EXHIBIT 4.1
EXECUTION COPY
EAGLE FAMILY FOODS, INC.
$115,000,000
8 3/4% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
January 16, 1998
CHASE SECURITIES INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE,
▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
c/o Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Eagle Family Foods, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell $115,000,000 aggregate principal amount of its 8 3/4%
Senior Subordinated Notes due 2008 (the "Securities"). The Securities will be
issued pursuant to an Indenture to be dated as of January 23, 1998 (the
"Indenture") by and among the Company, Eagle Family Foods Holdings, Inc.
("Holdings"), as a guarantor, and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Co., as trustee (the
"Trustee"). The Securities will be guaranteed on a senior subordinated and
unsecured basis by Holdings. The Company hereby confirms its agreement with
Chase Securities Inc. ("CSI") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. (together with CSI, the
"Initial Purchasers") concerning the purchase of the Securities from the Company
by the several Initial Purchasers.
The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company has
prepared a preliminary offering memorandum dated December 30, 1997 (the
"Preliminary Offering Memorandum") and will prepare an offering memorandum dated
the date hereof (the "Offering Memorandum") setting forth information concerning
the Company and the Securities. Copies of the Preliminary Offering Memorandum
have been, and copies of the Offering Memorandum will be, delivered by the
Company to the Initial Purchasers pursuant to the terms of this Agreement. Any
references herein to the Preliminary Offering Memorandum and the Offering
Memorandum shall be deemed to include all amendments and supplements thereto,
unless otherwise noted. The Company hereby confirms that it has authorized the
use of the Preliminary Offering Memorandum and the Offering Memorandum in
connection with the offering and resale of the Securities by the Initial
Purchasers in accordance with Section 2.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement"), pursuant to which the Company and
Holdings will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of senior
subordinated notes of the Company (the "Exchange Securities") which are
identical in all material respects to the Securities (except that the Exchange
Securities will not contain terms with respect to transfer restrictions) and
(ii) under certain circumstances, a shelf registration statement pursuant to
Rule 415 under the Securities Act (the "Shelf Registration Statement").
The Securities are being issued in conjunction with the acquisition
(the "Acquisition") by the Company of certain assets related to the Eagle Brand,
ReaLemon, Cremora, None Such, ▇▇▇▇▇▇ Egg Nog, and Kava brands of ▇▇▇▇▇▇ Foods
Corporation ("BFC") and BFC Investments, L.P. ("BFC Investments") and certain of
their affiliates for an aggregate purchase
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price of approximately $376.5 million, subject to certain post-closing
adjustments. Pursuant to an asset purchase agreement by and among BFC, BFC
Investments and the Company dated November 24, 1997, as amended as of December
9, 1997, and as of January 15, 1998 (as so amended, the "Asset Purchase
Agreement"), the Company will purchase, among other things: (i) four
manufacturing facilities; (ii) all machinery and equipment located at such
facilities; (iii) certain machinery and equipment located at a Canadian BFC
facility; (iv) the trademarks Eagle; Eagle Brand, the Dessert Maker; ReaLemon;
ReaLime; Cremora; Kava; None Such and certain other trademarks in North America
and in certain foreign territories; and (v) a non-compete and non-solicitation
agreement from BFC and certain of its affiliates. In connection with the
Acquisition, BFC will retain receivables, trade payables and most accrued
liabilities relating to the BBNA Business.
Financing for the Acquisition and related fees and expenses will
consist of (i) an $82.5 million equity contribution from Holdings (the "Equity
Contribution") (which is being financed by an aggregate equity contribution in
that amount by GE Investment Private Placement Partners II, a Limited
Partnership ("GEI") and Warburg, ▇▇▇▇▇▇ Ventures, L.P. ("Warburg", and together
with GEI, the "Equity Sponsors"), as the Equity Sponsors, and certain members of
the Company's management, (the "Management Investors"), who are expected to
contribute approximately $1.7 million of the Equity Contribution); (ii) $115.0
million of the Securities and (iii) senior secured credit facilities (the
"Senior Credit Facilities") in an aggregate principal amount of $245.0 million,
consisting of a $175.0 million term loan and a $70.0 million revolving credit
facility, under which $16.5 million is expected to be drawn at the time of the
closing of the Acquisition.
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company and
Holdings. The Company and Holdings jointly and severally represent and warrant
to, and agree with, the several Initial Purchasers on and as of the date hereof
that:
(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, did not, and on the Closing Date the
Offering Memorandum will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company and Holdings make no representation or warranty as to information
contained in or omitted from the Preliminary Offering Memorandum or the
Offering Memorandum in reliance upon and in conformity with written
information relating to the Initial Purchasers furnished to the Company by
or on behalf of any Initial Purchaser specifically for use therein (the
"Initial Purchasers' Information").
(b) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of the Securities, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and warranties of
the Initial Purchasers contained in Section 2 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchasers and the
offer, initial resale and delivery of the Securities by the Initial
Purchasers in the manner contemplated by this Agreement and the Offering
Memorandum, to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
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(d) Holdings has no direct or indirect subsidiaries other than the
Company, and the Company has no direct or indirect subsidiaries. Each of
Holdings and the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which its ownership or lease
of property or the conduct of its business requires such qualification, and
has all power and authority necessary to own or hold its properties and to
conduct the business in which it is engaged, except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a material adverse effect on the financial condition,
results of operations, business or prospects of Holdings or the Company
taken as a whole (a "Material Adverse Effect"). Holdings is not engaged in
any business other than holding its equity interest in the Company.
(e) As of the Closing Date, the Company will have an authorized
capitalization as set forth in the Offering Memorandum under the heading
"Capitalization"; all of the outstanding shares of capital stock of the
Company have been, and of Holdings will be, duly and validly authorized and
issued and are fully paid and non-assessable; and the capital stock of
Holdings and the Company conforms in all material respects to the
description thereof contained in the Offering Memorandum. All outstanding
shares of capital stock of the Company are owned directly by Holdings, free
and clear of any lien, charge, encumbrance, security interest, restriction
upon voting or transfer or any other claim of a third party except as
created in connection with the Senior Credit Facilities.
(f) Each of the Company and Holdings has all corporate power and
authority to execute and deliver this Agreement, the Indenture, the
Registration Rights Agreement, the Securities, the Asset Purchase Agreement
and the documents related to the Senior Credit Facilities (collectively,
the "Transaction Documents"), as applicable, and to perform its obligations
hereunder and thereunder; and all corporate action required to be taken for
the due and proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions contemplated
thereby have been duly and validly taken.
