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Exhibit 1
TOM'S FOODS INC.
$60,000,000
10-1/2 SENIOR SECURED NOTES DUE NOVEMBER 1, 2004
PURCHASE AGREEMENT
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October 8, 1997
PAINEWEBBER INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Tom's Foods Inc., a Delaware corporation (the "Company"), hereby confirms
its agreement with you (the "Initial Purchaser"), as set forth below.
1. The Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the Initial Purchaser $60,000,000
aggregate principal amount of its 10-1/2 % Senior Secured Notes due November 1,
2004 (the "Notes"). The Notes are to be issued under an indenture (the
"Indenture") dated as of October 14, 1997 between the Company and IBJ ▇▇▇▇▇▇▇▇
Bank & Trust Company, as trustee (the "Trustee").
The Notes will be offered and sold to you without being registered under
the Securities Act of 1933, as amended (the "Act"), in reliance on exemptions
therefrom.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum dated September 18, 1997 (the "Preliminary
Memorandum") and a final offering memorandum dated October 8, 1997 (the
"Final Memorandum"; the Preliminary Memorandum and the Final Memorandum each
herein being referred to as a "Memorandum") setting forth or including a
description of the terms of the Notes, the terms of the offering of the Notes,
a description of the Company and any material developments re-
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lating to the Company occurring after the date of the most recent historical
financial statements included therein.
The Notes are being offered in connection with the Company's refinancing
of certain existing indebtedness, including (i) term loans outstanding under
the Loan and Security Agreement dated as of August 30, 1996 by and between
Congress Financial Corporation (Southern)("Congress") and the Company (the
"Existing Credit Agreement"), (ii) indebtedness owed to STI Credit Corporation
(the "STI Debt") and (iii) a portion of the indebtedness owed to TFH Corp.
(the "TFH Debt"). Concurrently with the offering of the Notes, the Company
will issue approximately $7,000,000 aggregate liquidation preference of its
Class A Preferred Stock and approximately $21,737,000 aggregate liquidation
preference of its Class B Preferred Stock for the remainder of the TFH Debt
and will enter into an Amended and Restated Loan and Security Agreement with
Congress (the "New Credit Agreement") to provide for its on-going working
capital needs.
The Initial Purchaser and its direct and indirect transferees of the Notes
will be entitled to the benefits of a Registration Rights Agreement (the
"Registration Rights Agreement"), pursuant to which the Company will agree,
among other things, to file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
registering the Exchange Notes (as defined in the Registration Rights
Agreement) under the Act. This Agreement, the Notes, the Exchange Notes, the
Private Exchange Notes (as defined in the Registration Rights Agreement), the
Indenture, the Security Documents (as defined in the Indenture) and the
Registration Rights Agreement are referred to herein as the "Operative
Documents."
2. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with the Initial Purchaser that:
A. Neither the Preliminary Memorandum as of the date thereof nor the
Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date (as
defined in Section 3 below) contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties set
forth in this Section 2(a) do not apply to statements or omissions made in
reliance upon and in conformity with information relating to the Initial
Purchaser furnished to the Company in writing by the Initial Purchaser
expressly for use in the Preliminary Memorandum, the Final Memorandum or any
amendment or supplement thereto.
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B. As of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Final Memorandum; all
of the outstanding shares of capital stock of the Company have been,
or as of the Closing Date will be, duly authorized and validly issued, are
or, as of the Closing Date, will be fully paid and nonassessable and were not
or, as of the Closing Date will not be, issued in violation of any preemptive
or similar rights; all of the outstanding shares of capital stock of the
Company will be free and clear of all liens, encumbrances, equities and
claims or restrictions on transferability (other than those imposed by the
Act and the securities or "Blue Sky" laws of certain jurisdictions) or
voting; except as set forth in the Final Memorandum, there are no (i)
options, warrants or other rights to purchase, (ii) agreements or other
obligations to issue or (iii) other rights to convert any obligation into, or
exchange any securities for, shares of capital stock of or ownership
interests in the Company outstanding. Except as set forth in the Final
Memorandum, the Company does not own, directly or indirectly, any shares of
capital stock or any other equity or long-term debt securities or have any
equity interest in any corporation, firm, partnership, joint venture or other
entity.
C. The Company is duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own its properties and conduct its business
as now conducted and as described in the Final Memorandum; the Company is
duly qualified to do business as a foreign corporation in good standing in
all other jurisdictions where the ownership or leasing of its properties or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not, individually or in the aggregate, have
a material adverse effect on the properties, business, condition (financial
or otherwise), or results of operations of the Company (any such event, a
"Material Adverse Effect").
D. The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Operative
Documents and to consummate the transactions contemplated thereby.
E. This Agreement has been duly and validly authorized, executed and
delivered by the Company.
F. The Indenture has been duly and validly authorized by the Company
and, when duly executed and delivered in accordance with its terms
(assuming the due execution and delivery thereof by the Trustee), will be the
legally valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or
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hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law). The Indenture meets the
requirements for qualification under the Trust Indenture Act of 1939, as
amended (the "TIA").
G. The Notes have been duly and validly authorized for issuance and
sale to the Initial Purchaser by the Company pursuant to this Agreement
and, when issued and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with the terms
hereof, will be the legally valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms and entitled to
the benefits of the Indenture, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
H. The Exchange Notes and the Private Exchange Notes have been duly
and validly authorized for issuance by the Company and, when issued and
authenticated in accordance with the terms of the Indenture, will be the
legally valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of the
Indenture, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
I. The Registration Rights Agreement has been duly and validly
authorized by the Company and, when executed and delivered by the Company
(assuming due authorization, execution and delivery by the Initial
Purchaser), will constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
that (A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) general principles
of equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is considered
in a proceeding in equity or at law) and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations.
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J. No consent, approval, authorization or order of any court or
governmental agency or body, or third party is required for the
performance of this Agreement or the other Operative Documents, or the
consummation by the Company of the transactions contemplated hereby or by the
other Operative Documents, except such as have been obtained and such as may
be required under state securities or "Blue Sky" laws in connection with the
purchase and resale of the Notes by the Initial Purchaser or by the federal
and state securities laws in connection with the obligations under the
Registration Rights Agreement. The Company is not (i) in violation of its
certificate of incorporation or bylaws, (ii) in breach or violation of any
statute, judgment, decree, order, rule or regulation applicable to the
Company or any of its properties or assets, except for any such breach or
violation which would not, individually or in the aggregate, have a Material
Adverse Effect, or (iii) in breach of or default under (nor has any event
occurred which, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate, contract or other agreement or
instrument to which the Company is a party or to which any of its properties
or assets are subject (collectively, "Contracts"), except for any such
breach, default, violation or event which would not, individually or in the
aggregate, have a Material Adverse Effect.
