EXHIBIT 4.14
ACTIVANT SOLUTIONS INC.
$145,000,000
Floating Rate Senior Notes due 2010
PURCHASE AGREEMENT
October 6, 2005
DEUTSCHE BANK SECURITIES INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
c/o Deutsche Bank Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Activant Solutions Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell (the "Offering") $145,000,000 aggregate principal amount of the
Company's Floating Rate Senior Notes due 2010 (the "Notes"). The Notes will be
issued pursuant to an indenture dated March 30, 2005, including any subsequently
executed supplemental indenture (the "Indenture"), between the Company, the
guarantors named therein and ▇▇▇▇▇ Fargo Bank, N.A., as trustee (the "Trustee").
The Notes will initially be guaranteed on an unsecured senior basis (the
"Guarantees," and together with the Notes, the "Securities") by each of the
Company's direct and indirect subsidiaries (the "Subsidiaries") identified on
Schedule II hereto (collectively, the "Guarantors," and together with the
Company, the "Issuers". The Issuers hereby confirm their agreement with Deutsche
Bank Securities Inc. and ▇.▇. ▇▇▇▇▇▇ Securities Inc. (each an "Initial
Purchaser", and together the "Initial Purchasers") concerning the purchase of
the Securities from the Issuers by the Initial Purchasers.
The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon exemptions therefrom. The Company has
prepared a preliminary offering memorandum dated September 26, 2005 (the
"Preliminary Offering Memorandum") and will prepare a final offering memorandum
dated the date hereof (the "Final Offering Memorandum") setting forth
information concerning the Company, the Guarantors and the Securities. Copies of
the Preliminary Offering Memorandum have been, and copies of the Final Offering
Memorandum will be, delivered by the Issuers to the Initial Purchasers pursuant
to the terms of this Agreement. Any references herein to the Preliminary
Offering Memorandum and the Final Offering Memorandum shall be deemed to include
all amendments and supplements thereto and
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any documents incorporated by reference therein, unless otherwise noted. The
Issuers hereby confirm that they have authorized the use of the Preliminary
Offering Memorandum and the Final Offering Memorandum in connection with the
offering and resale of the Securities by the Initial Purchasers in accordance
with Section 2.
Holders of the Notes (including the Initial Purchasers and
their direct and indirect transferees) will be entitled to the benefits of an
Exchange and Registration Rights Agreement substantially in the form attached
hereto as Annex A (the "Registration Rights Agreement"), pursuant to which the
Company and the Guarantors will agree to file with the Securities and Exchange
Commission (the "Commission") (i) a registration statement under the Securities
Act (the "Exchange Offer Registration Statement") registering an issue of senior
notes of the Company (the "Exchange Notes") and guarantees of the Guarantors
(together with the Exchange Notes, the "Exchange Securities") which are
identical in all material respects to the Notes and the Guarantees, respectively
(except that the Exchange Securities will not contain terms with respect to
transfer restrictions), and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement").
Prior to the Offering,
(i) the Company acquired (the "Acquisition") all of the
outstanding capital stock of Prophet 21, Inc.
("P-21") pursuant to that certain Agreement and Plan
of Merger Agreement dated August 15, 2005 (the
"Acquisition Agreement"), between P-21, the Company,
P21 Merger Corporation and, for certain limited
purposes, ▇▇▇▇▇ ▇▇▇▇▇▇▇ Equity Partners, Inc.;
(ii) the Company entered into that certain Senior Bridge
Loan Agreement dated as of September 13, 2005, among
Activant Solutions Holdings, Inc., a Delaware
corporation, as parent guarantor ("Holdings"), the
Company, Deutsche Bank AG Cayman Islands Branch and
JPMorgan Chase Bank, N.A., as initial lenders, the
other lenders, the Initial Purchasers as joint lead
arrangers and joint book runners, and Deutsche Bank
AG Cayman Islands Branch, as administrative agent
(the "Activant Bridge Loan");
(iii) Holdings entered into that certain Senior Bridge Loan
Agreement dated as of September 13, 2005, among
Holdings, Deutsche Bank AG Cayman Islands Branch and
JPMorgan Chase Bank, N.A., as initial lenders, the
other lenders, Deutsche Bank Securities Inc. and ▇.▇.
▇▇▇▇▇▇ Securities Inc. as joint lead arrangers and
joint book runners, and Deutsche Bank AG Cayman
Islands Branch, as administrative agent (the
"Holdings Bridge Loan"); and
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(iv) the Company entered into that certain Fourth Amended
and Restated Credit Agreement (the "Credit Agreement
Amendment"), dated as of September 13, 2005, among
the Company as the Borrower, Holdings, the several
banks and other financial institutions from time to
time parties thereto, JPMorgan Chase Bank, N.A., as
administrative agent, and Deutsche Bank Securities
Inc. and ▇.▇. ▇▇▇▇▇▇ Securities Inc. as joint lead
arrangers and joint bookrunners (the "Credit
Facility").
The proceeds of the Offering will be used to repay the
Activant Bridge Loan which was used to fund a portion of the purchase price
necessary to purchase all of the outstanding capital stock of P-21 and pay
transaction fees and expenses related to the Offering.
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Final Offering Memorandum.
1. Representations, Warranties and Agreements of the Issuers.
The Issuers represent and warrant, jointly and severally, to, and agree with,
the Initial Purchasers on the date hereof and the Closing Date (with respect to
those made at the Closing Date, after giving effect to the transactions
contemplated by this Agreement) that:
(a) The Preliminary Offering Memorandum, as of its date did
not, and the Final Offering Memorandum, as of its date and as of the
Closing Date (as defined in Section 3), did not (or will not) contain
any 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 under which they were made, not misleading; provided,
however, that the Issuers make no representation or warranty as to
information contained in or omitted from the Preliminary Offering
Memorandum or the Final Offering Memorandum in reliance upon and in
conformity with written information relating to the Initial Purchasers
furnished to the Issuers by or on behalf of the Initial Purchasers
specifically for use therein (the "Initial Purchasers' Information").
The parties hereto acknowledge and agree that, for all purposes of this
Agreement, the Initial Purchasers' Information consists solely of the
statements relating to the Initial Purchasers in the third paragraph,
fifth and sixth sentences of the tenth paragraph, and the twelfth
paragraph under the heading "Plan of distribution" in the Final
Offering Memorandum.
(b) The Preliminary Offering Memorandum as of its date
contained, and the Final Offering Memorandum, as of its date and as of
the Closing Date, contained and will contain all of the information
that, if requested by a prospective purchaser of the Securities, would
be required to be provided to such prospective purchaser pursuant to
Rule 144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 2 and their
compliance with the agreements set
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forth herein, it is not necessary, in connection with the issuance and
sale of the Securities to the Initial Purchasers and the offer, resale
and delivery of the Securities by the Initial Purchasers in the manner
contemplated by this Agreement and the Final Offering Memorandum, to
register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(d) The Issuers and each of their respective subsidiaries have
been duly organized and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power
and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged, except where the
failure to so qualify or have such power or authority would not,
singularly or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), results of operations, business or
prospects of the Issuers and their respective subsidiaries taken as a
whole (a "Material Adverse Effect").
(e) The authorized capital stock of the Company consists of
1,000 shares of common stock, par value $.01 per share, and is owned by
Holdings. All of the outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of any lien, charge,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party (other than liens and security
interests created pursuant to the Credit Facility, the related
guarantees and security documents or any document or agreements
contemplated thereby, or applicable law).
(f) The Issuers have all requisite corporate power and
authority to execute and deliver, to the extent each is a party
thereto, this Agreement, the Registration Rights Agreement, the
Securities and the Exchange Securities (collectively, the "Transaction
Documents") and to perform their obligations hereunder and thereunder.
(g) This Agreement has been duly authorized, executed and
delivered by the Issuers.
