EXHIBIT 1.1
THE PANTRY, INC.
$200,000,000
Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
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October 17, 1997
CIBC WOOD GUNDY SECURITIES CORP.
FIRST UNION CAPITAL MARKETS CORP.
c/o CIBC Wood Gundy Securities Corp.
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Ladies and Gentlemen:
The Pantry, Inc., a Delaware corporation (the "Company"), and each of
the Company's subsidiaries listed in Exhibit A-1 hereto (subject to the last
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sentence of Section 1 with respect to Lil' Champ (as defined below)) (each, a
"Guarantor" and, collectively, the "Guarantors" and, together with the Company,
the "Issuers") hereby confirm their agreement with you (the "Initial
Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions
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herein contained, the Company proposes to issue and sell to the Initial
Purchasers $200,000,000 aggregate principal amount of its 10 1/4% Senior
Subordinated Notes due 2007 (the "Notes"). The obligations of the Company under
the Indenture (as hereinafter defined) and the Notes will be unconditionally
guaranteed on a senior subordinated basis (the "Guarantees"), on a joint and
several basis, by each Guarantor. The Notes and the Guarantees are to be issued
pursuant to the Indenture (the "Indenture"), dated as of October 23, 1997, among
the Company, the Guarantors and United States Trust Company of New York, as
trustee (the "Trustee"). The Notes and the Guarantees are hereinafter referred
to collectively as the "Securities."
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The Notes will be offered and sold to the Initial Purchasers under the
Securities Act of 1933, as amended (together with the rules and regulations of
the Securities and Exchange Commission (the "Commission") promulgated
thereunder, the "Securities Act"), in reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum dated September 29, 1997 (the "Preliminary
Memorandum") and a final offering memorandum dated October 17, 1997 (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 Securities, the terms of the offering of the
Notes, a description of the Company and its subsidiaries and Lil' Champ Food
Stores, Inc., a Florida corporation ("Lil' Champ") and any material developments
relating to the Company and its subsidiaries and Lil' Champ occurring after the
date of the most recent historical financial statements included therein.
The Company and the Guarantors understand that the Initial Purchasers
propose to make an offering of the Notes only on the terms and in the manner set
forth in the Memorandum and Section 9 hereof as soon as the Initial Purchasers
deem advisable after this Agreement has been executed and delivered, to persons
in the United States whom the Initial Purchasers reasonably believe to be
qualified institutional buyers ("QIBs") as defined in Rule 144A under the
Securities Act, as such rule may be amended from time to time ("Rule 144A"), in
transactions under Rule 144A, and outside the United States to certain persons
in reliance on Regulation S under the Securities Act.
The Initial Purchasers and their direct and indirect transferees of
the Notes will be entitled to the benefits of a Registration Rights Agreement
substantially in the form attached hereto as Annex A among the parties hereto
(the "Registration Rights Agreement") pursuant to which the Issuers have agreed,
among other things, to file (i) a registration
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statement (the "Registration Statement") with the Commission registering the
Notes or the Exchange Notes (as defined in the Registration Rights Agreement)
under the Securities Act or (ii) a shelf registration statement pursuant to Rule
415 under the Securities Act relating to the resale of the Notes by holders
thereof or, if applicable, relating to the resale of Private Exchange Notes (as
defined in the Registration Rights Agreement) by the Initial Purchasers pursuant
to an exchange of the Notes for Private Exchange Notes.
The Securities, the Exchange Notes, the Private Exchange Notes, the
Indenture, the Registration Rights Agreement and this Agreement are herein
collectively referred to as the "Basic Documents." The Issuers propose to issue
the Securities in connection with the consummation of certain related
transaction including (i) the acquisition (the "Lil' Champ Acquisition") by the
Company of Lil' Champ and (ii) an equity investment in the Company of $32.4
million by certain existing stockholders and management of the Company (the
"Equity Investment"). In addition, the Company is (i) entering into a New
Credit Facility (as defined in the Final Memorandum) and (ii) conducting a
tender offer (the "Tender Offer") and consent solicitation (the "Consent
Solicitation") with respect to its 12% Series B Senior Notes due 2000 (the
"Senior Notes"). The Lil' Champ Acquisition, the Equity Investment, the New
Credit Facility, the Tender Offer and the Consent Solicitation are collectively
referred to herein as the "Transactions" and the stock purchase agreement
relating to the Lil' Champ Acquisition, the stock purchase agreement relating to
the Equity Investment, the New Credit Facility and the supplemental indenture
relating to the consent solicitation are collectively referred to as the
"Transaction Documents". At the time the Lil' Champ Acquisition is consummated
(the "Effective Time"), which shall occur simultaneously with the consummation
of the sale of the Securities, Lil' Champ will become a wholly owned subsidiary
of the Company and will execute and deliver this Agreement and the Guarantees
and become subject to all of the provisions of this Agreement and the Guarantees
as a Guarantor.
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2. Representations and Warranties of the Issuers. The
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Issuers, jointly and severally, represent and warrant to and agree with each
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 (as
defined in Section 3 below) 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 do not apply to statements or
omissions made in reliance upon and in conformity with information relating
to the Initial Purchasers furnished to the Company in writing by the
Initial Purchasers expressly for use in the Preliminary Memorandum, the
Final Memorandum or any amendment or supplement thereto.
(b) Each of the Company and its subsidiaries set forth in Exhibit
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A-2 hereto (the "Subsidiaries") and, to the best knowledge of the Company,
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Lil' Champ has been duly incorporated and each of the Company and the
Subsidiaries and, to the best knowledge of the Company, Lil' Champ is
validly existing in good standing as a corporation under the laws of its
jurisdiction of incorporation, with the requisite corporate power and
authority to own its properties and conduct its business as now conducted
as described in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum) and 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,
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management, business, condition (financial or other), properties, prospects
or results of operations of the Company, Lil' Champ and the Subsidiaries,
taken as a whole (any such event, a "Material Adverse Effect"); as of the
Closing Date, the Company will have the authorized, issued and outstanding
capitalization set forth in the Final Memorandum; except as set forth in
Exhibit A-2 hereto, neither the Company nor, to the best knowledge of the
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Company, Lil' Champ have any subsidiaries or own directly or indirectly any
of the capital stock or other equity or long-term debt securities of or
have any equity interest in any other person; except as set forth in the
Final Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum) all of the outstanding shares of capital
stock of the Company and the Subsidiaries and, to the best knowledge of the
Company, Lil' Champ have been duly authorized and validly issued, are fully
paid and nonassessable and were not issued in violation of any preemptive
or similar rights and the Subsidiaries and Lil' Champ Stock is owned free
and clear of all liens, encumbrances, equities and restrictions on
transferability (other than those imposed by the Securities Act and the
state securities or "Blue Sky" laws) or voting; except as set forth in the
Final Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum), all of the outstanding shares of capital
stock of the Subsidiaries are owned, directly or indirectly, by the
Company; except as set forth in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum), no
options, warrants or other rights to purchase from the Company or any
Subsidiary, or, to the best knowledge of the Company, Lil' Champ, and no
agreements or other obligations of the Company or any Subsidiary or, to the
best knowledge of the Company, Lil' Champ to issue or other rights to
convert any obligation into, or exchange any securities for, shares of
capital stock of or ownership interests in the Company or any Subsidiary
or, to the best knowledge of the Company, Lil' Champ are outstanding and no
holder of securities of the Company or any Subsidiary is entitled to have
such securities registered under the Registration Statement; and except as
set forth in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum), there is no agreement,
understanding or arrangement among the Company or any Subsidiary or, to the
best knowledge of the Company, Lil' Champ and each of their respective
stockholders or any other person relating to the ownership or disposition
of any capital stock of the Company or any Subsidiary or, to the best
knowledge of the Company, Lil' Champ or the election of directors of the
Company or any Subsidiary or, to the best knowledge of the
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Company, Lil' Champ or the governance of their respective affairs, and, if
any, such agreements, understandings and arrangements will not be breached
or violated as a result of the execution and delivery of, or the
consummation of the transactions contemplated by, this Agreement, the other
Basic Documents and the Transaction Documents.
