UNIVERSAL HOSPITAL SERVICES, INC. Exhibit (a)(7)
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$100,000,000
10 1/4% Senior Notes due 2008
PURCHASE AGREEMENT
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February 23, 1998
BT ALEX. ▇▇▇▇▇ INCORPORATED
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
UHS Acquisition Corp., a newly-formed Minnesota
corporation ("Acquisition Corp.") controlled by ▇.▇. Childs
Equity Partners, L.P. ("Childs"), hereby confirms its agreement
with you (the "Initial Purchaser"), as set forth below.
1. The Notes. Subject to the terms and conditions
herein contained, Universal Hospital Services, Inc., a
Minnesota corporation, in its capacity as the surviving
corporation of the Merger (as defined below) (the "Company")
proposes to issue and sell (the "Offering") to the Initial
Purchaser $100,000,000 aggregate principal amount of its 10
1/4% Senior Notes due 2008 (the "Notes"). The Notes are to be
issued under an indenture (the "Indenture") to be dated as of
February 25, 1998 by and between the Company, and First Trust
National Association, as Trustee (the "Trustee").
The Notes are being issued and sold in connection
with the recapitalization of the Company (the
"Recapitalization"), which is being effected through the merger
(the "Merger") of Acquisition Corp. with and into the Company
pursuant to an Agreement and Plan of Merger dated as of
November 25, 1997 (the "Merger Agreement"). In connection with
the Recapitalization (assuming it was consummated as of
September 30, 1997): (i) the Company's existing shareholders
(other than certain members of the Company's management (the
"Management Investors")) will receive, in consideration for the
cancellation of approximately 5.3 million shares of the
Company's common stock and options to purchase approximately
344,000 shares of the common stock held by such shareholders,
cash in the aggregate amount of approximately $84.9 million
(net of aggregate option exercise price), or $15.50 per share;
(ii) the Company will repay substantially all of its
outstanding borrowings of approximately $32.8 million under
existing loan agreements; (iii) the Company will pay estimated
fees and expenses of $11.5 million related to the
Recapitalization; and (iv) the Company will pay approximately
$3.3 million in severance pay to certain non-continuing members
of management. In order to finance the Recapitalization, the
Company will: (i) issue the Notes; (ii) receive an equity
contribution of approximately $21.5 million in cash from Childs
and affiliates and the Management Investors; and (iii) borrow
approximately $11.0 million under a $30.0 million revolving
credit facility to be entered into between the Company and
Bankers Trust Company, as agent for the lenders thereunder (the
"Credit Agreement").
The Notes will be offered and sold to the Initial
Purchaser without being registered under the Securities Act of
1933, as amended (the "Act"), in reliance on exemptions
therefrom.
In connection with the sale of the Notes, the Company
has prepared a preliminary offering memorandum dated
January 27, 1998 (the "Preliminary Memorandum") and a final
offering memorandum dated February 23, 1998 (the "Final
Memorandum"; the Preliminary Memorandum and the Final
Memorandum each herein being referred to as a "Memorandum")
each setting forth or including a description of the terms of
the Notes, the terms of the Offering, the other aspects of the
Recapitalization and the transactions contemplated hereby and
thereby, a description of the Company and any material
developments relating to the Company occurring after the date
of the most recent historical financial statements included
therein.
Acquisition Corp. understands that the Initial
Purchaser proposes to make an offering of the Notes only on the
terms and in the manner set forth in the Final Memorandum and
Section 8 hereof as soon as the Initial Purchaser deems
advisable after this Agreement has been executed and delivered,
to persons in the United States whom the Initial Purchaser
reasonably believes to be qualified institutional buyers
("Qualified Institutional Buyers" or "QIBs") as defined in Rule
144A under the Act, as such rule may be amended from time to
time ("Rule 144A") and outside the United States to certain
persons in reliance on Regulation S under the Act.
The Initial Purchaser and its direct and indirect
transferees of the Notes will be entitled to the benefits of
the Registration Rights Agreement, substantially in the form
attached hereto as Exhibit A (the "Registration Rights
Agreement"), to be dated the Closing Date (as defined in
Section 3 below), pursuant to which the Company has agreed,
among other things, to file a registration statement (the
"Registration Statement") with the Securities and Exchange
Commission (the "Commission") registering the Notes or the
Exchange Notes (as defined in the Registration Rights
Agreement) under the Act.
2. Representations and Warranties. Acquisition
Corp. represents and warrants to and agrees with the Initial
Purchaser that:
(a) Neither the Preliminary Memorandum as of the
date thereof nor the Final Memorandum nor any amendment or
supplement thereto as of the date thereof and at all times
subsequent thereto up to the Closing Date contained or
contains any untrue statement of a material fact or
omitted or omits 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 2(a) 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 in writing by the Initial Purchaser expressly
for use in the Preliminary Memorandum, the Final
Memorandum or any amendment or supplement thereto.
(b) As of the Closing Date and after giving effect
to the Recapitalization, the Company will have the
authorized, issued and outstanding capitalization set
forth in the Final Memorandum; all of the outstanding
shares of capital stock of the Company 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 or contemplated in the Final
Memorandum, all of the outstanding shares of capital stock
of the Company will be 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, those permitted under the Stockholders
Agreement (as defined in the Final Memorandum) or liens or
encumbrances created in connection with the equity
investment by the Management Investors) or voting; except
as set forth in the Final Memorandum, there are no
(i) options, warrants or other rights to purchase from the
Company, (ii) agreements or other obligations of the
Company to issue or (iii) other rights to convert any
obligation into, or exchange any securities for, shares of
capital stock of or ownership interests in the Company
outstanding. 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. No holder of securities of the Company is
entitled to have such securities registered under a
registration statement filed by the Company pursuant to
the Registration Rights Agreement.
