Exhibit 1
EXECUTION COPY
Volume Services America, Inc.
$100,000,000
11 1/4% Senior Subordinated Notes due 2009
PURCHASE AGREEMENT
February 25, 1999
CHASE SECURITIES INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
c/o Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Volume Services America, Inc., a Delaware corporation (the "Issuer"),
proposes to issue and sell $100,000,000 aggregate principal amount of its
11 1/4% Senior Subordinated Notes due 2009 (the "Securities"). The Securities
will be issued pursuant to an Indenture to be dated as of March 4, 1999 (the
"Indenture"), among the Issuer, Volume Services America Holdings, Inc. ("Volume
Holdings"), each of the subsidiaries of the Issuer listed on Schedule I hereto
(collectively, the "Subsidiary Guarantors" and together with Volume Holdings,
the "Guarantors") and Norwest Bank Minnesota, National Association, as trustee
(the "Trustee"). The Securities will be guaranteed on an unsecured senior
subordinated basis by each of the Guarantors. The Issuer hereby confirms its
agreement with Chase Securities Inc. ("CSI") and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. (together
with CSI, the "Initial Purchasers") concerning the purchase of the Securities
from the Issuer by the Initial Purchasers.
The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Issuer has
prepared a preliminary offering memorandum dated February 11, 1999 (the
"Preliminary Offering Memorandum"), and will prepare an offering memorandum
dated the date hereof (the "Offering Memorandum") setting forth information
concerning the Issuer, the Guarantors and the Securities. Copies of the
Preliminary Offering Memorandum have been, and copies of the Offering Memorandum
will be, delivered by the Issuer to the Initial Purchasers pursuant to the terms
of this Agreement. Any references herein to the Preliminary Offering Memorandum
and the Offering Memorandum shall be deemed to include all amendments and
supplements thereto, unless otherwise noted. The Issuer hereby confirms that it
has authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchasers in accordance with Section 2.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights
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Agreement, substantially in the form attached hereto as Annex A (the
"Registration Rights Agreement"), pursuant to which the Issuer will agree to
file with the Securities and Exchange Commission (the "Commission") (i) a
registration statement under the Securities Act (the "Exchange Offer
Registration Statement") registering an issue of senior subordinated notes of
the Issuer (the "Exchange Securities") which are identical in all material
respects to the Securities (except that the Exchange Securities will not contain
terms with respect to transfer restrictions) and (ii) under certain
circumstances, a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Shelf Registration Statement" and together with the
Exchange Offer Registration Statement, the "Registration Statements").
The proceeds from the sale of the Securities will be used (i) to repay
a portion of the indebtedness of the Issuer outstanding under the Credit
Agreement dated as of December 3, 1998, among Volume Holdings, the Issuer,
certain financial institutions listed as lenders therein, ▇▇▇▇▇▇▇ Sachs Credit
Partners L.P., Chase Manhattan Bank Delaware and the Chase Manhattan Bank (the
"Credit Agreement"), (ii) to pay a dividend to Volume Holdings to repay the note
issued by Volume Holdings to General Electric Capital Corporation (the "GE
Capital Note"), (iii) to pay a dividend to Volume Holdings to repurchase common
stock of Volume Holdings and (iv) to pay related fees and expenses. In order to
permit the incurrence of the indebtedness represented by the Securities and to
allow a portion of the proceeds from the sale of the Securities to be dividended
to Volume Holdings and used by Volume Holdings to repurchase shares of its
common stock and to repay the GE Capital Note, the Issuer requested and has
received the consent of the lenders under the Credit Agreement to certain
amendments to the Credit Agreement (the "Bank Amendment").
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Issuer and the
Guarantors. The Issuer and the Guarantors jointly and severally represent and
warrant to, and agree with, the several Initial Purchasers on and as of the date
hereof and the Closing Date (as defined in Section 3) that:
(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, did not, and on the Closing Date the
Offering Memorandum will not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading; provided that the Issuer and the Guarantors make
no representation or warranty as to information contained in or omitted
from the Preliminary Offering Memorandum or the Offering Memorandum in
reliance upon and in conformity with written information relating to the
Initial Purchasers furnished to the Issuer or the Guarantors by or on
behalf of any Initial Purchaser specifically for use therein (the "Initial
Purchasers' Information").
(b) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains all the information that,
if requested by a prospective purchaser of the Securities, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.
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(c) Assuming the accuracy of the representations and warranties of the
Initial Purchasers contained in Section 2 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchasers and the
offer, resale and delivery of the Securities by the Initial Purchasers in
the manner contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or, prior to the
effectiveness of any Registration Statement, to qualify the Indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(d) Volume Holdings and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign corporations
in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all corporate power and authority necessary to own
or hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure to so qualify or have such power
or authority would not, singularly or in the aggregate, have a material
adverse effect on the financial condition, results of operations or
business of Volume Holdings and its subsidiaries taken as a whole (a
"Material Adverse Effect"). Schedule II sets forth a list of all direct and
indirect subsidiaries of the Issuer.
(e) As of the Closing Date and after giving effect to the consummation
of the Financings, Volume Holdings and its subsidiaries had the authorized
capitalization as set forth in the Offering Memorandum under the heading
"Capitalization"; and all the issued and outstanding shares of capital
stock of Volume Holdings and the Issuer have been duly authorized and
validly issued and are fully paid and non-assessable. All of the
outstanding shares of capital stock of each Guarantor (other than Volume
Holdings) have been duly authorized and validly issued, are fully paid and
non-assessable and are owned directly or indirectly by the Issuer, free and
clear of any lien, charge, encumbrance, security interest, restriction upon
voting or transfer or any other claim of any third party other than those
contained in the Credit Agreement.
(f) The Issuer and each of the Guarantors have the corporate power and
authority to execute and deliver this Agreement, the Indenture, the
Registration Rights Agreement and the Securities (in the case of the Issuer
only) (all the foregoing are collectively referred to herein as the
"Transaction Documents") and to perform their respective obligations
hereunder and thereunder; and all corporate action required to be taken for
the due and proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions contemplated
thereby have been duly and validly taken by the Issuer and each of the
Guarantors.
(g) This Agreement has been duly authorized, executed and delivered by
the Issuer and each of the Guarantors and constitutes a valid and legally
binding agreement of the Issuer and each of the Guarantors, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally
and to general equitable principles (whether considered in a proceeding in
equity or at law).
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(h) The Registration Rights Agreement has been duly authorized by the
Issuer and each of the Guarantors and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute a
valid and legally binding agreement of the Issuer and each of the
Guarantors enforceable against the Issuer and each of the Guarantors in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally and to general equitable
principles (whether considered in a proceeding in equity or at law).
(i) The Indenture has been duly authorized by the Issuer and each of
the Guarantors and, when duly executed and delivered in accordance with its
terms by each of the parties thereto, will constitute a valid and legally
binding agreement of the Issuer and each of the Guarantors enforceable
against the Issuer and each of the Guarantors in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally and to general equitable principles (whether considered in
a proceeding in equity or at law). On the Closing Date, the Indenture will
conform in all material respects to the requirements of the Trust Indenture
Act and the rules and regulations of the Commission applicable to an
indenture that is qualified thereunder.
