Exhibit 10.6
▇▇▇▇▇▇▇▇ MANUFACTURING COMPANY, INC.
$85,000,000
10 1/8% Series A Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
September 11, 1997
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
NATIONSBANC CAPITAL MARKETS, INC.
$85,000,000
10 1/8% Series A Senior Subordinated Notes due 2007
of ▇▇▇▇▇▇▇▇ MANUFACTURING COMPANY, INC.
PURCHASE AGREEMENT
September 11, 1997
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
NationsBanc Capital Markets, Inc.
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇▇ Manufacturing Company, Inc., a Texas corporation (the
"Company"), proposes to issue and sell to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
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Securities Corporation ("DLJ") and NationsBanc Capital Markets, Inc.
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("NationsBanc") (each an "Initial Purchaser" and, together, the "Initial
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Purchasers") an aggregate of $85,000,000 in principal amount of its 10% Series
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A Senior Subordinated Notes due 2007 (the "Series A Notes"), subject to the
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terms and conditions set forth herein. The Series A Notes are to be issued
pursuant to the provisions of an indenture (the "Indenture"), to be dated as of
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the Closing Date (as defined below), between the Company and First Trust
National Association, as trustee (the "Trustee"). The Series A Notes and the
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Series B Notes (as defined below) issuable in exchange therefor are collectively
referred to herein as the "Notes." The Notes will be guaranteed (the
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"Guarantees") by future Subsidiaries of the Company as further provided in the
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Indenture. Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Offering Memorandum (as defined herein).
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1. Offering Memorandum. The Series A Notes will be offered and sold to
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the Initial Purchasers pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "Act"). The
Company has prepared a preliminary offering memorandum, dated August 29, 1997
(the "Preliminary Offering Memorandum"), and a final offering memorandum, dated
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September 12, 1997 (the "Offering Memorandum"), each relating to the Series A
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Notes.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities (other than the Series B Notes) issued in exchange therefor or in
substitution thereof) shall bear the following legend:
"THE NOTES (OR THEIR PREDECESSORS) EVIDENCED HEREBY WERE ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE NOTES EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTES EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE NOTES EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH NOTES MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (l)(a) INSIDE THE UNITED STATES TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 903 OR RULE 904 OF REGULATIONS UNDER THE SECURITIES ACT, OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY
SO REQUESTS), (2) TO THE
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COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE NOTES EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
2. Agreements to Sell and Purchase. On the basis of the
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representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers agree,
severally and not jointly, to purchase from the Company, the principal amount of
Series A Notes set forth opposite the name of such Initial Purchaser on Schedule
A hereto at a purchase price equal to 97% of the principal amount thereof (the
"Purchase Price").
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3. Terms of Offering. The Initial Purchasers have advised the Company
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that the Initial Purchasers will make offers (the "Exempt Resales") of the
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Series A Notes purchased hereunder on the terms set forth in the Offering
Memorandum, as amended or supplemented, solely to (i) persons whom the Initial
Purchasers reasonably believe to be "qualified institutional buyers" as defined
in Rule 144A under the Act ("QIBs") and (ii) to persons permitted to purchase
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the Series A Notes in offshore transactions in reliance upon Regulations under
the Act (each, a "Regulations Purchaser") (such persons specified in clauses
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(i) and (ii) being referred to herein as the "Eligible Purchasers"). The
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Initial Purchasers will offer the Series A Notes to Eligible Purchasers
initially at the offering price set forth on the cover of the Offering
Memorandum. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, substantially as
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described in the Offering Memorandum and containing other customary and
reasonable provisions. Pursuant to the Registration Rights Agreement, the
Company will agree to file with the Securities and Exchange Commission (the
"Commission"), under the circumstances set forth therein, (i) a registration
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statement under the Act (the "Exchange Offer Registration Statement") relating
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to the Company's 10% Series B Senior Subordinated Notes (the "Series B Notes"),
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to be offered in exchange for the Series A Notes (such offer to exchange being
referred to as the "Exchange Offer") and/or
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(ii) a shelf registration statement pursuant to Rule 415 under the Act (the
"Shelf Registration Statement" and, together with the Exchange Offer
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Registration Statement, the "Registration Statements") relating to the resale by
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certain holders of the Series A Notes and use its best efforts to cause such
Registration Statements to be declared and remain effective and usable for the
periods specified in the Registration Rights Agreement and to consummate the
Exchange Offer. This Agreement, the Indenture, the Notes, the Registration
Rights Agreement, the Agreement and Plan of Merger, to be dated as of September
19, 1997 (the "Merger Agreement"), between the Company and Dogloo, Inc., a
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California corporation ("Dogloo"), and the Credit Agreement, to be dated as of
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or prior to the Closing Date (the "New Credit Facility"), among the Company, DLJ
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and NationsBanc, as arrangers, certain lending parties thereto and NationsBank
of Texas, N.A., as administrative agent, are hereinafter sometimes referred to
collectively as the "Operative Documents."
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4. Delivery and Payment.
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(a) Delivery of, and payment of the Purchase Price for, the Series A
Notes shall be made at such location as may be mutually acceptable to the
parties hereto. Such delivery and payment shall be made at 9:00 a.m., New York
City time, on the fourth business day following the date of this Agreement, or
at such other time as shall be agreed upon by the Initial Purchasers and the
Company. The time and date of such delivery and the payment are herein called
the "Closing Date."
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(b) One or more of the Series A Notes in the definitive global form,
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the aggregate
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principal amount of the Series A Notes (collectively, the "Global Note"), shall
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be delivered by the Company to the Initial Purchasers (or as the Initial
Purchasers direct), in each case with any transfer taxes thereon duly paid by
the Company against payment by the Initial Purchasers of the Purchase Price
thereof by wire transfer in same day funds to the order of the Company. The
Global Note shall be made available to the Initial Purchasers for inspection not
later than 9:30 a.m., New York City time, on the business day immediately
preceding the Closing Date.
5. Agreements of the Company. The Company hereby agrees with each
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Initial Purchaser as follows:
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(a) To advise the Initial Purchasers promptly and, if requested by an
Initial Purchaser, confirm such advice in writing, (i) of the issuance by any
state securities commission of any stop order suspending the qualification or
exemption from qualification of any Series A Notes for offering or sale in any
jurisdiction designated by an Initial Purchaser pursuant to Section 5(e) hereof,
or the initiation of any proceeding by any state securities commission or any
other federal or state regulatory authority for such purpose and (ii) of the
happening of any event during the period referred to in Section 5(d) below that
makes any statement of a material fact made in the Offering Memorandum untrue or
that requires any additions to or changes in the Offering Memorandum in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Company shall use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption of
any Series A Notes under any state securities or Blue Sky laws and, if at any
time any state securities commission or other federal or state regulatory
authority shall issue an order suspending the qualification or exemption of any
Series A Notes under any state securities or Blue Sky laws, the Company shall
use its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Company, without charge, as many copies of the
Offering Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request. Subject to the Initial Purchasers' compli
ance with their representations and warranties and agreements set forth in
Section 7 hereof, the Company consents to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto, by the Initial Purchasers in connection with Exempt Resales.
(c) During the period referred to in Section 5(d) below, not to make
any amendment or supplement to the Offering Memorandum of which the Initial
Purchasers shall not previously have been advised or to which the Initial
Purchasers shall reasonably object after being so advised.