K. The execution, delivery and performance by the Company of each of
the Operative Documents and the consummation by the Company of the
transactions contemplated thereby, and the fulfillment of the terms thereof,
will not conflict with or constitute or result in a breach of or a default
under (or an event which with notice or passage of time or both would
constitute a default under) or violation of any of (i) the terms or
provisions of any Contract, except for any such conflict, breach, violation,
default or event which would not, individually or in the aggregate, have a
Material Adverse Effect, (ii) the certificate of incorporation or bylaws of
the Company, or (iii) (assuming compliance with all applicable federal and
state securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of the Initial Purchaser in Section 8 hereof)
any statute, judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to the Company or any of its
properties or assets, except for any such conflict, breach or violation which
would not, individually or in the aggregate, have a Material Adverse Effect.
L. Each of the Indenture, the Notes, the Exchange Notes and the
Registration Rights Agreement conform in all material respects to the
description thereof in the Final Memorandum.
M. The audited financial statements of the Company included in the
Final Memorandum present fairly the financial position, results of operations
and
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cash flows of the Company at the dates and for the periods to which they
relate and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated therein,
and comply as to form in all material respects with the applicable accounting
requirements of the Act and the rules and regulations thereunder. The
summary and selected financial and statistical data included in the Final
Memorandum present fairly in all material respects the information shown
therein and have been prepared and compiled on a basis consistent with the
audited financial statements included therein, except as otherwise stated
therein, and comply as to form in all material respects with the applicable
accounting requirements of the Act and the rules and regulations thereunder.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP is an independent public accounting firm as required by
the Act and the rules and regulations thereunder.
N. Except as described in the Final Memorandum, there is not pending
or, to the best knowledge of the Company, threatened, any action, suit,
proceeding, inquiry or investigation to which the Company is a party, or to
which its properties or assets are subject, before or brought by any court,
arbitrator or governmental agency or body, which, if determined adversely to
the Company, would have a Material Adverse Effect, or which seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge the
issuance or sale of the Notes to be sold hereunder or the consummation of the
other transactions described in the Final Memorandum.
O. The Company owns or possesses adequate licenses or other rights
to use all patents, trademarks, service marks, trade names, copyrights
and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, system or procedures
(collectively, the "Intellectual Property") necessary to conduct its business
as described in the Final Memorandum, and the Company has not received any
notice of infringement of or conflict with (or knows of no such infringement
of or conflict with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how which, if such
assertion of infringement or conflict were sustained, would, individually or
in the aggregate, have a Material Adverse Effect.
P. The Company possesses all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has made
or will have made all declarations and filings with, all federal, state,
local and other governmental authorities, all self-regulatory organizations
and all courts and other tribunals, presently required or necessary to own or
lease, as the case may be, and to operate its properties and to carry on its
business as described in the Final Memorandum ("Permits"), except where the
failure to obtain such Permits would not, individually or in the aggregate,
have a Material Adverse Effect; the Company has fulfilled and per-
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formed all of its material obligations with respect to such Permits and no
event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit; and the Company
has not received any notice of any proceeding relating to revocation or
modification of any such Permit, except as described in the Final Memorandum
and except where such revocation or modification would not, individually or
in the aggregate, have a Material Adverse Effect.
Q. Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein, (i) the Company has
not incurred any liabilities or obligations, direct or contingent, or entered
into or agreed to enter into any transactions or contracts (written or oral)
not in the ordinary course of business which liabilities, obligations,
transactions or contracts would, individually or in the aggregate, be
material to the properties, business, condition (financial or otherwise), or
results of operations of the Company (a "Material Change"), (ii) the Company
has not purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock,
and (iii) there has not been any change in the capital stock or long-term
indebtedness of the Company which would, individually or in the aggregate, be
a Material Change.
R. The Company has filed all necessary federal, state and foreign
income and franchise tax returns, except where the failure to so file such
returns would not, individually or in the aggregate, have a Material Adverse
Effect, and has paid all taxes shown as due thereon; and other than tax
deficiencies which the Company is contesting in good faith and for which the
Company has provided adequate reserves, there is no tax deficiency that has
been asserted against the Company that would have, individually or in the
aggregate, a Material Adverse Effect.
S. The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company believes
to be reliable and accurate.
T. Neither of the Company nor any agent acting on its behalf has
taken or will take any action that might cause this Agreement or the sale
of the Notes to violate Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System, in each case as in effect, or as the same may
hereafter be in effect, on the Closing Date.
U. The Company has good and marketable title to all real and
personal property described in the Final Memorandum as being owned by it
and good and marketable title to the leasehold estates in the real and
personal property described in
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the Final Memorandum as being leased by it free and clear of all
liens, charges, encumbrances or restrictions, except to the extent the
failure to have such title or the existence of such liens, charges,
encumbrances or restrictions would not, individually or in the aggregate,
have a Material Adverse Effect and except as described in the Final
Memorandum. All material leases, contracts and agreements to which the
Company is a party or by which it is bound are valid and enforceable against
the Company, to the knowledge of the Company are valid and enforceable
against the other party or parties thereto and are in full force and effect
with only such exceptions as would not, individually or in the aggregate,
have a Material Adverse Effect.
V. There are no legal or governmental proceedings involving or
affecting the Company or any of its properties or assets which would be
required to be described in a prospectus pursuant to the Act that are not
described in the Final Memorandum, nor are there any material contracts or
other documents which would be required to be described in a prospectus
pursuant to the Act that are not described in the Final Memorandum.
W. Except as would not, individually or in the aggregate, have a
Material Adverse Effect, (A) the Company is in compliance with and not
subject to liability under applicable Environmental Laws, (B) the Company has
made all filings and provided all notices required under any applicable
Environmental Law, and has and is in compliance with all Permits required
under any applicable Environmental Laws and each of them is in full force and
effect, (C) there is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for information pending or, to the
knowledge of the Company, threatened against the Company under any
Environmental Law, (D) no lien, charge, encumbrance or restriction has been
recorded under any Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the Company, (E) the
Company has not received notice that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), or any
comparable state law and (F) no property or facility of the Company is (i)
listed or proposed for listing on the National Priorities List under CERCLA
or (ii) is listed in the Comprehensive Environmental Response, Compensation,
Liability Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common law
and all applicable federal, state and local laws or regulations, codes, orders,
decrees, judgments or injunctions issued, promulgated, approved or entered
thereunder, relating to pollution or the environment, including, without
limitation, laws relating to (i) emissions, dis-
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charges, releases or threatened releases of hazardous materials, into the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), (ii) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of hazardous materials, and (iii) underground and above ground storage
tanks, and related piping, and emissions, discharges, releases or threatened
releases therefrom.