(c) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Securities, the Exchange Notes and the Private Exchange Notes. The Notes,
the Exchange Notes and the Private Exchange Notes have each been duly and
validly authorized by the Company for issuance and, when executed by the
Company and authenticated by the Trustee in accordance with the provisions
of the Indenture and the Registration Rights Agreement and, in the case of
the Notes, delivered to and paid for by the Initial Purchasers in
accordance with the terms hereof, 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 except that the enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar
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laws now or hereafter in effect relating to or affecting creditors' rights
generally or (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought (regardless of
whether such enforcement is considered in a proceeding at law or in equity)
(collectively, the "Enforceability Exceptions"); the Guarantees endorsed on
the Notes and the guarantees to be endorsed on the Exchange Notes and the
Private Exchange Notes have each been duly and validly authorized by each
of the Guarantors and, when the Notes are executed by the Company and
authenticated by the Trustee in accordance with the provisions of the
Indenture, and delivered to and paid for by the Initial Purchasers in
accordance with the terms hereof, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of the
Guarantors, entitled to the benefits of the Indenture and enforceable
against the Guarantors in accordance with their terms except that the
enforcement thereof may be limited by the Enforceability Exceptions; the
Securities are in the form contemplated by the Indenture.
(d) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture. The Indenture has been duly and validly authorized by the
Issuers and meets the requirements for qualification under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and, when
executed and delivered by the Issuers (assuming the due authorization,
execution and delivery by the Trustee), will constitute a valid and legally
binding agreement of the Issuers, enforceable against the Issuers in
accordance with its terms except that the enforcement thereof may be
limited by the Enforceability Exceptions.
(e) Each of the Issuers has the requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized, executed
and delivered by the
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Issuers and constitutes a valid and legally binding agreement of the
Issuers, enforceable against the Issuers in accordance with its terms
except that the enforcement thereof may be limited by the Enforceability
Exceptions and except as any rights to indemnity or contribution hereunder
may be limited by federal and state securities laws and public policy
considerations.
(f) Each of the Issuers has the requisite 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 by the Issuers and, when executed and delivered
by the Issuers, will constitute a valid and legally binding agreement of
the Issuers, enforceable against the Issuers in accordance with its terms
except that the enforcement thereof may be limited by the Enforceability
Exceptions and except as any rights to indemnity or contribution hereunder
may be limited by federal and state securities laws and public policy
considerations. The Securities, the Indenture and the Registration Rights
Agreement conform in all material respects to the descriptions thereof in
the Final Memorandum (or, if the Final Memorandum is not in existence, the
most recent Preliminary Memorandum).
(g) Each of the Issuers and, to the best knowledge of the Company,
after due inquiry, Lil' Champ, to the extent a party thereto, has the
requisite corporate power and authority to execute, deliver and perform its
obligations under the Transaction Documents. The Transaction Documents
have been duly and validly authorized by each Issuer and, to the best
knowledge of the Company, after due inquiry, Lil' Champ, to the extent a
party thereto and, when executed and delivered by such Issuer, and, to the
best knowledge of the Company, after due inquiry, Lil' Champ, will
constitute a valid and legally binding agreement of such Issuer,
enforceable against the Issuers and, to the best knowledge of the
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Company, after due inquiry, Lil' Champ, to the extent a party thereto in
accordance with their terms except that the enforcement thereof may be
limited by the Enforceability Exceptions and except as any rights to
indemnity or contribution thereunder may be limited by federal and state
securities laws and public policy considerations. Each of the Transaction
Documents conforms in all material respects to the description thereof in
the Final Memorandum (or, if the Final Memorandum is not in existence, the
most recent Preliminary Memorandum).
(h) (i) The Issuers have delivered to the Initial Purchasers a true
and correct copy of each of the Transaction Documents that have been
executed and delivered prior to the date of this Agreement and each other
Transaction Document in the form substantially as it will be executed and
delivered on or prior to the Closing Date, together with all related
agreements and all schedules and exhibits thereto, and as of the date
hereof there have been no amendments, alterations, modifications or waivers
of any of the provisions of any of the Transaction Documents from the form
in which any such Transaction Document has been delivered to the Initial
Purchasers; and (ii) there exists as of the date hereof (after giving
effect to the transactions contemplated by each of the Transaction
Documents) no event or condition that would constitute a default or an
event of default (in each case as defined in each of the Transaction
Documents) under any of the Transaction Documents that would result in a
Material Adverse Effect or materially adversely affect the ability of the
Company to consummate the Transactions.
(i) Assuming the Securities are sold in the manner described in
this Agreement, no consent, approval, authorization, license,
qualification, exemption or order of any court or governmental agency or
body or third party is required for the performance of this Agreement, the
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Registration Rights Agreement, the Securities, the Indenture or any
Transaction Document by the Issuers and, to the best knowledge of the
Company, after due inquiry, Lil' Champ, or for the consummation by the
Issuers and, to the best knowledge of the Company, after due inquiry, Lil'
Champ, of any of the transactions contemplated hereby and thereby, or the
application of the proceeds of the issuance of the Securities as described
in the Final Memorandum (or, if the Final Memorandum is not in existence,
the most recent Preliminary Memorandum), except for consents the failure of
which to obtain would not, individually or in the aggregate, cause a
Material Adverse Effect and as has already been acquired or as may be
required under state securities or "Blue Sky" laws in connection with the
purchase and distribution of the Securities by the Initial Purchasers or
the Securities Act and Trust Indenture Act in the case of the Registration
Rights Agreement; all such consents, approvals, authorizations, licenses,
qualifications, exemptions and orders set forth in the Final Memorandum
(or, if the Final Memorandum is not in existence, the most recent
Preliminary Memorandum) which are required to be obtained by the Closing
Date have been or will be prior to the Closing Date obtained or made, as
the case may be, and are or will be prior to the Closing Date in full force
and effect and not the subject of any pending or, to the best knowledge of
the Issuers, and, to the best knowledge of the Company, after due inquiry,
Lil' Champ, threatened attack by appeal or direct proceeding or otherwise.
(j) None of the Company or the Subsidiaries or, to the best
knowledge of the Company, Lil' Champ, is (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, which violation would, individually or in the aggregate, have a
Material Adverse Effect, or (iii) in default (nor has any event occurred
which with notice or
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passage of time, or both, would constitute a default) in the performance or
observance of any obligation, agreement, covenant or condition contained in
this Agreement, the Registration Rights Agreement, the Securities, the
Indenture or any Transaction Document or any other contract, indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate or agreement or instrument to which it is a
party or to which it is subject, which default would, individually or in
the aggregate, have a Material Adverse Effect.