(d) If, after the date hereof during such period prior to the date on
which the Exchange Offer is consummated as in your reasonable judgment you are
required to deliver the Offering Memorandum in connection with Exempt Resales by
you, any event shall occur as a result of which it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances as of the date the Offering Memorandum is
delivered to an Eligible Purchaser, not misleading, or if it is necessary to
amend
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or supplement the Offering Memorandum to comply with any applicable law,
promptly to prepare an appropriate amendment or supplement to such Offering
Memorandum so that the statements therein, as so amended or supplemented, will
not, in the light of the circumstances when it is so delivered, be misleading,
or so that such Offering Memorandum, as so amended or supplemented, will comply
with applicable law, and to furnish to the Initial Purchasers and such other
persons as the Initial Purchasers may designate such number of copies thereof as
the Initial Purchasers may reasonably request.
(e) Prior to the sale of all the Series A Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration or
qualification of the Series A Notes for offer and sale to the Initial Purchasers
and pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may reasonably request and to continue
such qualification in effect so long as required for Exempt Resales and to file
such consents to service of process or other documents as may be necessary in
order to effect such registration or qualification; provided, however, that the
Company shall not be required in connection therewith to register or qualify as
a foreign corporation in any jurisdiction in which it is not now so qualified or
to take any action that would subject it to service or process or taxation other
than as to matters and transactions relating to Exempt Resales, in any
jurisdiction in which it is not now so subject.
(f) So long as the Notes are outstanding, to furnish to the Initial
Purchasers as soon as available copies of all reports or other communications
furnished by the Company to its security holders or furnished to or filed with
the Commission or any national securities exchange on which any class of
securities of the Company is listed and such other publicly available
information concerning the Company and/or its subsidiaries as the Initial
Purchasers may reasonably request.
(g) For so long as any of the Series A Notes remain outstanding and
during any period in which the Company is not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
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available to any holder of Series A Notes in connection with any sale thereof
and any prospective purchaser of such Series A Notes from such holder, upon
request, the information ("Rule 144A Information") required by Rule 144A(d)(4)
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under the Act.
(h) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be
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paid all expenses incident to performance of the obligations of the Company
under this Agreement, including: (i) all fees and expenses in connection with
the prepara tion, printing and distribution of the Preliminary Offering
Memorandum, the Offering Memorandum and all amendments and supplements thereto
(including financial statements) prior to or during the period specified in
Section 5(d), including the mailing and delivering of copies thereof to the
Initial Purchasers and persons designated by them as specified herein, (ii) all
costs and expenses related to the issuance and delivery of the Series A Notes to
the Initial Purchasers and pursuant to Exempt Resales, including any transfer or
other taxes payable thereon, (iii) all costs of printing or reproduction of any
agreements or documents in connection with the offering, purchase, sale or
delivery of the Series A Notes, (iv) all expenses in connection with the
registration or qualification of the Series A Notes for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any preliminary and supplemental Blue Sky memoranda in connection
therewith (including the filing fees and reasonable fees and disbursements of
counsel for the Initial Purchasers in connection with such registration or
qualification and memoranda relating thereto), (v) the cost of printing
certificates representing the Series A Notes, (vi) all expenses and listing fees
in connection with the application for quotation of the Series A Notes in the
National Association of Securities Dealers, Inc. ("NASD") Automated Quotation
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System - PORTAL ("PORTAL"), (vii) all fees and expenses of the Trustee and
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Trustee's counsel in connection with the Indenture and the Notes, (viii) all
costs and charges of any transfer agent, registrar and/or depositary (including
DTC), (ix) any fees charged by rating agencies for the rating of the Notes, (x)
all costs and expenses of the Exchange Offer and any Registration Statement and
(xi) all other costs and expenses incident to the performance of the obligations
of the Company hereunder for which provision is not otherwise made in this
Section 5.
(i) To use its best efforts to effect the inclusion of the Series A
Notes in PORTAL and to maintain the listing of the Series A Notes on PORTAL for
so long as the Series A Notes are outstanding.
(j) To use its best efforts to obtain the approval of DTC for "book-
entry" transfer of the Notes, and to comply with all of its agreements set forth
in the representation letters of the Company to DTC relating to the approval of
the Notes by DTC for "book entry" transfer.
(k) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or any
warrants,
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rights or options to purchase or otherwise acquire debt securities of the
Company substantially similar to the Notes (other than the Notes) without the
prior written consent of DLJ.
(l) Not to, and not to permit any of its affiliates (as such term is
defined in Rule 501(b) under the Act) to, sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the Act)
that could be expected to be integrated with the sale of the Series A Notes to
the Initial Purchasers or pursuant to Exempt Resales in a manner that would
require the registration of any such sale of the Series A Notes under the Act.
(m) Except in connection with the Exchange Offer or the filing of the
Shelf Registration Statement, as the case may be, not to, and not to authorize
or knowingly permit any person acting on its behalf to, solicit any offer to buy
or offer to sell the Notes by means of any form of general solicitation or
general advertising (including, without limitation, as such terms are used in
Regulation D under the 1933 Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Act.
(n) To use its reasonable efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Closing Date and to satisfy all conditions precedent to the delivery of
the Series A Notes.
6. Representations and Warranties of the Company. As of the date
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hereof, the Company represents and warrants to each Initial Purchaser that:
(a) The Preliminary Offering Memorandum and the Offering Memorandum
do not, and any supplement or amendment to them will not, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchasers furnished to the Company in
writing by the Initial Purchasers expressly for use therein. The Company
acknowledges for all purposes of this Agreement that the last paragraph on the
cover page of the Preliminary Offering Memorandum and the Offering Memorandum,
the information contained in the first and third paragraphs under the caption
"Plan of Distribution"
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in the Preliminary Offering Memorandum and the Offering Memorandum, and the
information regarding stabilization on the inside front cover of the Preliminary
Offering Memorandum and the Offering Memorandum constitute the only information
relating to the Initial Purchasers furnished to the Company in writing by any
Initial Purchaser expressly for use in the Preliminary Offering Memorandum or
the Offering Memorandum (or any amendment or supplement thereto) and that the
Initial Purchasers shall not be deemed to have provided any other information
(and therefore are not responsible for any such statement or omission)
pertaining to any arrangement or agreement with respect to any party other than
the Initial Purchasers. No contract or document that would be required to be
described in the Offering Memorandum if the Offering Memorandum were contained
in a registration statement on Form S-1 filed under the Act is not so described.
No stop order preventing the use of the Preliminary Offering Memorandum or the
Offering Memorandum, or any amendment or supplement thereto, or any order
asserting that any of the transactions contemplated by this Agreement are
subject to the registration requirements of the Act, has been issued.
(b) Each of the Company and Dogloo has been duly organized, is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation and has full corporate power and authority to carry on its
business and to own, lease and operate its properties as described in the
Preliminary Offering Memorandum and the Offering Memorandum. The Company has
the requisite corporate power and authority to authorize the offering of the
Notes, and each of the Company and ▇▇▇▇▇▇ has the requisite corporate power and
authority to execute, deliver and perform its obligations under each Operative
Document to which it is a party. Each of the Company and Dogloo is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which such qualification is required, except
where the failure to be so qualified or in good standing would not (i) have a
material adverse effect on the business, financial condition or results of
operations of the Company and Dogloo, taken as a whole, (ii) materially
interfere with or materially adversely affect the issuance or marketability of
the Series A Notes pursuant hereto or (iii) adversely affect in any manner the
validity of this Agreement or the other Operative Documents (the events referred
to in clauses (i) through (iii), a "Material Adverse Effect"). Neither the
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Company nor Dogloo has any subsidiaries.