(h) The Registration Rights Agreement has been duly authorized
by the Issuers, and, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid
and legally binding agreement of the Issuers, enforceable against the
Issuers in accordance with its terms, except (i) to the extent that
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights generally and
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by general equitable principles (whether considered in a proceeding in
equity or at law) (the "Enforceability Exceptions") and (ii) to the
extent that the enforceability of rights to indemnification and
contribution thereunder may be limited by federal or state securities
laws or regulations or the public policy underlying such laws or
regulations.
(i) The Indenture was duly authorized, executed and delivered
by the Issuers and constitutes a valid and legally binding agreement of
the Issuers enforceable against the Issuers in accordance with its
terms, except to the extent that such enforceability may be limited by
the Enforceability Exceptions.
(j) The Notes have been duly authorized by the Company and,
when duly executed, authenticated, issued and delivered as provided in
the Indenture and paid for as provided herein, will be duly and validly
issued and outstanding 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 to the extent that such enforceability may be limited by the
Enforceability Exceptions.
(k) The Guarantees have been duly authorized by each of the
Guarantors and when duly executed and delivered as provided in the
Indenture and when the Notes are paid for and delivered as provided
herein, will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of each Guarantor
entitled to the benefits of the Indenture and enforceable against each
such Guarantor in accordance with their terms, except to the extent
that such enforceability may be limited by the Enforceability
Exceptions.
(l) The Exchange Securities have been duly authorized by the
Issuers to the extent each will be an obligor thereunder, and, when
duly executed, authenticated, issued and delivered as provided in the
Indenture and the Registration Rights Agreement, will be duly and
validly issued and outstanding and will constitute valid and legally
binding obligations of the Issuers entitled to the benefits of the
Indenture and enforceable against the Issuers in accordance with their
terms, except to the extent that such enforceability may be limited by
the Enforceability Exceptions.
(m) The execution, delivery and performance by the Issuers and
their respective subsidiaries of each of the Transaction Documents, to
the extent each is a party thereto, the issuance, authentication, sale
and delivery of the Securities by the Issuers and compliance by such
Issuers with the terms thereof and the consummation by the Issuers and
their respective subsidiaries, as applicable, of the transactions
contemplated by the Transaction Documents (the "Transactions") do not
and will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or, except
as permitted by the Transaction Documents, result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets
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of the Issuers or any of their respective subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Issuers or any of their respective
subsidiaries are parties or by which the Issuers or any of their
respective subsidiaries are bound or to which any of the property or
assets of the Issuers or any of their respective subsidiaries are
subject, except for any such conflict, breach, violation, default,
lien, charge or encumbrance that has been waived and except for any
such conflict, breach, violation, default, lien, charge or encumbrance
that could not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect or any material adverse effect on the
ability of the Issuers to perform their respective obligations under
the Transaction Documents; nor will such actions result in any
violation of the provisions of the charter or bylaws of the Issuers or
any of their respective subsidiaries or result in any violation of any
statute or any order, rule or regulation of any court or arbitrator or
governmental agency or body having jurisdiction over the Issuers or any
of their respective subsidiaries or any of their properties or assets
except such violation of any statute or any order, rule or regulation
that could not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and, except for such consents,
approvals, authorizations, orders, filings, registrations or
qualifications which have been obtained or made or as may be required
under (i) applicable Blue Sky or securities laws in connection with the
purchase and resale of the Securities by the Initial Purchasers, (ii)
the Trust Indenture Act in connection with the Exchange Securities or
(iii) the Securities Act and state Blue Sky laws or securities laws in
connection with the actions contemplated by the Registration Rights
Agreement, no material consent, approval, authorization or order of, or
filing or registration with, any such court or arbitrator or
governmental agency or body is required for the execution, delivery and
performance by the applicable Issuers of each of the Transaction
Documents, the issuance, authentication, sale and delivery by the
Issuers of the Securities and compliance by the Issuers with the terms
thereof and the consummation by the Issuers of the other Transactions.
(n) Each Transaction Document, to the extent described in the
Final Offering Memorandum, will conform in all material respects to the
description of such Transaction Document contained in the Final
Offering Memorandum.
(o) (i) Ernst & Young LLP are independent public accountants
with respect to the Issuers and their respective subsidiaries within
the meaning of Rule 101 of the Code of Professional Conduct of the
American Institute of Certified Public Accountants ("AICPA") and its
interpretations and rulings thereunder, (ii) the historical financial
statements of the Company (including the related notes) contained in
the Preliminary Offering Memorandum and the Final Offering Memorandum
have been prepared in conformity with generally accepted accounting
principles in the United States consistently applied throughout the
periods covered thereby and fairly present, in all material respects,
the financial condition and the results of operations of the entities
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purported to be covered thereby for the respective periods indicated
except as otherwise disclosed therein and (iii) the unaudited pro forma
condensed combined financial statements (including the notes thereto)
and the other pro forma financial information included in the
Preliminary Offering Memorandum and the Final Offering Memorandum
comply as to form in all material respects with the applicable
requirements of Regulation S-X promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), except for the
inclusion of the additional twelve month period ended June 30, 2005;
the assumptions underlying the pro forma financial information included
in the Preliminary Offering Memorandum and the Final Offering
Memorandum include all assumptions required to give effect to the
transactions and events described in the notes thereto, are reasonable
and are set forth in the Preliminary Offering Memorandum and the Final
Offering Memorandum and the pro forma adjustments give proper effect to
those assumptions and reflect the proper application of those
adjustments to the applicable historical financial statements included
in the Preliminary Offering Memorandum and the Final Offering
Memorandum. The financial information contained in the Preliminary
Offering Memorandum and the Final Offering Memorandum under the
headings "Summary Unaudited Pro Forma Condensed Combined Financial and
Operating Data of Holdings and the Company," "Capitalization,"
"Selected Historical Consolidated Financial Data of Holdings and the
Company" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" is derived from the accounting
records of the entities purported to be covered thereby and fairly
present in all material respects the information purported to be shown
thereby.
(p) To the Company's knowledge, (i) KPMG LLP (Montreal) are
auditors of Speedware Corporation Inc. ("Speedware") and independent
within the meaning of the Code of Ethics of the Ordre des comptables
agrees du Quebec and within the meaning of the Securities Act and the
applicable rules and regulations thereunder and (ii) the historical
financial statements of Speedware, including the notes thereto, as
contained in the Preliminary Offering Memorandum and the Final Offering
Memorandum were prepared in accordance with generally accepted
accounting principles in Canada applied on a basis consistent with
prior periods, except as noted therein, are correct in all material
respects, are complete and present fairly the assets, liabilities
(whether accrued, absolute, contingent or otherwise) and financial
condition of Speedware and its subsidiaries on a consolidated basis as
at the respective dates thereof and the results of operations of
Speedware and its subsidiaries on a consolidated basis for the
respective periods covered thereby.
(q) To the Company's knowledge, (i) KPMG LLP (Philadelphia)
are independent public accountants with respect to P-21 and its
subsidiaries within the meaning of Rule 101 of the Code of Professional
Conduct of the AICPA and its interpretations and rulings thereunder,
(ii) the historical financial statements of P-21 (including
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the related notes) contained in the Preliminary Offering Memorandum and
the Final Offering Memorandum have been prepared in conformity with
generally accepted accounting principles in the United States
consistently applied throughout the periods covered thereby, except as
noted therein, are correct in all material respects, are complete and
present fairly the assets, liabilities (whether accrued, absolute,
contingent or otherwise) and financial condition of P-21 and its
subsidiaries on a consolidated basis as at the respective dates thereof
and the results of operations of P-21 and its subsidiaries on a
consolidated basis for the respective periods covered thereby.