(k) The execution, delivery and performance by the Issuers of this
Agreement, the Registration Rights Agreement, the Securities, the Indenture
and the Transaction Documents and the consummation by the Issuers of the
transactions contemplated hereby and thereby and the fulfillment of the
terms hereof and thereof will not (a) violate, conflict with or constitute
or result in a breach of or a default under (or an event that, with notice
or lapse of time, or both, would constitute a breach of or a default under)
any of (i) the terms or provisions of any contract, indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate or agreement or instrument to which any of the Company
or the Subsidiaries or, to the best knowledge of the Company, Lil' Champ is
a party or to which any of their respective properties or assets are
subject, (ii) the certificate of incorporation or bylaws of any of the
Company or the Subsidiaries or, to the best knowledge of the Company, Lil'
Champ (or similar organizational document) or (iii) (assuming compliance
with all applicable state securities or "Blue Sky" laws and with respect to
the Registration Rights Agreement, the Securities Act and the Trust
Indenture Act) any statute, judgment, decree, order, rule or regulation of
any court or governmental agency or other body applicable to the Company or
the Subsidiaries or the best knowledge of the Company, Lil' Champ, or any
of their respective properties
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or assets or (b) result in the imposition of any lien upon or with respect
to any of the properties or assets now owned or hereafter acquired by the
Company or any of the Subsidiaries or to the best knowledge of the Company,
Lil' Champ, which violation, conflict, breach, default or lien would,
individually or in the aggregate, have a Material Adverse Effect.
(l) The audited consolidated financial statements of The Pantry,
Inc. and the audited financial statements of Lil' Champ Food Stores, Inc.
included in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum) present fairly the
financial position, results of operations and cash flows of the Company on
a Consolidated basis and to the best knowledge of the Company, after due
inquiry, of Lil' Champ, 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; the interim unaudited
financial statements included in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum)
present fairly the financial position, results of operations and cash flows
of the Company and, to the best knowledge of the Company after due inquiry,
Lil' Champ at the dates and for the periods to which they relate subject to
year-end audit adjustments and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis with
the audited financial statements included therein; the summary and selected
financial and statistical data included in the Final Memorandum (or, if the
Final Memorandum is not in existence, the most recent Preliminary
Memorandum) present fairly the 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; and
Deloitte & Touche LLP and Price Waterhouse LLP, each of which has examined
certain of such financial statements as set forth in their reports
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included in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum), are independent public
accounting firms as required by the Securities Act.
(m) The unaudited pro forma financial data (including the notes
thereto) included in the Final Memorandum (or, if the Final Memorandum is
not in existence, the most recent Preliminary Memorandum) (A) (except with
respect to Note (c) to Summary Unaudited Pro Forma Financial Data, Note (h)
to Unaudited Pro Forma Statement of Operations Data and Note (h) to
Supplemental Unaudited Pro Forma Statement of Operations Data, which each
includes supplemental adjustments not provided under the Securities Act)
have been prepared in accordance with applicable requirements of Regulation
S-X promulgated under the Securities Exchange Act of 1934, as amended
(together with the rules and regulations of the Commission promulgated
thereunder, the "Exchange Act") and (B) have been properly computed on the
bases described therein; and the assumptions used in the preparation of the
unaudited pro forma data included in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum) are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein.
(n) Except as described in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum),
there is not pending or, to the best knowledge of the Issuers, threatened
any action, suit, proceeding, inquiry or investigation, governmental or
otherwise, to which any of the Company or the Subsidiaries or, to the best
knowledge of the Company, Lil' Champ, is a party, or to which their
respective properties or assets are subject, before or brought by any
court, arbitrator or governmental agency or body, that, if determined
adversely to the Company or any such subsidiary or Lil' Champ would,
individually or in the aggregate,
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have a Material Adverse Effect or that seeks to restrain, enjoin, prevent
the consummation of or otherwise challenge the Transaction or the issuance
or sale of the Securities to be sold hereunder or the application of the
proceeds therefrom or the other transactions described in the Final
Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum).
(o) None of the Company or the Subsidiaries or, to the best
knowledge of the Company, Lil' Champ has, and, after giving effect to the
Transactions and the issuance and sale of the Securities, will not have,
any material 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 any
of the Company or the Subsidiaries or, to the best knowledge of the
Company, Lil' Champ makes or ever has made a contribution and in which any
employee of any of the Company or the Subsidiaries is or has ever been a
participant. With respect to such plans, the Company and the Subsidiaries
and, to the best knowledge of the Company, Lil' Champ are, and, after
giving effect to the Transaction and the issuance and sale of the
Securities, will be, in compliance in all material respects with all
provisions of ERISA.
(p) The Company and the Subsidiaries and to the best knowledge of
the Company, Lil' Champ own or possess adequate licenses or other rights to
use all patents, trademarks, service marks, trade names, copyrights and
know-how that are necessary to conduct their business as described in the
Final Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum). None of the Company or the Subsidiaries or
to the best knowledge of the Company, after due inquiry, Lil' Champ has
received any notice of infringement of or conflict with (or knows of any
such
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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) Each of the Company and the Subsidiaries and, to the best
knowledge of the Company, after due inquiry, Lil' Champ 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 Memorandum (or, if
the Final Memorandum is not in existence, the most recent Preliminary
Memorandum) ("Permits"), except where the failure to obtain such Permits
would not, individually or in the aggregate, have a Material Adverse
Effect; each of the Company and the Subsidiaries and to the best knowledge
of the Company, after due inquiry, Lil' Champ has fulfilled and performed
all of its obligations with respect to such Permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit; and none of the
Company or the Subsidiaries or to the best knowledge of the Company, after
due inquiry, Lil' Champ has received any notice of any proceeding relating
to revocation or modification of any such Permit, except as described in
the Final Memorandum (or, if the Final Memorandum is not in existence, the
most recent Preliminary Memorandum) and except where such revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect.
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(r) Subsequent to the respective dates as of which information is
given in the Final Memorandum (or, if the Final Memorandum is not in
existence, the most recent Preliminary Memorandum) and except as described
therein, (i) the Company and the Subsidiaries and to the best knowledge of
the Company, after due inquiry, Lil' Champ have not incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions, in either case whether or not in the ordinary course
of business, (ii) the Company and the Subsidiaries and to the best
knowledge of the Company, after due inquiry, Lil' Champ have not purchased
any of their respective outstanding capital stock, or declared, paid or
otherwise made any dividend or distribution of any kind on any of their
respective capital stock or otherwise (other than, with respect to any of
such Subsidiaries, the purchase of, or dividend or distribution on, Capital
Stock owned by the Company) and (iii) there shall not have been any change
in the capital stock or long-term indebtedness (other than under the
existing credit agreement) of the Company or the Subsidiaries or to the
best knowledge of the Company, after due inquiry, Lil' Champ.
(s) There are no legal or governmental proceedings, nor are there
any contracts or other documents required by the Securities Act to be
described in a prospectus that are not described in the Final Memorandum
(or, if the Final Memorandum is not in existence, the most recent
Preliminary Memorandum). Except as described in the Final Memorandum (or,
if the Final Memorandum is not in existence, the most recent Preliminary
Memorandum), none of the Company or the Subsidiaries or to the best
knowledge of the Company, after due inquiry, Lil' Champ is in default under
any of the contracts described in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum),
has received a notice or claim of any such default or has knowledge of any
breach of such contracts by the other party or parties thereto, except such
defaults or breaches
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as would not, individually or in the aggregate, have a Material Adverse
Effect.