(j) The Securities have been duly authorized by the Issuer and each of
the Guarantors and, when duly executed, authenticated, issued and delivered
as provided in the Indenture and paid for as provided herein (assuming due
authorization, execution and delivery of the Indenture by the Trustee and
due authentication of the Securities by the Trustee), will be duly and
validly issued and outstanding and will constitute valid and legally
binding obligations of the Issuer, as issuer, and each of the Guarantors,
as guarantors, entitled to the benefits of the Indenture and enforceable
against the Issuer, as issuer, and each of the Guarantors, as guarantors,
in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and to general
equitable principles (whether considered in a proceeding in equity or at
law).
(k) Each Transaction Document conforms in all material respects to the
description thereof contained in the Offering Memorandum.
(l) The execution, delivery and performance by the Issuer and each of
the Guarantors of the Transaction Documents to which each is a party, the
issuance, authentication, sale and delivery of the Securities and
compliance by the Issuer and each of the Guarantors with the terms thereof
and the consummation of the transactions contemplated by the Transaction
Documents will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets (other than pursuant to the Credit Agreement) of Volume
Holdings or any of its subsidiaries pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
Volume Holdings or any of its subsidiaries is a party or by which Volume
Holdings or any of its subsidiaries is bound or to which any of the
property or assets of Volume Holdings or any of its subsidiaries is
subject, except for such conflicts, breaches, violations or defaults,
liens, charges or encumbrances that could not reasonably be
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expected to have a Material Adverse Effect, nor will such actions result in
any violation of the provisions of the charter or by-laws of the Issuer or
any Guarantor or any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body having
jurisdiction over the Issuer or any Guarantor or any of their properties or
assets, except such violations which would not reasonably be expected to
have a Material Adverse Effect; and no consent, approval, authorization or
order of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by the Issuer and each of the Guarantors of the Transaction
Documents to which each is a party, the issuance, authentication, sale and
delivery of the Securities and compliance by the Issuer and each of the
Guarantors with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents, except for such consents,
approvals, authorizations, filings, registrations or qualifications (i)
which shall have been obtained or made prior to the Closing Date and (ii)
as may be required to be obtained or made under the Securities Act and
applicable state securities laws.
(m)(i) Deloitte & Touche LLP ("D&T") are independent certified public
accountants with respect to Volume Holdings and its subsidiaries and (ii)
PricewaterhouseCoopers LLP ("PricewaterhouseCoopers") are independent
certified public accountants with respect to Service America Corporation
and its subsidiaries, in each case, within the meaning of Rule 101 of the
Code of Professional Conduct of the American Institute of Certified Public
Accountants ("AICPA") and its interpretations and rulings thereunder. The
historical financial statements (including the related notes) contained in
the Offering Memorandum comply in all material respects with the
requirements applicable to a registration statement on Form S-1 under the
Securities Act (except that certain (i) supporting schedules, (ii)
financial statements for the period ended December 28, 1998 and (iii)
financial disclosure concerning the subsidiaries of the Issuer that are not
Subsidiary Guarantors, are omitted); such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby and fairly
present, in all material respects, the financial position of the entities
purported to be covered thereby at the respective dates indicated and the
results of their operations and their cash flows for the respective periods
indicated, subject in the case of unaudited combined or consolidated
financial statements, to year-end audit adjustments; and the historical
financial information contained in the Offering Memorandum under the
headings "Summary Summary Historical Financial Information of Volume
Holdings", "Summary Summary Historical Financial Information of Service
America", "Capitalization", "Selected Historical Financial Information of
Volume Holdings", "Selected Historical Financial Information of Service
America" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" are derived from the accounting records of
Volume Holdings and its subsidiaries or Service America and its
subsidiaries, and fairly present in all material respects the information
purported to be shown thereby. The pro forma financial information
contained in the Offering Memorandum has been prepared on a basis
consistent with the historical financial statements contained in the
Offering Memorandum (except for the pro forma adjustments specified
therein), includes all material adjustments to the historical financial
information required by Rule 11-02 of Regulation S-X under the Securities
Act to reflect the Transactions, gives effect to assumptions made on a
reasonable
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basis and fairly presents in all material respects the historical and
proposed transactions contemplated by the Offering Memorandum and the
Transaction Documents. The other historical financial and statistical
information and data included in the Offering Memorandum are, in all
material respects, fairly presented.
(n) There are no legal or governmental proceedings pending to which
Volume Holdings or any of its subsidiaries is a party or of which any
property or assets of Volume Holdings or any of its subsidiaries is the
subject which (A) singularly or in the aggregate, if determined adversely
to Volume Holdings or any of its subsidiaries, could reasonably be expected
to have a Material Adverse Effect or (B) question the validity or
enforceability of any of the Transaction Documents or any action taken or
to be taken pursuant thereto; and to the knowledge of the Issuer no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(o) To the knowledge of the Issuer, no action has been taken and no
statute, rule, regulation or order has been enacted, adopted or issued by
any governmental agency or body (other than "Blue Sky" laws, regulations or
orders) that prevents the issuance of the Securities or suspends the sale
of the Securities in any jurisdiction; no injunction, restraining order or
order of any nature by any federal or state court of competent jurisdiction
has been issued with respect to the Issuer or any of the Guarantors that
would prevent or suspend the issuance or sale of the Securities or the use
of the Preliminary Offering Memorandum or the Offering Memorandum in any
jurisdiction; no action, suit or proceeding is pending against or, to the
knowledge of the Issuer, threatened against or affecting the Issuer or any
of the Guarantors before any court or arbitrator or any governmental
agency, body or official, domestic or foreign, that could reasonably be
expected to restrain, enjoin, interfere with or adversely affect the
transactions contemplated by the Transaction Documents in any material
respect; and the Issuer has complied with any and all requests by any
securities authority in any jurisdiction for additional information to be
included in the Preliminary Offering Memorandum and the Offering
Memorandum.
(p) None of the Issuer or any of the Guarantors is (i) in violation of
its charter or by-laws (or other comparable organizational documents), (ii)
in default in any respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which
any of its property or assets is subject or (iii) in violation in any
respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject, other than, in
the case of clauses (ii) or (iii), such defaults or violations that would
not, singularly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(q) Volume Holdings and each of its subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate federal, state or foreign
regulatory agencies or bodies that are necessary for the ownership of their
respective properties or the conduct of their respective businesses as
described in the Offering Memorandum, except where the failure to possess
or make the same would not, singularly or in the aggregate, reasonably be
expected to have a Material Adverse Effect, and none of Volume
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Holdings or any of its subsidiaries has received notification of any
revocation or modification of any such license, certificate, authorization
or permit or has any reason to believe that any such license, certificate,
authorization or permit will not be renewed in the ordinary course, except
where the failure to possess the same would not reasonably be expected to
have a Material Adverse Effect.
(r) Volume Holdings and each of its subsidiaries have filed all
federal, state, local and foreign income and franchise tax returns required
to be filed through the date hereof or have timely filed requests for
extensions and such extensions have been granted and have not expired and
have paid all taxes due thereon (or have made adequate provision for such
taxes on their respective balance sheets), except for such taxes of which
such failure to pay or so file would not reasonably be expected to have a
Material Adverse Effect, and no tax deficiency has been determined
adversely to Volume Holdings or any of its subsidiaries that has had (nor
does Volume Holdings or any of its subsidiaries have any knowledge of any
tax deficiency that, if determined adversely to Volume Holdings or any of
its subsidiaries, could reasonably be expected to have) a Material Adverse
Effect.