(r) There are no legal or governmental proceedings pending to
which the Issuers or any of their respective subsidiaries is a party or
of which any property or assets of the Issuers or any of their
respective subsidiaries or affiliates is the subject which, singularly
or in the aggregate, if determined adversely to the Issuers or any of
their respective subsidiaries or affiliates, could reasonably be
expected to have a Material Adverse Effect; and to the best knowledge
of the Issuers no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(s) No injunction, restraining order or order of any nature by
any federal or state court of competent jurisdiction has been issued
with respect to the Issuers or any of their respective subsidiaries
which would prevent or suspend the issuance or sale of the Securities
or the use of the Final Offering Memorandum in any jurisdiction; no
action, suit or proceeding is pending against or, to the best knowledge
of the Issuers threatened against or affecting the Issuers or any of
their respective subsidiaries before any court or arbitrator or any
governmental agency, body or official, domestic or foreign, which could
reasonably be expected to interfere with or adversely affect the
issuance of the Securities or in any manner draw into question the
validity or enforceability of any of the Transaction Documents or any
action taken or to be taken pursuant thereto.
(t) None of the Issuers nor any of their respective
subsidiaries is (i) in violation of its charter or by-laws, (ii) in
default, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject which could
reasonably be expected to have a Material Adverse Effect or (iii) in
violation of any applicable law, ordinance, court decree, governmental
rule or regulation to which it or its material property or assets may
be subject which could reasonably be expected to have a Material
Adverse Effect.
(u) The Issuers and each of their respective subsidiaries
possess all licenses, orders, certificates, authorizations, approvals
and permits issued by, and have
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made all declarations, applications, reports, instruments, information
and filings with, the appropriate federal, state or foreign regulatory
agencies or bodies that are necessary or desirable for the ownership of
their respective properties or the conduct of their respective
businesses as described in the Final Offering Memorandum and such
declarations, applications, reports, instruments, information and
filings are true, correct and complete in all material respects, except
where the failure to possess or make the same would not, singularly or
in the aggregate, have a Material Adverse Effect, and neither any of
the Issuers nor any of their respective subsidiaries has received
notification of any revocation or modification of any such license,
certificate, authorization or permit that is generally renewable in the
ordinary course or has any reason to believe that any such license,
certificate, authorization or permit will not be renewed in the
ordinary course.
(v) None of the Issuers or any of their respective
subsidiaries is an open-end investment company, unit investment trust
or face-amount certificate company that is or is required to be
registered under Section 8 of the United States Investment Company Act
of 1940, as amended (the "Investment Company Act"), nor are any of them
a closed-end investment company required to be registered, but not
registered, thereunder; and none of the Issuers is and, after giving
effect to the offering and sale of the Securities and the application
of the proceeds thereof as described in the Final Offering Memorandum,
none of the Issuers will be, an "investment company" as defined in the
Investment Company Act.
(w) The Issuers and each of their respective subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(x) There is and has been no failure on the part of the
Company and any of the Company's directors or officers, in their
capacities as such, to comply in all material respects with any
provision of the Sarbanes Oxley Act of 2002 (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act")
and the rules and regulations promulgated in connection therewith,
including Section 402 related to loans and Sections 302 and 906 related
to certifications; the chief executive officer and the chief financial
officer of the Company have made all certifications required by the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and any related rules and regulations promulgated by
the Commission, and the statements contained in any such certification
are complete and correct;
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(y) The Issuers and each of their respective subsidiaries have
insurance covering their respective properties, operations, personnel
and businesses, which insurance is in amounts and insures against such
losses and risks as are in the Issuers' opinion adequate to protect the
Issuers and their respective subsidiaries and their respective
businesses. None of the Issuers or any of their respective subsidiaries
have received notice from any insurer or agent of such insurer that
capital improvements or other expenditures are required or necessary to
be made in order to continue such insurance.
(z) The Issuers and each of their respective subsidiaries own
or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses as
described in the Final Offering Memorandum; and the conduct of their
respective businesses does not conflict in any material respect with,
and the Issuers and their respective subsidiaries have not received any
notice of any claim of conflict with, any such rights of others.
(aa) The Issuers and each of their respective subsidiaries
have good and marketable title in fee simple to, or have valid rights
to lease or otherwise use, all items of real and personal property
which are material to the business of the Issuers and their respective
subsidiaries, taken as a whole, in each case free and clear of all
liens, encumbrances and defects other than (i) liens and encumbrances
granted pursuant to the Credit Facility and (ii) liens, encumbrances
and defects that do not materially interfere with the use made and
proposed to be made of such property by the Issuers and their
respective subsidiaries or could not reasonably be expected to have a
Material Adverse Effect.
(bb) No labor disturbance by or dispute with the employees of
the Issuers or any of their respective subsidiaries exists or, to the
best knowledge of the Issuers is imminent, which could reasonably be
expected to have a Material Adverse Effect.
(cc) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release or
threatened release of any kind of toxic or other wastes or other
hazardous substances by, due to or caused by the Issuers or any of
their respective subsidiaries (or, to the best knowledge of the
Issuers, any other entity (including any predecessor) for whose acts or
omissions the Issuers or any of their respective subsidiaries are or
could reasonably be expected to be liable) upon any property now or
previously owned or leased by the Issuers or any of their respective
subsidiaries, or upon any other property, in violation of any statute
or any ordinance, rule, regulation, order, judgment, decree or permit
or which would, under any
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statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any
liability except for any violation or liability which would not have,
singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; and there has been no disposal,
discharge, emission or other release of any kind onto such property or
into the environment surrounding such property of any toxic or other
wastes or other hazardous substances with respect to which the Issuers
have knowledge, except for any such disposal, discharge, emission or
other release of any kind which would not have, singularly or in the
aggregate with all such disposal, discharge, emission and other
release, a Material Adverse Effect.
(dd) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan of
the Issuers or any of their respective subsidiaries which could
reasonably be expected to have a Material Adverse Effect; each such
employee benefit plan is in compliance in all material respects with
applicable law, including ERISA and the Code; the Issuers and each of
their respective subsidiaries have not incurred and do not expect to
incur liability under Title IV of ERISA with respect to the termination
of, or withdrawal from, any pension plan for which the Issuers or any
of their respective subsidiaries would have any liability; and each
such pension plan that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which could
reasonably be expected to cause the loss of such qualification.
(ee) On the Closing Date, the Company and its subsidiaries
taken as a whole (after giving effect to the Transactions), will be
Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular date, that on such date (i) the present fair
market value (or present fair saleable value) of the assets of the
Company and its subsidiaries is not less than the total amount of the
liabilities of the Company and its subsidiaries on their total existing
debts and liabilities (including contingent liabilities); (ii) the
Company and its subsidiaries are able to realize upon their assets and
pay their debts and other liabilities, contingent obligations and
commitments as they mature and become due in the normal course of
business; (iii) assuming consummation of the issuance of the Securities
and the related transactions as contemplated by this Agreement and the
Final Offering Memorandum, the Company and its subsidiaries are not
incurring debts or liabilities beyond their ability to pay as such
debts and liabilities mature; (iv) the Company and its subsidiaries are
not engaged in
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any business or transaction, and does not propose to engage in any
business or transaction, for which their property would constitute
unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which the Company is engaged;
and (v) the Company and its subsidiaries are not otherwise insolvent
under applicable federal or state laws.
(ff) No holder of securities of the Issuers or any of their
respective subsidiaries will be entitled to have such securities
registered under the registration statements required to be filed by
the Issuers pursuant to the Registration Rights Agreement, to the
extent each is a party thereto, other than as expressly permitted
thereby or that has been waived.
(gg) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Preliminary Offering Memorandum and the Final Offering
Memorandum has been made or reaffirmed without a reasonable basis or
has been disclosed other than in good faith.
(hh) Nothing has come to the attention of the Company that has
caused the Company to believe that the statistical and market-related
data included in the Preliminary Offering Memorandum and the Final
Offering Memorandum is not based on or derived from sources that are
reliable and accurate in all material respects.