(t) Neither the issuance or sale of the Securities will violate
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System, in each case as in effect on the Closing Date.
(u) Each of the Company and the Subsidiaries and to the best
knowledge of the Company, after due inquiry, Lil' Champ has good and
marketable title to all real property described in the Final Memorandum
(or, if the Final Memorandum is not in existence, the most recent
Preliminary Memorandum) as being owned by it and good and marketable title
to the leasehold estate in the real property described therein as being
leased by it, free and clear of all liens, charges, encumbrances or
restrictions, except, in each case, as described in the Final Memorandum
(or, if the Final Memorandum is not in existence, the most recent
Preliminary Memorandum) or such as would not, individually or in the
aggregate, have a Material Adverse Effect. All leases, contracts and
agreements, including those referred to in the Final Memorandum (or, if the
Final Memorandum is not in existence, the most recent Preliminary
Memorandum) to which the Company or Lil' Champ or any of the Subsidiaries
is a party or by which any of them is bound are valid and enforceable
against the Company or any such Subsidiary or, to the best knowledge of the
Company, after due inquiry, Lil' Champ, and are, to the best knowledge of
the Issuers, valid and enforceable against the other party or parties
thereto and are in full force and effect except where the failure to be
valid and enforceable against the other party or parties thereto or to be
in full force and effect would not have a Material Adverse Effect.
(v) Each of the Company, the Subsidiaries and to the best knowledge
of the Company, after due inquiry, Lil' Champ, has filed all necessary
federal, state and foreign
-18-
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 have paid all taxes shown as due thereon; and other
than tax deficiencies which the Company, any Subsidiary or Lil' Champ is
contesting in good faith and for which adequate reserves have been
provided, in accordance with generally accepted accounting principles,
there is no tax deficiency that has been asserted against the Company or
any Subsidiary or to the best knowledge of the Company, after due inquiry,
Lil' Champ, that would, individually or in the aggregate, have a Material
Adverse Effect.
(w) (i) Immediately after the consummation of the Transaction and
the other transactions contemplated by this Agreement, the other Basic
Documents and the Transaction Documents, the fair value and present fair
saleable value of the assets of each of the Company and the Subsidiaries
and to the best knowledge of the Company, after due inquiry, Lil' Champ,
will exceed the sum of its stated liabilities and identified contingent
liabilities; and (ii) each of the Company and the Subsidiaries and to the
best knowledge of the Company, after due inquiry, Lil' Champ, is not, nor
will it be, after giving effect to the execution, delivery and performance
of this Agreement, the other Basic Documents and the Transaction Documents,
and the consummation of the Transactions and the other 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.
(x) Except as disclosed in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum) and
except as would not, individually or in the aggregate, have a Material
Adverse Effect, (A) each of the Company and the Subsidiaries and, to the
best knowledge of the Company, after due inquiry,
-19-
Lil' Champ is in compliance with all applicable Environmental Laws, (B)
each of the Company and the Subsidiaries has made all filings and provided
all notices required under any applicable Environmental Law, and has all
permits, authorizations and approvals required under any applicable
Environmental Laws and is in compliance with their requirements, (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 best knowledge of the
Issuers, threatened against the Company or any of the Subsidiaries or to
the best knowledge of the Company, after due inquiry, Lil' Champ 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 or any of
the Subsidiaries, (E) neither the Company nor any of the Subsidiaries nor
to the best knowledge of the Company, after due inquiry, Lil' Champ has
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 or any of the Subsidiaries (or
any predecessor in interest of the Company or Subsidiary or to the best
knowledge of the Company after due inquiry, Lil' Champ 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 (iii) listed on
any comparable list maintained by any state or local governmental
authority, and (G) there are no past or present actions, events, operations
or activities which could reasonably be expected to prevent or interfere
with compliance by the Company or any Subsidiary with any applicable,
Environmental Law or to result in liability under any applicable
Environmental Law.
-20-
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any federal, state, local or
municipal statute, law, rule, regulation, ordinance, code, published policy
or rule of common law and any judicial or administrative interpretation
thereof, including without limitation any judicial or administrative order,
consent decree or judgment binding on any of the Company or the
Subsidiaries, relating to pollution or protection of the environment or
health or safety or any pollutant, contaminant, waste, chemical, material,
substance or constituent, including without limitation petroleum, including
crude oil or any component thereof, that is subject to regulation
thereunder. "Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
notices of responsibility, information requests, liens, notices of
noncompliance or violation, investigations or proceedings relating in any
way to any Environmental Law.
(y) None of the Company or the Subsidiaries is, or immediately
after the Closing Date will be, required to register as an "investment
company" or a company "controlled by" an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(z) None of the Company or the Subsidiaries or to the Company's
knowledge any of such entities' directors, officers, employees, agents or
controlling persons has taken, directly or indirectly, any action designed,
or that might reasonably be expected, to cause or result, under the
Securities Act or otherwise, in, or that has constituted, stabilization or
manipulation of the price of the Securities.
(aa) None of the Company, the Subsidiaries or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act) or, to the best knowledge of the Company, after due
inquiry, Lil' Champ or
-21-
any of its Affiliates 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 Securities Act) which is or could be
integrated with the sale of the Securities in a manner that would require
the registration under the Securities Act of the Securities or (ii) engaged
in any form of general solicitation or general advertising (as those terms
are used in Regulation D under the Securities Act) in connection with the
offering of the Securities or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act. Assuming the
accuracy of the representations and warranties of the Initial Purchasers in
Section 9 hereof, it is not necessary in connection with the offer, sale
and delivery of the Securities to the Initial Purchasers in the manner
contemplated by this Agreement to register any of the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.
(bb) No securities of any Issuer are of the same class (within the
meaning of Rule 144A under the Securities 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.
(cc) Except as set forth in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum),
there is no strike, labor dispute, slowdown or work stoppage by the
employees of the Company or any of the Subsidiaries or, to the best
knowledge of the Company, after due inquiry, Lil' Champ which is pending
or, to the best knowledge of the Company or any of the Subsidiaries,
threatened.
(dd) Each of the Company and the Subsidiaries carries insurance
(including self-insurance) in such amounts and covering such risks as in
its reasonable determination is
-22-
adequate for the conduct of its business and the value of its properties.
(ee) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which 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 assets 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.
(ff) No holder of securities of the Company or any Subsidiary 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.
(gg) The statistical and market and industry-related data included
in the Final Memorandum (or, if the Final Memorandum is not in existence,
the most recent Preliminary Memorandum) are based on or derived from
sources which the Issuers believe to be reliable and accurate or represent
the Issuers good faith estimates that are made on the basis of data derived
from such sources.
(hh) Except as stated in the Final Memorandum (or, if the Final
Memorandum is not in existence, the most recent Preliminary Memorandum),
the Company does not know of any claims for services, either in the nature
of a finder's fee or financial advisory fee, with respect to the offering
of the Securities and the transactions contemplated by the Final
Memorandum.
-23-
(ii) None of the Company, the Subsidiaries, any of their respective
Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers) has engaged in any directed selling efforts (as that
term is defined in Regulation S under the Securities Act ("Regulation S"))
with respect to the Securities and the Company, the Subsidiaries and their
respective Affiliates and any person acting on its or their behalf have
acted in accordance with the offering restrictions requirement of
Regulation S.