X. The Company is in material compliance with all federal, state and
local employment and labor laws, including, but not limited to, laws
relating to non-discrimination in hiring, promotion and pay of employees; no
labor dispute with employees of the Company exists or, to the knowledge of
the Company, is imminent or threatened; and the Company is not aware of any
existing, imminent or threatened labor disturbance by the employees of any of
its principal suppliers, manufacturers, distributors or contractors that
could result in a Material Adverse Effect.
Y. The Company carries insurance in such amounts and covering such
risks as is adequate for the conduct of its business and the value of its
properties. The Company has not received written notice from any insurer or
agent of such insurer that any material capital improvements or other
material expenditures will have to be made in order to continue any insurance
maintained by the Company.
Z. The Company does not have any liability for any prohibited
transaction or funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other plan which is
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), to which the Company makes or ever has made a contribution and in
which any employee of the Company is or has ever been a participant. With
respect to such plans, the Company is in compliance in all material respects
with all applicable provisions of ERISA.
AA. The Company (i) makes and keeps books and records which are
accurate in all material respects and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B) transactions are
recorded as necessary to permit preparation of its financial statements and
to maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
BB. The Company will not be an "investment company" or "promoter" or
"principal underwriter" for an "investment company," as such terms are
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defined in the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
CC. No holder of securities, other than the Notes, of the Company
will be entitled to have such securities registered under the registration
statements required to be filed by the Company pursuant to the Registration
Rights Agreement.
DD. Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable
value of the assets of the Company will exceed the sum of its stated
liabilities and identified contingent liabilities; the Company is not, nor
will the Company be, after giving effect to the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, (a) left with unreasonably small capital with which to
carry on its business as it is proposed to be conducted, (b) unable to pay
its debts (contingent or otherwise) as they mature or (c) otherwise
insolvent.
EE. Neither the Company nor its respective Affiliates (as defined in
Rule 501(b) of Regulation D under the Act) has directly, or through any
agent, (i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any "security" (as defined in the Act) which is or
could be integrated with the sale of the Notes in a manner that would require
the registration under the Act of the Notes or (ii) engaged in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the Notes or
in any manner involving a public offering within the meaning of Section 4(2)
of the Act.
FF. Assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 8 hereof, it is not necessary in
connection with the offer, sale and delivery of the Notes to the Initial
Purchaser in the manner contemplated by this Agreement to register any of the
Notes under the Act or to qualify the Indenture under the TIA.
GG. No securities of the Company are of the same class (within the
meaning of Rule 144A under the Act) as the Notes and listed on a national
securities exchange registered under Section 6 of the Exchange Act, or quoted
in a U.S. automated inter-dealer quotation system.
HH. The Company has not taken, nor will take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Notes.
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II. Upon execution and delivery by the Company on the Closing Date
and assuming due recording, the Mortgages (as defined in the Indenture)
will create and constitute (A) valid and enforceable mortgage liens on the
real properties and fixtures described therein (the "Real Property") and (B)
a valid and enforceable secu rity interest in such of the Mortgaged
Properties (as defined in the Mortgages collectively), other than the Real
Property, in which a security interest can be created under Article 9 (the
"UCC Property") of the Uniform Commercial Code (the "UCC") as in effect in
the state in which such Mortgaged Property is located. The Mortgages will be
in proper form under the laws of the states in which the Mortgaged Properties
encumbered thereby are located, to be accepted for recording in the counties
or other appropriate jurisdictions where such Mortgaged Properties are
located.
JJ. Upon execution and delivery by the Company on the Closing Date,
the Security Documents will create and constitute valid, enforceable and,
subject to all required filings contemplated by clause KK. below, perfected
security interests in, liens on or pledges of all of the Pledged Collateral
(as defined in the Security Documents collectively).
KK. Upon (A) execution and delivery of the Security Documents by the
Company on the Closing Date and (B) the filing of the UCC-1 financing
statements (the "Financing Statements") relating to (1) the Mortgages with
the Office of the Secretaries of State in the states of Texas, California and
Georgia and with the recorder of ▇▇▇▇▇▇▇ County, Texas, Fresno County,
California and Muscogee County, Georgia and (2) the other Security Documents
with the Office of the Secretaries of State in the states of Texas,
California and Georgia and with the recorder of ▇▇▇▇▇▇▇ County, Texas, Fresno
County, California and Muscogee County, Georgia, the security interest, lien
or pledge created by (x) the Security Documents in the Pledged Collateral
will be a perfected security interest with respect to that portion of the
Pledged Collateral in which a security interest can be perfected by filing a
financing statement, prior to all other claims or security interests therein
which may be perfected by the filing of a financing statement or by
possession, except for prior liens and encumbrances permitted by the
applicable Security Document, and (y) the Mortgages in UCC Property will be a
perfected security interest with respect to that portion of the UCC
Properties in which a security interest can be perfected by filing a
financing statement, prior to all other security interests therein which may
be perfected by filing a financing statement or by possession, except for
prior liens and encumbrances permitted by the applicable Mortgage.
LL. Each of the Security Documents has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legally valid and binding obligation of the Company,
enforceable against it
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in accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity and the discretion of the court before
which any proceedings thereof may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law). The Security
Documents, when executed and delivered, will conform in all material respects
to the description thereof in the Final Memorandum.
MM. The Company has complied, and until the completion of the
distribution of the Notes will comply, with all of the provisions of
(including, without limitation, filing all forms required by) Section 517.075
of the Florida Securities and Investor Protection Act and regulation
3E-900.001 issued thereunder with respect to the offering and sale of the
Notes.
Any certificate signed by any officer of the Company or any Subsidiary and
delivered to the Initial Purchaser or to counsel for the Initial Purchaser
shall be deemed a representation and warranty by the Company to Initial
Purchaser as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company, all of the Notes at 96.50 % of their principal
amount.
One or more certificates in definitive form for the Notes that the Initial
Purchaser has agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Initial Purchaser
requests upon notice to the Company at least 48 hours prior to the Closing
Date, shall be delivered by or on behalf of the Company to the Initial
Purchaser, against payment by or on behalf of the Initial Purchaser of the
purchase price therefor by wire transfer of immediately available funds payable
to such account or account as the Company shall specify prior to the Closing
Date, or by such means as the parties hereto shall agree prior to the Closing
Date. Such delivery of and payment for the Notes shall be made at the offices
of ▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at 9:00
A.M., Chicago time, on October 14, 1997, or at such other place, time or date
as the Initial Purchaser and the Company may agree upon, such time and date of
delivery against payment being herein referred to as the "Closing Date." The
Company will make such certificate or certificates for the Notes available for
checking and packaging by the Initial Purchaser at the offices of PaineWebber
Incorporated in New York, New York or such other place as PaineWebber
Incorporated may designate, at least 24 hours prior to the Closing Date.