(ii) None of the proceeds of the sale of the Securities will
be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
(jj) Except as disclosed in the Final Offering Memorandum,
neither the Issuers nor any of their respective subsidiaries is a party
to any contract agreement or understanding with any person that would
give rise to a valid claim against the Issuers or the Initial
Purchasers for a brokerage commission, finders' fee or like payment in
connection with the offering and sale of the Securities.
(kk) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(ll) Neither any of the Issuers nor any Affiliate (as defined
in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")) has directly, or through any agent (provided that no
representation is made as to the Initial Purchasers or any Person
acting on its behalf): (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of any "security" (as defined in
the Securities Act) which sale, offer,
-13-
solicitation or negotiation is or will 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) in connection with the offering of the Securities.
(mm) When the Securities are delivered pursuant to this
Agreement, none of the Securities will be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities of the
Issuers or any of their respective subsidiaries that are listed on a
national securities exchange registered under Section 6 of the Exchange
Act or that are quoted in a United States automated inter-dealer
quotation system other than the PORTAL market.
(nn) None of the Issuers or any of their respective Affiliates
(as defined in Rule 501(b) of Regulation D), nor any person acting on
behalf of any of them (other than the Initial Purchasers) (i) has,
within the six-month period prior to the date hereof, offered or sold
in the United States or to any U.S. person (as such terms are defined
in Regulation S under the Securities Act ("Regulation S")) the
Securities or any security of the same class or series as the
Securities (A) in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act or (B) with respect to any such securities
sold in reliance on Rule 903 of Regulation S, by means of any directed
selling efforts within the meaning of Rule 902(b) of Regulation S. The
Issuers and their respective affiliates, and any person acting on
behalf of any of them (other than the Initial Purchasers) have complied
and will comply with the offering restrictions requirement of
Regulation S. The Issuers have not entered and will not enter into any
contractual arrangement with respect to the distribution of the
Securities except for this Agreement and the Registration Rights
Agreement, to the extent each is party thereto.
(oo) Since June 30, 2005, except as set forth in the Final
Offering Memorandum (i) both before and after giving effect to the
Transactions, there has been no material adverse change or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs, management or business prospects of the Issuers, whether or
not arising in the ordinary course of business, (ii) none of the
Issuers, nor any of their respective subsidiaries has incurred any
liability or obligation, direct or indirect, absolute or contingent,
other than in the ordinary course of business, which would, singly or
in the aggregate, have a Material Adverse Effect, (iii) there has not
been any change in the capital stock or long-term debt of any of the
Issuers or any of their respective subsidiaries, or any dividend or
distribution of any kind declared, paid or made by any of the Issuers
or any of their respective subsidiaries on any class of its capital
stock.
-14-
2. Purchase and Resale of the Securities.
(a) On the basis of the representations, warranties and agreements
contained herein, and subject to the terms and conditions set forth herein, the
Company agrees to issue and sell to the Initial Purchasers, and each of the
Initial Purchasers agrees, severally and not jointly, to purchase from the
Company, the aggregate principal amount of Notes set forth opposite its name in
Schedule 1 hereto at a purchase price equal to 97.25% of the principal amount
thereof. No Issuer shall be obligated to deliver any of the Securities except
upon payment for all of the Notes to be purchased from the Issuers as provided
herein.
(b) The Initial Purchasers have advised the Issuers that they propose
to offer the Securities for resale upon the terms and subject to the conditions
set forth herein and in the Final Offering Memorandum. Each Initial Purchaser,
severally and not jointly, represents and warrants to, and agrees with, the
Issuers that (i) it is purchasing the Securities pursuant to a private sale
exemption from registration under the Securities Act, (ii) it has not solicited
offers for, or offered or sold, and will not solicit offers for, or offer or
sell, the Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (iii) it has solicited and will solicit offers for the Securities only
from, and has offered or sold and will offer, sell or deliver the Securities, as
part of its initial offering, only (A) within the United States to persons whom
it reasonably believes to be qualified institutional buyers ("Qualified
Institutional Buyers"), as defined in Rule 144A under the Securities Act ("Rule
144A"), or if any such person is buying for one or more institutional accounts
for which such person is acting as fiduciary or agent, only when such person has
represented to it that each such account is a Qualified Institutional Buyer 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 in accordance with Rule 144A and
(B) outside the United States to persons other than U.S. persons in reliance on
Regulation S.
(c) In connection with the offer and sale of Securities in reliance on
Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) The Securities have not been registered under the
Securities Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except pursuant
to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act.
(ii) The Initial Purchasers have offered and sold the
Securities, and will offer and sell the Securities, (A) as part of
their distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering of the Securities and the
Closing Date, only in accordance with Regulation S or Rule 144A or any
other available exemption from registration under the Securities Act.
(iii) Neither of the Initial Purchasers nor any of their
respective affiliates nor any other person acting on their behalf has
engaged or will engage in any directed
-15-
selling efforts (as defined in Regulation S) with respect to the
Securities, and all such persons have complied and will comply with the
offering restrictions requirement of Regulation S.
(iv) At or prior to the confirmation of sale of any Securities
sold in reliance on Regulation S, the Initial Purchasers will have sent
to each distributor, dealer or other person receiving a selling
concession, fee or other remuneration that purchases Securities from
them during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering of
the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule
144A or any other available exemption from registration under
the Securities Act. Terms used above have the meanings given
to them by Regulation S."
(v) The Initial Purchasers have not and will not enter into
any contractual arrangement with any distributor with respect to the
distribution of the Securities, except with their affiliates or with
the prior written consent of the Issuers.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly, agrees that,
prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the applicable Issuers pursuant hereto, such Initial Purchaser
shall furnish to that purchaser a copy of the Final Offering Memorandum (and any
amendment or supplement thereto that the Issuers shall have furnished to such
Initial Purchaser prior to the date of such confirmation of sale), but excluding
any document incorporated by reference therein. In addition to the foregoing,
each Initial Purchaser, severally and not jointly, acknowledges and agrees that
the Issuers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 5(d), 5(e) and 5(f) counsel for the Issuers and
for the Initial Purchasers, respectively, may rely upon the accuracy of the
representations and warranties of each Initial Purchaser and their compliance
with their agreements contained in this Section 2, and each Initial Purchaser
hereby consents to such reliance.
(e) The Issuers acknowledge and agree that each Initial Purchaser may
sell Securities to any affiliate of such Initial Purchaser and that any such
affiliate may sell Securities purchased by it to such Initial Purchaser.
-16-
(f) Each Initial Purchaser, severally and not jointly, agrees that:
(i) it has not offered or sold and, prior to the date
six months after the Closing Date, will not offer or sell any
Securities to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in
an offer to the public in the United Kingdom within the
meaning of the United Kingdom Public Offers of Securities
Regulations 1995 (as amended);
(ii) it has only communicated or caused to be
communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the
United Kingdom Financial Services and Markets Act 2000 (the
"FSMA")) received by it in connection with the issue or sale
of any Securities in circumstances in which Section 21(1) of
the FSMA does not apply to the Issuers; and
(iii) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything
done by it in relation to the Securities in, from or otherwise
involving the United Kingdom.
(iv) in relation to each Member State of the European
Economic Area which has implemented the Prospectus Directive
(each, a "Relevant Member State"), from and including the date
on which the Prospectus Directive is implemented in that
Relevant Member State (the "Relevant Implementation Date") it
has not made and will not make an offer of the Securities to
the public in that Relevant Member State prior to the
publication of a prospectus in relation to the Securities
which has been approved by the competent authority in that
Relevant Member State or, where appropriate, approved in
another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance
with the Prospectus Directive, except that it may, with effect
from and including the Relevant Implementation Date, make an
offer of the Securities to the public in that Relevant Member
State at any time:
(a) to legal entities which are authorized or
regulated to operate in the financial markets or, if
not so authorized or regulated, whose corporate
purpose is solely to invest in securities;
(b) to any legal entity which meets two or more of
the following criteria: (1) an average of at least
250 employees during the last
-17-
financial year; (2) a total balance sheet of more
than E.43,00,000; and (3) an annual net turnover
of more than E.50,000,000, in each case as determined
in accordance with the Prospectus Directive and as
shown in its last annual or consolidated accounts; or
(c) in any other circumstances which do not require
the publication of a prospectus pursuant to Article 3
of the Prospectus Directive.