(c) The authorized, issued and outstanding capital stock of the
Company upon the consummation of the Transactions (as defined in the Offering
Memorandum) will be as set forth in the Offering Memorandum under "Pro Forma
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Capitalization." All of the shares of issued and outstanding capital stock of
the Company have been and, upon consummation of the Transactions, will be duly
authorized and validly issued and are and, upon consummation of the
Transactions, will be fully paid, nonassessable and not subject to any
preemptive or similar rights.
(d) This Agreement has been duly authorized, executed and delivered by
the Company and, assuming the due execution and delivery by the Initial
Purchasers, is a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except (i) as the enforceability
thereof may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, (ii) for general principles of equity (regardless of whether
enforcement is brought in a proceeding at law or in equity) and (iii)
limitations of applicable law regarding the enforceability of any rights to
contribution or indemnification.
(e) The Indenture has or will have been on or before the Closing Date
duly authorized by the Company and, on the Closing Date, will have been validly
executed and delivered by the Company. When the Indenture has been duly
executed and delivered by the Company, the Indenture will be a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms (assuming the due execution and delivery of the Indenture by the Trustee)
except (i) as the enforceability thereof may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally, (ii) for general principles of
equity (regardless of whether enforcement is brought in a proceeding at law or
in equity) and (iii) the waiver as to stay, extension or usury laws may not be
enforceable.
(f) The Series A Notes have or will have been on or before the Closing
Date duly authorized and, on the Closing Date, will have been validly executed
and delivered by the Company. When the Series A Notes have been issued,
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, the Series A Notes will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except (i) as the enforceability
thereof may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, (ii) for general principles of equity (regardless of whether
enforcement is brought in a proceeding at law or in equity) and (iii) the waiver
as to stay, extension or usury laws may not be enforceable. The
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Series A Notes, when authenticated, executed and delivered, will conform in all
material respects to the description thereof contained in the Offering
Memorandum.
(g) The Series B Notes will have been duly authorized by the Company
on or before the Closing Date. When the Series B Notes are executed and
authenticated in accordance with the provisions of the Indenture and delivered
in exchange for Series A Notes in accordance with the Indenture and the Exchange
Offer, the Series B Notes will be entitled to the benefits of the Indenture and
will be the valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except (i) as the enforceability
thereof may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, (ii) for general principles of equity (regardless of whether
enforcement is brought in a proceeding at law or in equity) and (iii) the waiver
as to stay, extension or usury laws may not be enforceable.
(h) The Registration Rights Agreement has or will have been on or
before the Closing Date duly authorized by the Company and, on the Closing Date,
will have been duly executed and delivered by the Company. When the
Registration Rights Agreement has been duly executed and delivered by the
Company, the Registration Rights Agreement will be a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms
(assuming the due execution and delivery of the Registration Rights Agreement by
the Initial Purchasers) except (i) as the enforceability thereof may be limited
by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally, (ii) for general
principles of equity (regardless of whether enforcement is brought in a
proceeding at law or in equity) and (iii) limitations of applicable law
regarding the enforceability of any rights to contribution or indemnification.
The Registration Rights Agreement conforms to the description thereof in the
Offering Memorandum.
(i) The Merger Agreement will have been duly authorized, executed and
delivered by the Company and Dogloo and will be a valid and binding agreement of
the Company and Dogloo on or before the Closing Date, enforceable against each
of them in accordance with its terms, except (i) as the enforceability thereof
may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and (ii)
for general principles of equity (regardless of whether enforcement is brought
in a proceeding at law or in equity). On or before the Closing Date, the merger
of Dogloo with and into the Company as contemplated by the Merger
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Agreement (the "Merger") will have been approved by stockholders of the Company
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and Dogloo holding the requisite number of shares to approve the Merger. The
Merger Agreement conforms to the description thereof in the Offering Memorandum.
(j) The transactions comprising the Recapitalization (as defined in
the Offering Memorandum) conform to the description thereof in the Offering
Memorandum.
(k) Neither the Company nor Dogloo (i) is in violation of its
respective charter or by-laws, or (ii)(a) before giving effect to the
transactions contemplated by this Agreement and the other Transactions is, or
(b) assuming that the Transactions occur as contemplated by the Offering
Memorandum will be, in default in the performance of any obligation, agreement,
covenant or condition contained in any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Company and
Dogloo, taken as a whole, to which the Company or Dogloo is a party or by which
the Company, Dogloo or any of their respective property is bound, except for any
such violations and defaults as would not, singly or in the aggregate, have a
Material Adverse Effect. There exists no condition that, with notice, the
passage of time or otherwise, would constitute a default under any such document
or instrument, except for any such defaults or violations as would not, singly
or in the aggregate, have a Material Adverse Effect, and except for indebtedness
and other obligations that will be repaid in connection with the Transactions.
(l) The execution, delivery and performance by the Company and Dogloo
of each Operative Agreement to which either of them is a party, the issuance and
sale of the Series A Notes as contemplated by this Agreement and the Offering
Memorandum and the consummation of the transactions contemplated by this
Agreement, each other Operative Document and the Offering Memorandum will not
(i) require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as may
be required under the securities or Blue Sky laws of the various states or as
previously have been made or obtained and assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section 7 hereof),
or (ii) violate the charter or by-laws of the Company or Dogloo, or (iii)
constitute a breach of any of the terms or provisions of, or a default under, or
cause an acceleration of any obligation under, or result in the imposition or
creation of (or the obligation to create or impose) a Lien with respect to, any
material indenture, loan agreement, mortgage, lease or other material agreement
or instrument to which the Company or Dogloo is a party
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or by which the Company or Dogloo or their respective property is subject,
except for indebtedness and other obligations that will be repaid in connection
with the Transactions, or (iv) violate or conflict with any applicable law or
any rule, regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over the Company, Dogloo or their respective
property (assuming the accuracy of the representations and warranties of the
Initial Purchasers in Section 7 hereof), or (v) result in the termination or
revocation of any permit (as defined below) of the Company or Dogloo or result
in any other impairment of the rights of the holder of any such permit, except,
in the case of clause (i), (iii), (iv) or (v) above, for such conflicts or
violations as would not, singly or in the aggregate, have a Material Adverse
Effect.
(m) The Company and Dogloo have good title in fee simple to all real
property and good title to all personal property owned by them which is material
to the business of the Company and Dogloo taken as a whole, in each case free
and clear of all liens, encumbrances, pledges, claims, security interests,
mortgages, assessments, easements, rights of way, covenants, restrictions,
rights of first refusal, defects in title, encroachments and other burdens or
adverse claims (collectively, "Liens"), except such as are Liens permitted under
-----
the debt instruments (including the Indenture) described in the Offering
Memorandum or that will be repaid in connection with the Transactions, or such
as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and Dogloo or which would not, singly or in the aggregate, have a
Material Adverse Effect. Any real property and buildings held under lease by
the Company or Dogloo are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially interfere
with the use made and proposed to be made of such property and buildings by the
Company and Dogloo, except as described in the Offering Memorandum or which
would not, singly or in the aggregate, have a Material Adverse Effect.