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4. Offering by the Initial Purchaser. The Initial Purchaser proposes to
make an offering of the Notes at the price and upon the terms set forth in the
Final Memorandum as soon as practicable after this Agreement is entered into
and as in the sole judgment of the Initial Purchaser is advisable.
5. Covenants of the Company. The Company covenants and agrees with the
Initial Purchaser that:
A. The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchaser and
counsel to the Initial Purchaser shall not previously have been advised and
furnished a copy for a reasonable period of time prior to the proposed
amendment or supplement and as to which the Initial Purchaser shall not have
given its consent, which consent shall not be unreasonably withheld. The
Company will promptly, upon the reasonable request of the Initial Purchaser
or counsel for the Initial Purchaser, make any amendments or supplements to
the Preliminary Memorandum or the Final Memorandum that may be necessary or
advisable in connection with the resale of the Notes by the Initial
Purchaser.
B. The Company will cooperate with the Initial Purchaser in
arranging for the qualification of the Notes for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Initial
Purchaser may designate and will continue such qualifications in effect for
as long as may be necessary to complete the resale of the Notes by the
Initial Purchaser; provided, however, that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction or
subject the Company to any tax in any such jurisdiction where it is not then
so subject.
C. If, at any time prior to the completion of the distribution by
the Initial Purchaser of the Notes or the Private Exchange Notes, any event
occurs or information becomes known as a result of which the Final Memorandum
as then amended or supplemented would include an untrue statement of a
material fact, or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time
to amend or supplement the Final Memorandum in order to comply with
applicable law, the Company will promptly notify the Initial Purchaser
thereof and will prepare, at the Company's expense, an amendment to the Final
Memorandum that corrects such statement or omission or effects such
compliance.
D. The Company will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of the
Preliminary
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Memorandum and the Final Memorandum or any amendment or supplement thereto
as the Initial Purchaser may reasonably request.
E. The Company will apply the net proceeds from the sale of the
Notes substantially as set forth under "Use of Proceeds" in the Final
Memorandum.
F. For so long as any Notes remain outstanding, the Company will
furnish to the Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the Company to the
Trustee or the holders of the Notes and, as soon as available, copies of any
reports or financial statements furnished to or filed by the Company with the
Commission or any national securities exchange on which any class of
securities of the Company may be listed.
G. Prior to the Closing Date, the Company will furnish to the
Initial Purchaser, as soon as they have been prepared by or are available
to the Company, to the extent not previously provided to the Initial
Purchasers, a copy of any unaudited interim consolidated financial statements
of the Company for any period subsequent to the period covered by its most
recent financial statements appearing in the Final Memorandum.
H. Neither the Company nor any of its Affiliates will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any "security" (as defined in the Act) that could be integrated with the sale
of the Notes in a manner that would require the registration under the Act of
the Notes.
I. The Company will not engage in any form of general solicitation
or general advertising (as those terms are used in Regulation D under the
Act) in connection with the offering of the Notes or in any manner involving
a public offering within the meaning of Section 4(2) of the Act.
J. For so long as any of the Notes remain outstanding, the Company
will make available, upon request, to any holder of such Notes and any
prospective purchasers thereof the information specified in Rule 144A(d)(4)
under the Act, unless the Company is then subject to Section 13 or 15(d) of
the Exchange Act.
K. The Company will use its best efforts to (i) permit the Notes to
be designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the Private Offerings,
Resales and Trading through Automated Linkages market (the "Portal Market")
and (ii) permit the Notes to be eligible for clearance and settlement through
The Depository Trust Company.
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6. Expenses. The Company agrees to pay all costs and expenses incident to
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof including all costs and expenses
incident to: (i) the printing, word processing or other production of
documents with respect to such transactions, including any costs of printing
the Preliminary Memorandum and the Final Memorandum and any amendments or
supplements thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to the Initial Purchaser of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company, (iv) the preparation
(including printing), issuance and delivery to the Initial Purchaser of any
certificates evidencing the Notes, (v) the qualification of the Notes under
state securities and "Blue Sky" laws, including filing fees and reasonable fees
and disbursements of counsel for the Initial Purchaser relating thereto, (vi)
the expenses of the Company in connection with any meetings with prospective
investors in the Notes, (vii) the fees and expenses of the Trustee, including
fees and expenses of its counsel and (viii) all expenses and listing fees
incurred in connection with the application for quotation of the Notes on the
PORTAL Market and (ix) any fees charged by investment rating agencies for the
rating of the Notes. If the issuance and sale of the Notes provided for herein
is not consummated because any condition to the obligations of the Initial
Purchaser set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 11 hereof or because of any
failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder (other than solely by reason of a default by the Initial Purchaser of
its obligations hereunder after all conditions hereunder have been satisfied in
accordance herewith, the Company will promptly reimburse the Initial Purchaser
upon demand for all out-of-pocket expenses (including fees, disbursements and
charges of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchaser) that
shall have been incurred by the Initial Purchaser in connection with the
proposed purchase and sale of the Notes.
7. Conditions of the Initial Purchaser's Obligations. The obligation of
the Initial Purchaser to purchase and pay for the Notes shall, in its sole
discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
A. All of the conditions contained in the New Credit Agreement to be
fulfilled or complied with prior to any borrowing under such agreement
shall have been complied with.
B. On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, counsel for the Company, in form and
substance satisfactory to counsel for the Initial Purchaser, to the effect
that:
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(i) The Company has been duly incorporated, and is validly
existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to
own, lease and operate its properties and to conduct its business
as described in the Final Memorandum. The Company is duly
qualified as a foreign corporation and in good standing in each
jurisdiction listed on Schedule A hereto.
(ii) The authorized capital stock of the Company as set forth
in the Final Memorandum conforms to the Certificate of
Incorporation of the Company; all of the outstanding shares of
capital stock of the Company held by TFH have been duly authorized
and validly issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights.
(iii) Except as set forth in the Final Memorandum, (A) no
options, warrants or other rights to purchase from the Company
shares of capital stock or ownership interests in the Company are
outstanding, (B) no agreements or other obligations of the Company
to issue, or other rights to cause the Company to convert, any
obligation into, or exchange any securities for, shares of capital
stock or ownership interests in the Company are outstanding and (C)
no holder of securities of the Company is entitled to have such
securities registered under a registration statement filed by the
Company pursuant to the Registration Rights Agreement.