(c) The Company has been duly incorporated, is
validly existing and is in good standing as a corporation
under the laws of Minnesota, with all requisite corporate
power and authority to own its properties and conduct its
business as now conducted and as described in the Final
Memorandum; the Company is duly qualified to do 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)
or results of operations of the Company (any such event, a
"Material Adverse Effect").
(d) The Company has all requisite corporate power
and authority to execute, deliver and perform each of its
obligations under the Notes, the Exchange Notes and the
Private Exchange Notes (as defined in the Registration
Rights Agreement). As of the Closing Date, the Notes, the
Exchange Notes and the Private Exchange Notes will 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 Notes, when delivered to and paid
for by the Initial Purchaser in accordance with the terms
of this Agreement, and, in the case of the Exchange Notes
and the Private Exchange Notes, when delivered in exchange
for Notes pursuant to the terms of the Exchange Offer (as
defined in the Registration Rights 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
respective 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.
(e) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under the Indenture. As of the Closing Date,
the Indenture will have been duly and validly authorized
by the Company and, when executed and delivered by the
Company (assuming the due authorization, execution and
delivery by the Trustee), will constitute a 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, 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.
(f) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under the Registration Rights Agreement. As
of the Closing Date, the Registration Rights Agreement
will have 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, except that (A) 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 and (B) any rights to indemnity or contribution
thereunder may be limited by federal and state securities
laws and public policy considerations.
(g) Acquisition Corp. has all requisite corporate
power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the
transactions contemplated hereby. This Agreement and the
transactions contemplated hereby have been duly and
validly authorized, executed and delivered by Acquisition
Corp.
(h) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under the Assumption Agreement dated the
Closing Date whereby the Company will assume the rights,
duties and obligations of Acquisition Corp. under this
Agreement (the "Assumption Agreement"). As of the Closing
Date, the Assumption Agreement will constitute a valid and
legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except
that (A) 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 and (B) any rights to
indemnity or contribution thereunder may be limited by
federal and state securities laws and public policy
considerations.
(i) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under the Merger Agreement. The Merger
Agreement has been duly and validly authorized by the
Company and constitutes a valid and legally binding
agreement of the Company enforceable against the Company
in accordance with its terms, except that (A) 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 and (B) any rights to indemnity or
contribution thereunder may be limited by federal and
state securities laws and public policy considerations.
The Company has no reasonable basis to believe that the
transactions contemplated by the Merger Agreement will not
be consummated in accordance with the terms of such
Agreement.
(j) The Company has all requisite corporate power
and authority to execute, deliver and perform its
obligations under the Credit Agreement. As of the Closing
Date, the Credit Agreement will have 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, except that (A) 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 and (B) any rights to indemnity or
contribution thereunder may be limited by federal and
state securities laws and public policy considerations.
(k) No consent, approval, authorization or order of
any court, governmental agency or body or third party is
required for the issuance and sale by the Company of the
Notes to the Initial Purchaser or the consummation by the
Company of the transactions contemplated hereby, except
such as have been obtained and such as may be required
under state securities or "Blue Sky" laws in connection
with the purchase and resale of the Notes by the Initial
Purchaser. The Company is not (i) in violation of its
certificate of incorporation or bylaws (or similar
organizational document), (ii) in breach or violation of
any statute, judgment, decree, order, rule or regulation
applicable to it or any of its properties or assets,
except for any such breach or violation that would not,
individually or in the aggregate, have a Material Adverse
Effect, or (iii) in breach of or default under (nor has
any event occurred that, 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 it is a party or to
which it or its properties or assets is subject
(collectively, "Contracts"), except for any such breach,
default, violation or event that would not, individually
or in the aggregate, have a Material Adverse Effect.
(l) The execution, delivery and performance by the
Company of this Agreement, the Indenture, the Registration
Rights Agreement, the Assumption Agreement, the Credit
Agreement, the Merger Agreement and the consummation by
the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and
sale of the Notes to the Initial Purchaser) will not
conflict with or constitute or result in a breach of or a
default under (or an event that 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
Contract, except for any such conflict, breach, violation,
default or event that would not, individually or in the
aggregate, have a Material Adverse Effect, (ii) the
certificate of incorporation or bylaws of the Company or
(iii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of
the representations and warranties of the Initial
Purchaser in Section 8 hereof) any statute, judgment,
decree, order, rule or regulation applicable to the
Company or any of its properties or assets, except for any
such conflict, breach or violation that would not,
individually or in the aggregate, have a Material Adverse
Effect.
(m) The audited financial statements of the Company
included in the Final Memorandum present fairly in all
material respects the financial position, results of
operations and cash flows of the Company at the dates and
for the periods to which they relate and have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as
otherwise stated therein. The summary and selected
historical financial and statistical data in the Final
Memorandum present fairly in all material respects the
information shown therein and the summary and selected
financial data have been prepared and compiled on a basis
consistent with the audited financial statements included
therein, except as otherwise stated therein. Coopers &
▇▇▇▇▇▇▇ LLP (the "Independent Accountants") is an
independent public accounting firm within the meaning of
the Act and the rules and regulations promulgated
thereunder.
(n) The pro forma financial statements (including
the notes thereto) and, to the extent applicable, the
other pro forma financial information included in the
Final Memorandum (i) comply as to form in all material
respects with the applicable requirements of Regulation S-
X promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (ii) have been prepared
in accordance with the Commission's rules and 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 financial
information included in the Final Memorandum are
reasonable and the adjustments used therein are
appropriate to give effect to the transactions or
circumstances referred to therein.