(s) None of the Issuer or any of the Guarantors is an "investment
company" or a company "controlled by" an investment company within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act"), and the rules and regulations of the Commission thereunder.
(t) The Issuer and each of the Guarantors maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general
or specific authorization and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(u) The Issuer and each of the Guarantors have insurance covering
their respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are
customary for similar businesses or is required by law. Neither the Issuer
nor any of the Guarantors has received notice from any insurer or agent of
such insurer that capital improvements or other expenditures are required
or necessary to be made in order to continue such insurance.
(v) Volume Holdings and each of its subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real and personal property that are material to
the business of Volume Holdings and its subsidiaries taken as a whole, in
each case free and clear of all liens, encumbrances, claims and defects and
imperfections of title except such as (i) do not materially interfere with
the use made and proposed to be made of such property by Volume Holdings
and its subsidiaries, (ii) are contemplated by the Transaction Documents or
the Credit Agreement or (iii) could not reasonably be expected to have a
Material Adverse Effect.
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(w) No labor disturbance by or dispute with the employees of Volume
Holdings or any of its subsidiaries exists or, to the knowledge of the
Issuer, is threatened that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
(x) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to
any employee benefit plan of Volume Holdings or any of its subsidiaries
which could reasonably be expected to have a Material Adverse Effect; each
such employee benefit plan is in compliance with applicable law, including
ERISA and the Code except where any noncompliance would not reasonably be
expected to have a Material Adverse Effect; the Issuer and each of the
Guarantors have not incurred and do not expect to incur liability under
Title IV of ERISA with respect to the termination of, or withdrawal from,
any pension plan for which the Issuer or any of the Guarantors would have
any liability; and each such pension plan that is intended to be qualified
under Section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service.
(y) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release of any kind of
toxic or other wastes or other hazardous substances by, due to or caused by
Volume Holdings or any of its subsidiaries (or, to the knowledge of the
Issuer, any other entity (including any predecessor) for whose acts or
omissions Volume Holdings or any of its subsidiaries is or could reasonably
be expected to be liable) upon any of the property now or previously owned
or leased by Volume Holdings or any of its subsidiaries, or upon any other
property, in violation of any statute or any ordinance, rule, regulation,
order, judgment, decree or permit or that would, under any statute or any
ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any
violation or liability that could not reasonably be expected to have,
singularly or in the aggregate with all such violations and liabilities, a
Material Adverse Effect; and there has been no disposal, discharge,
emission or other release of any kind onto such property or into the
environment surrounding such property of any toxic or other wastes or other
hazardous substances with respect to which Volume Holdings or any of its
subsidiaries has knowledge, except for any such disposal, discharge,
emission or other release of any kind which could not reasonably be
expected to have, singularly or in the aggregate with all such discharges
and other releases, a Material Adverse Effect.
(z) Neither the Issuer nor any of the Guarantors, to the knowledge of
the Issuer, nor any director, officer, agent, employee or other person
associated with or acting on behalf of the Issuer or any of the Guarantors
has (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt
Practices Act
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of 1977; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(aa) On and immediately after the Closing Date, the Issuer (after
giving effect to the issuance of the Securities and to the other
transactions related thereto as described in the Offering Memorandum) will
be Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular date, that on such date (i) the present fair market
value (or present fair saleable value) of the assets of the Issuer is not
less than the total amount required to pay the probable liabilities of the
Issuer on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured, (ii) the Issuer is able
to realize upon its assets and pay its debts and other liabilities,
contingent obligations and commitments as they mature and become due in the
normal course of business, (iii) assuming the sale of the Securities as
contemplated by this Agreement and the Offering Memorandum, the Issuer is
not incurring debts or liabilities beyond its ability to pay as such debts
and liabilities mature and (iv) the Issuer is not engaged in any business
or transaction, and is not about to engage in any business or transaction,
for which its property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in
which the Issuer is engaged. In computing the amount of such contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
(bb) Except as described in the Offering Memorandum, there are no
outstanding subscriptions, rights, warrants, calls or options to acquire,
or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of
capital stock of or other equity or other ownership interest in the Issuer
or any of the Guarantors.
(cc) Neither the Issuer nor any of the Guarantor owns any "margin
securities" as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"), and
none of the proceeds of the sale of the Securities will be used, directly
or indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry any margin security or for any
other purpose which might cause any of the Securities to be considered a
"purpose credit" within the meanings of Regulations T, U or X of the
Federal Reserve Board.
(dd) Other than this Agreement, neither the Issuer nor any of the
Guarantors is a party to any contract, agreement or understanding with any
person that would give rise to a valid claim against the Issuer or any of
the Guarantors or the Initial Purchasers for a brokerage commission,
finder's fee or like payment in connection with the offering and sale of
the Securities.
(ee) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(ff) Neither the Issuer nor any of its affiliates or any person acting
on its or their behalf has engaged or will engage in any directed selling
efforts (as such term is defined in Regulation S under the Securities Act
("Regulation S")), and all such
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persons have complied and will comply with the offering restrictions
requirement of Regulation S to the extent applicable.
(gg) Neither the Issuer nor any of its affiliates has, directly or
through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as such term is defined
in the Securities Act), which is or will be integrated with the sale of the
Securities in a manner that would require registration of the Securities
under the Securities Act.
(hh) Assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 2, neither the Issuer nor any of its
affiliates or any person acting on its or their behalf has engaged, in
connection with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act.
(ii) There are no securities of the Issuer registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or listed
on a national securities exchange or quoted in a U.S. automated
inter-dealer quotation system.
(jj) Neither the Issuer nor any of its affiliates has taken or will
take, directly or indirectly, any action prohibited by Regulation M under
the Exchange Act in connection with the offering of the Securities.
(kk) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Offering Memorandum or the Offering Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other than in
good faith.
(ll) Neither the Issuer nor any of the Guarantors does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Florida Statutes Section 517.075.
(mm) Since the date as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change or, to the knowledge of the Issuer, any development
involving a prospective material adverse change in the financial condition,
or in the earnings, business affairs or management of the Issuer and the
Guarantors, whether or not arising in the ordinary course of business, (ii)
none of the Issuer or any of the Guarantors has incurred any material
liability or obligation, direct or contingent, other than in the ordinary
course of business, (iii) none of the Issuer or any of the Guarantors has
entered into any material transaction other than in the ordinary course of
business and (iv) there has not been any change in the capital stock or
long-term debt of the Issuer or any of the Guarantors, or any dividend or
distribution of any kind declared, paid or made by the Issuer or any of the
Guarantors on any class of their respective capital stock.
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Issuer agrees to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Issuer, the principal amount of Securities set forth opposite the name
11
of such Initial Purchaser on Schedule III hereto at a purchase price equal to
97.0% of the principal amount thereof. The Issuer shall not be obligated to
deliver any of the Securities except upon payment for all of the Securities to
be purchased as provided herein.