(n) There is no legal or governmental proceeding pending or, to the
Company's knowledge, threatened to which the Company or Dogloo is bound or would
reasonably be expected to be a party or to which any of their respective
property is or would reasonably be expected to be subject, except for any such
proceedings as would not, singly or in the aggregate, have a Material Adverse
Effect.
(o) To the Company's knowledge, no action has been taken and no law,
statute, rule or regulation or order has been enacted, adopted or issued by
14
any governmental agency or body which prevents the execution, delivery and
performance of any of the Operative Documents, the consummation of any of the
transactions contemplated thereunder or the issuance of the Series A Notes, or
suspends the sale of the Series A Notes in any jurisdiction referred to in
Section 5(e). To the Company's knowledge, no injunction, restraining order or
other order or relief of any nature by a federal or state court or other
tribunal of competent jurisdiction has been issued with respect to the Company
or Dogloo which would prevent or suspend the issuance or sale of the Series A
Notes in any jurisdiction referred to in Section 5(e) or the consummation of any
transaction contemplated by the Operative Documents.
(p) Except as would not, singly or in the aggregate, have a Material
Adverse Effect, (i) neither the Company nor Dogloo is in violation of any
Federal, state or local laws or regulations relating to pollution or protection
of human health or the environment ("Environmental Laws"), which violation
------------------
includes, but is not limited to, noncompliance with or lack of any permits (as
defined below) or other governmental authorizations; and (ii) (A) neither the
Company nor Dogloo has received any communication, whether from a governmental
authority or otherwise, alleging any such violation or noncompliance, and there
are no circumstances, either past, present or that are reasonably foreseeable,
that are reasonably likely to lead to such violation in the future, (B) there is
no pending or, to the Company's knowledge, threatened claim, action,
investigation or notice by any person or entity alleging potential liability for
investigatory, cleanup, or governmental response costs, or natural resources or
property damages, or personal injuries, attorney's fees or penalties relating to
any actual, alleged or, to the Company's knowledge, threatened pollution or
contamination, or any circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law (collectively, "Environmental
-------------
Claims"), and (C) there are no past or present actions, activities,
------
circumstances, conditions, events or incidents, that could reasonably be
expected to form the basis of any Environmental Claim against the Company or
Dogloo or against any person or entity whose liability for any Environmental
Claim the Company or Dogloo has retained or assumed either contractually or by
operation of law. In the ordinary course of its business, each of the Company
and Dogloo, where required or appropriate, has conducted environmental
investigations of, and has reviewed information regarding, its business
properties and operations; on the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities are not likely
to have a Material Adverse Effect.
(q) Except for the Initial Purchasers, there are no contracts,
agreements or understandings between the Company or Dogloo and any person
15
granting such person the right to require the Company or Dogloo to include
securities held by such person in any Registration Statement.
(r) Except as would not be unlawful, neither the Company nor Dogloo
has (i) taken, directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Notes or (ii) since the date of the Preliminary Offering Memorandum (A) sold,
bid for, purchased or paid any person any compensation for soliciting purchases
of the Notes or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(s) Except for the Initial Purchasers, there are no contracts,
agreements or understandings between the Company or Dogloo and any person that
would give rise to a valid claim against the Company, Dogloo or any Initial
Purchaser for a brokerage commission, finder's fee or like payment in connection
with the issuance, purchase and sale of the Notes.
(t) The Company has no knowledge of any actionable violation by the
Company or Dogloo of any Federal, state or local law relating to employment
practices, discrimination in the hiring, promotion or pay of employees or any
applicable wage or hour laws, or of any provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA") or the rules and regulations promulgated
thereunder, except for any such violation as would not, singly or in the
aggregate, have a Material Adverse Effect. There is (A) no significant unfair
labor practice complaint pending against the Company or Dogloo or, to the best
knowledge of the Company, threatened against either of them, before the National
Labor Relations Board or any state or local labor relations board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is pending against the Company or
Dogloo or, to the knowledge of the Company, threatened against either of them,
(B) no labor strike, dispute, slowdown or stoppage ("Labor Dispute") in which
the Company or Dogloo is involved nor, to the best knowledge of the Company, is
any Labor Dispute imminent, other than routine disciplinary and grievance
matters, and the Company is not aware of any existing or imminent Labor Dispute
by the employees of any of its or Dogloo's principal suppliers, manufacturers or
contractors, and (C) no question concerning union representation within the
meaning of the National Labor Relations Act existing with respect to the
employees of the Company or Dogloo and, to the knowledge of the Company, no
union organizing activities with respect to such employees are
16
taking place, except with respect to any matter specified in clause (A), (B), or
(C) above as would not, singly or in the aggregate, have a Material Adverse
Effect.
(u) Each of the Company and Dogloo has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals ("permits")
-------
of, and has made all filings with and notice to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to have any
such permit or to make any such filing or notice would not, singly or in the
aggregate, have a Material Adverse Effect. Each such permit is valid and in
full force and effect and each of the Company and Dogloo is in compliance with
all the terms and conditions of its respective permits and with the rules and
regulations of the authorities and governing bodies having jurisdiction with
respect thereto; no event has occurred (including the receipt of any notice from
any authority or governing body) which allows or, after notice or elapse of time
or both, would allow revocation, suspension or termination of any such permit,
or results or, after notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such permit; and such permits
contain no restrictions that are unduly burdensome to the Company or Dogloo,
except, in each case, where such failure to be valid and in full force and
effect or to be in compliance, the occurrence of any such event or the presence
of any such restriction would not, singly or in the aggregate, have a Material
Adverse Effect.
(v) Except as otherwise disclosed in the Offering Memorandum or as
would not, singly or in the aggregate, have a Material Adverse Effect, each of
the Company and Dogloo owns or possesses all patents, patent rights, licenses,
inventions, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names, in each case to the extent disclosed
in the Offering Memorandum as being material to the business of the Company or
Dogloo, as applicable (collectively, the "Intellectual Property"), presently
---------------------
employed by it in connection with the businesses now operated by it, and
neither the Company nor Dogloo has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the foregoing.
The use of such Intellectual Property in connection with the business and
operations of the Company and Dogloo does not infringe on the rights of any
person except as would not, singly or in the aggregate, have a Material Adverse
Effect.
17
(w) The accountants, Ernst & Young LLP, KPMG Peat Marwick LLP, and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, that have certified the financial statements and related
notes included in the Preliminary Offering Memorandum and the Offering
Memorandum are independent public accountants with respect to the Company (as
for Ernst & Young LLP and KPMG Peat Marwick LLP) and Dogloo (as for Ernst &
Young LLP and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP) as required by the Act and the Exchange Act.
The respective historical financial statements of the Company and Dogloo,
together with the related notes, included in the Preliminary Offering Memorandum
and the Offering Memorandum comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under the Act.
(x) The respective historical financial statements of the Company and
Dogloo, together with related notes forming part of the Preliminary Offering
Memorandum and the Offering Memorandum (and any amendment or supplement
thereto), present fairly the consolidated financial position, results of
operations and changes in financial position of the Company and Dogloo,
respectively, on the basis stated in the Preliminary Offering Memorandum and
the Offering Memorandum at the respective dates or for the respective periods to
which they apply; such statements and related notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data included in the Preliminary
Offering Memorandum and the Offering Memorandum (and any amendment or supplement
thereto) are presented and prepared on a basis consistent with such financial
statements and the books and records of the Company and Dogloo, respectively.