(o) There is not pending or, to the best knowledge
of the Company, threatened any action, suit, proceeding,
inquiry or investigation to which the Company is a party,
or to which the property or assets of the Company are
subject, before or brought by any court, arbitrator or
governmental agency or body that, if determined adversely
to the Company, would, individually or in the aggregate,
have a Material Adverse Effect or that seeks to restrain,
enjoin, prevent the consummation of or otherwise challenge
the issuance or sale of the Notes to be sold hereunder or
the consummation of the other transactions described in
the Final Memorandum.
(p) The Company owns or possesses adequate licenses
or other rights to use all patents, trademarks, service
marks, trade names, copyrights and know-how necessary to
conduct the businesses now or proposed to be operated by
it as described in the Final Memorandum, and the Company
has not received any notice of infringement of or conflict
with (or knows of any such infringement of or conflict
with) asserted rights of others with respect to any
patents, trademarks, service marks, trade names,
copyrights or know-how that, if such assertion of
infringement or conflict were sustained, would,
individually or in the aggregate, have a Material Adverse
Effect.
(q) Except where the same would not, individually or
in the aggregate, have a Material Adverse Effect: (i) the
Company 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 properties
and to carry on its businesses as now or proposed to be
conducted as set forth in the Final Memorandum
("Permits"); (ii) the Company has fulfilled and performed
all of its obligations with respect to such Permits and no
event has occurred that allows, or after notice or lapse
of time alone would allow, revocation or termination
thereof or results in any other material impairment of the
rights of the holder of any such Permit; and (iii) the
Company has not received any notice of any proceeding
relating to revocation or modification of any such Permit,
except as described in the Final Memorandum.
(r) Since the date of the most recent financial
statements appearing in the Final Memorandum, except as
described therein, (i) the Company has not 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, which liabilities, obligations, transactions or
contracts would, individually or in the aggregate, be
material to the general affairs, management, business,
condition (financial or otherwise) or results of
operations of the Company, (ii) the Company has not
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
pursuant to the Company's 1992 Employee Stock Purchase
Plan) and (iii) there shall not have been any change in
the capital stock or long-term indebtedness of the
Company.
(s) The Company 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 that the Company is contesting
in good faith and for which the Company has provided
adequate reserves, there is no tax deficiency that has
been asserted against the Company that would have,
individually or in the aggregate, a Material Adverse
Effect.
(t) The statistical and market-related data included
in the Final Memorandum are based on or derived from
sources that the Company believes to be reliable and
accurate.
(u) Neither the Company nor any agent acting on its
behalf has taken or will take any action that might cause
this Agreement or the sale of the Notes 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.
(v) The Company has good and marketable title to all
real property and good title to all personal property
described in the Final Memorandum as being owned by it and
good and marketable title to a leasehold estate in the
real and personal property described in the Final
Memorandum as being leased by it free and clear of all
liens, charges, encumbrances or restrictions, except as
described in the Final Memorandum 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. All leases, contracts and agreements to which the
Company is a party or by which the Company is bound are
valid and enforceable against the Company, are to the
knowledge of the Company valid and enforceable against the
other party or parties thereto except that the enforcement
of such leases, contracts and agreements 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 and are in full force
and effect with only such exceptions as would not,
individually or in the aggregate, have a Material Adverse
Effect.
(w) There are no legal or governmental proceedings
involving or affecting the Company or any of its
properties or assets that would be required to be
described in a prospectus pursuant to the Act that are not
described in the Final Memorandum, nor are there any
material contracts or other documents that would be
required to be described in a prospectus pursuant to the
Act that are not described in the Final Memorandum.
(x) Except as would not, individually or in the
aggregate, have a Material Adverse Effect (A) the Company
is in compliance with and not subject to liability under
applicable Environmental Laws (as defined below), (B) the
Company has made all filings and provided all notices
required under any applicable Environmental Law, and has
and is in compliance with all Permits required under any
applicable Environmental Laws and each of them is in full
force and effect, (C) there is no civil, criminal or
administrative action, suit, demand, claim, hearing,
notice of violation, investigation, proceeding, notice or
demand letter or request for information pending or, to
the knowledge of the Company, threatened against the
Company under any Environmental Law, (D) no lien, charge,
encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the
Company, (E) the Company has not received notice that it
has been identified as a potentially responsible party
under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended
("CERCLA") or any comparable state law, (F) no property or
facility of the Company is (i) listed or proposed for
listing on the National Priorities List under CERCLA or
(ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List
promulgated pursuant to CERCLA or on any comparable list
maintained by any state or local governmental authority.
For purposes of this Agreement, "Environmental Laws"
means the common law and all applicable federal, state and
local laws or regulations, codes, orders, decrees,
judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of
public or employee health and safety or the environment,
including, without limitation, laws relating to (i)
emissions, discharges, releases or threatened releases of
hazardous materials, into the environment (including,
without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of
hazardous materials and (iii) underground and above ground
storage tanks, and related piping, and emissions,
discharges, releases or threatened releases therefrom.
(y) To the knowledge of the Company, there is no
strike, labor dispute, slowdown or work stoppage with the
employees of the Company that is pending or threatened.
(z) The Company carries insurance in such amounts
and covering such risks as is adequate in the reasonable
judgment of the Company for the conduct of its business
and the value of its properties.
(aa) The Company does not have 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 that is subject
to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Company makes or ever has
made a contribution and in which any employee of the
Company is or has ever been a participant. With respect
to such plans, the Company is in compliance in all
material respects with all applicable provisions of ERISA.