(iv) The Company has all requisite corporate power and
authority to execute, deliver and perform each of its obligations
under the Operative Documents and to consummate the transactions
contemplated hereby and thereby.
(v) The Indenture has been duly and validly authorized,
executed and delivered by the Company and, (assuming the due
authorization, execution and delivery thereof by the Trustee),
constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles
of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
The Indenture is in sufficient form for qualification under the
TIA.
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(vi) The Notes are in the form contemplated by the Indenture.
The Notes have each been duly and validly authorized, executed and
delivered by the Company and, when paid for by the Initial
Purchaser in accordance with the terms of this Agreement (assuming
the due authorization, execution and delivery of the Indenture by
the Trustee and due authentication and delivery of the Notes by the
Trustee in accordance with the Indenture), will constitute the
valid and legally binding obligations of the Company, entitled to
the benefits of the Indenture, and enforceable against the Company
in accordance with their terms, except that the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought (regardless of
whether such enforcement is considered in a proceeding in equity or
at law).
(vii) The Exchange Notes and the Private Exchange Notes have
been duly and validly authorized by the Company and, when the
Exchange Notes and the Private Exchange Notes have been duly
executed and delivered by the Company in accordance with the terms
of the Registration Rights Agreement and the Indenture (assuming
the due authorization, execution and delivery of the Indenture by
the Trustee and due authentication and delivery of the Exchange
Notes and the Private Exchange Notes by the Trustee in accordance
with the Indenture), will constitute the valid and legally binding
obligations of the Company, entitled to the benefits of the
Indenture, and enforceable against the Company in accordance with
their terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles
of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(viii) The Registration Rights Agreement has been duly and
validly authorized, executed and delivered by the Company and
(assuming due authorization, execution and delivery thereof by the
Initial Purchaser), constitutes the valid and legally binding
agreement of the Company enforceable against the Company in
accordance with their terms, except that (A) the enforcement
thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
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and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and (B) any rights
to indemnity or contribution thereunder may be limited by federal
and state securities laws and public policy considerations.
(ix) This Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly and validly
authorized by the Company. This Agreement has been duly executed
and delivered by the Company.
(x) The Indenture, the Notes and the Exchange Notes conform
as to legal matters in all material respects to the descriptions
thereof contained in the Final Memorandum.
(xi) To the knowledge of such counsel, based upon
representations of the Company, no legal or governmental
proceedings are pending to which the Company is a party or to which
the property or assets of the Company is subject which would be
required under the Act to be described in a registration statement
or in a prospectus and are not described in the Final Memorandum,
or which seek to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Notes to be sold
hereunder or the consummation of the other transactions described
in the Final Memorandum under the caption "Use of Proceeds" or the
"Acquisition."
(xii) The statements in the Final Memorandum under the caption
"Certain United States Federal Tax Consequences" are accurate and
present fairly the information described therein in all material
respects. The statements made in the Final Memorandum under the
captions "Description of Other Senior Indebtedness," "Exchange
Offer; Registration Rights", insofar as they describe certain
provisions of the Credit Agreement, the Industrial Revenue Bonds
and the Registration Rights Agreement are accurate in all material
respects.
(xiii) The execution, delivery and performance of the
Operative Documents and the consummation of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance and sale of the Notes to the Initial Purchaser) will not
conflict with or constitute or result in a breach or a default
under (or an event which with notice or passage of time or both
would constitute a default under) or violation of any of (i) the
terms or provisions of any Contract identified by the Company as
material, except for any such con-
19
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flict, breach, violation, default or event which would not,
individually or in the aggregate, have a Material Adverse Effect,
(ii) the certificate of incorporation or bylaws of the Company, or
(iii) (assuming compliance with all applicable state securities or
"Blue Sky" laws and assuming the accuracy of the representations
and warranties of the Initial Purchaser in Section 8 hereof) the
Delaware General Corporate Law or any New York or Federal statute,
judgment, decree, order, rule or regulation known to such counsel
to be applicable to the Company and to transactions of the type
contemplated by the Final Memorandum (but without our having made
any special investigation as to other laws and provided that such
opinion need not cover any laws or regulations to which the Company
or its affiliates may be subject as a result of the Initial
Purchaser's legal or regulatory status or the involvement of the
Initial Purchaser in such transaction), except for any such
conflict, breach or violation which would not, individually or in
the aggregate, have a Material Adverse Effect.
(xiv) To the knowledge of such counsel, no consent, approval,
authorization or order of any New York or federal governmental
authority is required for the performance of the Operative
Documents or the issuance and sale by the Company of the Notes to
the Initial Purchaser or the other transactions contemplated
hereby, except such as may be required under Blue Sky laws, as to
which such counsel need express no opinion, and those which have
previously been obtained.
(xv) The Company is not, or immediately after the sale of the
Notes to be sold hereunder and the application of the proceeds from
such sale (as described in the Final Memorandum under the caption
"Use of Proceeds") will be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(xvi) No registration under the Act of the Notes is required
in connection with the sale of the Notes to the Initial Purchaser
as contemplated by this Agreement and the Final Memorandum or in
connection with the initial resale of the Notes by the Initial
Purchaser in accordance with Section 8 of this Agreement, and prior
to the commencement of the Exchange Offer (as defined in the
Registration Rights Agreement) or the effectiveness of the Shelf
Registration Statement (as defined in the Registration Rights
Agreement), the Indenture is not required to be qualified under the
TIA, in each case assuming (i) that the purchasers who buy such
Notes in the initial resale thereof are qualified institutional
buyers as defined in Rule 144A promulgated under the Act ("QIBs")
or accredited investors as defined in Rule 501(a) (1), (2), (3) or
(7) promulgated under the Act ("Accredited Investors"), (ii) the
accuracy of the
20
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Initial Purchaser's representations in Section 8 and those of
the Company contained in this Agreement regarding the absence of a
general solicitation in connection with the sale of such Notes to
the Initial Purchaser and the initial resale thereof, (iii) the due
performance by the Initial Purchaser of the agreements set forth in
Section 8 hereof and (iv) the accuracy of the representations made
by each Accredited Investor who purchases Notes in the initial
resale as set forth in the Final Memorandum.
(xvii) Neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance, execution or
delivery of the Notes will violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
(xviii) The New Credit Agreement has been duly authorized,
executed and delivered by the Company.