(b) The Initial Purchasers have advised the Issuer that they propose to
offer the Securities for resale upon the terms and subject to the conditions set
forth herein and in the Offering Memorandum. Each Initial Purchaser, severally
and not jointly, represents and warrants to and agrees with the Issuer that (i)
it is purchasing the Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act and (iii) it has solicited and will
solicit offers for the Securities only from, and has offered or sold and will
offer, sell or deliver the Securities, as part of their initial offering, only
(A) within the United States to persons whom it reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers"), as defined in
Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and in each case,
in transactions in accordance with Rule 144A and (B) outside the United States
to persons other than U.S. persons in reliance on Regulation S under the
Securities Act ("Regulation S").
(c) In connection with the offer and sale of Securities in reliance on
Regulation S, each Initial Purchaser, severally and not jointly, represents and
warrants to and agrees with the Issuer that:
(i) the Securities have not been registered under the Securities Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except pursuant to an exemption from,
or in transactions not subject to, the registration requirements of the
Securities Act;
(ii) such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of its distribution at any
time and (B) otherwise until 40 days after the later of the commencement of
the offering of the Securities and the Closing Date, only in accordance
with Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act;
(iii) none of such Initial Purchaser or any of its affiliates or any
other person acting on its or their behalf has engaged or will engage in
any directed selling efforts (as such term is defined in Regulation S) with
respect to the Securities, and all such persons have complied and will
comply with the offering restriction requirements of Regulation S;
(iv) at or prior to the confirmation of sale of any Securities sold in
reliance on Regulation S, it will have sent to each distributor, dealer or
other person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the restricted period a confirmation or
notice to substantially the following effect:
12
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their distribution
at any time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the date of
original issuance of the Securities, except in accordance with
Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the
meanings given to them by Regulation S."
(v) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the Issuer;
and
(iv) it has and will comply with all applicable laws and regulations,
in each jurisdiction, in which it acquires, offers, sells or delivers
Securities or has in its possession or distributed the Preliminary Offering
Memorandum or Offering Memorandum at its own expense.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly, represents and
warrants to and agrees with the Issuer and each of the Guarantors that (i) it
has not offered or sold and prior to the date six months after the Closing Date
will not offer or sell any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995; (ii) it has complied and will
comply with all applicable provisions of the Financial Services ▇▇▇ ▇▇▇▇ and the
Public Offers of Securities Regulations 1995 with respect to anything done by it
in relation to the Securities in, from or otherwise involving the United
Kingdom; and (iii) it has only issued or passed on and will only issue or pass
on in the United Kingdom any document received by it in connection with the
issue of the Securities to a person who is of a kind described in Article 11(3)
of the Financial Services ▇▇▇ ▇▇▇▇ (Investment Advertisements) (Exemptions)
Order 1996 or is a person to whom such document may otherwise lawfully be issued
or passed on.
(e) Each Initial Purchaser, severally and not jointly, agrees with the
Issuer and each of the Guarantors that, prior to or simultaneously with the
confirmation of sale by such Initial Purchaser to any purchaser of any of the
Securities purchased by such Initial Purchaser from the Issuer pursuant hereto,
such Initial Purchaser shall furnish to that purchaser a copy of the Offering
Memorandum (and any amendment or supplement thereto that the Issuer shall have
furnished to such Initial Purchaser prior to the date of such confirmation of
sale). In addition to the foregoing, each Initial Purchaser acknowledges and
agrees that the Issuer and each of the Guarantors and, for purposes of the
opinions to be delivered to the Initial Purchasers pursuant to Sections 5(d) and
(e), counsel for the Issuer and for the Initial Purchasers, respectively, may
rely upon the accuracy of the representations and warranties of the Initial
Purchasers and their compliance with their agreements contained in this Section
2, and each Initial Purchaser hereby consents to such reliance.
13
(f) The Issuer and each of the Guarantors acknowledge and agree that
the Initial Purchasers may sell Securities to any affiliate of an Initial
Purchaser and that any such affiliate may sell Securities purchased by it to an
Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Cravath, Swaine &
▇▇▇▇▇, New York, New York, or at such other place as shall be agreed upon by the
Initial Purchasers and the Issuer, at 10:00 A.M., New York City time, on March
4, 1999, or at such other time or date, not later than seven full business days
thereafter, as shall be agreed upon by the Initial Purchasers and the Issuer
(such date and time of payment and delivery being referred to herein as the
"Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Issuer by wire or book-entry transfer of
same-day funds to such account or accounts as the Issuer shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchasers of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the Initial Purchasers hereunder. Upon delivery,
the Securities shall be in global form, registered in such names and in such
denominations as CSI on behalf of the Initial Purchasers shall have requested in
writing not less than two full business days prior to the Closing Date. The
Issuer agrees to make one or more global certificates evidencing the Securities
available for inspection by CSI on behalf of the Initial Purchasers in New York,
New York at least 24 hours prior to the Closing Date.
4. Further Agreements of the Issuer and the Guarantors. The Issuer and
each of the Guarantors agree with each of the several Initial Purchasers:
(a) to advise the Initial Purchasers promptly and, if requested,
confirm such advice in writing, of the happening of any event during the
period prior to the completion of the resale of the Securities by the
Initial Purchasers which makes any statement of a material fact made in the
Offering Memorandum untrue or which requires the making of any additions to
or changes in the Offering Memorandum (as amended or supplemented from time
to time) in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; to advise the
Initial Purchasers promptly of any order preventing or suspending the use
of the Preliminary Offering Memorandum or the Offering Memorandum, of any
suspension of the qualification of the Securities for offering or sale in
any jurisdiction and of the initiation or threatening of any proceeding for
any such purpose; and to use their reasonable best efforts to prevent the
issuance of any such order preventing or suspending the use of the
Preliminary Offering Memorandum or the Offering Memorandum or suspending
any such qualification and, if any such suspension is issued, to use their
reasonable best efforts to obtain the lifting thereof at the earliest
possible time;
(b) to furnish promptly to each of the Initial Purchasers and counsel
for the Initial Purchasers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any
amendments or supplements thereto) as may be reasonably requested;
14
(c) prior to making any amendment or supplement to the Offering
Memorandum at any time prior to the completion of the resale of the
Securities by the Initial Purchasers, to furnish a copy thereof to each of
the Initial Purchasers and counsel for the Initial Purchasers and not to
effect any such amendment or supplement to which the Initial Purchasers
shall reasonably object by notice to the Issuer after a reasonable period
to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Initial Purchasers or counsel for the Issuer, to amend or supplement
the Offering Memorandum in order that the Offering Memorandum will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
(e) for so long as the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
to furnish to holders of the Securities and prospective purchasers of the
Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act, unless the Issuer is then
subject to and in compliance with Section 13 or 15(d) of the Exchange Act
(the foregoing agreement being for the benefit of the holders from time to
time of the Securities and prospective purchasers of the Securities
designated by such holders);
(f) for a period of three years following the Closing Date, to furnish
to the Initial Purchasers copies of any annual reports, quarterly reports
and current reports filed by Volume Holdings or the Issuer with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may
be designated by the Commission, and such other documents, reports and
information as shall be furnished by Volume Holdings or the Issuer to the
Trustee or to the holders of the Securities pursuant to the Indenture or
the Exchange Act or any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the Initial
Purchasers may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may designate and to continue such qualifications in
effect for so long as required for the resale of the Securities; and to
arrange for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial Purchasers
may reasonably request; provided that, Volume Holdings and its subsidiaries
shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to file a general
consent to service of process or to subject themselves to taxation in
respect of doing business in any jurisdiction;
15
(h) to assist the Initial Purchasers in arranging for the Securities
to be designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL Market and for the Securities to
be eligible for clearance and settlement through The Depository Trust
Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) that could be integrated
with the sale of the Securities in a manner that would require registration
of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may
be, not to, and to cause its affiliates not to, and not to authorize or
knowingly permit any person acting on their behalf to, solicit any offer to
buy or offer to sell the Securities by means of any form of general
solicitation or general advertising within the meaning of Regulation D or
in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act; and not to offer, sell, contract to sell or
otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, contract or disposition would cause
the exemption afforded by Section 4(2) of the Securities Act to cease to be
applicable to the offering and sale of the Securities as contemplated by
this Agreement and the Offering Memorandum;
(k) for a period of 90 days from the date of the Offering Memorandum,
not to offer for sale, sell, contract to sell or otherwise dispose of,
directly or indirectly, or file a registration statement for, or announce
any offer, sale, contract for sale of or other disposition of any debt
securities issued or guaranteed by the Issuer or any of its subsidiaries
(other than the Securities and in respect of borrowings under the Credit
Agreement) without the prior written consent of the Initial Purchasers.