(g) This Agreement has been duly authorized, executed and delivered
by each of the Company and Holdings and constitutes a valid and legally
binding agreement of the Company and Holdings.
(h) The Registration Rights Agreement has been duly authorized by
each of the Company and Holdings and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute a
valid and legally binding agreement of the Company and Holdings enforceable
against the Company and Holdings in accordance with its terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law) and except to the extent that rights to indemnity and contribution
thereunder may be limited by federal or state securities laws or the public
policy underlying such laws.
(i) The Indenture has been duly authorized by each of the Company and
Holdings and, when duly executed and delivered in accordance with its terms
by each of the parties thereto, will constitute a valid and legally binding
agreement of the Company and Holdings enforceable against the Company and
Holdings in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law). On the Closing
Date, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act of 1939
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and the rules and regulations of the Commission applicable to an indenture
which is qualified thereunder.
(j) The Securities have been duly authorized by the Company and, when
duly executed, authenticated, issued and delivered as provided in the
Indenture and paid for as provided herein, will be duly and validly issued
and outstanding and will constitute valid and legally binding obligations
of the Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except to the extent
that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law).
(k) The Asset Purchase Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally binding
agreement of the Company enforceable against the Company in accordance with
its terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
by general equitable principles (whether considered in a proceeding in
equity or at law).
(l) Each of the documents governing the Senior Credit Facilities has
been duly authorized, executed and delivered by the Company and Holdings,
as applicable, and constitutes a valid and legally binding agreement of the
Company and Holdings, as applicable, enforceable against the Company and
Holdings, as applicable, in accordance with its terms, except to the extent
that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law).
(m) Each Transaction Document conforms in all material respects to
the description thereof contained in the Offering Memorandum.
(n) (i) The execution, delivery and performance by each of the
Company and Holdings of each of the Transaction Documents to which it is a
party, (ii) the issuance, authentication, sale and delivery of the
Securities and compliance by the Company and Holdings with the terms
thereof and (iii) the consummation of the transactions contemplated by the
Transaction Documents will not, except insofar as the provisions of the
Indenture granting each holder of Securities the right to require the
Company to repurchase such holder's Securities upon the occurrence of a
Change of Control (as defined in the Indenture) may conflict with certain
provisions of the documents governing the Senior Credit Facilities,
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or, except as created in
connection with the Senior Credit Facilities or as described in the
Offering Memorandum under the heading "Business--Trademarks, Copyrights and
Patents", result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or Holdings pursuant
to, any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or Holdings is a party
or by which the Company or Holdings is bound or to which any of the
property or assets of the Company or Holdings is subject except for such
conflicts, breaches, violations or defaults as would not have a Material
Adverse Effect or any material adverse effect on the ability of the Company
or Holdings to perform its obligations under each of the Transaction
Documents to which it is a party, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or
Holdings or (assuming compliance by the Initial Purchasers with all
applicable federal and state securities laws) any statute, judgment, order,
decree, rule or regulation of any court or arbitrator or
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governmental agency or body having jurisdiction over the Company or
Holdings or any of its properties or assets; and no consent, approval,
authorization or order of, or filing or registration with, any such court
or arbitrator or governmental agency or body under any such statute,
judgment, order, decree, rule or regulation is required for the execution,
delivery and performance by the Company or Holdings of each of the
Transaction Documents to which it is a party, the issuance, authentication,
sale and delivery of the Securities and compliance by the Company or
Holdings with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents, except for such consents,
approvals, authorizations, filings, registrations or qualifications (A)
which shall have been obtained or made prior to the Closing Date and (B) as
may be required to be obtained or made under the Securities Act and
applicable state securities laws as provided in the Registration Rights
Agreement.
(o) Coopers & ▇▇▇▇▇▇▇, LLP are independent certified public
accountants with respect to the Company and Holdings within the meaning of
Rule 101 of the Code of Professional Conduct of the American Institute of
Certified Public Accountants ("AICPA") and its interpretations and rulings
thereunder, and, to the best knowledge of the Company, Deloitte & Touche
LLP are independent certified public accountants with respect to ▇▇▇▇▇▇
Brands North America of BFC within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings
thereunder. The historical financial statements (including the related
notes) contained in the Offering Memorandum have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods covered thereby and fairly present the
financial position of the entities purported to be covered thereby at the
respective dates indicated and the results of their operations and their
cash flows for the respective periods indicated. The pro forma financial
information contained in the Offering Memorandum has been prepared on a
basis consistent with the historical financial statements contained in the
Offering Memorandum (except for the pro forma adjustments specified
therein), includes all material adjustments to the historical financial
information required by Rule 11-02 of Regulation S-X under the Securities
Act and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to reflect the transactions described in the Offering Memorandum,
gives effect to assumptions made on a reasonable basis and fairly presents
the historical and proposed transactions contemplated by the Offering
Memorandum and the Transaction Documents.
(p) There are no legal or governmental proceedings pending to which
the Company or Holdings is a party or of which any property or assets of
either the Company or Holdings is the subject which, singularly or in the
aggregate, if determined adversely to the Company or Holdings, could
reasonably be expected to have a Material Adverse Effect; and to the best
knowledge of the Company and Holdings, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
(q) To the best knowledge of the Company, no action has been taken
and no stat ute, rule, regulation or order has been enacted, adopted or
issued by any federal or state governmental agency or body which prevents
the issuance of the Securities or suspends the sale of the Securities in
any such jurisdiction; no injunction, restraining order or order of any
nature by any federal or state court of competent jurisdiction has been
issued with respect to the Company or Holdings which would prevent or
suspend the issuance or sale of the Securities or the use of the
Preliminary Offering Memorandum or the Offering Memorandum in any such
jurisdiction; no action, suit or proceeding is pending against or, to the
best knowledge of the Company and Holdings, threatened against or affecting
the Company or Holdings before any court or arbitrator or any governmental
agency, body or official, domestic or foreign, which could reasonably be
expected to interfere with or ad versely affect the issuance of the
Securities or in any manner draw into question the valid ity or
enforceability of any of the Transaction Documents or any action taken or
to be taken pursuant thereto; and each of the Company and Holdings has
complied with any and
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all requests by any securities authority in any such jurisdiction for
additional information to be included in the Preliminary Offering
Memorandum and the Offering Memorandum.