(xix) The Security Documents have been duly and validly
authorized, executed and delivered by the Company and, (assuming
the due authorization, execution and delivery thereof by the
Trustee), constitute the valid and legally binding agreements of
the Company, enforceable against the Company in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles
of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(xx) The Security Documents create a valid security interest
in your favor as security for the payment of the Secured
Obligations (as defined in the Security Agreement) in all of the
Company's right, title and interest in and to all personal property
included within the definition of the term Pledged Collateral (as
defined in the Security Agreement) in which a security interest can
be granted under the uniform commercial code in the states of
Illinois, New York and California (the "Applicable Uniform
Commercial Code") (the "Code Collateral"). We have examined the
financing statement ((the "Financing Statements") to be filed in
the filing offices (the "Filing Offices") with respect to the
security interests granted to the Trustee pursuant to the Security
Agreement, and upon the filing of such Financing Statements in the
Filing Offices, and assuming that the representations made in the
Security Documents with respect to the location of the Code
Collateral and the chief executive office of the Company are and
remain true and correct: (a) all filings, registrations and
re-
21
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cordings necessary to perfect the security interest granted to
the Trustee under such Security Documents in respect of all Code
Collateral in which a security interest may be perfected by filing
a financing statement in the Filing Offices will have been
accomplished; and (b) the security interests granted to the Trustee
pursuant to such Security Documents in and to such Code Collateral
will be perfected to the extent that such security interests may be
perfected by filing financing statements in the Filing Offices
under the Applicable Uniform Commercial Code.
At the time the foregoing opinion is delivered, such counsel shall
additionally state that it has participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants for the Company, representatives of the Initial Purchaser and
counsel for the Initial Purchaser, at which conferences the contents of the
Final Memorandum and related matters were discussed, and, although it has not
independently verified and is not passing upon and assumes no responsibility
for the accuracy, completeness or fairness of the statements contained in the
Final Memorandum (except to the extent specified in subsection 7(b)(x) or
(xiii)), no facts have come to its attention which lead it to believe that the
Final Memorandum, on the date thereof or at the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such firm need express no opinion with
respect to the financial statements and related notes thereto and the other
financial data included in or excluded from the Final Memorandum). The opinion
of such counsel described in this Section shall be rendered to the Initial
Purchaser at the request of the Company and shall so state therein.
References to the Final Memorandum in this subsection (b) shall include
any amendment or supplement thereto prepared in accordance with the provisions
of this Agreement at the Closing Date.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the federal laws of the
United States, the laws of the State of New York and Delaware General Corporate
Law. Such counsel may also state that, insofar as such opinion involves
factual matters, such counsel have relied, to the extent they deem proper, upon
certificates of officers of the Company and certificates of public officials;
provided that such certificates have been provided to the Initial Purchaser.
C. You shall have received opinions (satisfactory to you and your
counsel), dated the Closing Date, from local counsel for the Company in
the States of Texas, California and Georgia, substantially in the form of
Exhibit A hereto.
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D. The Initial Purchaser shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial
Purchaser, with respect to certain legal matters relating to this Agreement,
and such other related matters as the Initial Purchaser may reasonably
require. In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have
received and may rely upon such certificates and other documents and
information as they may reasonably request to pass upon such matters.
E. The Initial Purchaser shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, independent public accountants for the Company, comfort letters, dated
the date hereof and the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchaser and counsel for the Initial Purchaser.
F. The representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects on and
as of the Closing Date as if made on and as of the Closing Date; the Company
shall have performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
the Closing Date; and, except as set forth in the Final Memorandum (exclusive
of any amendment or supplement thereto after the date hereof) subsequent to
the date of the most recent financial statements in such Final Memorandum,
there shall have been no event or development that, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse
Effect.
G. The issuance and sale of the Notes pursuant to this Agreement
shall not be enjoined (temporarily or permanently) and no restraining order
or other injunctive order shall have been issued or any action, suit or
proceeding shall have been commenced with respect to this Agreement before
any court or governmental authority.
H. The Initial Purchaser shall have received certificates of the
Company, dated the Closing Date, signed by its Chief Financial Officer
and one other officer, in form and substance satisfactory to the Initial
Purchaser, to the effect that:
(i) Each signer of such certificate has carefully examined the Final
Memorandum and (A) as of the date of such certificate, such document is
true and correct in all material respects and does not omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not untrue or misleading and (B) since the Effective Date,
no event has occurred as a result of which it is necessary to amend or
supplement the Final Memorandum in order to make the statements therein not
untrue or misleading in any material respect
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(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects;
(iii) Each of the covenants required herein to be performed by the
Company on or prior to the delivery of such certificate has been duly,
timely and fully performed and each condition herein required to be complied
with by the Company on or prior to the date of such certificate has been
duly, timely and fully complied with;
(iv) Since the dates of the most recent financial statements in the
Final Memorandum (exclusive of any amendment or supplement thereto after
the date hereof), (A) no event or events have occurred, no information has
become known nor does any condition exist that, individually or in the
aggregate, would have a Material Adverse Effect and (B) neither the Company
nor any of its Subsidiaries has sustained any material loss or interference
with its business or properties from fire, explosion, flood or other
casualty, whether or not covered by insurance, or from any labor dispute or
any court or legislative or other governmental action, order or decree, which
is not set forth in the Final Memorandum; and
(v) The sale of the Notes hereunder have not been enjoined
(temporarily or permanently).
and such other matters as the Initial Purchaser may reasonably request.
I. On the Closing Date, the Initial Purchaser shall have received
the Registration Rights Agreement executed by the Company and the
Intercreditor Agreement executed by the parties thereto and such agreements
shall be in full force and effect at all times from and after the Closing
Date.
J. The Initial Purchaser shall have received from the Company a true
and correct executed copy of the New Credit Agreement, dated on or about
the Closing Date, and there shall have been no material amendments,
alterations, modifications or waivers of any provisions of the New Credit
Agreement, and there exists as of the date hereof and on and as of the
Closing Date (after giving effect to the transactions contemplated by this
Agreement and the application of the proceeds received by the Company from
the sale of the Notes) no condition that would constitute a Default or an
Event of Default (each as defined in the Credit Agreement) under the New
Credit Agreement. All indebtedness under the Existing Credit Agreement shall
have been repaid and all commitments thereunder terminated.
24
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K. The STI Debt and the TFH Debt shall have been repaid
substantially on the terms set forth in the Offering Memorandum.
L. On the Closing Date, the Trustee shall have received each of the
Security Agreement (as defined in the Indenture), duly executed by the
Company and dated on or before the Closing Date, together with:
(i) duly executed UCC-1 financing statements or other documents
under the provisions of the Uniform Commercial Code or any other
applicable state law in proper form for filing in each office where such
filing is necessary or appropriate to grant to the Trustee for its benefit
and the benefit of the holders of the Notes the Liens of the character and
priority contemplated by the Security Agreement; and
(ii) evidence that all other actions necessary to perfect and
protect the Liens created by the Security Agreement have been taken.