For the purposes of this clause (f), the expression
an "offer of the Securities to the public" in relation to any
Securities in any Relevant Member State means the
communication in any form and by any means, presenting
sufficient information on the terms of the offer and the
Securities to be offered, so as to enable an investor to
decide to purchase or subscribe to the Securities, as the same
may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Member State and
the expression "Prospectus Directive" means Directive
2003/71/EC and includes any relevant implementing measure in
the applicable Relevant Member State.
3. Delivery of and Payment for the Securities. (a) Delivery of
and payment for the Securities shall be made at the offices of Weil, Gotshal &
▇▇▇▇▇▇ LLP, Dallas, Texas or at such other place as shall be agreed upon by the
Initial Purchasers and the Issuers, at 9:00 A.M., Dallas time, on October 17,
2005, or at such other time or date, not later than seven full business days
thereafter, as shall be agreed upon by the Initial Purchasers and the Issuers
(such date and time of payment and delivery being referred to herein as the
"Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchasers of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of each Initial Purchaser hereunder. Upon delivery,
the Securities shall be in global form, registered in such names and in such
denominations as the Initial Purchasers shall have requested in writing not less
than two full business days prior to the Closing Date. The Issuers agree to make
one or more global certificates evidencing the Securities available for
inspection by the Initial Purchasers in New York, New York at least 24 hours
prior to the Closing Date.
4. Further Agreements of the Issuers. The Issuers, jointly and
severally, agree with each Initial Purchaser:
-18-
(a) to advise the Initial Purchasers promptly and, if
requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made in the
Preliminary Offering Memorandum or the Final Offering Memorandum untrue
or which requires the making of any additions to or changes in the
Preliminary Offering Memorandum or the Final Offering Memorandum (as
amended or supplemented from time to time) in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; to advise the Initial Purchasers promptly of
any order preventing or suspending the use of the Preliminary Offering
Memorandum or the Final Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any
jurisdiction and of the initiation or threatening of any proceeding for
any such purpose; and to use their reasonable best efforts to prevent
the issuance of any such order preventing or suspending the use of the
Preliminary Offering Memorandum or the Final Offering Memorandum or
suspending any such qualification and, if any such suspension is
issued, to obtain the lifting thereof at the earliest possible time;
(b) to furnish to the Initial Purchasers, without charge, as
many copies of the Preliminary Offering Memorandum and the Final
Offering Memorandum (and any amendments or supplements thereto) as may
be reasonably requested; provided that, in the event of any amendment
or supplement to the Final Offering Memorandum, the Initial Purchasers
shall have been given a reasonable opportunity to comment thereon, and
copies thereof shall have been delivered to the Initial Purchasers
reasonably in advance of the Closing Date;
(c) prior to making any amendment or supplement to the
Preliminary Offering Memorandum or the Final Offering Memorandum, to
furnish a copy thereof to the Initial Purchasers and counsel for the
Initial Purchasers and not to effect any such amendment or supplement
to which the Initial Purchasers shall reasonably object by notice to
the Issuers after a reasonable period of review, which shall not be in
any case longer than five business days after receipt of such copy;
(d) if, at any time prior to completion of the initial resale
of the Securities by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary, in the opinion of
counsel for the Initial Purchasers or counsel for the Issuers, to amend
or supplement the Final Offering Memorandum in order that the Final
Offering Memorandum will not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein
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, or if it is necessary to amend or supplement the Final
Offering Memorandum to comply with applicable law, to promptly prepare
such amendment or supplement as may be necessary to correct such untrue
statement or
-19-
omission so that the Final Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request
of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act;
(f) for a period of three years following the Closing Date, to
furnish to the Initial Purchasers copies of any annual reports,
quarterly reports and current reports filed by the Issuers with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the Commission, and such other documents, reports
and information as shall be furnished by the Issuers to the Trustee or
to the holders of the Securities pursuant to the Indenture or the
Exchange Act or any rule or regulation of the Commission thereunder;
provided, however, that any reports or information accepted for filing
by the Commission and readily available on the Internet shall be deemed
to have been provided to the Initial Purchasers;
(g) to use their reasonable best efforts to qualify the
Securities for sale under the state securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may reasonably designate and to
continue such qualifications in effect for so long as required for the
distribution of the Securities; provided, however, that the Issuers and
their respective subsidiaries shall not be obligated to qualify as a
foreign corporation in any jurisdiction where it is not then qualified
or to take any action which would subject it to general service of
process or to taxation in any such jurisdiction where it is not then so
subject;
(h) to use their reasonable best efforts to assist the Initial
Purchasers in arranging for the Securities to be designated Private
Offerings, Resales and Trading through Automated Linkages ("PORTAL")
Market securities in accordance with the rules and regulations adopted
by the National Association of Securities Dealers, Inc. ("NASD")
relating to trading in the PORTAL Market and for the Securities to be
eligible for clearance and settlement through The Depository Trust
Company ("DTC");
(i) not to, and to cause their affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as such term is defined in the Securities Act) which
could be integrated with the sale of the Securities in a manner which
would require registration of the Securities under the Securities Act;
-20-
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates (as such term is defined in
Rule 501(B) of Regulation D) not to, and not to authorize or knowingly
permit any person acting on their behalf to, (i) solicit any offer to
buy or offer to sell the Securities by means of any form of general
solicitation or general advertising within the meaning of Regulation D
or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engage in any directed
selling efforts within the meaning of Regulation S, and all such
persons will comply with the offering restrictions requirement of
Regulation S; and not to offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any securities under circumstances
where such offer, sale, contract or disposition would cause the
exemption afforded by Section 4(2) of the Securities Act to cease to be
applicable to the offering and sale of the Securities as contemplated
by this Agreement and the Final Offering Memorandum;
(k) for a period of 90 days from the date hereof, not to offer
for sale, sell, contract to sell or otherwise dispose of, directly or
indirectly, or file a registration statement (except as required by the
Registration Rights Agreement or the Exchange and Registration Rights
Agreement dated March 30, 2005 among the Company, the Company's
subsidiaries identified therein and the Initial Purchasers (the
"Initial Registration Rights Agreement")) for, or announce any offer,
sale, contract for sale of or other disposition of any debt securities
issued or guaranteed by the Issuers or any of their respective
subsidiaries (other than (i) the Securities or the Exchange Securities
or (ii) the Securities or the Exchange Securities as defined in the
Initial Registration Rights Agreement) without the prior written
consent of the Initial Purchasers (which consent may not be
unreasonably withheld);
(l) until the earlier of (i) the date that all the Notes have
either been exchanged or registered under a shelf registration
statement in accordance with the terms of the Registration Rights
Agreement and (ii) two years after the Closing Date, without the prior
written consent of the Initial Purchasers, not to, and not permit any
of their affiliates (as defined in Rule 144 under the Securities Act)
to, resell any of the Notes that have been reacquired by them, except
for Notes purchased by the Issuers or any of their affiliates and
resold in a transaction registered under the Securities Act;
(m) in connection with the offering of the Securities, until
the Initial Purchasers shall have notified the Issuers of the
completion of the resale of the Securities, not to, and to cause their
affiliated purchasers (as defined in Regulation M under the Exchange
Act), not to, either alone or with one or more other persons, bid for
or purchase, for any account in which they or any of their affiliated
purchasers have a beneficial interest, any Securities, or attempt to
induce any person to purchase any Securities; and not to, and to cause
their affiliated purchasers not to, make bids or purchase
-21-
for the purpose of creating actual, or apparent, active trading in or
of raising the price of the Securities;
(n) not to take any action prior to the Closing Date which
would require the Final Offering Memorandum to be amended or
supplemented pursuant to Section 4(d); and
(o) to apply the net proceeds from the sale of the Securities
as set forth in the Final Offering Memorandum under the heading "Use of
proceeds."