(bb) The Company (i) makes and keeps accurate books
and records and (ii) maintains internal accounting
controls that provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary
to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its
bank accounts is permitted only in accordance with
management's authorization and (D) the reported
accountability for its assets is compared with existing
assets at reasonable intervals.
(cc) Immediately after the sale of the Notes pursuant
hereto, the Company will not 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.
(dd) No holder of securities of the Company will be
entitled to have such securities registered under the
registration statements required to be filed by the
Company pursuant to the Registration Rights Agreement
other than as expressly permitted thereby.
(ee) Immediately after the consummation of the
Recapitalization, the fair value and present fair saleable
value of the assets of the Company (on a going concern
basis) will exceed the sum of its stated liabilities and
identified contingent liabilities; the Company is not, nor
will the Company be, after giving effect to the execution,
delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby and
thereby, (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) otherwise insolvent.
(ff) Neither the Company nor any of its Affiliates
(as defined in Rule 501(b) of Regulation D under the Act)
has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in
respect of, any "security" (as defined in the Act) that is
or could be integrated with the sale of the Notes in a
manner that would require the registration under the Act
of the Notes or (ii) engaged in any form of general
solicitation or general advertising (as those terms are
used in Regulation D under the Act) in connection with the
offering of the Notes or in any manner involving a public
offering within the meaning of Section 4(2) of the Act.
Assuming the accuracy of the representations and
warranties of the Initial Purchaser in Section 8 hereof,
it is not necessary in connection with the offer, sale and
delivery of the Notes to the Initial Purchaser in the
manner contemplated by this Agreement to register any of
the Notes under the Act or to qualify the Indenture under
the TIA.
(gg) No securities of the Company are of the same
class (within the meaning of Rule 144A) as the Notes 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.
(hh) The Company has not taken, nor will the Company
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 Notes.
3. Purchase, Sale and Delivery of the Notes. On
the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and
conditions herein set forth, Acquisition Corp. shall cause the
Company to issue and sell to the Initial Purchaser and the
Initial Purchaser agrees to purchase from the Company, the
Notes at 97% of their principal amount. One or more
certificates in definitive form for the Notes that the Initial
Purchaser has agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or
names as the Initial Purchaser requests upon notice to the
Company at least 36 hours prior to the Closing Date, shall be
delivered by or on behalf of the Company to the Initial
Purchaser, against payment by or on behalf of the Initial
Purchaser of the purchase price therefor by wire transfer (in
immediately available funds), to such account or accounts as
the Company shall specify prior to the Closing Date, or by such
means as the parties hereto shall agree prior to the Closing
Date. Such delivery of and payment for the Notes shall be made
at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, New
York, New York at 9:00 A.M., New York time on February 25,
1998, or at such other place, time or date as the Initial
Purchaser, on the one hand, and Acquisition Corp., on the other
hand, may agree upon, such time and date of delivery against
payment being herein referred to as the "Closing Date."
Acquisition Corp. shall cause the Company to make such
certificate or certificates for the Notes available for
checking and packaging by the Initial Purchaser at the offices
of BT Alex. ▇▇▇▇▇ Incorporated in New York, New York, or at
such other place as the Initial Purchaser may designate, at
least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchaser. The Initial
Purchaser proposes to make an offering of the Notes at the
price and upon the terms set forth in the Final Memorandum, as
soon as practicable after this Agreement is entered into and as
in the judgment of the Initial Purchaser is advisable.
5. Covenants of the Company. Acquisition Corp.
covenants and agrees with the Initial Purchaser that:
(a) The Company will not amend or supplement the
Final Memorandum 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 its
consent, which consent shall not be unreasonably withheld.
The Company will promptly, upon the reasonable request of
the Initial Purchaser or counsel for the Initial
Purchaser, make any amendments or supplements to the
Preliminary Memorandum or the Final Memorandum that may be
necessary or advisable in connection with the resale of
the Notes by the Initial Purchaser.
(b) The Company will cooperate with the Initial
Purchaser in arranging for the qualification of the Notes
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 Notes; provided, however, that in connection
therewith, the Company shall not 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 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
distribution by the Initial Purchaser of the Notes or the
Private Exchange Notes, any event occurs or information
becomes known as a result of which the Final Memorandum 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 Memorandum to
comply with applicable law, the Company will promptly
notify the Initial Purchaser thereof and will prepare, at
the expense of the Company, an amendment or supplement to
the Final Memorandum that corrects such statement or
omission or effects such compliance.
(d) The Company will, without charge, until the
completion of the distribution by the Initial Purchaser of
the Notes, provide to the Initial Purchaser and to counsel
for the Initial Purchaser as many copies of the
Preliminary Memorandum and the Final Memorandum 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 Notes as set forth under "Use of Proceeds" in
the Final Memorandum.
(f) For so long as the Notes remain outstanding, or
during the period ending three years from the date hereof,
whichever is shorter, the Company will furnish to the
Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the
Company to the Trustee, or the holders of the Notes and,
as soon as available, copies of any reports or financial
statements furnished to or filed by the Company with the
Commission or any national securities exchange on which
any class of securities of the Company may be listed.
(g) Neither the Company nor any of its Affiliates
will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any "security" (as
defined in the Act) that could be integrated with the sale
of the Notes in a manner that would require the
registration under the Act of the Notes.
(h) The Company will not engage in any form of
general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in
connection with the offering of the Notes or in any manner
involving a public offering within the meaning of Section
4(2) of the Act.