Any certificate signed by any officer of the Company or any Subsidiary
and delivered to any Initial Purchaser or to counsel for the Initial Purchasers
shall be deemed a joint and several representation and warranty by the Issuers
to each Initial Purchaser as to the matters covered thereby.
3. 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
agrees to issue and sell to the Initial Purchasers, and each Initial Purchaser
acting severally and not jointly agrees to purchase from the Company, the Notes
in the respective amounts set forth on Schedule 1 hereto, at 97.25% of their
----------
principal amount.
One or more certificates in definitive form for the Notes and the
related Guarantees that the Initial Purchasers have agreed to purchase
hereunder, and in such denomination or denominations and registered in such name
or names as the Initial Purchasers request upon notice to the Company at least
48 hours prior to the Closing Date (as defined) shall be delivered by or on
behalf of the Company, against payment by or on behalf of the Initial
Purchasers, of the purchase price therefor by wire transfer of immediately
available funds to the account of the Company previously designated by it in
writing. Such delivery of and payment for the Notes and the related Guarantees
shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 9:00
-24-
A.M., New York time, on October 23, 1997, or at such date as the Initial
Purchasers and the Company may agree upon, such time and date of delivery
against payment being herein referred to as the "Closing Date." The Company will
make such certificate or certificates for the Notes available for checking and
packaging by the Initial Purchasers at the offices in New York, New York of CIBC
Wood Gundy Securities Corp. at least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchasers. The Initial
----------------------------------
Purchasers propose to make an offering of the Securities 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 Purchasers is
advisable.
5. Certain Covenants. The Issuers jointly and severally
-----------------
covenant and agree with the Initial Purchasers that:
(i) The Issuers will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers shall not 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 Purchasers shall not have given their consent
(which consent shall not be unreasonably withheld). The Issuers will
promptly, upon the reasonable request of the Initial Purchasers or counsel
for the Initial Purchasers, make any amendments or supplements to the
Preliminary Memorandum or the Final Memorandum that may be necessary in
connection with the resale of the Securities by the Initial Purchasers.
(ii) The Issuers will cooperate with the Initial Purchasers 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 Purchasers may designate and will continue such qualifications in
effect for as long as may be necessary to complete the resale of the
Securities by the Initial
-25-
Purchasers; provided, however, that in connection therewith none of the
-------- -------
Issuers shall be required to qualify as a foreign corporation or to execute
a general consent to service of process in any jurisdiction or to take any
other action that would subject it to general service of process or to
taxation in excess of a nominal amount in respect of doing business in any
jurisdiction in which it is not otherwise subject.
(iii) If, at any time prior to the completion of the resale by the
Initial Purchasers of the Notes or the Private Exchange Notes, but in no
event longer than one year after the date of the Final Memorandum any event
shall occur as a result of which it is necessary, in the opinion of counsel
for the Initial Purchasers, to amend or supplement the Final Memorandum in
order to make such Final Memorandum not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if
for any other reason it shall be necessary to amend or supplement the Final
Memorandum in order to comply with applicable laws, rules or regulations,
the Issuers shall (subject to Section 5(i)) forthwith amend or supplement
such Final Memorandum at their own expense so that, as so amended or
supplemented, such Final Memorandum will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the
time it is delivered to a purchaser, not misleading and will comply with
applicable laws, rules or regulations.
(iv) The Issuers will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of each
Preliminary Memorandum or Final Memorandum or any amendment or supplement
thereto as the Initial Purchasers may reasonably request.
(v) None of the Issuers or any of their respective Affiliates will
sell, offer for sale or solicit offers to
-26-
buy or otherwise negotiate in respect of any "security" (as defined in the
Securities Act) which could be integrated with the sale of the Securities
in a manner which would require the registration under the Securities Act
of the Securities.
(vi) (a) For so long as any of the Securities remain outstanding,
the Company will furnish to the Initial Purchasers as soon as available, a
copy of each report or other communication (financial or otherwise) of the
Company mailed to the Trustee or holders of the Securities or stockholders
or filed with the Commission or any national securities exchange on which
any class of securities of the Company may be listed, and (b) for a period
of five years from the Closing Date from time to time the Company will
furnish to the Initial Purchasers such other information concerning the
Issuers as the Initial Purchasers may reasonably request.
(vii) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Memorandum.
(viii) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared by or are available
to the Company, a copy of any unaudited interim consolidated financial
statements of the Company and the Subsidiaries, for any period subsequent
to the period covered by the most recent financial statements appearing in
the Final Memorandum.
(ix) The Issuers will not, and will not permit any of their
Subsidiaries to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities
Act) in connection with the offering of the Securities or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
-27-
(x) For so long as any of the Securities remain outstanding, the
Company will make available at its expense, upon request, to any holder of
Securities and any prospective purchasers thereof the information specified
in Rule 144A(d)(4) under the Securities Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
(xi) The Issuers will use their best efforts to (i) permit the
Securities to be designated PORTAL securities in accordance with the rules
and regulations adopted by the National Association of Securities Dealers,
Inc. (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
The Depository Trust Company.
(xii) In connection with Securities offered and sold in an
offshore transaction (as defined in Regulation S), the Issuers will not
register any transfer of such Securities 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 Securities in the
form of definitive securities.
(xiii) If this Agreement shall be terminated by the Initial
Purchasers because of any failure or refusal on the part of the Issuers to
comply with the terms or fulfill any of the conditions of this Agreement
other than pursuant to Section 11(a) hereof (ii) through (iv), the Issuers,
on a joint and several basis, agree to reimburse the Initial Purchasers for
all reasonable out-of-pocket expenses (including fees and expenses of
counsel for the Initial Purchasers) incurred by the Initial Purchasers in
connection herewith, but in no event will the Issuers be liable to the
Initial Purchasers for damages on account of loss of anticipated profits
from the sale of the Securities.
-28-
(xiv) The Issuers will use their reasonable best efforts to do and
perform all things required to be done and performed by them under this
Agreement and the other Basic Documents prior to or after the Closing Date
and to satisfy all conditions precedent on their part to the obligations of
the Initial Purchasers to purchase and accept delivery of the Securities.
6. Expenses. Notwithstanding any termination of this
--------
Agreement (pursuant to Section 11 or otherwise), the Issuers jointly and
severally agree to pay the following costs and expenses and all other costs and
expenses incident to the performance by the Issuers of their obligations
hereunder: (i) the printing, typing, reproduction, of this Agreement and of the
other Basic Documents, any amendment or supplement to or modification of any of
the foregoing and any and all other documents furnished pursuant hereto or
thereto or in connection herewith or therewith; (ii) the printing or
reproduction of each Preliminary Memorandum, the Final Memorandum and each
amendment or supplement to any of them; (iii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of each Preliminary Memorandum, the Final Memorandum
and all amendments or supplements to any of them as may be reasonably requested
for use in connection with the offering and sale of the Securities; (iv) the
printing, authentication, issuance and delivery of certificates for the
Securities, including any stamp taxes in connection with the original issuance
and sale of the Securities and trustees' fees; (v) the reproduction and delivery
of this Agreement, the preliminary and supplemental "Blue Sky" memoranda and all
other agreements or documents reproduced and delivered in connection with the
offering of the Securities; (vi) the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
several states (including filing fees and the reasonable fees, expenses and
disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial Purchasers,
relating to such registration and qualification); (vii) the filing fees in
connection with any filings required to be made with the NASD;
-29-
(viii) expenses in connection with any meetings with prospective investors in
the Securities; (ix) the fees and expenses of the Company's accountants and the
fees and expenses of counsel (including local and special counsel) for the
Issuers; (x) fees and expenses of the Trustee including fees and expenses of its
counsel; (xi) all expenses and listing fees incurred in connection with the
application for quotation of the Securities on the PORTAL Market; and (xii) any
fees charged by investment rating agencies for the rating of the Securities. The
Initial Purchasers will pay all of their own costs and expenses, including fees
of counsel other than as provided in clauses (vi) and (viii).