(l) during the period from the Closing Date until two years after the
Closing Date, without the prior written consent of the Initial Purchasers,
not to, and not permit any of its affiliates (as defined in Rule 144 under
the Securities Act) to, resell any of the Securities that have been
reacquired by them, except for Securities purchased by the Issuer or any of
its affiliates and resold in a transaction registered under the Securities
Act;
(m) not to, until the consummation of the Exchange Offer, be or
become, or be or become owned by, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act, and to not
be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder;
(n) in connection with the offering of the Securities, until CSI on
behalf of the Initial Purchasers shall have notified the Issuer of the
completion of the resale of the Securities, not to, and to cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Securities, or attempt to induce any person
to purchase any
16
Securities; and not to, and to cause its affiliated purchasers not to, make
bids or purchase for the purpose of creating actual, or apparent, active
trading in or of raising the price of the Securities;
(o) in connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel reasonably
available upon request by the Initial Purchasers;
(p) to furnish to each of the Initial Purchasers on the date hereof a
copy of the independent accountants' reports included in the Offering
Memorandum signed by the accountants rendering such report;
(q) to do and perform all things required to be done and performed by
it under this Agreement that are within its control prior to, on or after
the Closing Date, and to use its reasonable best efforts to satisfy all
conditions precedent on its part to the delivery of the Securities; and
(r) to apply the net proceeds from the sale of the Securities as set
forth in the Offering Memorandum under the heading "Use of Proceeds".
5. Conditions of Initial Purchasers' Obligations. The respective
obligations of the several Initial Purchasers hereunder are subject to the
accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Issuer and the Guarantors contained
herein, to the accuracy of the statements of the Issuer and each of the
Guarantors and their respective officers made in any certificates delivered
pursuant hereto, to the performance by the Issuer and the Guarantors of their
respective obligations hereunder, and to each of the following additional terms
and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchasers
may agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(b) None of the Initial Purchasers shall have discovered and disclosed
to the Issuer on or prior to the Closing Date that the Offering Memorandum
or any amendment or supplement thereto contains an untrue statement of a
fact that, in the opinion of counsel for the Initial Purchasers, is
material or omits to state any fact which, in the opinion of such counsel,
is material and is necessary to make the statements made therein not
misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents and
the Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby, shall be
reasonably satisfactory in all material respects to the Initial Purchasers,
and the Issuer and the Guarantors shall have furnished to the Initial
Purchasers and their counsel all documents and information that they or
their counsel may reasonably request to enable them to pass upon such
matters.
17
(d) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and local counsel shall have furnished
to the Initial Purchasers their written opinion, as counsel to the Issuer
and the Guarantors, addressed to the Initial Purchasers and dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers.
(e) The Initial Purchasers shall have received from Cravath, Swaine &
▇▇▇▇▇, counsel for the Initial Purchasers, such opinion or opinions, dated
the Closing Date, with respect to such matters as the Initial Purchasers
may reasonably require, and the Issuer shall have furnished to such counsel
such documents and information as they reasonably request for the purpose
of enabling them to pass upon such matters.
(f) The Issuer shall have furnished to the Initial Purchasers a letter
(each, an "Initial Letter") of each of D&T and PricewaterhouseCoopers,
addressed to the Initial Purchasers and dated the date hereof, in form and
substance reasonably satisfactory to the Initial Purchasers, substantially
to the effect set forth in Annex B-1 and B-2, respectively, hereto.
(g) The Issuer shall have furnished to the Initial Purchasers (i) a
letter (the "D&T Bring-Down Letter") of D&T and (ii) a letter (the
"PricewaterhouseCoopers Bring-Down Letter" and, together with the D&T
Bring-Down Letter, the "Bring-Down Letters") of PricewaterhouseCoopers, in
each case, addressed to the Initial Purchasers and dated the Closing Date
confirming that (A) in the case of D&T, they are independent public
accountants with respect to Volume Holdings and its subsidiaries and (B) in
the case of PricewaterhouseCoopers, they are independent public accountants
with respect to Service America Corporation and its subsidiaries, in each
case within the meaning of Rule 101 of the Code of Professional Conduct of
the AICPA and its interpretations and rulings thereunder, (ii) stating, as
of the date of the Bring-Down Letters (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as of
a date not more than three business days prior to the date of the
Bring-Down Letters), that the conclusions and findings of such accountants
with respect to the financial information and other matters covered by the
Initial Letters furnished by D&T or PricewaterhouseCoopers, as the case may
be, are accurate and (iii) confirming in all material respects the
conclusions and findings set forth in such Initial Letter.
(h) Each of the Issuer and the Guarantors shall have furnished to the
Initial Purchasers a certificate, dated the Closing Date, of its chief
executive officer and chief financial officer stating that (A) such
officers have carefully examined the Offering Memorandum, (B) in their
opinion, the Offering Memorandum, as of its date, did not include any
untrue statement of a material fact and did not omit to state a material
fact necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading, and since
the date of the Offering Memorandum, no event has occurred that should have
been set forth in a supplement or amendment to the Offering Memorandum so
that the Offering Memorandum (as so amended or supplemented) would not
include any untrue statement of a material fact and would not omit to state
a material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading,
(C) to their knowledge after due inquiry, as of the Closing Date, the
representations and warranties of the Issuer or the particular
18
Guarantor, as applicable, in this Agreement are true and correct in all
material respects; the Issuer or the particular Guarantor, as applicable,
has complied in all material respects with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder on or prior
to the Closing Date and (D) to their knowledge after due inquiry,
subsequent to the date of the most recent financial statements contained in
the Offering Memorandum, except as set forth in the Offering Memorandum
under the heading "Recent Developments", there has been no material adverse
change in the financial position or results of operations of Volume
Holdings and its subsidiaries taken as a whole, or any change, or any
development involving a prospective change, in or affecting the financial
condition, results of operations or business of Volume Holdings and its
subsidiaries taken as a whole.
(i) The Initial Purchasers shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of the Issuer and each Guarantor.
(j) The Indenture shall have been duly executed and delivered by the
Issuer, the Guarantors and the Trustee, and the Securities shall have been
duly executed and delivered by the Issuer and duly authenticated by the
Trustee.