(i) For so long as any of the Notes remain
outstanding, the Company will make available, upon
request, to any seller of such Notes 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.
(j) The Company will use its reasonable best efforts
to (i) permit the Notes 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 Notes to be eligible
for clearance and settlement through The Depository Trust
Company.
(k) In connection with Notes offered and sold in an
off shore transaction (as defined in Regulation S) the
Company will not register any transfer of such Notes not
made in accordance with the provisions of Regulation S and
will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Notes in the
form of definitive securities.
6. Expenses. Acquisition Corp. agrees to pay all
costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this
Agreement is terminated pursuant to Section 11 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 Memorandum and the Final Memorandum
and any amendment or supplement thereto and any "Blue Sky"
memoranda, (ii) all arrangements relating to the delivery to
the Initial Purchaser of copies of the foregoing documents,
(iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the
Company, (iv) preparation (including printing), issuance and
delivery to the Initial Purchaser of the Notes, (v) the
qualification of the Notes under state securities and "Blue
Sky" laws, including filing fees and reasonable fees and
disbursements of counsel for the Initial Purchaser relating
thereto, (vi) expenses in connection with any meetings with
prospective investors in the Notes, (vii) fees and expenses of
the Trustee including reasonable fees and expenses of counsel,
(viii) all expenses and listing fees incurred in connection
with the application for quotation of the Notes on the PORTAL
Market and (ix) any fees charged by investment rating agencies
for the rating of the Notes. If the sale of the Notes provided
for herein is not consummated because any condition to the
obligations of the Initial Purchaser set forth in Section 7
hereof is not satisfied, because this Agreement is terminated
or because of any failure, refusal or inability on the part of
Acquisition Corp. to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder
(other than solely by reason of a default by the Initial
Purchaser of its obligations hereunder after all conditions
hereunder have been satisfied in accordance herewith),
Acquisition Corp. agrees to promptly reimburse the Initial
Purchaser upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Initial Purchaser) that shall have been
incurred by the Initial Purchaser in connection with the
proposed purchase and sale of the Notes. Acquisition Corp.
shall not, in any event, be liable to the Initial Purchaser for
the loss of anticipated profits from the transactions covered
by this Agreement.
7. Conditions of the Initial Purchaser's
Obligations. The obligation of the Initial Purchaser to
purchase and pay for the Notes 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 Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company, in
form and substance satisfactory to counsel for the Initial
Purchaser, to the effect that:
(i) Assuming the due authorization, execution
and delivery of the Indenture by the Company and the
Trustee, the Indenture will constitute 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, reorganization,
moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and
(ii) general principles of equity.
(ii) The Notes are in the form contemplated by
the Indenture. Assuming that the Notes have been
duly authorized, executed and delivered by the
Company and paid for by the Initial Purchaser in
accordance with the terms of this Agreement (assuming
the due authorization, execution and delivery of the
Indenture by the Trustee and due authentication and
delivery of the Notes by the Trustee in accordance
with the Indenture), the Notes will constitute the
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, 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.
(iii) When the Exchange Notes and the 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
(assuming the due authorization, execution and
delivery of the Indenture by the Trustee and due
authentication and delivery of the Exchange Notes and
the Private Exchange Notes by the Trustee in
accordance with the Indenture), the Exchange Notes
and the Private Exchange Notes will constitute the
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, 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.
(iv) Assuming the due authorization, execution
and delivery of the Registration Rights Agreement by
the Company and the Initial Purchaser, the
Registration Rights Agreement will constitute the
valid and legally binding agreement of the Company,
enforceable against the Company in accordance with
its terms, except that (A) 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
(B) any rights to indemnity or contribution
thereunder may be limited by federal and state
securities laws and public policy considerations.
(v) Assuming the due authorization, execution
and delivery of the Assumption Agreement by the
Company, the Assumption Agreement will constitute the
valid and legally binding agreement of the Company
enforceable against the Company in accordance with
its terms, except that (A) 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
(B) any rights to indemnity or contribution
thereunder may be limited by federal and state
securities laws and public policy considerations.
(vi) The Indenture, the Notes, the Exchange
Notes, the Registration Rights Agreement, the Credit
Agreement and the Merger Agreement conform in all
material respects to the descriptions thereof
contained in the Final Memorandum.
(vii) The statements in the Final Memorandum
under the caption "Certain Relationships and Related
Transactions," insofar as they are descriptions of
certain provisions of contracts or agreements, fairly
summarize such provisions in all material respects.
(viii) The execution and delivery of this
Agreement, the Indenture, the Registration Rights
Agreement, the Assumption Agreement and the Credit
Agreement and the consummation of the transactions
contemplated hereby, thereby and under the Merger
Agreement (including, without limitation, the
issuance and sale of the Notes to the Initial
Purchaser) will not conflict with or constitute or
result in a breach or a default under (or an event
that 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 Applicable
Contracts (as defined), except for any such conflict,
breach, violation, default or event that would not,
individually or in the aggregate, have a Material
Adverse Effect or (ii) (assuming compliance with all
applicable state securities or "Blue Sky" laws and
assuming the accuracy of the representations and
warranties of the Initial Purchaser in Section 8
hereof) any Applicable Laws (as defined).