7. Conditions of the Initial Purchasers' Obligations. The
-------------------------------------------------
obligation of each Initial Purchaser to purchase and pay for the Securities is
subject to the accuracy of the representations and warranties contained herein,
to the performance by the Issuers of their respective covenants and agreements
hereunder and to the following additional conditions unless waived in writing by
the Initial Purchasers:
(i) The Initial Purchasers shall have received an opinion of
counsel to the Issuers in form and substance satisfactory to the Initial
Purchasers and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial Purchasers,
dated the Closing Date, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇. In rendering such opinion,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have received and may rely upon such certificates
and other documents and information, including one or more opinions of
local counsel reasonably acceptable to the Initial Purchasers and ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial Purchasers, as they may reasonably
request to pass upon such matters. In addition, the Initial Purchasers
shall have received a letter or letters permitting them to rely on any
opinions rendered by counsel to the Issuers in connection with the
Transactions.
(ii) The Initial Purchasers shall have received an opinion, dated
the Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
-30-
▇▇▇▇▇▇▇, counsel to the Initial Purchasers, with respect to the sufficiency
of certain legal matters relating to this Agreement and such other related
matters as the Initial Purchasers may require. In rendering such opinion,
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have received and may rely upon such
certificates and other documents and information as they may reasonably
request to pass upon such matters. In addition, in rendering their opinion,
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ may state that their opinion is limited to matters
of New York, Delaware corporate and federal law.
(iii) The Initial Purchasers shall have received from independent
public accountants for the Issuers, "comfort" letters dated the date hereof
and the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial
Purchasers.
(iv) The representations and warranties of the Issuers contained
in this Agreement shall be true and correct on and as of the Closing Date;
the Issuers shall have complied in all material respects with all
agreements and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Date.
(v) There shall not have been any change in the capital stock of
the Company or the Subsidiaries or any material increase in the
consolidated short-term or long-term debt of the Company or the
Subsidiaries from that set forth or contemplated in the Final Memorandum
(other than additional borrowings under existing credit facilities) and the
Company and the Subsidiaries shall not have any liabilities or obligations,
contingent or otherwise (whether or not in the ordinary course of
business), that are material to the Company and the Subsidiaries, taken as
a whole, other than those reflected in the Final Memorandum.
-31-
(vi) None of the issuance and sale of the Securities pursuant to
this Agreement or any of the transactions contemplated by any of the other
Basic Documents or the Transaction Documents shall be enjoined (temporarily
or permanently) and no restraining order or other injunctive order shall
have been issued; and there shall not have been any legal action, order,
decree or other administrative proceeding instituted or threatened against
any of the Issuers or against the Initial Purchasers relating to the
issuance of the Securities or the Initial Purchasers' activities in
connection therewith or any other transactions contemplated by this
Agreement or the Final Memorandum, the other Basic Documents or the
Transaction Documents.
(vii) Subsequent to the date of this Agreement, and since the date
of the most recent financial statements in the Final Memorandum (exclusive
of any amendment or supplement thereto after the date thereof), there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting the general affairs, management,
business, condition (financial or other), properties, prospects or results
of operations of the Company and the Subsidiaries, taken as a whole, or
Lil' Champ not contemplated by the Final Memorandum that, in the opinion of
the Initial Purchasers, would materially adversely affect the market for
the Securities, or (ii) any event or development relating to or involving
any of the Company or the Subsidiaries or Lil' Champ or any of the officers
or directors of the Company or the Subsidiaries or Lil' Champ that makes
any statement made in the Final Memorandum untrue or that, in the opinion
of the Issuers and their counsel or the Initial Purchasers and their
counsel, requires the making of any addition to or change in the Final
Memorandum in order to state a material fact required by any applicable
law, rule or regulation to be stated therein or necessary in order to make
the statements made therein not misleading.
-32-
(viii) The Initial Purchasers shall have received certificates,
dated the Closing Date and signed by the chief executive officer and the
chief financial officer of each Issuer, to the effect that:
a. All of the representations and warranties of the Issuers set
forth in this Agreement are true and correct as if made on and as
of the Closing Date and the Issuers have complied in all material
respects with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the
Closing Date.
b. The issuance and sale of the Securities pursuant to this
Agreement or the Final Memorandum and the consummation of the
transactions contemplated by the Transaction Documents have not
been enjoined (temporarily or permanently) and no restraining
order or other injunctive order has been issued and there has not
been any legal action, order, decree or other administrative
proceeding instituted or to such officers' knowledge threatened
against any of the Issuers relating to the issuance of the
Securities or the Initial Purchasers' activities in connection
therewith or in connection with any other transactions
contemplated by this Agreement or the Final Memorandum, the other
Basic Documents or the Transaction Documents.
c. Subsequent to the date of this Agreement and since the date of
the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), there has not occurred (i) any change, or any
development involving a prospective change, in or affecting the
general affairs, management, business, condition (financial or
other), properties, prospects or
-33-
results of operations of the Company, the Subsidiaries and Lil'
Champ, taken as a whole, not contemplated by the Final Memorandum
that would materially adversely affect the market for the
Securities, or (ii) any event or development relating to or
involving any of the Company or the Subsidiaries, or Lil' Champ,
or any of the respective officers or directors of the Company or
the Subsidiaries, or Lil' Champ, that makes any statement made in
the Final Memorandum untrue or that requires the making of any
addition to or change in the Final Memorandum in order to state a
material fact required by any applicable law, rule or regulation
to be stated therein or necessary in order to make the statements
made therein not misleading.
d. There has not been any change in the capital stock of the Company
or the Subsidiaries, or Lil' Champ, nor any material increase in
the consolidated short-term or long-term debt of the Company or
Lil' Champ, from that set forth or contemplated in the Final
Memorandum (other than borrowings under existing credit
facilities) and the Company and the Subsidiaries and Lil' Champ
have no liabilities or obligations, contingent or otherwise
(whether or not in the ordinary course of business), that are
material to the Company, the Subsidiaries and Lil' Champ, taken
as a whole, other than those reflected in the Final Memorandum.
e. At the Closing Date and after giving effect to the consummation
of the transactions contemplated by this Agreement, the other
Basic Documents and the Transaction Documents, there exists no
Default or Event of Default (as defined in the Indenture).
-34-
(ix) Each of the Transaction Documents and each other agreement or
instrument executed in connection with the Transactions shall be reasonably
satisfactory in form and substance to the Initial Purchasers and shall have
been executed and delivered by all the respective parties thereto and shall
be in full force and effect, and there shall have been no material
amendments, alterations, modifications or waivers of any provision thereof
since the date of this Agreement. On the Closing Date, the New Credit
Facility shall provide for (i) a revolving credit facility of not less than
$45 million (with a $20 million sublimit for letters of credit), all of
which shall be available on the Closing Date, and (ii) an acquisition
facility of not less than $30 million, all of which shall be available to
---
the Company on the Closing Date. The Lil' Champ Acquisition, the Equity
Investment, the Tender Offer and the Consent Solicitation shall each have
been consummated on or prior to the Closing Date.