(y) The pro forma financial statements and related notes thereto
included in the Preliminary Offering Memorandum and the Offering Memorandum have
been prepared on a basis consistent with the historical financial statements of
the Company and Dogloo and give effect to assumptions made on a reasonable basis
and in good faith and present fairly the historical and proposed transactions
contemplated by the Preliminary Offering Memorandum and the Offering
Memorandum; and such pro forma financial statements and related notes comply as
to form in all material respects with the requirements applicable to pro forma
financial statements included in registration statements on Form S-1 under the
Act. The other pro forma financial and statistical information and data included
in the Preliminary Offering Memorandum and the Offering Memorandum are, in all
material respects, presented and prepared on a basis consistent with such pro
forma financial statements.
18
(z) The projected amounts of operating synergies and other cost
savings resulting from the Merger included in the Offering Memorandum were
determined by the Company with a reasonable basis and in good faith and the
assumptions used in the determination of the amounts of such projected operating
synergies and other cost reductions are all those that the Company believes are
significant in projecting the amounts of such synergies and other cost
reductions.
(aa) Neither the Company nor Dogloo is and, after giving effect to the
offering and sale of the Series A Notes and the application of the net proceeds
thereof as described in the Offering Memorandum, the Company will not be, an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
(ab) Neither the Company, ▇▇▇▇▇▇ nor any agent acting on behalf of
either of them has taken, and none of them will take, any action that might
cause this Agreement or the issuance or sale of the Series A Notes to violate
Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation
U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System.
(ac) Since the respective dates as of which information is given in
the Offering Memorandum, other than as set forth or contemplated in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material adverse change
or any development that might reasonably be expected to involve a prospective
material adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and Dogloo, taken as
a whole, (ii) there has not been any material adverse change or any development
that might reasonably be expected to involve a prospective material adverse
change in the capital stock or a prospective material increase in the long-term
debt of the Company or Dogloo and (iii) neither the Company nor Dogloo has
incurred any liability or obligation, direct or contingent, that is material to
the Company and Dogloo, taken as a whole.
(ad) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Act.
(ae) No form of general solicitation or general advertising (within
the meaning of Regulation D under the Act) was or will be used by the
19
Company, Dogloo or any of their respective representatives (other than the
Initial Purchasers, as to whom the Company and Dogloo make no representation) in
connection with the offer and sale of the Series A Notes contemplated hereby.
No securities of the same class as the Series A Notes have been issued and sold
by the Company within the six-month period immediately prior to the date hereof.
(af) No registration under the Act of the Series A Notes is required
for the sale of the Series A Notes to the Initial Purchasers as contemplated
hereby or for the Exempt Resales, assuming the accuracy of the Initial
Purchasers' representations and warranties and agreements set forth in Section 7
hereof.
(ag) The Company, Dogloo and their respective affiliates and all
persons acting on their behalf (other than the Initial Purchasers, as to whom
the Company and Dogloo make no representation) have complied with and will
comply with the offering restrictions requirements of Regulation S under the Act
in connection with any offering of the Series A Notes outside the United States.
(ah) Assuming the accuracy of the Initial Purchasers' representations,
warranties and agreements set forth in Section 7 hereof, prior to the
effectiveness of any Registration Statement, the Indenture is not required to
be qualified under the TIA.
(ai) The Company and Dogloo each maintains 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.
(aj) Except as would not, singly or in the aggregate, have a Material
Adverse Effect, (a) all Tax returns required to be filed by the Company or
Dogloo have been filed and all such returns are true, complete, and correct in
all material respects, and (b) all Taxes that are due or claimed to be due from
the Company or Dogloo have been paid other than those (i) currently payable
without penalty or interest or (ii) being contested in good faith and by
appropriate proceedings and for which adequate reserves have been established
in accordance with generally accepted accounting principles. For purposes of
this Agreement, the term
20
"Tax" and "Taxes" shall mean all Federal, state, local and foreign taxes, and
other assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties applicable
thereto.
(ak) Immediately after and after giving effect to the offering of the
Series A Notes as contemplated hereby, the use of proceeds therefrom as
described in the Offering Memorandum and the consummation of the Merger and the
other transactions contemplated by the Offering Memorandum, (i) the present fair
salable value of the Company's assets shall be more than the amount that will be
required to pay its debts (including contingent and unliquidated debts) as they
become absolute and matured, (ii) the Company's assets, at a fair valuation,
shall be greater than the sum of its debts (including contingent and
unliquidated debts), (iii) the Company shall not be engaged in a business or
transaction for which its remaining assets are unreasonably small in relation to
such business or transaction, and (iv) the Company shall not intend to incur or
believe that it will incur debts beyond its ability to pay such debts as they
become absolute and matured.
(al) Except as would not, singly or in the aggregate, have a Material
Adverse Effect, neither the Company nor ▇▇▇▇▇▇, nor any director, officer,
agent, employee or other person associated with or acting on behalf of either of
them has used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or is in violation of
any Federal "fraud and abuse legislation" or Federal "anti-kickback law."
(am) Each certificate signed by any officer of the Company or Dogloo
and delivered to the Initial Purchasers or counsel for the Initial Purchasers in
connection with this Agreement, the Notes, the Indenture or the Registration
Rights Agreement on or prior to the Closing Date shall be deemed to be a
representation and warranty of the Company or Dogloo, as applicable, to the
Initial Purchasers as to the matters covered thereby.
The Company acknowledges that the Initial Purchasers and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchasers, will rely
upon the accuracy and truth of the foregoing representations and hereby consent
to such reliance.
21
7. Initial Purchasers' Representations and Warranties. Each of the
--------------------------------------------------
Initial Purchasers, severally and not jointly, represents and warrants to the
Company and agrees that:
(a) Such Initial Purchaser is a QIB with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (A) is not acquiring the Series A Notes
with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Series A Notes only to (x) QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and (y) in offshore
transactions in reliance upon Regulation S under the Act.
(c) Such Initial Purchaser represents and warrants that (i) no form
of general solicitation or general advertising (within the meaning of Regulation
D under the Act) has been or will be used by such Initial Purchaser or any of
its representatives in connection with the offer and sale of the Series A Notes
pursuant hereto, and (ii) it has not and will not solicit offers for or offer to
sell Series A Notes in any manner involving a public offering within the meaning
of Section 4(2) of the Act.
(d) Such Initial Purchaser agrees that, in connection with Exempt
Resales, such Initial Purchaser will solicit offers to buy the Series A Notes
only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Each Initial Purchaser further agrees that it will offer to sell
the Series A Notes only to, and will solicit offers to buy the Series A Notes
only from (1)(A) QIBs who, in purchasing the Series A Notes will be deemed to
have represented and agreed that (x) they are purchasing the Series A Notes for
their own accounts or accounts with respect to which they exercise sole
investment discretion and that they or such accounts are QIBs and (y) they
acknowledge that the seller of such Series A Notes may be relying on the
exemption from the provisions of Section 5 of the Act provided by Rule 144A
thereunder and that such Series A Notes will not have been registered under the
Act and (B) Regulation S Purchasers who, in purchasing the Series A Notes will
be deemed to have represented and agreed that their purchase of Series A Notes
pursuant to Regulation S is not part of a plan or a scheme to evade the
registration provisions of the Act and (2) Eligible Purchasers that agree
22
that (x) Series A Notes purchased by them may be resold, pledged or otherwise
transferred within the time period referred to under Rule 144(k) (taking into
account the provisions of Rule 144(d) under the Act, if applicable) under the
Act, as in effect on the date of the transfer of such Series A Notes, only (I)
to the Company or any of its subsidiaries, (II) to a person whom the seller
reasonably believes is a QIB purchasing for its own account or for the account
of a QIB in a transaction meeting the requirements of Rule 144A under the Act,
(III) in an offshore transaction (as defined in Rule 902 under the Act) meeting
the requirements of Rule 904 of the Act, (IV) in a transaction meeting the
requirements of Rule 144 under the Act, (V) in accordance with another
exception from the registration requirements of the Act (and based upon an
opinion of counsel acceptable to the Company) or (VI) pursuant to an effective
registration statement and, in each case, in accordance with the applicable
securities laws of any state of the United States or any other acceptable
jurisdiction and (y) they will deliver to each person to whom such Series A
Notes or an interest therein is transferred a notice substantially to the effect
of the foregoing.