(r) Neither the Company nor Holdings is, and, upon consummation of
the Transactions, neither the Company nor Holdings will be, (i) in
violation of its respective charter or by-laws, (ii) in default in any
material respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which it is a party or by which it is bound or to which any
of its property or assets is subject or (iii) in violation in any material
respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject, other than, in
the case of clause (ii) or (iii), such defaults or violations which,
individually or in the aggregate, could not reasonably be expected to have
or result in a Material Adverse Effect.
(s) Each of the Company and Holdings possesses, and, upon
consummation of the Transactions, each of the Company and Holdings will
possess, all material licenses, certificates, authorizations and permits
issued by, and have made, and, upon consummation of the Transactions, will
have made, all declarations and filings with, the appropriate federal,
state or foreign regulatory agencies or bodies which are necessary for the
ownership of its properties or the conduct of its business as described in
the Offering Memorandum, except where the failure to possess or make the
same would not, singularly or in the aggregate, have a Material Adverse
Effect, and neither the Company nor Holdings has received written
notification of any revocation or modification of any such license,
certificate, authorization or permit or has any reason to believe that any
such license, certificate, authorization or permit will not be renewed in
the ordinary course.
(t) Neither the Company nor Holdings is, and, upon consummation of
the Transactions, neither the Company nor Holdings will be, (i) an
"investment company" or a company "controlled by" an investment company
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and the rules and regulations of the Commission
thereunder or (ii) a "holding company" or a "subsidiary company" of a
holding company or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(u) The Company and Holdings maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reason able intervals and appropriate
action is taken with respect to any differences.
(v) Upon consummation of the Transactions, each of the Company and
Holdings will have insurance covering its properties, operations, personnel
and businesses, which insurance will be in amounts and insure against such
losses and risks as will be adequate to protect the Company and Holdings
and its business.
(w) Each of the Company and Holdings owns or possesses, and, upon
consummation of the Transactions, each of the Company and Holdings will own
or possess, adequate rights to use all patents, patent applications,
trademarks (including, without limitation, Eagle; Eagle Brand, the Dessert
Maker; ReaLemon; ReaLime; Cremora; and None Such), service marks, trade
names, trademark registrations, service ▇▇▇▇ registrations, copyrights,
licenses and know-how (including trade secrets and other
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unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of its business, except
where the failure to own or possess any such intellectual property could
not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect and except as disclosed in the Offering Memorandum;
and the conduct of its business will not conflict in any material respect
with, and no officer or director of either the Company or Holdings has
received any notice of any written claim of conflict with, any such rights
of others.
(x) Upon consummation of the Transactions, each of the Company and
Holdings will have good and marketable title in fee simple to, or upon
consummation of the Transactions, will have, valid rights to lease or
otherwise use, all items of real and personal property which are material
to the business of the Company and Holdings, in each case free and clear of
all liens, encumbrances, claims and defects and imperfections of title
except as described in the Offering Memorandum or such as (i) do not
materially interfere with the use made and proposed to be made of such
property by the Company or Holdings or (ii) could not reasonably be
expected to have a Material Adverse Effect.
(y) No labor disturbance by or dispute with the employees of the
Company or Holdings exists or, to the best knowledge of the Company or
Holdings, is contemplated or threatened.
(z) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has, or, upon consummation of
the Transactions, will have, occurred with respect to any employee benefit
plan of the Company or Holdings which could reasonably be expected to have
a Material Adverse Effect; both the Company's and Holdings' employee
benefit plan is, and, upon consummation of the Transactions, will be, in
compliance in all material respects with applicable law, including ERISA
and the Code; neither the Company nor Holdings has incurred or expects to
incur liability under Title IV of ERISA with respect to the termination of,
or withdrawal from, any pension plan for which either the Company or
Holdings would have any liability; and each such pension plan that is
intended to be qualified under Section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by action or by
failure to act, which could reasonably be expected to cause the loss of
such qualification.
(aa) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release of any kind of
hazardous or toxic or other wastes or substances by, due to or caused by
the Company or Holdings (or, to the best knowledge of the Company and
Holdings, any other entity (including any predecessor) for whose acts or
omissions the Company or Holdings is or could reasonably be expected to be
liable) upon any of the property now, upon consummation of the Transactions
or previously owned or leased by the Company or Holdings, or upon any other
property, in violation of any statute or any ordinance, rule, regulation,
order, judgment, decree or permit or which would, under any statute or any
ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any
violation or liability which could not reasonably be expected to have,
singularly or in the aggregate with all such violations and liabilities, a
Material Adverse Effect; and there has been no disposal, discharge,
emission or other release of any kind onto such property or into the
environment surrounding such property of any hazardous or toxic or other
wastes or substances with respect to which the Company or Holdings has
knowledge, except for any such disposal, discharge, emission or other
release of any kind
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which could not reasonably be expected to have, singularly or in the
aggregate with all such discharges and other releases, a Material Adverse
Effect.
(bb) On and immediately after the Closing Date, each of the Company
and Holdings (after giving effect to the execution of the Indenture and the
issuance of the Securities and to the other transactions related thereto as
described in the Offering Memorandum) will be Solvent. As used in this
paragraph, the term "Solvent" means, with respect to a particular date,
that on such date (i) the present fair market value (or present fair
saleable value) of the assets of the Company or Holdings, as the case may
be, is not less than the total amount required to pay the probable
liabilities of the Company or Holdings, as the case may be, on its total
existing debts and liabilities (including contingent liabilities) as they
become absolute and matured, (ii) the Company or Holdings, as the case may
be, is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business, (iii) assuming the sale of the
Securities as contemplated by this Agreement and the Offering Memorandum,
neither the Company nor Holdings, as the case may be, is incurring debts or
liabilities beyond its ability to pay as such debts and liabilities mature
and (iv) neither the Company nor Holdings, as the case may be, is engaged
in any business or transaction, and neither the Company nor Holdings, as
the case may be, is about to engage in any business or transaction, for
which its property would constitute unreasonably small capital after giving
due consideration to the prevailing practice in the industry in which the
Company or Holdings, as the case may be, is engaged. In computing the
amount of such contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all the
facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
(cc) Except as described in the Offering Memorandum, there are, and
upon consummation of the Transactions, there will be, no outstanding
subscriptions, rights, warrants, calls or options to acquire, or
instruments convertible into or (except for the right, under certain
circumstances, of holders of Series A Preferred Stock to elect to receive
the redemption price for such shares in shares of Common Stock)
exchangeable for, or agreements with respect to the sale or issuance of,
any shares of capital stock of or other equity or other ownership interest
in, the Company or Holdings.