5. Conditions to Closing. The obligations of the Initial
Purchasers hereunder are subject to the accuracy, on and as of the date hereof
and the Closing Date, of the representations and warranties of the Issuers
contained herein, to the accuracy of the statements of the Issuers and their
officers made in any certificates delivered pursuant hereto, to the performance
by the Issuers of their obligations hereunder, and to each of the following
additional terms and conditions:
(a) The Final Offering Memorandum (and any amendments or
supplements thereto) shall have been printed and copies distributed to
the Initial Purchasers as promptly as practicable on or following the
date of this Agreement or at such other date and time as to which the
Initial Purchasers may designate; and no stop order suspending the sale
of the Securities in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(b) The Initial Purchasers shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the Final
Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of a fact which is material or omits to state any fact
which, in the opinion of counsel to the Initial Purchasers, is material
and is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of the Transaction
Documents, the Preliminary Offering Memorandum and the Final Offering
Memorandum, and all other legal matters relating to the Transaction
Documents and the Transactions, shall be reasonably satisfactory in all
material respects to the Initial Purchasers, and the Issuers shall have
furnished to the Initial Purchasers all documents and information that
they or their counsel may reasonably request to enable them to pass
upon such matters.
(d) Weil, Gotshal & ▇▇▇▇▇▇ LLP shall have furnished to the
Initial Purchasers their written opinion, as counsel for the Issuers,
addressed to the Initial Purchasers and dated the Closing Date,
substantially to the effect set forth in Annex B hereto.
-22-
(e) (i) ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP shall have furnished to
the Initial Purchasers their written opinion, as Pennsylvania counsel
for the Issuers, and (ii) ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇ PLLC shall have furnished
to the Initial Purchasers their written opinion, as South Carolina
counsel for the Issuers, in each case addressed to the Initial
Purchasers and dated the Closing Date, substantially to the effect set
forth in Annex C hereto.
(f) The Initial Purchasers shall have received from ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Initial Purchasers, such opinion
or opinions, dated the Closing Date, with respect to such matters as
the Initial Purchasers may reasonably require, and the Issuers shall
have furnished to such counsel such documents, certificates and
information as they reasonably request for the purpose of enabling them
to pass upon such matters.
(g) With respect to the letters (the "Initial Letters") of
Ernst & Young LLP, KPMG LLP (Philadelphia) and KPMG LLP (Montreal)
delivered by each of them to the Initial Purchasers concurrently with
the execution of this Agreement (which letters shall be in form and
substance reasonably satisfactory to the Initial Purchasers and counsel
for the Initial Purchasers), the Issuers shall have caused each of
Ernst & Young LLP, KPMG LLP (Philadelphia) and KPMG LLP (Montreal) to
furnish to the Initial Purchasers letters (the "Bring-Down Letters")
addressed to the Initial Purchasers and dated the Closing Date (i)
confirming that in the case of Ernst & Young LLP, they are independent
public accountants with respect to the Company and its subsidiaries, in
the case of KPMG LLP (Philadelphia) they are independent certified
public accountants with respect to P-21 and its subsidiaries, and in
the case of KPMG LLP (Montreal) they are auditors of Speedware and
independent, in the case of each of Ernst & Young LLP and KPMG LLP
(Philadelphia) within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings
thereunder, and in the case of KPMG LLP (Montreal) within the meaning
of the Code of Ethics of the Ordre des comptables agrees du Quebec,
(ii) stating, as of the date of the Bring-Down Letter (or, with respect
to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Final
Offering Memorandum, as of a date not more than two business days prior
to the date of the Bring-Down Letter), that the conclusions and
findings of such accountants with respect to the financial information
and other matters covered by its Initial Letter are accurate and (iii)
confirming in all material respects the conclusions and findings set
forth in its Initial Letter.
(h) Each of the Issuers shall have furnished to the Initial
Purchasers a certificate, dated the Closing Date, of a senior executive
officer of such Issuer (acting in his or her capacity as an officer of
such Issuer and not as an individual) stating that (A) such officer has
reviewed the Final Offering Memorandum, (B) in his or her opinion,
-23-
the Final Offering Memorandum, as of its date, did not include any
untrue statement of a material fact and did not omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
and since the date of the Final Offering Memorandum, no event has
occurred which should have been set forth in a supplement or amendment
to the Final Offering Memorandum so that the Final Offering Memorandum
(as so amended or supplemented) would not include any untrue statement
of a material fact and would not omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and (C) to the
best of his or her knowledge, as of the Closing Date, the
representations and warranties of such Issuer in this Agreement are
true and correct in all material respects, such Issuer has complied in
all material respects with all agreements and satisfied in all material
respects all conditions on its part to be performed or satisfied
hereunder on or prior to the Closing Date in all material respects, and
since the date hereof or subsequent to the date of the most recent
financial statements of the Company contained in the Final Offering
Memorandum, there has been no material adverse change in the financial
position or results of operations of the Issuers, their respective
subsidiaries taken as a whole, or any material change, or any
development including a prospective material change in or affecting the
condition (financial or otherwise), results of operations, business or
prospects of the Issuers, their respective subsidiaries taken as a
whole, except as set forth in the Final Offering Memorandum.
(i) The Initial Purchasers shall have received on and as of
the Closing Date satisfactory evidence of the good standing of the
Company and its subsidiaries in their respective jurisdictions of
organization and, as applicable, their good standing in the
jurisdictions listed on Schedule III hereto, in each case in writing or
any standard form of telecommunication, from the appropriate
governmental authorities of such jurisdictions.
(j) The Initial Purchasers shall have received a counterpart
of the Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of each Issuer.
(k) The Notes shall have been duly executed and delivered by
the Company and duly authenticated by the Trustee and the Guarantees
shall have been duly executed and delivered by the Guarantors.
(l) The offering of Holdings PIK Notes by Holdings shall have
been consummated.
(m) If any event shall have occurred that requires the Issuers
under Section 4(d) to prepare an amendment or supplement to the Final
Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchasers shall
-24-
have been given a reasonable opportunity to comment thereon, and copies
thereof shall have been delivered to the Initial Purchasers reasonably
in advance of the Closing Date.
(n) There shall not have occurred any invalidation of Rule
144A under the Securities Act by any court or any withdrawal or
proposed withdrawal of any rule or regulation under the Securities Act
or the Exchange Act by the Commission or any amendment or proposed
amendment thereof by the Commission which in the judgment of the
Initial Purchasers would materially impair the ability of the Initial
Purchasers to purchase, hold or effect resales of the Securities as
contemplated hereby.
(o) Other than as contemplated by the Transaction Documents or
the Final Offering Memorandum, since the dates (both before and after
the Transactions) as of which information is given in the Final
Offering Memorandum (exclusive of any amendment or supplement to the
Final Offering Memorandum on or after the date of the Final Offering
Memorandum), there shall not have been any change in the capital stock
or long-term debt or any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Issuers
and their respective subsidiaries taken as a whole, the effect of
which, in any such case described above, is, in the judgment of the
Initial Purchasers, so material and adverse as to make it impracticable
or inadvisable to proceed with the sale or delivery of the Securities
on the terms and in the manner contemplated in the Final Offering
Memorandum (exclusive of any amendment or supplement thereto).
(p) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance, sale or resale of the
Securities.