(k) The Securities shall have been made eligible for clearance and
settlement through DTC.
(l) If any event shall have occurred that requires the Issuer under
Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchasers shall have been given a reasonable opportunity to
comment thereon, and copies thereof shall have been delivered to the
Initial Purchasers reasonably in advance of the Closing Date.
(m) There shall not have occurred any invalidation of Rule 144A under
the Securities Act by any court or any withdrawal or proposed withdrawal of
any rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
that in the reasonable judgment of the Initial Purchasers would materially
impair the ability of the Initial Purchasers to purchase, hold or effect
resales of the Securities as contemplated hereby.
(n) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting
the financial condition, results of operations or business of the Issuer
and the Guarantors taken as a whole, the effect of which, in any such case
described above, is, in the reasonable judgment of the Initial Purchasers,
so material and adverse as to make it impracticable or inadvisable to
proceed with the sale or delivery of the Securities on the terms and in the
manner contemplated by this Agreement and the Offering Memorandum
(exclusive of any amendment or supplement thereto).
19
(o) No action shall have been taken and no statute, rule, regulation,
injunction, restraining order or order of any other nature shall have been
enacted, adopted or issued by any federal or state court of competent
jurisdiction, or any governmental agency or body, that would, as of the
Closing Date, prevent the issuance or sale of the Securities.
(p) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Securities or
any of the Issuer's other debt securities by any "nationally recognized
statistical rating organization", as such term is defined by the Commission
for purposes of Rule 436(g)(2) of the rules and regulations of the
Commission under the Securities Act and (ii) no such organization shall
have publicly announced that it has under surveillance or review (other
than an announcement with positive implications of a possible upgrading),
its rating of the Securities or any of the Issuer's other debt securities.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or market
by the Commission, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in any securities of
the Issuer on any exchange or in the over-the-counter market shall have
been suspended or (ii) any moratorium on commercial banking activities
shall have been declared by federal or New York state authorities or (iii)
an outbreak or escalation of hostilities involving the U.S. or a
declaration by the United States of a national emergency or war or (iv) a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) the effect of which, in the
case of this clause (iv) is, in the judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to proceed
with the sale or the delivery of the Securities on the terms and in the
manner contemplated by this Agreement and in the Offering Memorandum
(exclusive of any amendment or supplement thereto).
(r) The Bank Amendment providing for amendments to the Credit
Agreement to permit the incurrence of the indebtedness represented by the
Securities and the use of the proceeds from the sale of the Securities as
contemplated in the Offering Memorandum shall have been received.
(s) Each of the Issuer and the Guarantors shall have furnished to the
Initial Purchasers a certificate, dated the Closing Date, of its chief
executive officer and chief financial officer stating that each of the
Company and the Guarantors is not (A) in violation of its Certificate of
Incorporation or By-laws, (B) to their knowledge after due inquiry, in
default in any material respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained
in any agreement or instrument set forth in Schedule I attached thereto or
(C) in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree known to such officers to
which the property or assets of the Company or any of the Guarantors may be
subject.
20
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
in all material respects to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers hereunder may
be terminated by the Initial Purchasers, in their absolute discretion, by notice
given to and received by the Issuer prior to delivery of and payment for the
Securities if, prior to that time, any of the events described in Section 5(m),
(n), (o), (p) or (q) shall have occurred and be continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing Date, any
Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchaser may make arrangements for the
purchase of the Securities (the "Unpurchased Securities") which such defaulting
Initial Purchaser agreed but failed to purchase by other persons satisfactory to
the Issuer and the non-defaulting Initial Purchaser, but if no such arrangements
are made within 36 hours after such default, then (i) if the principal amount of
the Unpurchased Securities does not exceed 10% of the principal amount of
Securities to be purchased on such date, the non-defaulting Initial Purchaser
shall be obligated to purchase the full amount thereof, or (ii) if the principal
amount of the Unpurchased Securities exceeds 10% of the Securities to be
purchased on such date, the Issuer shall be entitled to a further period of 36
hours within which to procure another party or parties reasonably satisfactory
to the non-defaulting Initial Purchaser to purchase such Unpurchased Securities
upon such terms herein set forth. If, however, the Issuer shall not have
completed such arrangements within 72 hours after such default and the principal
amount of Unpurchased Securities exceeds 10% of the principal amount of
Securities to be purchased on such date, then this Agreement shall terminate
without liability on the part of the non-defaulting Initial Purchaser, the
Issuer or the Guarantors, except that the Issuer and the Guarantors will
continue to be liable for the payment of expenses to the extent set forth in
Sections 8 and 12 and except that the provisions of Sections 9 and 10 shall not
terminate and shall remain in effect. As used in this Agreement, the term
"Initial Purchasers" includes, for all purposes of this Agreement unless the
context otherwise requires, any party not listed in Schedule II hereto that,
pursuant to this Section 7, purchases Securities which a defaulting Initial
Purchaser agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Issuer, the Guarantors or any
non-defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to purchase the Securities of a defaulting
Initial Purchaser, either the non-defaulting Initial Purchaser or the Issuer may
postpone the Closing Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Issuer or counsel for the
Initial Purchasers may be necessary in the Offering Memorandum or in any other
document or arrangement, and the Issuer agrees promptly to prepare any amendment
or supplement to the Offering Memorandum that effects any such changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a) this Agreement
shall have been terminated in accordance with Section 6 or 7, (b) the Issuer
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason permitted under this Agreement or (c) the Initial Purchasers shall
decline to purchase the Securities for any reason permitted under this
Agreement, the Issuer and Guarantors shall reimburse the Initial Purchasers for
such out-of-pocket expenses (including reasonable fees and disbursements of
21
counsel) as shall have been reasonably incurred by the Initial Purchasers in
connection with this Agreement and the proposed purchase and resale of the
Securities. If this Agreement is terminated pursuant to Section 7 by reason of
the default of one or more of the Initial Purchasers, neither the Issuer nor the
Guarantors shall be obligated to reimburse any defaulting Initial Purchaser on
account of such expenses.
9. Indemnification. (a) The Issuer and each of the Guarantors shall
jointly and severally indemnify and hold harmless each Initial Purchaser, its
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act or the Exchange Act (collectively referred to for
purposes of this Section 9(a) and Section 10 as an Initial Purchaser), from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of the Securities), to which
that Initial Purchaser may become subject, whether commenced or threatened,
under the Securities Act, the Exchange Act, any other federal or state statutory
law or regulation, at common law or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum or in any amendment
or supplement thereto or in any information provided by the Issuer or any
Guarantor pursuant to Section 4(e) or (ii) the omission or alleged omission to
state therein a material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, and shall reimburse each Initial Purchaser promptly upon demand for
any legal or other expenses reasonably incurred by that Initial Purchaser in
connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Issuer and the Guarantors shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with any Initial Purchasers' Information; and provided, further, that with
respect to any such untrue statement in or omission from the Preliminary
Offering Memorandum, the indemnity agreement contained in this Section 9(a)
shall not inure to the benefit of any such Initial Purchaser to the extent that
the sale to the person asserting any such loss, claim, damage, liability or
action was an initial resale by such Initial Purchaser and any such loss, claim,
damage, liability or action of or with respect to such Initial Purchaser results
from the fact that both (A) to the extent required by applicable law, a copy of
the Offering Memorandum was not sent or given to such person at or prior to the
written confirmation of the sale of such Securities to such person and (B) the
untrue statement in or omission from the Preliminary Offering Memorandum was
corrected in the Offering Memorandum, unless such failure to deliver the
Offering Memorandum was a result of non-compliance by the Issuer and the
Guarantors with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless Volume Holdings, its affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls Volume Holdings within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 9(b) and
Section 10 as Volume Holdings), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which Volume
Holdings may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or
22
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Initial Purchasers' Information, and
shall reimburse Volume Holdings for any legal or other expenses reasonably
incurred by Volume Holdings in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 9(a) or 9(b), notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have under this Section 9 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have to
an indemnified party otherwise than under this Section 9. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of outside counsel to the indemnified party) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based upon advice of outside
counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the right
to direct the defense of such action on behalf of the indemnified party) or (4)
the indemnifying party has not in fact employed counsel reasonably satisfactory
to the indemnified party to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm of attorneys (in addition to any local counsel) at any one time for all
such indemnified party or parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 9(a) and 9(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action
23
or claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
reasonably could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
The obligations of each of the Issuer, the Guarantors and the Initial
Purchasers in this Section 9 and in Section 10 are in addition to any other
liability that the Issuer, the Guarantors or the Initial Purchasers, as the case
may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such party.