M. On the Closing Date, the Company shall have caused to be
delivered to the Trustee the following documents and instruments with
regard to each Mortgaged Property (as defined in the Indenture) located
in the United States:
(i) a Mortgage encumbering the Company's fee interest or leasehold
interest, as the case may be, in each such Mortgaged Property, duly
executed and acknowledged by the owner or holder of the fee interest or
leasehold interest, as the case may be, constituting such Mortgaged Property
and otherwise in form for recording in the appropriate recording office of
the political subdivision where such Mortgaged Property is situated, together
with such certificates, affidavits, questionnaires or returns as shall be
required in connection with the recording or filing thereof and such UCC-1
financing statements and other similar statements as are contemplated in
respect of such Mortgage by the counsel opinions described in Section 7(c) of
this Agreement, and any other instruments necessary to grant the interests
purported to be granted by such Mortgage under the laws of any applicable
jurisdiction, which Mortgage and financing statements and other instruments
shall be effective to create a Lien on such Mortgaged Property subject to no
Liens other than Liens permitted to be outstanding pursuant to such Mortgage;
(ii) with respect to each Mortgage, a policy of title insurance (or
commitment to issue such a policy) insuring (or committing to insure) the
Lien of such Mortgage as a valid first Mortgage Lien on the real property and
fixtures described therein in respect of the Notes in an amount not less than
115% of the fair market value of such real property and fixtures, which
policy or commitment shall (a) be issued by Chicago Title Insurance Company,
(b) include such reinsurance arrangements (with
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provisions for direct access) as shall be acceptable to the Trustee, (c) have
been supplemented by such endorsements, where such endorsements are available
at commercially reasonable premium costs, as shall be requested by the
Trustee (including, without limitation, endorsements or opinion letters on
matters relating to usury, first loss, last dollar, zoning, non-imputation,
public road access, contiguity (where appropriate), cluster, survey, doing
business, variable rate and so-called comprehensive coverage over covenants
and restrictions) and (d) contain only such exceptions to title as shall be
agreed to by the Trustee prior to the Closing Date with respect to such
Mortgaged Property;
(iii) with respect to each Mortgaged Property, a survey certified to
the Trustee and the title insurance company and dated (or redated) not
earlier than six months prior to the date of delivery thereof, unless there
shall have occurred any exte rior change in the property affected thereby
during such period, in which event such survey shall be dated or redated to a
date after such change in such form as shall be required by the title
insurance company to issue the so-called comprehensive endorsement required
under paragraph (ii) hereof;
(iv) with respect to each Mortgaged Property, policies or
certificates of insurance as required by the Mortgages relating thereto,
which policies or certificates shall bear mortgage endorsements of the
character required by such Mortgages;
(v) with respect to each Mortgaged Property, UCC, judgment and tax
lien searches confirming that the personal property comprising a part of
such Mortgaged Property is subject to no Liens other than as set forth in
Schedule B to the Mortgages;
(vi) with respect to each Mortgaged Property, such affidavits,
certificates and instruments of indemnification as shall reasonably be
required to induce the title insurance company to issue the policy or
policies (or commitment) contemplated in subparagraph (ii) above;
(vii) checks payable to the appropriate public officials in payment
of all recording costs and transfer taxes (or checks or wire transfers to
the title insurance company in respect of such amounts) due in respect of the
execution, delivery or recording of such Mortgages, together with a wire
transfer for the title insurance company in payment of its premium, search
and examination charges, survey costs and any other amounts due in connection
with the issuance of its policies (or commitments);
(viii) with respect to each Mortgaged Property, copies of all Leases
(as defined in the Mortgages), all of which Leases shall, to the extent
not previously ap-
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proved in writing by the Initial Purchasers and the Trustee, be satisfactory
to the Initial Purchasers and the Trustee;
(ix) with respect to each Mortgaged Property, an Officers'
Certificate (as defined in the Indenture) stating that there has been issued
and is in effect a valid and proper certificate of occupancy or local
equivalent, if required by the local codes or ordinances for the use then
being made of the applicable Mortgaged Property and that the Company has not
received any outstanding citation, violation or similar notice indicating
that such Mortgaged Property contains conditions which are not in compliance
with local codes or ordinances relating to building or fire safety or
structural soundness; and
(x) such consents, approvals, amendments, supplements, estoppels,
tenant subordination agreements or other instruments as shall be
necessary in order for the owner or holder of the fee interest to grant the
Lien contemplated by the Mortgage with respect to such Mortgaged Property.
N. On or before the Closing Date, the Initial Purchaser and counsel
for the Initial Purchaser shall have received such further documents,
certificates and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company as they shall have
heretofore reasonably requested from the Company.
All such documents, opinions, certificates and schedules or instruments
delivered pursuant to this Agreement will comply with the provisions hereof
only if they are reasonably satisfactory in all material respects to the
Initial Purchaser and counsel for the Initial Purchaser. The Company shall
furnish to the Initial Purchaser such conformed copies of such documents,
opinions, certificates and schedules or instruments in such quantities as the
Initial Purchaser shall reasonably request.
8. Offering of Notes; Restrictions on Transfer. The Initial Purchaser
represents and warrants that it is a QIB. The Initial Purchaser agrees with
the Company (as to itself only) that (i) it has not and will not solicit offers
for, or offer or sell, the Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Act; and (ii) it has and will solicit offers for the Notes only from, and will
offer the Notes only to (A) in the case of offers inside the United States, (x)
persons whom the Initial Purchaser reasonably believes to be QIBs or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented
to the Initial Purchaser that each such account is a QIB, to whom notice has
been given that such sale or delivery is being made in reliance on Rule 144A,
and, in each case, in transactions under Rule 144A or (y) a limited number of
other institutional investors
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reasonably believed by the Initial Purchaser to be Accredited Investors that,
prior to their purchase of the Notes, deliver to the Initial Purchaser a letter
containing the representations and agreements set forth in Annex A to the Final
Memorandum and (B) in the case of offers outside the United States, to persons
other than U.S. persons ("foreign purchasers," which term shall include dealers
or other professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than an estate or
trust)); provided, however, that in the case of this clause (B), in purchasing
such Notes such persons are deemed to have represented and agreed as provided
under the caption "Transfer Restrictions" contained in the Final Memorandum.