The Initial Purchasers acknowledge that the Company and, for purposes of
the opinions to be delivered to each Initial Purchaser pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and the Initial
Purchasers hereby consent to such reliance.
8. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless the Initial
Purchasers, their directors, their officers and each person, if any, who
controls an Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any legal or
other expenses incurred in connection with defending or investigating any
matter, including any action that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), the Preliminary Offering Memorandum or any
Rule 144A Information provided by the Company to any holder or prospective
purchaser of Series A Notes pursuant to Section 5(g) hereof or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to an Initial
23
Purchaser furnished in writing to the Company by such Initial Purchaser
expressly for use in the Preliminary Offering Memorandum or the Offering
Memorandum.
(b) Each Initial Purchaser agrees to indemnify and hold harmless the
Company, its directors and officers and each person who controls (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company,
to the same extent as the foregoing indemnity from the Company but only with
reference to information relating to such Initial Purchaser furnished in writing
to the Company by such Initial Purchaser expressly for use in the Preliminary
Offering Memorandum or the Offering Memorandum.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
-----------------
against whom such indemnity may be sought (the "indemnifying party") in writing
------------------
(provided that the failure to give such notice shall not relieve the
--------
indemnifying party of its obligations under this Section 8 unless and only to
the extent that the indemnifying party is materially prejudiced by the failure
to notify) and the indemnifying party shall assume promptly the defense of such
action, including the employment of counsel reasonably satisfactory to the
indemnified party and the payment of all reasonable fees and expenses of such
counsel, as incurred (except that in the case of any action in respect of which
indemnity may be sought pursuant to both Sections 8(a) and 8(b), an Initial
Purchaser shall not be required to assume the defense of such action pursuant to
this Section 8(c), but may employ separate counsel and participate in the
defense thereof, but the fees and expenses of such counsel, except as provided
below, shall be at the expense of such Initial Purchaser). Any indemnified
party shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed promptly to
assume the defense of such action or employ counsel reasonably satisfactory to
the indemnified party or (iii) the named parties to any such action (including
any impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising
24
out of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
DLJ, in the case of the parties indemnified pursuant to Section 8(a), and by the
Company, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than 10 business days after such indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or fault,
culpability or failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party, or is insufficient in respect
of any losses, claims, damages, liabilities or judgments referred to herein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and any of the Initial Purchasers, on the other hand,
from the offering of the Series A Notes or (ii) if the allocation provided by
clause 8(d)(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
8(d)(i) above but also the relative fault of the Company and any Initial
Purchaser in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company and any
of the Initial Purchasers shall be deemed to be in the same proportion as the
total net
25
proceeds from the offering of the Series A Notes (before deducting expenses but
after deducting discounts and commissions received by the Initial Purchasers)
received by the Company, and the total discounts and commission received by such
Initial Purchaser bear to the total price to investors of the Series A Notes, in
each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of the Company and any of the Initial Purchasers
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or an
Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any matter that
could have given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 8, no Initial Purchaser (and its
related indemnified parties) shall be required to contribute any amount in
excess of the amount by which the total discounts and fees received by such
Initial Purchaser in connection with the sale of Series A Notes pursuant to this
Agreement exceeds the amount of any damages which such Initial Purchaser (and
any related indemnified party) has otherwise been required to pay by reason of
such 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective principal amount of Series A Notes purchased by
each of the Initial Purchasers hereunder, and not joint.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
26
9. Conditions of Initial Purchasers' Obligations. The obligations of
---------------------------------------------
the Initial Purchasers to purchase the Series A Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and
Dogloo contained in this Agreement shall be true and correct on the date hereof
and on the Closing Date with the same force and effect as if made on and as of
the Closing Date.
(b) The Initial Purchasers shall have received on the Closing
Date a certificate dated the Closing Date, signed by the President and the Chief
Financial Officer of the Company, confirming, as of the Closing Date, the
matters set forth in paragraphs (a), (c), (d) and (m) of this Section 9.
(c) Since the respective dates as of which information is given
in the Offering Memorandum, other than as set forth or contemplated in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there shall not have occurred any
change or any development involving a prospective change in the condition,
financial or otherwise, or the earnings, business, management or operations of
the Company and Dogloo, taken as a whole, (ii) there shall not have been any
change or any development involving a prospective change in the capital stock or
increase in the long-term debt of the Company or Dogloo and (iii) neither the
Company nor Dogloo shall have incurred any material liability or obligation,
direct or contingent, the effect of which, in any such case described in clause
9(c)(i), 9(c)(ii) or 9(c)(iii), in your good faith judgment, would have a
Material Adverse Effect.
(d) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the issuance or
sale of any of the Series A Notes or otherwise have a Material Adverse Effect;
no action, suit or proceeding shall be pending against or, to the knowledge of
the Company, threatened against, the Company or Dogloo before any court or
arbitrator or any governmental body, agency or official which would reasonably
be expected to prohibit, interfere with or adversely affect the issuance or sale
of the Notes or otherwise have a Material Adverse Effect; and no stop order,
injunction, restraining order, or order of any nature preventing the use of the
Offering Memorandum, or any amendment or supplement thereto, or any order
asserting that any of the transactions contemplated by this Agreement are
subject to the registration requirements of the Act shall have been issued.
27
(e) On the Closing Date, the Initial Purchasers shall have
received:
A. An opinion, dated the Closing Date, of O'Melveny &
▇▇▇▇▇ LLP, special counsel for the Company, substantially to the effect that:
(1) Assuming the due authorization, execution and delivery
of the Indenture by the Company and the Trustee, the Indenture is
a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except (i) as may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws affecting the
rights of creditors generally, (ii) for the effect of general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive
relief regardless of whether enforcement is brought in a
proceeding at law or in equity and (iii) the waiver as to stay,
extension or usury laws may not be enforceable.
(2) Assuming the due authorization of the Series A Notes by
the Company, when executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by
the Initial Purchasers in accordance with the terms of this
Agreement, the Series A Notes will be valid and binding
obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with
their terms, except (i) as may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally,
(ii) for the effect of general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific
performance or injunctive relief regardless of whether enforcement
is brought in a proceeding at law or in equity and (iii) the
waiver as to stay, extension or usury laws may not be enforceable.