(dd) Except as provided in this Agreement, neither the Company nor
Holdings is a party to any contract, agreement or understanding with any
person that would give rise to a valid claim against the Company, Holdings
or the Initial Purchasers for a brokerage commission, finder's fee or like
payment in connection with the offering and sale of the Securities.
(ee) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(ff) None of the Company, Holdings any of their respective affiliates
or any person (other than the Initial Purchasers or their affiliates, as to
whom neither the Company nor Holdings makes any representation) acting on
its or their behalf has engaged in any directed selling efforts (as such
term is defined in Regulation S under the Securities Act ("Regulation S")),
and all such persons have complied and will comply with the offering
restrictions requirement of Regulation S to the extent applicable.
(gg) None of the Company, Holdings or any of their respective
affiliates have, directly or through any agent, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security
(as such term is defined in the Securities Act), which is or will be
integrated with the sale of the Securities in a manner that would require
regis tration of the Securities under the Securities Act.
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(hh) None of the Company, Holdings or any of their respective
affiliates or any other person (other than the Initial Purchasers or their
affiliates, as to whom neither the Company nor Holdings makes any
representation) acting on its or their behalf has engaged, in connection
with the offering of the Securities, in any form of general solic itation
or general advertising within the meaning of Rule 502(c) under the
Securities Act.
(ii) There are no securities of the Company or Holdings registered
under the Exchange Act or listed on a national securities exchange or
quoted in a U.S. automated inter-dealer quotation system.
(jj) Neither the Company nor Holdings has taken and will not take,
directly or indirectly, any action prohibited by Regulation M under the
Exchange Act in connection with the offering of the Securities.
(kk) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Offering Memorandum or the Offering Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other than in
good faith.
(ll) Neither the Company nor Holdings does business with the
government of Cuba or with any person or affiliate located in Cuba within
the meaning of Florida Statutes Section 517.075.
(mm) Since the date as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change in the financial condition, results of operations,
business or prospects of the Company or Holdings, whether or not arising in
the ordinary course of business, (ii) neither the Company nor Holdings has
incurred any material liability or obligation, direct or contingent, other
than in the ordinary course of business, (iii) neither the Company nor
Holdings has entered into any material transaction other than in the
ordinary course of business and (iv) there has not been any change in the
capital stock or long-term debt of the Company or Holdings, or any dividend
or distribution of any kind declared, paid or made by the Company or
Holdings on any class of its capital stock.
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on Schedule 1 hereto at a purchase price equal to 97% of the
principal amount thereof. The Company shall not be obligated to deliver any of
the Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Initial Purchasers have advised the Company that they propose
to offer the Securities for resale upon the terms and subject to the conditions
set forth herein and in the Offering Memorandum. Each Initial Purchaser,
severally and not jointly, represents and warrants to, and agrees with, the
Company and Holdings that (i) it is purchasing the Securities pursuant to a
private sale exempt from registration under the Securities Act, (ii) it has not
solicited offers for, or offered or sold, and will not solicit offers for, or
offer or sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D under the
Securities Act ("Regulation D") or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act and (iii) it has
solicited and will solicit offers for the Securities only from, and has offered
or sold and will offer, sell or deliver the Securities, as part of its initial
offering, only (A) within the United States to persons whom it reasonably
believes to be qualified institutional buyers ("Qualified Institutional
Buyers"), as defined in Rule 144A under the Securities Act ("Rule 144A"), or if
any such person is buying for one or more institutional
10
accounts for which such person is acting as fiduciary or agent, only when such
person has represented to it that each such account is a Qualified Institutional
Buyer to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A and in each case, in transactions in accordance with Rule
144A and (B) outside the United States to persons other than U.S. persons in
reliance on and in compliance with Regulation S.
(c) In connection with the offer and sale of Securities in reliance on
Regulation S, each Initial Purchaser, severally and not jointly, represents and
warrants to and agrees with the Company and Holdings that:
(i) The Securities have not been registered under the Securities
Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act;
(ii) Such Initial Purchasers have offered and sold the Securities,
and will offer and sell the Securities, (A) as part of their
distribution at any time only in compliance with Regulation S or Rule
144A and (B) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the Closing Date,
only in accordance with Regulation S or Rule 144A or any other
available exemption from registration under the Securities Act;
(iii) None of such Initial Purchasers or any of their affiliates
or any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities,
and all such persons have complied and will comply with the offering
restrictions requirement of Regulation S;
(iv) at or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, it will have sent to each distributor,
dealer or other person receiving a selling concession, fee or other
remuneration that purchase Securities from it during the restricted
period a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"),
and may not be offered or sold within the United States to, or
for the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering of the Securities
and the date of original issuance of the Securities, except in
accordance with Regulation S or Rule 144A or any other available
exemption from registration under the Securities Act. Terms used
above have the meanings given to them by Regulation S.";
(v) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the
Securities, except with its affiliates or with the prior written
consent of the Company.
Terms used in this Section 2(c) have the meanings given to them by
Regulation S.
(d) Each Initial Purchaser, severally and not jointly, represents and
warrants to and agrees with the Company and Holdings that (i) it has not
offered or sold and prior to the date six months after the Closing Date
will not offer or sell any Securities to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for
the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of
11
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services ▇▇▇ ▇▇▇▇ and the Public
Offers of Securities Regulations 1995 with respect to anything done by it
in relation to the Securities in, from or otherwise involving the United
Kingdom; and (iii) it has only issued or passed on and will only issue or
pass on in the United Kingdom any document received by it in connection
with the issue of the Securities to a person who is of a kind described in
Article 11(3) of the Financial Services ▇▇▇ ▇▇▇▇ (Investment Advertisement)
(Exemptions), Order 1996 or is a person to whom such document may otherwise
lawfully be issued or passed on.
(e) Each Initial Purchaser, severally and not jointly, agrees that,
prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such
Initial Purchaser from the Company pursuant hereto, such Initial Purchaser
shall furnish to that purchaser a copy of the Offering Memorandum (and any
amendment or supplement thereto that the Company shall have furnished to
such Initial Purchaser prior to the date of such confirmation of sale). In
addition to the foregoing, each Initial Purchaser acknowledges and agrees
that the Company and, for purposes of the opinions to be delivered to the
Initial Purchasers pursuant to Sections 5(d) and (e) counsel for the
Company and for the Initial Purchasers, respectively, may rely upon the
accuracy of the representations and warranties of the Initial Purchasers
and their compliance with their agreements contained in this Section 2, and
each Initial Purchaser hereby consents to such reliance.