(x) All proceedings taken in connection with the issuance of the
Securities and the transactions contemplated by this Agreement, the other
Basic Documents and the Transaction Documents and all documents and papers
relating thereto shall be reasonably satisfactory to the Initial Purchasers
and counsel to the Initial Purchasers. The Initial Purchasers and counsel
to the Initial Purchasers shall have received copies of such papers and
documents as they may reasonably request in connection therewith, all in
form and substance reasonably satisfactory to them.
(xi) The Company shall apply the proceeds necessary from the
issuance and sale of the Notes, together with cash on hand and the proceeds
of the Equity Investment, as described under "Use of Proceeds" in the Final
Memorandum.
(xii) There shall not have been any announcement by any
"nationally recognized statistical rating organization," as defined for
purposes of Rule 436(g)
-35-
under the Securities Act, that (A) it is
downgrading its rating assigned to any debt securities of the Company, or
(B) it is reviewing its rating assigned to any debt securities of the
Company with a view to possible downgrading, or with negative implications,
or direction not determined.
(xiii) On or before the Closing Date, the Initial Purchasers shall
have received the Registration Rights Agreement executed by the Company and
such agreement shall be in full force and effect at all times from and
after the Closing Date.
(xiv) The Issuers shall have furnished or caused to be furnished
to the Initial Purchasers such further certificates and documents as the
Initial Purchasers shall have reasonably requested.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory to the Initial Purchasers and
counsel to the Initial Purchasers. The Issuers shall furnish to the Initial
Purchasers such conformed copies of such opinions, certificates, letters,
schedules, documents and instruments in such quantities as the Initial
Purchasers shall reasonably request.
8. Indemnification and Contribution. (a) Each Issuer
--------------------------------
jointly and severally agrees to indemnify and hold harmless the Initial
Purchasers, each director, officer, employee or agent of any Initial Purchaser
and each person, if any, who controls any Initial Purchaser within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, against
any losses, claims, damages,
-36-
liabilities or expenses to which such Initial Purchaser or such director,
officer, employee, agent or controlling person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as any such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) arise
out of or are based upon:
(i) (A) any untrue statement or alleged untrue statement of any
material fact contained in any Preliminary Memorandum or the Final
Memorandum or any amendment or supplement thereto or (B) the breach of any
representation and warranty of the Issuers made by the Issuers in this
Agreement; or
(ii) the omission or alleged omission to state, in any Preliminary
Memorandum or the Final 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
Purchasers and each such director, officer, employee, agent or controlling
person for any reasonable legal or other out of pocket expenses reasonably
incurred by the Initial Purchasers or such director, officer, employee,
agent or controlling person in connection with investigating, defending
against or appearing as a third-party witness in connection with any such
loss, claim, damage, liability, expense or action; provided, however, that
-------- -------
none of the Issuers will be liable in any such case to an Initial Purchaser
or any director, officer, employee, agent or controlling person of such
Initial Purchaser to the extent that any such loss, claim, damages or
liability, expense or action arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Memorandum or the Final Memorandum or any amendment or
supplement thereto, in reliance upon and in conformity with written
information furnished to the Issuers by or on behalf of Initial Purchasers
specifically for use therein; and provided, further, that none of the
-------- -------
Issuers will be liable to any Initial Purchaser or any director, officer,
employee, agent or any person controlling any Initial Purchaser with
respect to any such
-37-
untrue statement or omission made in any Preliminary Memorandum that is
corrected in the Final Memorandum (or any amendment or supplement thereto)
if the person asserting any such loss, claim, damage, expense or liability
purchased Securities from an Initial Purchaser in reliance upon the
Preliminary Memorandum but was not sent or given a copy of the Final
Memorandum (as amended or supplemented) that was made available by the
Issuers to such Initial Purchaser at or prior to the written confirmation
of the sale of the Securities to such person in any case where such
delivery of such Final Memorandum (as so amended or supplemented) is
required by the Securities Act, unless such failure to deliver such Final
Memorandum (as amended or supplemented) was a result of noncompliance by
the Issuers with Section 5(iv) of this Agreement. This indemnity agreement
will be in addition to any liability that the Issuers may otherwise have to
the indemnified parties. The Issuers further agree that the
indemnification, contribution and reimbursement commitments set forth in
this Section 8 shall apply whether or not any Initial Purchaser is a formal
party to any such lawsuits, claims or other proceedings. None of the
Issuers will without the prior written consent of the Initial Purchasers,
settle or compromise or consent to the entry of any judgment in any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification by the Initial Purchasers may be sought hereunder (whether
or not the Initial Purchasers or any person who controls any Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Initial Purchasers and each such director,
officer, employee, agent or controlling person from all liability arising
out of such claim, action, suit or proceeding.
(b) The Initial Purchasers severally and not jointly will indemnify
and hold harmless the Issuers, their respective
-38-
directors, officers, employees and agents and each person, if any, who controls
any of the Issuers within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any losses, claims, damages, liabilities
or expenses to which any of the Issuers or any such director, officer, employee,
agent or controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Preliminary Memorandum or the Final Memorandum or any amendment or
supplement thereto, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement was made in reliance upon and
in conformity with written information furnished to any of the Issuers by or on
behalf of such Initial Purchaser specifically for use therein. This indemnity
agreement will be in addition to any liability that the Initial Purchasers may
otherwise have to the indemnified parties.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability that it may have to any indemnified party except to the extent that
such omission results in the forfeiture by the indemnifying party of substantial
rights and defenses. In case any such action is brought against any indemnified
party, and such indemnified party 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 the named
-------- -------
parties in any such action (including any impleaded parties) include both the
indemnified party and the indemnifying party and the
-39-
indemnified party shall have reasonably concluded 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 any such indemnifying party,
then the indemnifying parties 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 8 for any legal or other expenses, other
than reasonable out-of-pocket costs of investigation, 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,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions); (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying parties; or (iii) the
indemnifying party shall have failed promptly to assume the defense or retain
counsel reasonably satisfactory to the indemnified party. The indemnifying
parties will not be liable under this Section 8 for the costs and expenses of
any settlement of such action effected by such indemnified party without the
consent of the indemnifying party (which consent shall not be unreasonably
withheld).
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this
-40-
Section 8 is unavailable or insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages, expenses 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, expenses 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,
expenses or liabilities (or actions in respect thereof). The relative benefits
received by the Issuers on the one hand and the Initial Purchasers on the other
shall be deemed to be in the same proportion as the total proceeds from the
offering of the Securities (before deducting expenses) received by the Issuers
bear to the total discounts and commissions received by the Initial Purchasers.
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 Issuers on the one hand or the Initial Purchasers on
the other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The amount paid or
payable by a party as a result of the losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
incurred by such party in connection with investigating or defending any such
claim. The Issuers and the Initial Purchasers agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation (even if the
-41-
Issuers on the one hand and the Initial Purchasers on the other hand were
treated as one entity for such purpose) 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), the Initial Purchasers shall not be obligated to make
contributions hereunder that in the aggregate exceed the total discounts and
commissions received by the Initial Purchasers under this Agreement, less the
aggregate amount of any damages that the Initial Purchasers have otherwise been
required to pay by reason of the untrue or alleged untrue statements, and no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each director, officer, employee or agent of and each person, if
any, who controls any Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Initial Purchaser, and each director, officer, employee and
agent of any of the Issuers and each person, if any, who controls any of the
Issuers within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the Issuers.