(3) Assuming the due authorization of the Series B Notes by
the Company, when executed and authenticated in accordance with
the provisions of the Indenture and delivered in
28
exchange for Series A Notes in accordance with the Indenture and
the Exchange Offer, the Series B Notes will be valid and binding
obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with
their terms, except (i) as may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally,
(ii) for the effect of general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of
specific performance or injunctive relief regardless of whether
enforcement is brought in a proceeding at law or in equity and
(iii) the waiver as to stay, extension or usury laws may not be
enforceable.
(4) Assuming the due authorization, execution and delivery
of the Registration Rights Agreement by the Company and the
Initial Purchasers, the Registration Rights Agreement is a valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except (i) as may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws affecting the
rights of creditors generally, (ii) for the effect of general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive
relief regardless of whether enforcement is brought in a
proceeding at law or in equity and (iii) no option need be
expressed as to the validity binding nature of enforceability of
the provisions of Section 7 of the Registrations Rights
Agreement.
(5) Based solely on such counsel's review of good standing
certificates issued by the applicable governmental authorities in
the states of California and Indiana, respectively, the Company
is duly qualified and in good standing as a foreign corporation
authorized to do business in the states of California and
Indiana.
(6) The statements in the Offering Memorandum under the
captions "The ▇▇▇▇▇▇▇▇ Recapitalization," "The Merger,"
"Management--Employment and Other Arrangements," "Certain
29
Relationships and Related Transactions" and "Description of
Notes," insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein,
fairly summarize the information called for with respect to such
legal matters, documents and proceedings.
(7) The execution and delivery of and performance by the
Company of this Agreement, the Indenture and the Registration
Rights Agreement, the issuance and sale of the Series A Notes as
contemplated by this Agreement and the consummation of the
transactions contemplated by this Agreement, the Indenture and
the Registration Rights Agreement (but otherwise excluding the
Transactions, including, without limitation, the use of proceeds
from the offering of the Notes and the New Credit Facility as
described in the Offering Memorandum under "Use of Proceeds") do
not violate, breach or result in a default under any loan or
credit agreement or any other material agreement, lease or
instrument to which the Company or Dogloo is a party or by which
either of them or their respective properties may be bound that
will not be repaid in connection with the issuance of the Series
A Notes and which is listed on the certificate of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Chief Financial Officer of the Company, attached to
such opinion or on the certificate of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief
Financial Officer of Dogloo, attached to such opinion
(collectively, the "Other Agreements") or (ii) violate any United
----------------
States federal, New York or California statute or regulation that
such counsel has, in the exercise of customary professional
diligence, recognized as applicable to the Company or Dogloo or
to transactions of the type contemplated by the Purchase
Agreement except that no opinion need be expressed with regard to
any Blue Sky or securities laws of any jurisdiction or (iii)
result in the creation of any Lien upon any of the properties or
assets of the Company or Dogloo under any mortgage, deed of
trust, pledge or security interest of any nature under or
pursuant to any Other Agreement (other than pursuant to the New
Credit Facility and the other Loan Documents (as defined in the
New Credit Facility)) upon, or with respect to, any of the
properties now owned by the Company or Dogloo, except for such
conflicts or violations as would not, singly or in the aggregate,
have a Material Adverse
30
Effect and except for indebtedness and other obligations that
will be repaid in connection with the Transactions.
(8) No order, consent, permit or approval of any New York,
California or federal governmental authority that such counsel
has, in the exercise of customary professional diligence,
recognized as applicable to the Company is required on the part
of the Company for the execution and delivery of, and performance
of its obligations under this Agreement, the Indenture, the Notes
and the Registration Rights Agreement that are required to be
performed on or before the Closing Date except in each case as
have been obtained or made prior to the Closing Date and except
that no opinion need be expressed with regard to any consents,
authorizations, orders or approvals under the Blue Sky or
securities laws of any jurisdiction.
(9) To such counsel's actual knowledge, there is no legal
or governmental proceeding pending or threatened which would be
required to be described in the Offering Memorandum if the
Offering Memorandum were a prospectus included in a registration
statement on Form S-1 and is not so described.
(10) Neither the Company nor Dogloo is and, after giving
effect to the offering and sale of the Series A Notes and the
application of the net proceeds thereof as described in the
Offering Memorandum, the Company will not be, an "investment
company," as such term is defined in the Investment Company Act
of 1940, as amended.
(11) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, complied with the
requirements of Rule 144A(d)(4) under the Act.
(12) No registration under the Act of the Series A Notes or
qualification of the Indenture under the TIA is required for the
sale of the Series A Notes to the Initial Purchasers as
contemplated by this Agreement or for the Exempt Resales,
assuming (i) the accuracy of, and compliance with, the Initial
Purchaser's representations and agreements contained in Section 7
of this Agreement and (ii) the accuracy of the representations
and agreements
31
of the Company set forth in this Agreement and (iii) that the
offer, sale and delivery of the Series A Notes have been made as
contemplated by this Agreement and the Offering Memorandum.
Such counsel may state that such opinions are limited to matters
governed by the Federal laws of the United States of America and the laws of the
States of New York and California; may assume the validity of the matters set
forth in the opinion of ▇▇▇▇▇▇▇, Sapp, Zivley, Hill & ▇▇▇▇▇▇ LLP, to be
delivered to the Initial Purchasers on the Closing Date pursuant to Section
9(e)B; and may include in its opinion customary qualifications and assumptions
reasonably satisfactory to the Initial Purchasers and their counsel.
In addition, O'Melveny & ▇▇▇▇▇ LLP shall state that in connection with
such counsel's participation in the preparation of the Preliminary Offering
Memorandum and the Offering Memorandum, such counsel has not independently
verified the accuracy, completeness or fairness of the statements contained
therein, and the limitations inherent in the examination made by such counsel
and the knowledge available to such counsel are such that such counsel is unable
to assume, and such counsel does not assume any responsibility for, such
accuracy, complete ness or fairness. However, on the basis of such counsel's
review and participation in conferences in connection with the preparation of
the Preliminary Offering Memorandum and the Offering Memorandum, and relying as
to materiality to a large extent upon opinions of officers and other
representatives of the Company and Dogloo, such counsel does not believe that
the Offering Memorandum (as amended or supplemented, if applicable) as of its
date or as of the Closing Date contained any untrue statement of a material fact
or omitted 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 (it being understood that such counsel need not make any statement
with respect to the financial statements (including the pro forma financial
information) and the notes thereto and the schedules and other financial and
statistical data included in the Offering Memorandum).
B. An opinion, dated the Closing Date, from Liddell, Sapp,
Zivley, Hill & ▇▇▇▇▇▇, LLP, special Texas counsel for the Company, substantially
to the effect that:
(1) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of Texas
and has full corporate power and authority to carry on its business
and to own, lease and operate its properties as
32
described in the Offerng Memorandum. The Company has the
requisite corporate power and authority to execute, deliver and
perform its obligations under each Operative Document to which it
is a party.
(2) All of the outstanding shares of capital stock of the
Company have duly authorized and validly issued and are fully
paid and non-assessable and not subject to any preemptive or
similar rights.
(3) Each of this Agreement, the Indenture and the
Registration Rights Agreement has been duly authorized, executed
and delivered by the Company.
(4) The Series A Notes have been duly authorized, executed
and delivered by the Company. The Series B Notes have been duly
authorized by the Company.