(f) The Company acknowledges and agrees that the Initial Purchasers
may sell Securities to any affiliate of an Initial Purchaser and that any
such affiliate may sell Securities purchased by it to an Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, New York, New York, or at such other place as shall be agreed upon by
the Initial Purchasers and the Company, at 10:00 a.m., New York City time, on
January 23, 1998, or at such other time or date, not later than seven full
business days thereafter, as shall be agreed upon by the Initial Purchasers and
the Company (such date and time of payment and delivery being referred to herein
as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of same-
day funds to such account or accounts as the Company shall specify prior to the
Closing Date or by such other means as the parties hereto shall agree prior to
the Closing Date against delivery to the Trustee, as custodian, of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the Initial Purchasers hereunder. Upon
delivery, the Securities shall be in global form, registered in such names and
in such denominations as CSI on behalf of the Initial Purchasers shall have
requested in writing not less than two full business days prior to the Closing
Date. The Company agrees to make one or more global certificates evidencing the
Securities available for inspection by CSI on behalf of the Initial Purchasers
in New York, New York at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company and Holdings. The Company and
Holdings agree with each of the several Initial Purchasers:
(a) (i) to advise the Initial Purchasers promptly and, if requested,
confirm such advice in writing, of the happening of any event which makes
any statement of a material fact made in the Offering Memorandum untrue or
which requires the making of any additions to or changes in the Offering
Memorandum (as amended or supplemented from time to time) in order to make
the statements therein, in the light of the circumstances
12
under which they were made, not misleading; (ii) to advise the Initial
Purchasers promptly of any order preventing or suspending the use of the
Preliminary Offering Memorandum or the Offering Memorandum, of any
suspension of the qualification of the Securities for offering or sale in
any jurisdiction and of the initiation or threatening of any proceeding for
any such purpose; and (iii) to use its best efforts to prevent the issuance
of any such order preventing or suspending the use of the Preliminary
Offering Memorandum or the Offering Memorandum or suspending any such
qualification and, if any such suspension is issued, to obtain the lifting
thereof at the earliest possible time; and, in the event that such advice
is received by the Initial Purchasers, their use of the Offering Memorandum
shall be suspended until the Company shall have amended or supplemented the
Offering Memorandum to correct such misstatement or omission;
(b) to furnish promptly to each of the Initial Purchasers and counsel
for the Initial Purchasers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any
amendments or supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the Offering
Memorandum, to furnish a copy thereof to each of the Initial Purchasers and
counsel for the Initial Purchasers and not to effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by
notice to the Company after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Initial Purchasers or counsel for the Company, to amend or supplement
the Offering Memorandum in order that the Offering Memorandum will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
(e) for so long as the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
to furnish to holders of the Securities and prospective purchasers of the
Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act, unless the Company is then
subject to and in compliance with Section 13 or 15(d) of the Exchange Act
(the foregoing agreement being for the benefit of the holders from time to
time of the Securities and prospective purchasers of the Securities
designated by such holders);
(f) for so long as the Securities are outstanding, to furnish to the
Initial Purchasers copies of any annual reports, quarterly reports and
current reports filed by the Company or Holdings with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated
by the Commission, and such other documents, reports and information as
shall be furnished by the Company and Holdings to the Trustee or to the
holders of the Securities pursuant to the Indenture or the Exchange Act or
any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the Initial
Purchasers may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may designate and to continue such qualifications in
effect for so long as required for the initial resale of the Securities;
13
and to arrange for the determination of the eligibility for investment of
the Securities under the laws of such jurisdictions as the Initial
Purchasers may reasonably request; provided that none of the Company,
Holdings or any of their subsidiaries shall be obligated to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified or
to file a general consent to service of process in any jurisdiction or to
subject itself to taxation in any jurisdiction in which it is not so
subject;
(h) to assist the Initial Purchasers in arranging for the Securities
to be designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL Market and for the Securities to
be eligible for clearance and settlement through The Depository Trust
Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner which would require
registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement (each as defined
in the Registration Rights Agreement), as the case may be, not to, and to
cause its affiliates not to, and not to authorize or knowingly permit any
person (other than the Initial Purchasers or their affiliates, as to whom
neither the Company nor Holdings expresses any opinion) acting on their
behalf to, solicit any offer to buy or offer to sell the Securities by
means of any form of general solicitation or general advertising within the
meaning of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act; and not to offer, sell,
contract to sell or otherwise dispose of, directly or indirectly, any
securities under circumstances where such offer, sale, contract or
disposition would cause the exemption afforded by Section 4(2) of the
Securities Act to cease to be applicable to the offering and sale of the
Securities as contemplated by this Agreement and the Offering Memorandum;
(k) for a period of 180 days from the date of the Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise
dispose of, directly or indirectly, or file a registration statement for,
or announce any offer, sale, contract for sale of or other disposition of
any debt securities issued or guaranteed by the Company, Holdings or any of
their subsidiaries (other than the Securities or pursuant to the
Registration Rights Agreement, and other than the debt securities issued
under the Senior Credit Facilities) without the prior written consent of
the Initial Purchasers;
(l) during the period from the Closing Date until two years after the
Closing Date, without the prior written consent of the Initial Purchasers,
not to, and not permit any of its affiliates (as defined in Rule 144 under
the Securities Act) to, resell any of the Securities that have been
reacquired by them, except for Securities purchased by the Company or any
of its affiliates and resold in a transaction registered under the
Securities Act;
(m) not to, for so long as the Securities are outstanding, be or
become, or be or become owned by, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Invest ment Company Act, and to
not be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder;
(n) in connection with the offering of the Securities, until CSI on
behalf of the Initial Purchasers shall have notified the Company of the
completion of the resale of the
14
Securities, not to, and to cause its affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to, either alone or with one or
more other persons, bid for or purchase, for any account in which it or any
of its affiliated purchasers has a beneficial interest, any Securities, or
attempt to induce any person to purchase any Securities; and not to, and to
cause its affiliated purchasers not to, make bids or purchase for the
purpose of creating actual, or apparent, active trading in or of raising
the price of the Securities;
(o) in connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel reasonably
available upon request by the Initial Purchasers;
(p) to furnish to each of the Initial Purchasers on the date hereof a
copy of the independent accountants' report included in the Offering
Memorandum signed by the accountants rendering such report;
(q) to do and perform all things required to be done and performed by
it under this Agreement that are within its control prior to or after the
Closing Date, and to use its reasonable best efforts to satisfy all
conditions precedent on its part to the delivery of the Securities;
(r) to not take any action prior to the Closing Date which would
require the Offering Memorandum to be amended or supplemented pursuant to
Section 4(d);
(s) prior to the Closing Date, not to issue any press release or
other communication directly or indirectly or hold any press conference
with respect to the Company or Holdings, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except for
routine oral marketing communications in the ordinary course of business
and consistent with the past practices of the Company and Holdings and of
which the Initial Purchasers are notified), without the prior written
consent of the Initial Purchasers, unless in the judgment of the Company or
Holdings and their counsel, and after notification to the Initial
Purchasers, such press release or communication is required by law; and
(t) to apply the net proceeds from the sale of the Securities as set
forth in the Offering Memorandum under the heading "Use of Proceeds".