"Applicable Contracts" mean those contracts set forth
on Schedule 1 to this Agreement. "Applicable Laws"
means the laws of the State of New York and the laws
of the United States of America, in each case, that,
in such counsel's experience, are normally applicable
to transactions of the type provided for herein (it
being understood that such counsel has made no
special investigation with respect to any other
laws), but excluding securities or blue sky laws of
any jurisdiction, anti-fraud laws of any
jurisdiction, rules and regulations of the National
Association of Securities Dealers, Inc. and the Trust
Indenture Act of 1939, as amended. Such counsel need
not express any opinion, however, as to whether the
execution or delivery by the Company of the Notes,
this Agreement, the Indenture, the Registration
Rights Agreement, the Credit Agreement or the
Assumption Agreement, or the performance by the
Company of its obligations thereunder or under the
Merger Agreement, will constitute a violation of or a
default under any covenant, restriction or provision
with respect to financial ratios or tests or any
aspect of the financial condition or results of
operations of the Company.
(ix) No consent, approval, authorization or
order of any Governmental Authority (as defined) is
required for the issuance and sale by the Company of
the Notes to the Initial Purchaser or the other
transactions contemplated hereby, except such as may
be required under Blue Sky laws, as to which such
counsel need express no opinion, and those that have
previously been obtained. "Governmental Authority"
means any New York or federal executive, legislative,
judicial, administrative or regulatory body with
authority to administer Applicable Laws.
(x) The Company is not, nor immediately after
the sale of the Notes to be sold hereunder and the
application of the proceeds from such sale (as
described in the Final Memorandum under the caption
"Use of Proceeds") will it be, an "investment
company" as such term is defined in the Investment
Company Act of 1940, as amended.
(xi) No registration under the Act of the Notes
is required in connection with the sale of the Notes
to the Initial Purchaser as contemplated by this
Agreement and the Final Memorandum or in connection
with the initial resale of the Notes by the Initial
Purchaser in accordance with Section 8 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 Notes
in the initial resale thereof are QIBs or are
purchasing the Notes in offshore transactions in
reliance on Regulation S, (ii) the accuracy of the
Initial Purchaser's representations in Section 8 and
those of the Company contained in paragraphs (g),
(h), (i) and (k) of Section 5 and (iii) the due
performance by the Initial Purchaser of the
agreements set forth in Section 8 hereof.
(xii) Neither the consummation of the
transactions contemplated by this Agreement nor the
sale, issuance, execution or delivery of the Notes
will violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
At the time the foregoing opinion is delivered,
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP shall
additionally state that it has participated in conferences
with officers and other representatives of the Company,
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 Memorandum 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 Memorandum
(except to the extent specified in subsection 7(a)(vi) and
(vii)) no facts have come to its attention that lead it to
believe that the Final Memorandum, 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 the light of the circumstances under
which they were made, not misleading (it being understood
that such firm need express no opinion with respect to the
financial statements and related notes thereto and the
other financial, statistical and accounting data included
in the Final Memorandum). The opinion of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP described in this Section shall
be rendered to the Initial Purchaser at the request of the
Company and shall so state therein.
References to the Final Memorandum in this
subsection (a) shall include any amendment or supplement
thereto prepared in accordance with the provisions of this
Agreement at the Closing Date.
(b) 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 ▇▇▇▇▇▇ & Whitney
LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Initial Purchaser, to the
effect that:
(i) The Company is duly incorporated, validly
existing and in good standing under the laws of
Minnesota and has the corporate power and authority
to own, lease and operate its properties and to
conduct its business as described in the Final
Memorandum.
(ii) The Company has an authorized capital
stock consisting of 25,000,000 shares of common
stock, $.01 par value; all of the outstanding shares
of capital stock of the Company have been duly
authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any
preemptive or similar rights pursuant to the
Company's restated articles of incorporation, bylaws
or Minnesota law.
(iii) The Company has the corporate power and
authority to execute, deliver and perform its
obligations under the Indenture, the Notes, the
Exchange Notes and the Private Exchange Notes; the
Indenture has been duly and validly authorized,
executed and delivered by the Company.
(iv) The Notes have each been duly and validly
authorized, executed and delivered by the Company.
(v) The Exchange Notes and the Private
Exchange Notes have been duly and validly authorized
by the Company.
(vi) The Company has the corporate power and
authority to execute, deliver and perform its
obligations under the Registration Rights Agreement;
the Registration Rights Agreement has been duly and
validly authorized, executed and delivered by the
Company.
(vii) The Company has the corporate power and
authority to execute, deliver and perform its
obligations under the Assumption Agreement; the
Assumption Agreement has been duly and validly
authorized by the Company. The Assumption Agreement
has been duly executed and delivered by the Company.
(viii) Acquisition Corp. has the corporate power
and authority to execute, deliver and perform its
obligations under this Agreement; this Agreement has
been duly and validly authorized by Acquisition Corp.
This Agreement has been duly executed and delivered
by Acquisition Corp.
(ix) The execution and delivery of this
Agreement by Acquisition Corp., and the performance
by Acquisition Corp. of its obligations hereunder do
not violate or cause a breach of the restated
articles of incorporation or bylaws of Acquisition
Corp.
(x) The execution and delivery of the
Indenture, the Registration Rights Agreement, the
Assumption Agreement and the Credit Agreement by the
Company, and the performance by the Company of its
obligations thereunder do not violate or cause a
breach of the restated articles of incorporation or
bylaws of the Company.
(c) 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
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, 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 reasonably require. In rendering
such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have received
and may rely upon such certificates and other documents
and information as it may reasonably request to pass upon
such matters.
(d) The Initial Purchaser shall have received from
Coopers & ▇▇▇▇▇▇▇ LLP, the Company's independent
accountants, a "comfort letter" or letters dated the date
hereof and the Closing Date, in form and substance
satisfactory to counsel for the Initial Purchaser.