(e) Notwithstanding anything to the contrary in this Section 8, the
indemnification and contribution provisions of the Registration Rights Agreement
shall govern any claim with respect thereto.
9. Offering of Securities; Restrictions on Transfer. (a)
------------------------------------------------
Each Initial Purchaser represents and warrants as to itself only that it is a
QIB. Each Initial Purchaser agrees with the Issuers as to itself only that (i)
it has not solicited 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 Securities Act) or in any manner
involving a public offering
-42-
within the meaning of Section 4(2) of the Securities Act; and (ii) it has and
will solicit offers for the Securities only from, and will offer the Securities
only to, (A) in the case of offers inside the United States, persons whom such
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 such 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 Securities such persons are deemed to have represented and
agreed as provided under the caption "Notice to Investors" contained in the
Final Memorandum (or, if the Final Memorandum is not in existence, the most
recent Preliminary Memorandum.
(b) Each of the Initial Purchasers represents and warrants (as to
itself only) 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 Securities or has
in its possession or distributes any Memorandum or any such other material, in
all cases at its own expense; (ii) the Securities 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 Securities Act
or pursuant to an exemption from the registration requirements of the Securities
Act; (iii) it has offered the Securities and will offer and sell the Securities
(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
-43-
acting on its behalf have engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the Securities, 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 Securities, it will have sent to each distributor,
dealer or person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the restricted period a confirmation or
notice to substantially the following effect:
"The securities 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 securities 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 9 and not defined in this Agreement have the meanings
given to them in Regulation S.
10. Survival Clause. The respective representations,
---------------
warranties, agreements, covenants, indemnities and other statements of the
Issuers, their respective officers and the Initial Purchasers set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Issuers, any of their respective
officers or directors, the Initial Purchasers or any controlling person referred
to in Section 8 hereof and (ii) delivery of, payment for or disposition of the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall
-44-
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 Purchasers by notice to the Issuers given in
the event that the Issuers shall have failed, refused or been unable to satisfy
all conditions on their part to be performed or satisfied hereunder on or prior
to the Closing Date or if at or prior to the Closing Date:
(i) any of the Company or the Subsidiaries or Lil' Champ shall have
sustained any loss or interference with respect to their respective
businesses or properties from fire, flood, hurricane, earthquake, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, which loss or
interference, in the sole judgment of the Initial Purchasers, has had or
has a material adverse effect on the general affairs, management, business,
condition (financial or other), properties, prospects or results of
operations of the Company and the Subsidiaries and Lil' Champ, taken as a
whole, or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company or any
Subsidiary), in the general affairs, management, business, condition
(financial or other), properties, prospects or results of operations of the
Company and the Subsidiaries, taken as a whole, except as described in or
contemplated by the Final Memorandum (exclusive of any amendment or
supplement thereto);
(ii) trading in securities of the Company or any Subsidiary or in
securities generally on the New York Stock Exchange, the 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;
-45-
(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, (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 that, in the case of (A), (B) or (C) above, in the sole
judgment of the Initial Purchasers, makes it impracticable or inadvisable
to proceed with the delivery of the Securities as contemplated by the Final
Memorandum, as amended as of the date hereof; or
(v) any securities of the Company or any of the Subsidiaries 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.
12. Notices. All communications hereunder shall be in
-------
writing and, if sent to the Initial Purchasers, shall be hand delivered, mailed
by first-class mail, couriered by next-day air courier or telecopied and
confirmed in writing to CIBC Wood Gundy Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department,
and with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq. If sent to any of the Issuers, shall be
mailed, delivered or telecopied and confirmed in writing, to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and with a
copy to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
-46-
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 guaranteeing overnight
delivery; and when receipt is acknowledged by the addressee, if telecopied.
13. Successors. This Agreement shall inure to the benefit of
----------
and be binding upon the Initial Purchasers and each of the Issuers 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 Issuers contained in Section 8 of this Agreement shall
also be for the benefit of the directors, officers, employees and agents and any
person or persons who control the Initial Purchasers within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchasers contained in Section 8 of this Agreement
shall also be for the benefit of the directors, officers, employees and agents
and of the Issuers and any person or persons who control any Issuer within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
No purchaser of Securities from any Initial Purchaser will be deemed a successor
or assign because of such purchase.
14. No Waiver; Modifications in Writing. No failure or delay
-----------------------------------
on the part of any Issuer or the Initial Purchasers in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are
-47-
cumulative and are not exclusive of any remedies that may be available to any
Issuer or the Initial Purchasers at law or in equity or otherwise. No waiver of
or consent to any departure by any Issuer or the Initial Purchasers from any
provision of this Agreement shall be effective unless signed in writing by the
party entitled to the benefit thereof, provided that notice of any such waiver
--------
shall be given to each party hereto as set forth below. Except as otherwise
provided herein, no amendment, modification or termination of any provision of
this Agreement shall be effective unless signed in writing by or on behalf of
each of the Issuers and the Initial Purchasers. Any amendment, supplement or
modification of or to any provision of this Agreement, any waiver of any
provision of this Agreement, and any consent to any departure by the Issuers or
the Initial Purchasers from the terms of any provision of this Agreement shall
be effective only in the specific instance and for the specific purpose for
which made or given. Except where notice is specifically required by this
Agreement, no notice to or demand on the Issuers in any case shall entitle the
Issuers to any other or further notice or demand in similar or other
circumstances.
15. Information Supplied by the Initial Purchaser. The
---------------------------------------------
statements set forth in the last two sentences of the third paragraph, and the
third sentence of the fifth paragraph and the last three paragraphs, in each
case under the heading "Plan of Distribution" in the Final Memorandum (to the
extent such statements relate to the Initial Purchasers) constitute the only
information furnished by the Initial Purchasers to the Issuers for purposes of
Section 8 hereof.
16. Entire Agreement. This Agreement constitutes the entire
----------------
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
--------------
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH
-48-
HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS
OF LAW.
18. 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.
19. Joint and Several Obligations. All of the obligations of
-----------------------------
the Issuers hereunder shall be joint and several obligations of each of them.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this Agreement shall constitute a binding agreement among the Company,
Sandhills, Inc. and, at the Effective Time, Lil' Champ, and the Initial
Purchasers.
Very truly yours,
THE PANTRY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President & CEO
Sandhills, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Lil' Champ Food Stores, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive V.P. & Assistant
Secretary
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
CIBC WOOD GUNDY SECURITIES CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
By:
Name:
Title:
FIRST UNION CAPITAL MARKETS CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Director
Exhibit A-1
-----------
Guarantors
----------
Sandhills, Inc.
Lil' Champ Food Stores, Inc.
-1-
Exhibit A-2
-----------
Subsidiaries
------------
Sandhills, Inc.
TC Capital Management, Inc.
Pantry Properties, Inc.
PH Holdings, Inc.
1
Schedule 1
----------
CIBC Wood Gundy Securities Corp. $140,000,000
First Union Capital Markets Corp. 60,000,000
------------
============
Total.......................................................... $200,000,000
============