5. Conditions of Initial Purchasers' Obligations. The respective
obligations of the several Initial Purchasers to purchase the Securities are
subject to the accuracy, on and as of the date hereof and the Closing Date, of
the representations and warranties of the Company and Holdings contained herein,
to the accuracy of the statements of the Company and its officers made in any
certificates delivered pursuant hereto, to the performance by the Company and
Holdings of their obligations hereunder, and to each of the following additional
terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchasers
may agree; and no stop order suspending the sale of the Secu rities in any
jurisdiction shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(b) Neither of the Initial Purchasers shall have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which, in the reasonable opinion of counsel for the
Initial Purchasers, is material or omits to state any fact which, in the
reasonable opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
15
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents and
the Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby, shall be
reasonably satisfactory in all material respects to the Initial Purchasers,
and the Company and Holdings shall have furnished to the Initial Purchasers
all documents and information that they or their counsel may reasonably
request to enable them to pass upon such matters.
(d) ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Company and Holdings,
addressed to the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers, substantially
to the effect set forth in Annex B hereto.
(e) The Initial Purchasers shall have received from Cravath, Swaine &
▇▇▇▇▇, counsel for the Initial Purchasers, such opinion or opinions, dated
the Closing Date, with respect to such matters as the Initial Purchasers
may reasonably require, and the Company shall have furnished to such
counsel such documents and information as they request for the purpose of
enabling them to pass upon such matters.
(f) The Company shall have furnished to the Initial Purchasers letters
(each, an "Initial Letter") from Coopers & ▇▇▇▇▇▇▇, LLP and Deloitte &
Touche LLP, addressed to the Initial Purchasers and dated the date hereof,
in form and substance satisfactory to the Initial Purchasers.
(g) The Company shall have furnished to the Initial Purchasers letters
(each, a "Bring-Down Letter") from Coopers & ▇▇▇▇▇▇▇, LLP and Deloitte &
Touche LLP, addressed to the Initial Purchasers and dated the Closing Date
(i) stating that they are independent public accountants with respect to
the Company or ▇▇▇▇▇▇ Brands North America of BFC, as applicable, within
the meaning of Rule 101 of the Code of Professional Conduct of the AICPA
and its interpretations and rulings thereunder, (ii) stating, as of the
date of the Bring-Down Letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Offering Memorandum, as of a date not
more than three business days prior to the date of the Bring-Down Letter),
that the conclusions and findings of such accountants with respect to the
financial information and other matters covered by their Initial Letter are
accurate and (iii) confirming in all material respects the conclusions and
findings set forth in their Initial Letter.
(h) The Company shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, signed by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman
of the Board of Directors and Chief Operating Officer, and ▇▇▇▇ O'▇.
▇▇▇▇▇▇, Chief Executive Officer, President and Director, stating that (A)
such officers have carefully examined the Offering Memorandum, (B) in their
opinion, the Offering Memorandum, as of its date, did not include any
untrue statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and since the date of the Offering Memorandum, no
event has occurred which should have been set forth in a supplement or
amendment to the Offering Memorandum so that the Offering Memorandum (as so
amended or supplemented) would not include any untrue statement of a
material fact and would not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading and
(C) as of the Closing Date, the representations and warranties of the
Company and Holdings in this Agreement are true and correct in all material
respects, the Company and Holdings have complied, in all material respects,
with all agreements and satisfied, in all material respects, all conditions
on their part to be performed or satisfied hereunder on or prior to the
Closing Date, and subsequent to the
16
date of the most recent financial statements contained in the Offering
Memorandum, there has been no material adverse change in the financial
position or results of operation of the Company, Holdings or the BBNA
Business, or any change, or any development including a prospective change,
in or affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company, Holdings or the BBNA
Business.
(i) The Initial Purchasers shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of the Company and Holdings.
(j) The Indenture shall have been duly executed and delivered by the
Company, Holdings and the Trustee, and the Securities shall have been duly
executed and delivered by the Company and duly authenticated by the
Trustee.
(k) The Securities shall have been approved by the NASD for trading in
the PORTAL Market.
(l) If any event shall have occurred that requires the Company under
Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchasers shall have been given a reasonable opportunity to
comment thereon, and copies thereof shall have been delivered to the
Initial Purchasers reasonably in advance of the Closing Date.
(m) There shall not have occurred any invalidation of Rule 144A or
Regulation S under the Securities Act by any court or any withdrawal or
proposed withdrawal of any rule or regulation under the Securities Act or
the Exchange Act by the Commission or any amendment or proposed amendment
thereof by the Commission which in the reasonable judgment of the Initial
Purchasers would materially impair the ability of the Initial Purchasers to
purchase, hold or effect resales of the Securities as contemplated hereby.
(n) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), results of operations, business or
prospects of the Company and Holdings, taken as a whole, the effect of
which, in any such case described above, is, in the judgment of the Initial
Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Securities on the
terms and in the manner contemplated by this Agreement and the Offering
Memorandum (exclusive of any amendment or supplement thereto).
(o) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or
sale of the Securities; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction
shall have been issued as of the Closing Date which would prevent the
issuance or sale of the Securities.
(p) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Securities by
any "nationally recognized statistical rating organization", as such term
is defined by the Commission for purposes of Rule 436(g)(2) of the rules
and regulations of the Commission under the Securities Act and (ii) no such
organization shall have publicly announced that it has under surveillance
or review (other than an announcement with positive implications of a
possible upgrading), its rating of the Securities.