10. Contribution. If the indemnification provided for in Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or 9(b) otherwise than as a result of the limitations therein contained,
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the Issuer and the Guarantors on the one hand and the Initial
Purchasers on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Issuer and
the Guarantors on the one hand and the Initial Purchasers on the other with
respect to the statements or omissions that resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Issuer and the
Guarantors on the one hand and the Initial Purchasers on the other with respect
to such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities purchased under this Agreement
(before deducting expenses) received by or on behalf of the Issuer and the
Guarantors, on the one hand, and the total discounts and commissions received by
the Initial Purchasers with respect to the Securities purchased under this
Agreement, on the other, bear to the total gross proceeds from the sale of the
Securities under this Agreement. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to the Issuer or the Guarantors or information supplied by the Issuer or
the Guarantors, on the one hand or to any Initial Purchasers' Information on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Issuer, the Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contributions pursuant to this Section 10
were to be determined by pro rata allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation that does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 10 shall be deemed to include, for purposes of this
Section 10, any legal or other expenses reasonably incurred by such indemnified
party in
24
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 10, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total discounts and commissions received by such Initial Purchaser
with respect to the Securities purchased by it under this Agreement exceeds the
amount of any damages which such Initial Purchaser has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute as provided
in this Section 10 are several in proportion to their respective purchase
obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Issuer,
the Guarantors and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 9 and 10 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Issuer, the
Guarantors and the Initial Purchasers and in Section 4(e) with respect to
holders and prospective purchasers of the Securities. Nothing in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 11, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
12. Expenses. The Issuer and each of the Guarantors agree with the
Initial Purchasers to pay (a) the costs incident to the authorization, issuance,
sale, preparation and delivery of the Securities to the Initial Purchasers and
any taxes payable in that connection; (b) the costs incident to the preparation,
printing and distribution of the Preliminary Offering Memorandum, the Offering
Memorandum and any amendments or supplements thereto; (c) the costs of
reproducing and distributing each of the Transaction Documents; (d) the costs
incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities to the Initial Purchasers; (e) the fees
and expenses of the Issuer's counsel and the independent accountants; (f) the
fees and expenses of qualifying the Securities under the securities laws of the
several jurisdictions as provided in Section 4(g) and of preparing, printing and
distributing Blue Sky Memoranda (including related reasonable fees and expenses
of counsel for the Initial Purchasers) as herein provided; (g) any fees charged
by rating agencies for rating the Securities; (h) the fees and expenses of the
Trustee and any paying agent (including related reasonable fees and expenses of
any counsel to such parties); (i) all expenses and application fees incurred in
connection with the application for the inclusion of the Securities on the
PORTAL Market and the approval of the Securities for book-entry transfer by DTC;
and (j) all other costs and expenses incident to the performance of the
obligations of the Issuer and the Guarantors under this Agreement which are not
otherwise specifically provided for in this Section 12; provided, however, that
except as provided in this Section 12 and Section 8, the Initial Purchasers
shall pay their own costs and expenses.
13. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Issuer, each of the Guarantors
and the Initial Purchasers contained in this Agreement or made by or on behalf
of the Issuer, each of the Guarantors or the Initial Purchasers pursuant to this
Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Securities and shall remain in full force and
effect, regardless of any termination or cancelation of this
25
Agreement or any investigation made by or on behalf of any of them or any of
their respective affiliates, officers, directors, employees, representatives,
agents or controlling persons.
26
14. Notices, etc.. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail
or telecopy transmission to Chase Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department (telecopier no.: (212)
270-0994); or
(b) if to the Issuer or the Guarantors, shall be delivered or sent by
mail or telecopy transmission to the address of the Issuer set forth in the
Offering Memorandum, Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (telecopier no.: (203)
975-5928 with a copy to Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇, The Blackstone Group L.P., ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇);
provided that any notice to an Initial Purchaser pursuant to Section 9(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Issuer shall be
entitled to act and rely upon any request, consent, notice or agreement given or
made on behalf of the Initial Purchasers by CSI.
15. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.
27
16. Initial Purchasers' Information. The parties hereto acknowledge and
agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the following information in the Preliminary
Offering Memorandum and the Offering Memorandum: (i) the last two bullet points
on the front cover page concerning the terms of the offering by the Initial
Purchasers and (ii) the statements concerning the Initial Purchasers contained
in the third, fourth, fifth, seventh, ninth, twelfth and thirteenth paragraphs
under the heading "Plan of Distribution".
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
19. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
28
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Issuer, the Guarantors and
the several Initial Purchasers in accordance with its terms.
Very truly yours,
VOLUME SERVICES AMERICA,
INC.,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
VOLUME SERVICES AMERICA
HOLDINGS, INC., as Guarantor,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
VOLUME SERVICES, INC., as Guarantor,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
SERVICE AMERICA CORPORATION,
as Guarantor,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
VOLUME SERVICES, INC. (Kansas), as
Guarantor,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
EVENTS CENTER CATERING, INC., as
Guarantor,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
29
SERVICE AMERICA CONCESSIONS
CORPORATION, as Guarantor,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
SERVICE AMERICA CORPORATION OF
WISCONSIN, as Guarantor,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
SERVO-KANSAS, INC. as Guarantor,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
SERVOMATION DUCHESS, INC., as
Guarantor,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
SVM OF TEXAS, INC., as Guarantor,
By /s/ ▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: CEO and Chairman of the Board of Directors
30
Accepted:
CHASE SECURITIES INC.
By /s/ Chase Securities Inc.
--------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.,
By /s/ ▇▇▇▇▇▇▇, Sachs Co
--------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Registration Department
SCHEDULE I
Subsidiary Guarantors
Volume Services, Inc. (Delaware)
Service America Corporation
Volume Services, Inc. (Kansas)
Events Center Catering, Inc.
Service America Concessions Corporation
Service America Corporation of Wisconsin
Servo-Kansas, Inc.
Servomation Duchess, Inc.
SVM of Texas, Inc.
SCHEDULE II
Subsidiaries
Service America Corporation
Service America Concessions Corporation
Service America Corporation of Wisconsin
Service America of Texas, Inc.