(e) The representations and warranties of
Acquisition Corp. contained in this Agreement shall be
true and correct 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 officers made
pursuant to any certificate delivered in accordance with
the provisions hereof shall be true and correct on and as
of the date made and on and as of the Closing Date;
Acquisition Corp. shall have performed all covenants and
agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the
Closing Date; and, except as described in the Final
Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), subsequent to the date of
the most recent financial statements in such Final
Memorandum, there shall have been no event or development
that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect.
(f) The sale of the Notes hereunder shall not be
enjoined (temporarily or permanently) on the Closing Date.
(g) Subsequent to the date of the most recent
financial statements in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date
hereof), the conduct of the business and operations of the
Company shall not have been interfered with by strike,
fire, flood, hurricane, accident or other calamity
(whether or not insured) or by any court or governmental
action, order or decree, and, except as otherwise stated
therein, the properties of the Company shall not have
sustained any loss or damage (whether or not insured) as a
result of any such occurrence, except any such
interference, loss or damage that would not, individually
or in the aggregate, have a Material Adverse Effect.
(h) The Initial Purchaser shall have received a
certificate of the Company, dated the Closing Date, signed
on behalf of the Company by its Chairman of the Board,
President or any Vice President and the Chief Financial
Officer, to the effect that:
(i) The representations and warranties of
Acquisition Corp. contained in this Agreement are
true and correct as of the date hereof and as of the
Closing Date, and Acquisition Corp. has performed all
covenants and agreements and satisfied all conditions
on its 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 Memorandum (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; and
(iii) The sale of the Notes hereunder has not
been enjoined (temporarily or permanently).
(i) The Initial Purchaser shall have received a true
and correct copy of the Credit Agreement, together with
all related documents, instruments and agreements and all
schedules, exhibits, appendices and attachments thereto;
there have been no material amendments, alterations,
modifications or waivers of any of the provisions of the
Credit Agreement dated the Closing Date, and there shall
have been no material amendments, alterations,
modifications or waivers of any provisions of the Credit
Agreement; there exists as of the date hereof and on and
as of the Closing Date (after giving effect to the
transactions contemplated by this Agreement and the
application of the proceeds received by the Company from
the sale of the Notes) no condition that would constitute
a Default or an Event of Default (each as defined in the
Credit Agreement) under the Credit Agreement.
(j) The Initial Purchaser shall have received a true
and correct copy of the Merger Agreement, together with
all related documents, instruments and agreements and all
schedules, exhibits, appendices and attachments thereto;
there have been no material amendments, alterations,
modifications or waivers of any of the provisions of the
Merger Agreement dated the Closing Date.
(k) On the Closing Date, the Initial Purchaser shall
have received the Registration Rights Agreement and the
Assumption Agreement executed by the Company and such
agreements shall be in full force and effect at all times
from and after the Closing Date.
(l) The Company shall have received, as equity, at
least $21.0 million from Childs and related investors and
affiliates and the Management Investors.
(m) The certificate of merger with respect to the
Merger shall have been filed with the Secretary of State
of Minnesota and shall have become effective.
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 as they shall have
heretofore reasonably requested from the Company.
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. Acquisition
Corp. shall cause the Company to 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.
8. Offering of Notes; Restrictions on Transfer.
(a) The Initial Purchaser represents and warrants that it is a
QIB. The Initial Purchaser agrees with the Company that (i) it
has not and will not solicit offers for, or offer or sell, the
Notes 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 (ii) it has and will
solicit offers for the Notes only from, and will offer the
Notes only to (A) in the case of offers inside the United
States, persons whom the Initial Purchaser reasonably believes
to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to
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, and, in each case, in transactions
under Rule 144A and (B) in the case of offers outside the
United States, to persons other than U.S. persons ("foreign
purchasers," which term shall include dealers or other
professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than
an estate or trust)); provided, however, that, in the case of
this clause (B), in purchasing such Notes such persons are
deemed to have represented and agreed as provided under the
caption "Transfer Restrictions" contained in the Final
Memorandum.
(b) The Initial Purchaser represents and warrants
with respect to offers and sales outside the United States that
(i) it has and will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers,
sells or delivers Notes or has in its possession or distributes
any Memorandum or any such other material, in all cases at its
own expense; (ii) the Notes have not been and will not be
offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with
Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act; (iii) it has offered the
Notes and will offer and sell the Notes (A) as part of its
distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering and the Closing
Date, only in accordance with Rule 903 of Regulation S and,
accordingly, neither it nor any persons acting on its behalf
have engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the Notes,
and any such persons have complied and will comply with the
offering restrictions requirement of Regulation S; and (iv) it
agrees that, at or prior to confirmation of sales of the Notes,
it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that
purchases Notes from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Notes covered hereby have not been
registered under the United States Securities Act
of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to,
or for the account or benefit of, U.S. persons
(i) as part of the distribution of the Notes at
any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and
the closing date of the offering, except in
either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act.
Terms used above have the meaning given to them
in Regulation S."
Terms used in this Section 8 and not defined in this
Agreement have the meanings given to them in Regulation S.
