
items specified by the Initial Purchaser, in each case as compared with
amounts shown in the latest balance sheet of the Company included in the
Final Circular, except in each case for changes, increases or decreases
which the Final Circular discloses have occurred or may occur or which are
described in such letter; and
(E) for the period from the date of the latest financial
statements included in the Final Circular to the specified date referred to
in clause (D) there were any decreases in consolidated net revenues or
operating income or income before income taxes or the total or per share
amounts of consolidated net income or other items specified by the Initial
Purchaser, or any increases in any items specified by the Initial
Purchaser, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified
by the Initial Purchaser, except in each case for decreases or increases
which the Final Circular discloses have occurred or may occur or which are
described in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Final Circular and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and (iv)
above, they have carried out certain specified procedures, not constituting an
audit in accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the Initial
Purchaser, which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Final Circular, and have compared
certain of such amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and have found them to be
in agreement.
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