Servo-Kansas, Inc.
Servomation Duchess, Inc.
Servomation Inc.
SVM of Texas, Inc.
Service America/National Business Services Enterprises
Service America Corporation/Forum Catering
Volume Services, Inc. (Delaware)
Volume Services, Inc. (Kansas)
VSI of Maryland, Inc.
Events Center Catering, Inc.
SCHEDULE III
Principal Amount
Initial Purchasers of Securities
------------------ ----------------
Chase Securities Inc. $ 50,000,000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. 50,000,000
------------
Total $100,000,000
ANNEX A
[Form of Exchange and Registration Rights Agreement]
ANNEX B-1
FORM OF D&T COMFORT LETTER
The Issuer shall have furnished to the Initial Purchasers a letter of
Deloitte & Touche LLP, addressed to the Initial Purchasers and dated the date of
the Purchase Agreement, in form and substance satisfactory to the Initial
Purchasers, substantially to the effect set forth below:
(i) they are independent certified public accountants with respect to
Volume Holdings and its subsidiaries within the meaning of Rule 101 of the
Code of Professional Conduct of the AICPA and its interpretations and
rulings;
(ii) in their opinion, the audited financial statements and pro forma
financial information included in the Offering Memorandum and reported on
by them comply in form in all material respects with the accounting
requirements of the Exchange Act and the related published rules and
regulations of the Commission thereunder that would apply to the Offering
Memorandum if the Offering Memorandum were a prospectus included in a
registration statement on Form S-1 under the Securities Act (except that
certain supporting schedules are omitted);
(iii) based upon a reading of the latest unaudited financial
statements made available by Volume Holdings and the Issuer, the procedures
of the AICPA for a review of interim financial information as described in
Statement of Auditing Standards No. 71, reading of minutes and inquiries of
certain officials of Volume Holdings and the Issuer who have responsibility
for financial and accounting matters and certain other limited procedures
requested by the Initial Purchasers and described in detail in such letter,
nothing has come to their attention that causes them to believe that (A)
any unaudited financial statements included in the Offering Memorandum do
not comply as to form in all material respects with applicable accounting
requirements, (B) any material modifications should be made to the
unaudited financial statements included in the Offering Memorandum for them
to be in conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited financial
statements included in the Offering Memorandum or (C) the information
included under the headings, "Summary--Summary Historical Financial
Information of Volume Holdings", "Capitalization", "Selected Historical
Financial Information of Volume Holdings", "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
"Management--Executive Compensation" is not in conformity with the
disclosure requirements of Regulation S-K that would apply to the Offering
Memorandum if the Offering Memorandum were a prospectus included in a
registration statement on Form S-1 under the Securities Act;
(iv) based upon the procedures detailed in such letter with respect to
the period subsequent to the date of the last available balance sheet,
including reading of minutes and inquiries of certain officials of Volume
Holdings and the Issuer who have responsibility for financial and
accounting matters, nothing has come to their attention that causes them to
believe that (A) at a specified date not more than three business days
prior to the date of such letter, there was any change in capital stock,
increase in long-term debt or decrease in net current assets of Volume
Holdings as compared with the amounts shown in the September 29, 1998
unaudited balance sheet included in the Offering Memorandum or (B) for the
period from September 30, 1998, to a specified date not more than three
business days prior to the
2
date of such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in net sales, income from
operations, EBITDA or net income of Volume Holdings, except in all
instances for changes, increases or decreases that the Offering Memorandum
discloses have occurred or which are set forth in such letter, in which
case the letter shall be accompanied by an explanation by Volume Holdings
as to the significance thereof unless said explanation is not deemed
necessary by the Initial Purchasers;
[(v) based upon the procedures detailed in such letter with respect to
the period subsequent to June 30, 1998, including reading of minutes and
inquiries of certain officials of Service America and its subsidiaries who
have responsibility for financial and accounting matters, nothing has come
to their attention that causes them to believe that (A) at a specified date
not more than three business days prior to the date of such letter, there
was any change in capital stock, increase in long-term debt or decrease in
net current assets of Service America as compared with the amounts shown in
the June 30, 1998 unaudited balance sheet data of Service America included
in the Offering Memorandum or (B) for the period from July 1, 1998 to a
specified date not more than three business days prior to the date of such
letter, there were any decreases, as compared with the corresponding period
in the preceding year, in net sales, income from operations, EBITDA or net
income of Service America, except in all instances for changes, increases
or decreases that the Offering Memorandum discloses have occurred or which
are set forth in such letter, in which case the letter shall be accompanied
by an explanation by Service America as to the significance thereof unless
said explanation is not deemed necessary by the Initial Purchasers;]
(vi) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
Volume Holdings) set forth in the Offering Memorandum agrees with the
accounting records of Volume Holdings, excluding any questions of legal
interpretation; and
(vii) on the basis of a reading of the unaudited pro forma financial
information included in the Offering Memorandum, carrying out certain
specified procedures, reading of minutes and inquiries of certain officials
of Volume Holdings and the Issuer who have responsibility for financial and
accounting matters and proving the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts in the pro forma
financial information, nothing came to their attention which caused them to
believe that the pro forma financial information does not comply in form in
all material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
information.
ANNEX B-2
FORM OF INITIAL PRICEWATERHOUSECOOPERS COMFORT LETTER
The Issuer shall have furnished to the Initial Purchasers a letter of
PricewaterhouseCoopers LLP, addressed to the Initial Purchasers and dated the
date of the Purchase Agreement, in form and substance satisfactory to the
Initial Purchasers, substantially to the effect set forth below:
(i) they are independent certified public accountants with respect to
Service America and its subsidiaries within the meaning of Rule 101 of the
Code of Professional Conduct of the AICPA and its interpretations and
rulings;
(ii) in their opinion, the audited financial statements included in
the Offering Memorandum and reported on by them comply in form in all
material respects with the accounting requirements of the Exchange Act and
the related published rules and regulations of the Commission thereunder
that would apply to the Offering Memorandum if the Offering Memorandum were
a prospectus included in a registration statement on Form S-1 under the
Securities Act (except that certain supporting schedules are omitted);
(iii) based upon a reading of the latest unaudited financial
statements made available by Service America, the procedures of the AICPA
for a review of interim financial information as described in Statement of
Auditing Standards No. 71, reading of minutes and inquiries of certain
officials of Service America who have responsibility for financial and
accounting matters and certain other limited procedures requested by the
Initial Purchasers and described in detail in such letter, nothing has come
to their attention that causes them to believe that (A) any unaudited
financial statements included in the Offering Memorandum do not comply as
to form in all material respects with applicable accounting requirements,
(B) any material modifications should be made to the unaudited financial
statements included in the Offering Memorandum for them to be in conformity
with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included in the Offering Memorandum or (C) the information included under
the headings "Summary--Summary Historical Financial Information of Service
America", "Selected Historical Financial Information of Service America",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Management--Executive Compensation" is not in conformity
with the disclosure requirements of Regulation S-K that would apply to the
Offering Memorandum if the Offering Memorandum were a prospectus included
in a registration statement on Form S-1 under the Securities Act; and
(iv) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
Service America) set forth in the Offering Memorandum agrees with the
accounting records of Service America, excluding any questions of legal
interpretation.