9. Indemnification and Contribution.
a. The Company will indemnify and hold harmless, the directors,
officers, employees and agents of the Initial Purchaser and each person,
if any, who controls the Initial Purchaser within the meaning of Section 15
of the Act or Section 20 of the Exchange Act from and against any and all
losses, claims, liabilities, expenses and damages (including, but not limited
to, any and all investigative, legal and other expenses reasonably incurred
in connection with, and any and all amounts paid in settlement of, any
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as and when incurred, to which the Initial
Purchaser, or any such person, may become subject under the Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in any Memorandum or any amendment or
supplement thereto or in any application or other document executed by or on
behalf of the Company or based on written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the Notes
under the securities laws thereof or filed with the Commission, (ii) the
omission or alleged omission to state in such document a material fact
required to be stated in it or necessary to make the statements in it not
misleading or (iii) any act or failure to act or any alleged act or failure
to act by the Initial Purchaser in connection with, or relating in any manner
to, the Notes or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, liability, expense or damage
arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company shall not be liable under this clause (iii) to the
extent it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, liability, expense or damage resulted
directly from any such acts or failures to act undertaken or omitted to be
taken by the Initial Purchaser through its gross negligence or willful
misconduct); provided that the Company will not be liable to the extent that
such loss, claim,
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liability, expense or damage arises from the sale of the Notes
in the offering to any person by the Initial Purchaser and is based on an
untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to the Initial
Purchaser furnished in writing to the Company by the Initial Purchaser
expressly for inclusion in any Memorandum. This indemnity agreement will be
in addition to any liability that the Company might otherwise have.
b. The Initial Purchaser will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to the Initial Purchaser,
but only insofar as losses, claims, liabilities, expenses or damages arise
out of or are based on any untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to the Initial Purchaser furnished in writing to the Company by the
Initial Purchaser expressly for use in any Memorandum. This indemnity will
be in addition to any liability that the Initial Purchaser might otherwise
have; pro vided, however, that in no case shall the Initial Purchaser be
liable or responsible for any amount in excess of the total discounts and
commissions received by the Initial Purchaser.
c. Any party that proposes to assert the right to be indemnified
under this Section 9 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is
to be made against an indemnifying party or parties under this Section 9,
notify each such indemnifying party of the commencement of such action,
enclosing a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 9
unless, and only to the extent that, such omission results in the forfeiture
of substantive rights or defenses by the indemnifying party. If any such
action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be
entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of
the commencement of the action from the indemnified party, jointly with any
other indemnifying party similarly notified, to assume the defense of the
action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to
assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently incurred by
the indemnified party in connection with the defense. The indemnified party
will have the right to employ its own counsel in any such action, but the
fees, expenses and
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other charges of such counsel 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 on advice of counsel) 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 on advice of
counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel 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 admitted
to practice in such jurisdiction at any one time for all such indemnified
party or parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or
claim effected without its written consent (which consent will not be
unreasonably withheld). No indemnifying party shall, without the prior
written consent of each indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated by this Section 9 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action
or proceeding.
d. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 9 is applicable in accordance with its terms but
for any reason is held to be unavailable from the Company or the Initial
Purchaser, the Company and the Initial Purchaser will contribute to the total
losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted, but after deducting any contribution received by the
Company from persons other than the Initial Purchaser, such as persons who
control the Company within the meaning of the Act, who also may be liable for
contribution) to which the Company and the Initial Purchaser may be subject
in such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Initial Purchaser on the
other. The relative benefits received by the Company on
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the one hand and the Initial Purchaser on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total discounts and
commissions received by the Initial Purchaser, in each case as set forth in
the table on the cover page of the Final Memorandum. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one
hand, and the Initial Purchaser, on the other, with respect to the statements
or omissions which resulted in such loss, claim, liability, expense or
damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company or the Initial Purchaser, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company
and the Initial Purchaser agree that it would not be just and equitable if
contributions pursuant to this Section 9(d) were to be determined by pro rata
allocation or by any other method of allocation which 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, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 9(d) shall be deemed to include, for purpose of this Section 9(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9(d), the Initial Purchaser
shall not be required to contribute any amount in excess of the total
discounts and commissions received by it and no person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9(d), any person
who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 9(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have under this Section 9(d). Except for a
settlement entered into pursuant to the last sentence of Section 9(c) hereof,
no party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent will not be unreasonably
withheld).
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e. The indemnity and contribution agreements contained in this
Section 9 and the representations and warranties of the Company contained
in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Initial
Purchaser, (ii) acceptance of the Notes and payment therefore or (iii) any
termination of this Agreement.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the Initial Purchaser set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, the Initial Purchaser or any
controlling person referred to in Section 9 hereof and (ii) delivery of and
payment for the Notes. The respective agreements, covenants, indemnities and
other statements set forth in Sections 6, 9 and 15 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination.
A. The obligations of the Initial Purchaser under this Agreement may
be terminated at any time on or prior to the Closing Date by notice to
the Company, without liability on the part of the Initial Purchaser to the
Company, if, prior to delivery and payment for the Notes, in the sole
judgment of the Initial Purchaser, (i) there has been, since the respective
dates as of which information is given in the Final Memorandum, any material
adverse change in the Company's business, properties, business prospects,
condition (financial or otherwise) or results of operations, (ii) trading in
securities generally on the New York Stock Exchange or the Nasdaq Stock
Market shall have been suspended or limited or minimum or maximum prices
shall have been generally established on such exchange or over the counter
market, or additional material governmental restrictions, not in force on the
date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or the NASD or any
court or other governmental authority, (iii) a general banking moratorium
shall have been declared by either Federal or New York State authorities or
(iv) any material adverse change in the financial or securities markets in
the United States or in political, financial or economic conditions in the
United States or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or other
calamity or crisis shall have occurred the effect of any of which is such as
to make it, in the sole judgment of the Initial Purchaser, impracticable or
inadvisable to market the Notes on the terms and in the manner contemplated
by the Final Memorandum.
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B. Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchaser. The statements set
forth in the last paragraph of the cover page and the third paragraph of the
section entitled "Private Placement" constitute the only information furnished
by the Initial Purchaser to the Company for the purposes of Sections 2(a) and 9
hereof.
13. Notices. All communications hereunder shall be in writing and, if
sent to the Initial Purchaser, shall be mailed or delivered or telecopied and
confirmed in writing to PaineWebber Incorporated, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department, and if
sent to the Company, shall be mailed, delivered or telecopied and confirmed in
writing to the Company at Tom's Foods Inc., ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ Attn: Chief Financial Officer.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchaser and the Company and their respective
successors, assigns and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of
this Agreement, or any provisions herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of the Company contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control
any of the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the indemnities of the Initial
Purchaser contained in Section 9 of this Agreement shall also be for the
benefit of the directors and officers of the Company and any person or persons
who control the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act. No purchaser of any of the Notes from the Initial
Purchaser will be deemed a successor because of such purchase.
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15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement between the Company and the
Initial Purchaser.
Very truly yours,
TOM'S FOODS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Pres./C.E.O.
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PAINEWEBBER INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director