9. Indemnification and Contribution. (a) Acquisi-
tion Corp. agrees to indemnify and hold harmless the Initial
Purchaser, and each person, if any, who controls the Initial
Purchaser or its affiliates within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities to which the Initial Purchaser
or such controlling person 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 Memorandum
or any amendment or supplement thereto; or
(ii) the omission or alleged omission to state, in
any Memorandum or any amendment or supplement thereto, a
material fact required to be stated therein or necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
and will reimburse, as incurred, the Initial Purchaser and each
such controlling person for any legal or other expenses
reasonably incurred by the Initial Purchaser or such
controlling person in connection with investigating, defending
against or appearing as a third-party witness in connection
with any such loss, claim, damage, liability or action;
provided, however, that Acquisition Corp. will not be liable
(i) 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 Memorandum or any amendment or supplement
thereto 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
or (ii) in any such case with respect to the Preliminary
Memorandum, to the extent that any such loss, claim, damage or
liability arises solely from the fact that the Initial
Purchaser sold Notes to a person to whom there was not sent or
given a copy of the Final Memorandum (as amended or
supplemented) at or prior to the written confirmation of such
sale if the Company shall have previously furnished copies
thereof to the Initial Purchaser in accordance with Section
5(d) hereof and the Final Memorandum (as amended and
supplemented) would have corrected any such untrue statement or
omission. This indemnity agreement will be in addition to any
liability that Acquisition Corp. may otherwise have to the
indemnified parties. Acquisition Corp. shall not be liable
under this Section 9 for any settlement of any claim or action
effected without its prior written consent, which shall not be
unreasonably withheld. The Initial Purchaser shall not,
without the prior written consent of the Company, effect any
settlement or compromise of any pending or threatened
proceeding in respect of which the Company is or could have
been a party, or indemnity could have been sought hereunder by
the Company, unless such settlement (A) includes an
unconditional written release of the Company, in form and
substance reasonably satisfactory to the Company, 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 Company.
(b) The Initial Purchaser agrees to indemnify and
hold harmless Acquisition Corp. and its directors, officers and
each person, if any, who controls Acquisition Corp. within the
meaning of Section 15 of the Act or Section 20 of the Exchange
Act against any losses, claims, damages or liabilities to which
Acquisition Corp. 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 Memorandum or any
amendment or supplement thereto, or (ii) the omission or the
alleged omission to state therein a material fact required to
be stated in any Memorandum or any amendment or supplement
thereto, or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information concerning such 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 reasonably incurred by
Acquisition Corp. 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 9 for any settlement of any claim or action
effected without its consent, which shall not be unreasonably
withheld. Acquisition Corp. shall not, 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 9 of notice of the commencement of any
action for which such indemnified party is entitled to
indemnification under this Section 9, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, 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 of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the
indemnification obligation provided in 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 and the indemnified party
shall have been advised by counsel that in such counsel's
reasonable opinion 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 9 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 9 or Acquisition Corp. in the
case of paragraph (b) of this Section 9, 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 9, 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 9 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 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
Acquisition Corp. on the one hand and the Initial Purchaser on
the other shall be deemed to be in the same proportion as the
total proceeds from the Offering (before deducting expenses)
received by the Company 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 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. Acquisition
Corp. 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 this
paragraph (d). Notwithstanding any other provision of this
paragraph (d), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this
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
contribution as the Initial Purchaser, and each director and
officer of Acquisition Corp. and each person, if any, who
controls Acquisition Corp. within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as Acquisition Corp.
10. Survival Clause. The respective
representations, warranties, agreements, covenants, indemnities
and other statements of the Company and its 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 or any of its officers or
directors, the Initial Purchaser or any controlling person
referred to in Section 9 hereof and (ii) delivery of and
payment for the Notes. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6, 9 and
15 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be
terminated in the sole discretion of the Initial Purchaser by
notice to Acquisition Corp. given prior to the Closing Date in
the event that Acquisition Corp. shall have failed, refused or
been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder
at or prior thereto or, if at or prior to the Closing Date:
(i) the Company shall have sustained any loss or
interference with respect to its business or properties
from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike,
labor dispute, slowdown or work stoppage or any legal or
governmental proceeding, which loss or interference, in
the sole judgment of the Initial Purchaser, has had or has
a Material Adverse Effect, or there shall have been, in
the sole judgment of the Initial Purchaser, any event or
development that, individually or in the aggregate, has or
would be reasonably likely to have a Material Adverse
Effect (including, without limitation, a change in control
of the Company), except in each case as described in the
Final Memorandum (exclusive of any amendment or supplement
thereto);
(ii) trading in securities of the Company or 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 Notes as
contemplated by the Final Memorandum; or
(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 organization.
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other
party except as provided in Section 10 hereof.
(c) Unless the parties hereto mutually agree
otherwise, this Agreement shall terminate automatically in the
event that the Merger is not consummated on the Closing Date,
except as provided in Section 10 hereof.
12. Information Supplied by the Initial Purchaser.
The statements set forth in the last paragraph on the front
cover page and the last two sentences of the third paragraph
under the heading "Private Placement" in the Final Memorandum
(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 2(a) and
9 hereof.
13. Notices. All communications hereunder shall be
in writing and, if sent to the Initial Purchaser, shall be
mailed or delivered to BT Alex. ▇▇▇▇▇ Incorporated, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance
Department; if sent to the Company, shall be mailed or
delivered to the Company at 1250 Northland Plaza, ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Chief
Executive Officer; with a copy to Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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; and one business day after
being timely delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the
benefit of and be binding upon the Initial Purchaser and
Acquisition Corp. 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 Acquisition
Corp. contained in Section 9 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 9 of this Agreement
shall also be for the benefit of the directors of Acquisition
Corp., its officers and any person or persons who control
Acquisition Corp. within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act. No purchaser of Notes from
the Initial Purchaser will be deemed a successor because of
such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION
OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH
HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO
ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. 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.
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 by and between Acquisition
Corp. and the Initial Purchaser.
Very truly yours,
UHS ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------
Name:
Title:
The foregoing Agreement
is hereby confirmed and accepted
as of the date first above
written.
BT ALEX. ▇▇▇▇▇ INCORPORATED
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President