(5) The execution, delivery and performance by the Company
of each Operative Document to which it is a party, the issuance
and sale of the Series A Notes as contemplated by this Agreement
and the consummation of the transactions contemplated by this
Agreement, each other Operative Document and the Offering
Memorandum will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court
or governmental body or agency in the State of Texas (except such
as may be required under the securities or Blue Sky laws of such
state), or (ii) violate the charter or bylaws of the Company,
except in the case of clause (i) above for such conflicts or
violations as would not, singly or in the aggregate, have a
Material Adverse Effect.
Such counsel may state that such opinions are limited to matters
governed by the Federal laws of the United States of America and the laws of the
State of Texas and may include in its opinion customary qualifications and
assumptions reasonably satisfactory to the Initial Purchasers and their counsel.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
33
LLP, special counsel for the Initial Purchasers, in form and substance
reasonably satisfactory to the Initial Purchasers.
(g) The Initial Purchasers shall have received an opinion from
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Financial Advisors (satisfactory to the Initial
Purchasers and their counsel) dated the Closing Date, to the effect that,
immediately after and after giving effect to the Offering and the New Credit
Facility and the application of the net proceeds therefrom as described in the
Offering Memorandum, with respect to the Company on a consolidated basis, (i) on
a pro forma basis the fair value and present fair saleable value of the
Company's assets would exceed the Company's stated liabilities and identified
contingent liabilities; (ii) the Company should be able to pay its debts as they
become absolute and mature; and (iii) the capital remaining in the Company after
the consummation of the Transactions would be unreasonably small for the
business in which the Company is engaged, as management has indicated it is now
conducted and is proposed to be conducted following the consummation of the
Transactions.
(h) The Initial Purchasers shall have received (i) at the time
this Agreement is executed, letters dated the date hereof in form and substance
satisfactory to the Initial Purchasers from Ernst & Young LLP, KPMG Peat Marwick
LLP and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public accountants, and (ii) at the
Closing Date a letter dated the Closing Date from Ernst & Young LLP, in each
case containing the information and statements of the type ordinarily included
in accountants' "comfort letters" to the Initial Purchasers with respect to the
financial statements and certain financial information contained in the Offering
Memorandum.
(i) The Series A Notes shall have been approved by the NASD for
trading and duly listed in PORTAL.
(j) The Company shall have executed the Registration Rights
Agreement and the Initial Purchasers shall have received an original copy
thereof, duly executed by the Company.
(k) The Company and the Trustee shall have executed the
Indenture and the Initial Purchasers shall have received an original copy
thereof, duly executed by the Company and the Trustee.
(l) Concurrently with the offering of the Series A Notes as
contemplated hereby and by the Offering Memorandum, (i) the Merger will become
effective, (ii) the New Credit Facility will become effective, and (ii) the
Company
34
will use the proceeds from the offering of the Series A Notes and from the New
Credit Facility in the manner described in the Offering Memorandum under the
caption "Use of Proceeds" (including the repayment in full of all the Company's
obligations under the Bridge Notes (as defined in the Offering Memorandum) and
the New Credit Facility, which will thereupon be cancelled and no longer
outstanding or available). The Initial Purchasers acknowledge that certain of
the capital stock redemptions included as part of the Transactions will not be
effected concurrently with the offering of the Series A Notes, but with respect
to such Transactions, the Company hereby covenants to use proceeds from the
offering of the Series A Notes and from the New Credit Facility in the manner
described in the Offering Memorandum under the caption "Use of Proceeds."
(m) The Company shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company at or prior to the
Closing Date.
10. Effectiveness of Agreement and Termination. This Agreement shall
------------------------------------------
become effective upon the delivery of this Agreement by the parties hereto.
This Agreement may be terminated at any time prior to the Closing Date
by the Initial Purchasers by written notice to the Company if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in the Initial
Purchasers' judgment, is material and adverse and would, in the Initial
Purchasers' judgment, make it impracticable to market the Series A Notes on the
terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities on the New York Stock
Exchange, the American Stock Exchange, the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange, the Chicago Board of Trade or the Nasdaq
National Market, (iii) the suspension of trading of any securities of the
Company on any exchange or in the over-the-counter market, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects, or will materially and adversely
affect, the business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
35
adverse affect on the financial markets in the United States and would, in the
Initial Purchasers' judgment, make it impracticable to market the Series A Notes
on the terms and in the manner contemplated in the Offering Memorandum.
If on the Closing Date any of the Initial Purchasers shall fail or
refuse to purchase the Series A Notes which it has agreed to purchase hereunder
on such date and the aggregate principal amount of the Series A Notes which such
defaulting Initial Purchaser agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of the Series A Notes to
be purchased on such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated to purchase the Series A Notes which such
defaulting Initial Purchaser or Initial Purchasers, as the case may be, agreed
but failed or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of the Series A Notes which any Initial Purchaser
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such principal amount of
the Series A Notes without the written consent of such Initial Purchaser. If on
the Closing Date any Initial Purchaser or Initial Purchasers shall fail or
refuse to purchase the Series A Notes and the aggregate principal amount of the
Series A Notes with respect to which such default occurs is more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased by all
Initial Purchasers and arrangements satisfactory to the Initial Purchasers and
the Company for purchase of such Series A Notes are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Initial Purchaser and the Company. In any such case which
does not result in termination of this Agreement, either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, to the Offering
Memorandum or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of any such Initial Purchaser under
this Agreement.
11. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (i) if to the Company, to ▇▇▇▇▇▇▇▇
Manufacturing Company, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
Chief Financial Officer, with a copy to O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq., (ii) if to any Initial Purchasers, c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department, with a copy to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention:
36
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. or (iii) in any case to such other address as the person
to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, Dogloo and the Initial
Purchasers set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Series A Notes, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of an Initial Purchaser, the officers
or directors of an Initial Purchaser, any person controlling an Initial
Purchaser, the Company, Dogloo, the officers or directors of the Company or
Dogloo, or any person controlling the Company or Dogloo, (ii) acceptance of the
Series A Notes and payment for them hereunder and (iii) termination of this
Agreement.
If for any reason the Series A Notes are not delivered by or on behalf
of the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Company agrees to reimburse the
Initial Purchasers for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them. Notwithstanding any
termination of this Agreement, the Company shall be liable for all expenses
which it has agreed to pay pursuant to Section 5(h) hereof. The Company also
agrees to reimburse the Initial Purchasers, their respective directors and
officers and any person controlling either of the Initial Purchasers for any and
all fees and expenses (including, without limitation, the fees and disbursements
of counsel) incurred by them in connection with enforcing their rights
hereunder.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the parties hereto and their
respective successors and the officers and directors and other persons referred
to in Section 8, all as and to the extent provided in this Agreement, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Series A Notes from the Initial Purchaser merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
37
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Initial Purchasers.
Very truly yours,
▇▇▇▇▇▇▇▇ MANUFACTURING COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President and CFO
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
NATIONSBANC CAPITAL MARKETS, INC.
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By:_______________________________________
Name:
Title:
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Initial Purchasers.
Very truly yours,
▇▇▇▇▇▇▇▇ MANUFACTURING COMPANY, INC.
By:_______________________________________
Name:
Title:
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
NATIONSBANC CAPITAL MARKETS, INC.
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
SCHEDULE A
Principal Amount
Initial Purchaser of Notes
----------------- ----------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation........................ $59,500,000
NationsBanc Capital Markets, Inc............... $25,500,000
===========
Total...................................... $85,000,000