(q) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the ratings accorded the
Securities or any of the Issuers' other debt securities or preferred
stock by any "nationally recognized statistical rating organization,"
as such term is defined by the Commission for purposes of Rule
436(g)(2) of the rules and regulations of the Commission under the
Securities Act and (ii) no such organization shall have publicly
announced that it has under surveillance or review or changed its
outlook with respect to its rating of the Securities or any of the
Issuers' other debt securities or preferred stock (other than an
announcement with positive implications of a possible upgrading).
(r) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market
-25-
shall have been suspended or limited, or minimum prices shall have been
established on any such exchange or market by the Commission, by any
such exchange or by any other regulatory body or governmental authority
having jurisdiction, or trading in any securities of the Company on any
exchange or in the over-the-counter market shall have been suspended or
(ii) any moratorium on commercial banking activities shall have been
declared by federal or New York state authorities or (iii) an outbreak
or escalation of hostilities or a declaration by the United States of a
national emergency or war or any calamity or crisis or (iv) a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) the effect of which, in the case of
this clause (iv), is, in the judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to
proceed with the offering, sale or the delivery of the Securities on
the terms and in the manner contemplated by this Agreement and in the
Final Offering Memorandum (exclusive of any amendment or supplement
thereto).
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers, in their absolute
discretion, by notice given to and received by the Issuers prior to delivery of
and payment for the Securities if, prior to that time, any of the events
described in Sections 5(m), (n), (o), (p), (q), or (r) shall have occurred and
be continuing.
7. Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6, (b) the Issuers
shall fail to tender the Securities for delivery to the Initial Purchasers or
(c) the Initial Purchasers shall decline to purchase the Securities for any
reason permitted under this Agreement, the Issuers shall, jointly and severally,
reimburse the Initial Purchasers for such out-of-pocket expenses (including
reasonable fees and disbursements of counsel) as shall have been reasonably
incurred by the Initial Purchasers in connection with this Agreement and the
proposed purchase or resale of the Securities.
8. Indemnification.
(a) The Issuers shall, jointly and severally, indemnify and
hold harmless the Initial Purchasers, their affiliates, their
respective officers, directors, employees, representatives, partners
and agents, and each person, if any, who controls either of the Initial
Purchasers or any affiliate within the meaning of the Securities Act or
the Exchange Act (collectively referred to for purposes of this Section
8(a) and Section 9 as the Initial Purchasers), from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim,
-26-
damage, liability or action relating to purchases and sales of the
Securities), to which the Initial Purchasers may become subject,
whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common
law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Final Offering Memorandum or in
any amendment or supplement thereto or in any information provided by
the Issuers pursuant to Section 4(d) or (ii) the omission or alleged
omission to state therein a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, and shall reimburse the Initial
Purchasers promptly upon demand for any legal or other expenses
reasonably incurred by the Initial Purchasers in connection with
investigating or defending or preparing to defend against or appearing
as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided,
however, that the Issuers shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents
in reliance upon and in conformity with any Initial Purchasers'
Information; and provided, further, however, that with respect to any
such untrue statement in or omission from the Preliminary Offering
Memorandum or the Final Offering Memorandum, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of the
Initial Purchasers to the extent that such sale to the person asserting
any such loss, claim, damage, liability or action was an initial resale
by the Initial Purchasers and any such loss, claim, damage, liability
or action of or with respect to the Initial Purchasers results from the
fact that both (A) a copy of the Final Offering Memorandum or any
correcting amendments or supplements thereto, as applicable, but
excluding the documents incorporated by reference therein, was not sent
or given to such person at or prior to the written confirmation of the
sale of such Securities to such person and (B) the untrue statement in
or omission from the Preliminary Offering Memorandum or the Final
Offering Memorandum, was corrected in the Final Offering Memorandum or
an amendment or supplement to the Final Offering Memorandum and the
Final Offering Memorandum (as amended or supplemented) does not contain
any other untrue statement or omission or alleged untrue statement or
omission of a material fact unless, in either case, such failure to
deliver the Final Offering Memorandum (as amended or supplemented) was
a result of non-compliance by the Issuers with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Issuers, their affiliates, their
respective officers, directors, employees, representatives, partners
and agents, and each person, if any, who controls the Issuers or any
such affiliate within the meaning of the Securities Act or the Exchange
Act (collectively referred to for purposes of this Section 8(b) and
Section 9 as the Issuers),
-27-
from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Issuers may
become subject, whether commenced or threatened, under the Securities
Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Memorandum or the Final Offering
Memorandum or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each
of clause (i) and (ii) of this Section 8(b) only to the extent that the
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with any Initial
Purchaser's Information provided by such Initial Purchaser, and shall
reimburse the Issuers for any legal or other expenses reasonably
incurred by the Issuers in connection with investigating or defending
or preparing to defend against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party pursuant to Section 8(a) or 8(b), notify
the indemnifying party in writing of such claim or the commencement of
such action; provided, however, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have under this Section 8 except to the extent that the indemnifying
party was otherwise unaware of such claim or the commencement of such
action and it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and, provided further,
however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action shall
be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under
this Section 8 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel
for the indemnified party will be at the expense of such indemnified
party unless (1) the employment of counsel by the indemnified party has
been authorized in writing by the
-28-
indemnifying party, (2) the indemnified party has reasonably concluded
(based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying
party, (3) a conflict or potential conflict exists (based upon advice
of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the
indemnified party) or (4) the indemnifying party has not in fact
employed counsel reasonably satisfactory to the indemnified party to
assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel
will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition
to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 8(a) and 8(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but
if settled with its written consent or if there be a final judgment for
the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld),
effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party in form and substance satisfactory to such
indemnified party from all liability on claims that are the subject
matter of such proceeding.
The obligations of the Issuers and the Initial Purchasers in
this Section 8 and in Section 9 are in addition to any other liability that the
Issuers or the Initial Purchasers, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
9. Contribution. If the indemnification provided for in
Section 8 is unavailable or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Issuers on the one hand and the
Initial Purchasers on the
-29-
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Issuers on the one hand and the Initial
Purchasers on the other with respect to the statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Issuers on the one hand and the Initial Purchasers on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Securities purchased under this
Agreement (before deducting expenses) received by or on behalf of the Issuers,
on the one hand, and the total discounts and commissions received by the Initial
Purchasers with respect to the Securities purchased under this Agreement, on the
other, bear to the total gross proceeds from the sale of the Securities under
this Agreement. The relative fault 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 the
Issuers or information supplied by the Issuers on the one hand or to any Initial
Purchasers' Information on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Issuers and the Initial Purchasers agree
that it would not be just and equitable if contributions pursuant to this
Section 9 were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 9 shall be deemed to include, for purposes of this Section
9, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating, preparing to defend or defending any such action
or claim. Notwithstanding the provisions of this Section 9, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total discounts and commissions received by such Initial Purchaser with respect
to the Securities purchased by it under this Agreement exceeds the amount of any
damages which such Initial Purchaser has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. 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.
10. Defaulting Initial Purchaser.
(a) If, on the Closing Date, any Initial Purchaser defaults on
its obligation to purchase the Securities that it has agreed to
purchase hereunder, the non-defaulting Initial Purchaser may in its
discretion arrange for the purchase of such Securities by other persons
satisfactory to the Issuers on the terms contained in this Agreement.
If, within 36 hours after any such default by any Initial Purchaser,
the non-defaulting Initial Purchaser does not arrange for the purchase
of such Securities, then the Issuers shall be entitled to a further
period of 36 hours within which to procure other persons
-30-
reasonable satisfactory to the non-defaulting Initial Purchaser to
purchase such Securities on such terms. If other persons become
obligated or agree to purchase the Securities of a defaulting Initial
Purchaser, either the non-defaulting Initial Purchaser or the Issuers
may postpone the Closing Date for up to five full business days in
order to effect any changes that in the opinion of counsel for the
Issuers or counsel for the Initial Purchasers may be necessary in the
Final Offering Memorandum or in any other document or arrangement, and
the Issuers agree to promptly prepare any amendment or supplement to
the Final Offering Memorandum that effects any such changes. As used in
this Agreement, the term "Initial Purchaser" includes, for all purposes
of this Agreement unless the context otherwise requires, any person not
listed in Schedule 1 hereto that, pursuant to this Section 10,
purchases Securities that a defaulting Initial Purchaser agreed but
failed to purchase.
(b) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Initial Purchaser by the
non-defaulting Initial Purchaser and the Issuers as provided in
paragraph (a) above, the aggregate principal amount of such Securities
that remains unpurchased does not exceed one-eleventh of the aggregate
principal amount of all the Securities, then the Issuers shall have the
right to require the non-defaulting Initial Purchaser to purchase the
principal amount of Securities that such Initial Purchaser agreed to
purchase hereunder plus such Initial Purchaser's pro rata share (based
on the principal amount of Securities that such Initial Purchaser
agreed to purchase hereunder) of the Securities of such defaulting
Initial Purchaser for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Initial Purchaser by the
non-defaulting Initial Purchaser and the Issuers as provided in
paragraph (a) above, the aggregate principal amount of such Securities
that remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Issuers shall not
exercise the right described in paragraph (b) above, then this
Agreement shall terminate without liability on the part of the
non-defaulting Initial Purchaser. Any termination of this Agreement
pursuant to this Section 10 shall be without liability on the part of
the Issuers, except that the Issuers will continue to be liable for the
payment of expenses as set forth in Section 12 hereof and except that
the provisions of Section 7 hereof shall not terminate and shall remain
in effect.
(d) Nothing contained herein shall relieve a defaulting
Initial Purchaser of any liability it may have to the Issuers or the
non-defaulting Initial Purchaser for damages caused by its default.
11. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers and the
Issuers and their respective
-31-
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except as provided in Sections 8 and 9 with
respect to affiliates, officers, directors, employees, representatives,
partners, agents and controlling persons of the Issuers and the Initial
Purchasers and affiliates of the Initial Purchasers and in Section 4(e) with
respect to holders and prospective purchasers of the Securities. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 11, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
12. Expenses. Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Issuers
agree with the Initial Purchasers to pay (a) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities and
any taxes payable in that connection; (b) the costs incident to the preparation,
printing and distribution of the Preliminary Offering Memorandum and the Final
Offering Memorandum and any amendments or supplements thereto; (c) the costs of
reproducing and distributing each of the Transaction Documents; (d) the costs
incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (e) the fees and expenses of the
Issuers' counsel and independent accountants; (f) the fees and expenses of
qualifying the Securities under the securities laws of the several jurisdictions
as provided in Section 4(g) and of preparing, printing and distributing Blue Sky
Memoranda (including related fees and expenses of one counsel for the Initial
Purchasers in an amount not to exceed $10,000); (g) any fees charged by rating
agencies for rating the Securities; (h) the fees and expenses of the Trustee and
any paying agent (including related fees and expenses of any counsel to such
parties); (i) all expenses and application fees incurred in connection with the
application for the inclusion of the Securities on the PORTAL Market and the
approval of the Securities for book-entry transfer by DTC; and (j) all other
costs and expenses incident to the performance of the obligations of the Issuers
under this Agreement which are not otherwise specifically provided for in this
Section 12; provided, however, that except as provided in this Section 12 and
Section 7, the Initial Purchasers shall pay their own costs and expenses
(including the costs and expenses of their counsel).
13. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Issuers and the
Initial Purchasers contained in this Agreement or any certificates delivered
pursuant hereto made by or on behalf of the Issuers or the Initial Purchasers
pursuant to this Agreement shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them.
-32-
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail or telecopy transmission to the Initial Purchasers c/o Deutsche
Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Finance Department; or
(b) if to the Issuers, shall be delivered or sent by mail or
telecopy transmission to the address of the Issuers at Activant
Solutions Inc., ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇ ▇▇▇▇▇▇▇▇ (telecopier no: (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to Hicks,
Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ (telecopier no: (214)
740-7888);
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Issuers shall be entitled to act and rely upon any
request, consent, notice or agreement given or made by the Initial Purchasers.
15. Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
the conflicts of law provisions thereof to the extent the application of the
laws of another jurisdiction would be required thereby.
17. Counterparts. This Agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
18. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
19. No Advisory or Fiduciary Responsibility. The Company
acknowledges and agrees that (i) the purchase and sale of the Securities
pursuant to this Agreement is an arm's-length commercial transaction between the
Company, on the one hand, and the Initial Purchasers, on the other, (ii) in
connection therewith and with the process leading to such transaction each
Initial Purchaser is acting solely as a principal and not the agent or fiduciary
of the Company, (iii) no Initial Purchaser has assumed an advisory or fiduciary
responsibility
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in favor of the Company with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether such Initial Purchaser has
advised or is currently advising the Company on other matters) or any other
obligation to the Company except the obligations expressly set forth in this
Agreement and (iv) the Company has consulted its own legal and financial
advisors to the extent it deemed appropriate. The Company agrees that it will
not claim that any Initial Purchaser has rendered advisory services of any
nature or respect, or owes a fiduciary or similar duty to the Company, in
connection with such transaction or the process leading thereto.
20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
[Remainder of page intentionally left blank]
S-1
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Issuers and the Initial
Purchasers in accordance with its terms.
Very truly yours,
ACTIVANT SOLUTIONS INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
CCI/ARD, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
CCI/TRIAD GEM, INC.
TRIAD SYSTEMS CORPORATION
TRIAD SYSTEMS FINANCIAL
CORPORATION
TRIAD DATA CORPORATION
SPEEDWARE HOLDINGS, INC.
SPEEDWARE USA INC.
ENTERPRISE COMPUTER SYSTEMS, INC.
PRELUDE SYSTEMS, INC.
PROPHET 21, INC.
PROPHET 21 INVESTMENT CORPORATION
PROPHET 21 CANADA INC.
PROPHET 21 (NEW JERSEY), INC.
DISTRIBUTOR INFORMATION SYSTEMS
CORPORATION
TRADE SERVICE SYSTEMS, INC.
STANPAK SYSTEMS, INC.
SDI MERGER CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
S-2
Accepted by:
DEUTSCHE BANK SECURITIES INC.
for itself and on behalf of the several
Initial Purchasers listed on Schedule I hereto
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
SCHEDULE I
Aggregate Principal Interest
Initial Purchaser of Securities to be Purchased
----------------- -----------------------------
Deutsche Bank Securities Inc. $ 72,500,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. $ 72,500,000
-----------------------------
Total $ 145,000,000
SCHEDULE II
Guarantors
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CCI/ARD, INC.
PROPHET 21, INC.
CCI/TRIAD GEM, INC.
TRIAD SYSTEMS CORPORATION
TRIAD SYSTEMS FINANCIAL CORPORATION
TRIAD DATA CORPORATION
SPEEDWARE HOLDINGS, INC.
SPEEDWARE USA INC.
ENTERPRISE COMPUTER SYSTEMS, INC.
PRELUDE SYSTEMS, INC.
PROPHET 21 INVESTMENT CORPORATION
PROPHET 21 CANADA INC.
PROPHET 21 (NEW JERSEY), INC.
DISTRIBUTOR INFORMATION SYSTEMS
CORPORATION
TRADE SERVICE SYSTEMS, INC.
STANPAK SYSTEMS, INC.
SDI MERGER CORPORATION
SCHEDULE III
Applicable Jurisdiction for Good Standing Certificates
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Illinois
North Carolina
California
Texas
Florida
New York
Minnesota
Pennsylvania
Ohio
South Carolina
ANNEX A
[Form of Registration Rights Agreement]
[See attached]
ANNEX B
[Form of Opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP]
[See attached]
ANNEX C
[Form of Opinion of Local Counsel]
[See attached