17
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or market
by the Commission, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in the Securities in
the over-the-counter market shall have been suspended or (ii) any
moratorium on commercial banking activities shall have been declared by
federal or New York state authorities or (iii) an outbreak or escalation of
hostilities or a declaration by the United States of a national emergency
or war or (iv) a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the
financial markets in the United States shall be such) the effect of which,
in the case of this clause (iv), is, in the reasonable judgment of the
Initial Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or the delivery of the Securities on
the terms and in the manner contemplated by this Agreement and in the
Offering Memorandum (exclusive of any amendment or supplement thereto).
(r) All conditions to the consummation of each of the Transactions
shall have been satisfied or waived and, substantially simultaneously with
the sale of the Securities hereunder, the Acquisition and each of the other
Transactions shall have been consummated in all material respects on the
terms described in the Offering Memorandum.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers by notice given to and received by
the Company prior to delivery of and payment for the Securities if, prior to
that time, any of the events described in Section 5(m), (n), (o), (p) or (q)
shall have occurred and be continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing Date, any
Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchasers may make arrangements for the
purchase of the Securities which such defaulting Initial Purchaser agreed but
failed to purchase by other persons satisfactory to the Company and the non-
defaulting Initial Purchasers, but if no such arrangements are made within 36
hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers, the Company or Holdings,
except that the Company and Holdings will continue to be liable for the payment
of expenses to the extent set forth in Sections 8 and 12 and except that the
provisions of Sections 9 and 10 shall not terminate and shall remain in effect.
As used in this Agreement, the term "Initial Purchasers" includes, for all
purposes of this Agreement unless the context otherwise requires, any party not
listed in Schedule 1 hereto that, pursuant to this Section 7, purchases
Securities which a defaulting Initial Purchaser agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company or Holdings or any non-
defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to purchase the Securities of a defaulting
Initial Purchaser, either the non-defaulting Initial Purchasers or the Company
may postpone the Closing Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Initial Purchasers may be necessary in the Offering Memorandum or in any
other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Offering Memorandum that effects any such
changes.
18
8. Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6 or 7, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason permitted under this Agreement or (c) the Initial Purchasers shall
decline to purchase the Securities for any reason permitted under this
Agreement, the Company and Holdings shall jointly and severally reimburse the
Initial Purchasers for such out-of-pocket expenses (including reasonable fees
and disbursements of counsel) as shall have been reasonably incurred by the
Initial Purchasers in connection with this Agreement and the proposed purchase
and resale of the Securities. If this Agreement is terminated pursuant to
Section 7 by reason of the default of one or more of the Initial Purchasers, the
Company shall not be obligated to reimburse any defaulting Initial Purchaser on
account of such expenses.
9. Indemnification. (a) The Company and Holdings shall jointly and
severally indemnify and hold harmless each Initial Purchaser, its affiliates,
their respective officers, directors, employees, representatives and agents, and
each person, if any, who controls any Initial Purchaser within the meaning of
the Securities Act or the Exchange Act (collectively referred to for purposes of
this Section 9(a) and Section 10 as an "Initial Purchaser"), from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, without limitation, any loss, claim, damage, liability or
action relating to purchases and sales of the Securities), to which that Initial
Purchaser may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum or in any amendment or supplement
thereto or in any information provided by the Company pursuant to Section 4(e)
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and shall reimburse each Initial Purchaser promptly upon demand for
any legal or other expenses reasonably incurred by that Initial Purchaser in
connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company and Holdings shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with any Initial Purchasers' Information; and provided, further, that with
respect to any such untrue statement in or omission from the Preliminary
Offering Memorandum, the indemnity agreement contained in this Section 9(a)
shall not inure to the benefit of any such Initial Purchaser to the extent that
the sale to the person asserting any such loss, claim, damage, liability or
action was an initial resale by such Initial Purchaser and any such loss, claim,
damage, liability or action of or with respect to such Initial Purchaser results
from the fact that both (A) to the extent required by applicable law, a copy of
the Offering Memorandum was not sent or given to such person at or prior to the
written confirmation of the sale of such Securities to such person and (B) the
untrue statement in or omission from the Preliminary Offering Memorandum was
corrected in the Offering Memorandum unless, in either case, such failure to
deliver the Offering Memorandum was a result of non-compliance by the Company
with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, Holdings, their respective affiliates, officers,
directors, employees, representatives and agents, and each person, if any, who
controls either the Company or Holdings within the meaning of the Securities Act
or the Exchange Act (collectively referred to for purposes of this Section 9(b)
and Section 10 as the "Company"), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or
19
the Offering Memorandum or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, but in
each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with any Initial Purchasers' Information, and shall reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 9(a) and 9(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
20
The obligations of the Company, Holdings and the Initial Purchasers in
this Section 9 and in Section 10 are in addition to any other liability that the
Company, Holdings or the Initial Purchasers, as the case may be, may otherwise
have, including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
10. Contribution. If the indemnification provided for in Section 9
is unavailable or insufficient to hold harmless an indemnified party under
Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and Holdings, on the one
hand, and the Initial Purchasers, on the other, from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and Holdings, on the one hand, and the Initial Purchasers,
on the other, with respect to the statements or omissions that resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and Holdings, on the one hand, and the Initial Purchasers on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Securities purchased under this
Agreement (before deducting expenses) received by or on behalf of the Company,
on the one hand, and the total discounts and commissions received by the Initial
Purchasers with respect to the Securities purchased under this Agreement, on the
other, bear to the total gross proceeds from the sale of the Securities under
this Agreement, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to the
Company or Holdings or information supplied by the Company or Holdings, on the
one hand, or to any Initial Purchasers' Information, on the other, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company, Holdings
and the Initial Purchasers agree that it would not be just and equitable if
contributions pursuant to this Section 10 were to be determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 10 shall be deemed
to include, for purposes of this Section 10, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending or preparing to defend any such action or claim. Notwithstanding
the provisions of this Section 10, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total discounts and
commissions received by such Initial Purchaser with respect to the Securities
purchased by it under this Agreement exceeds the amount of any damages which
such Initial Purchaser has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute as provided in this Section 10 are several
in proportion to their respective purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
Holdings and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 9 and 10 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Company and
the Initial Purchasers and in Section 4(e) with respect to holders and
prospective purchasers of the Securities. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons referred to in
this Section 11, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
21
12. Expenses. The Company and Holdings jointly and severally agree
with the Initial Purchasers to pay (a) the costs incident to the authorization,
issuance, sale, preparation and delivery of the Securities and any taxes payable
in that connection; (b) the costs incident to the preparation, printing and
distribution of the Preliminary Offering Memorandum, the Offering Memorandum and
any amendments or supplements thereto; (c) the costs of reproducing and
distributing each of the Transaction Documents; (d) the costs incident to the
preparation, printing and delivery of the certificates evidencing the
Securities, including stamp duties and transfer taxes, if any, payable upon
issuance of the Securities; (e) the fees and expenses of the Company's and
Holdings' counsel and independent accountants; (f) the fees and expenses of
qualifying the Securities under the securities laws of the several jurisdictions
as provided in Section 4(h) and of preparing, printing and distributing Blue Sky
Memoranda (including related fees and expenses of counsel for the Initial
Purchasers); (g) any fees charged by rating agencies for rating the Securities;
(h) the fees and expenses of the Trustee and any paying agent (including related
fees and expenses of any counsel to such parties); (i) all expenses and
application fees incurred in connection with the application for the inclusion
of the Securities on the PORTAL Market and the approval of the Securities for
book-entry transfer by DTC; and (j) all other costs and expenses incident to the
performance of the obligations of the Company and Holdings under this Agreement
which are not otherwise specifically provided for in this Section 12; provided,
however, that except as provided in this Section 12 and Section 8, the Initial
Purchasers shall pay their own costs and expenses.
13. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, Holdings and the
Initial Purchasers contained in this Agreement or made by or on behalf of the
Company, Holdings or the Initial Purchasers pursuant to this Agreement or any
certificate delivered pursuant hereto shall survive the delivery of and payment
for the Securities and shall remain in full force and effect, regardless of any
termination or cancelation of this Agreement or any investigation made by or on
behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail
or telecopy transmission to Chase Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ (telecopier no.: (212) 270-
0994); or
(b) if to the Company or Holdings, shall be delivered or sent by mail
or telecopy transmission to the address of the Company set forth in the
Offering Memorandum, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇;
provided that any notice to an Initial Purchaser pursuant to Section 9(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by CSI.
15. Definition of Terms. For purposes of this Agreement, (a) the
term "business day" means any day on which the New York Stock Exchange, Inc. is
open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
16. Initial Purchasers' Information. The parties hereto acknowledge
and agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the following information in the Preliminary
Offering Memorandum and the Offering Memorandum:
22
(i) the last paragraph on the front cover page concerning the terms of the
offering by the Initial Purchasers; (ii) the legends on the inside pages
concerning over-allotment and trading activities by the Initial Purchasers; and
(iii) the statements concerning the Initial Purchasers contained in the third,
fourth, fifth, seventh, ninth, twelfth and thirteenths paragraphs under the
heading "Plan of Distribution".
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
19. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
23
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and the several
Initial Purchasers in accordance with its terms.
Very truly yours,
EAGLE FAMILY FOODS, INC.,
by /s/ ▇▇▇▇ O'▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ O'▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
EAGLE FAMILY FOODS HOLDINGS, INC.,
by /s/ ▇▇▇▇ O'▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ O'▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
Accepted:
CHASE SECURITIES INC.,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
24
▇▇▇▇▇▇▇ LYNCH, PIERCE,
▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED,
by /s/ ▇▇▇▇ ▇▇▇▇
-----------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
25
SCHEDULE 1
Principal
Amount
Initial Purchasers of Securities
------------------ -------------
Chase Securities Inc.................................... $ 69,000,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated...... 46,000,000
------------
Total................................................ $115,000,000
============
26
ANNEX A
Form of Registration Rights Agreement
27
ANNEX B
Form of Opinion of Counsel for the Company and Holdings
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Company and Holdings,
addressed to the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers, substantially to
the effect set forth below:
(i) Each of Holdings and the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its business requires such
qualification, and has all corporate power and authority necessary to own
or hold its properties and to conduct the business in which it is engaged,
except where the failure to so qualify or have such power or authority
would not, singularly or in the aggregate, have a Material Adverse Effect;
(ii) the Company has an authorized capitalization as set forth in the
Offering Memorandum under the heading "Capitalization"; all of the
outstanding shares of capital stock of Holdings and the Company have been
duly and validly authorized and issued and are fully paid and non-
assessable; and the capital stock of Holdings and the Company conforms in
all material respects to the description thereof contained in the Offering
Memorandum. All outstanding shares of capital stock of the Company are
owned directly by Holdings, free and clear of any lien, charge,
encumbrance, security interest, restriction upon voting or transfer or any
other claim of a third party except as created in connection with the
Senior Credit Facilities;
(iii) the descriptions in the Offering Memorandum of statutes, legal
and govern mental proceedings and contracts and other documents are
accurate in all material respects; the statements in the Offering
Memorandum under the heading "Certain U.S. Federal Income Tax
Consequences", to the extent that they constitute summaries of matters of
law or regulation or legal conclusions, fairly summarize the matters
described therein in all material respects;
(iv) the Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations of
the Commission applicable to an indenture which is qualified thereunder;
(v) each of the Company and Holdings has all corporate power and
authority to execute and deliver each of the Transaction Documents to which
it is a party and to perform its obligations thereunder; and all corporate
action required to be taken for the due and proper authorization, execution
and delivery of each of the Transaction Documents and the consummation of
the transactions contemplated thereby have been duly and validly taken;
(vi) each of the Purchase Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by each of the
Company and Holdings;
(vii) the Indenture has been duly authorized, executed and delivered
by each of the Company and Holdings and, assuming due authorization,
execution and delivery thereof by the Trustee, constitutes a valid and
legally binding agreement of the Company and Holdings enforceable against
the Company and Holdings in accordance with its terms, except to the extent
that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws
28
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law);
(viii) the Securities have been duly authorized and issued by the
Company and, assuming due authentication thereof by the Trustee and upon
payment and delivery in accordance with the Purchase Agreement, will
constitute valid and legally binding obligations of the Company entitled to
the benefits of the Indenture and enforceable against the Company in
accordance with their terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law);
(ix) each Transaction Document conforms in all material respects to
the description thereof contained in the Offering Memorandum;
(x) (i) except as set forth in the Offering Memorandum (which
exceptions shall be noted in a schedule attached to such opinion), the
execution, delivery and performance by each of the Company and Holdings of
each of the Transaction Documents to which it is a party, (ii) the
issuance, authentication, sale and delivery of the Securities and
compliance by the Company and Holdings with the terms thereof and (iii) the
consummation of the transactions contemplated by the Transaction Documents
will not, except insofar as the provisions of the Indenture granting each
holder of Securities the right to require the Company to repurchase such
holder's Securities upon the occurrence of a Change of Control (as defined
in the Indenture) may conflict with certain provisions of the documents
governing the Senior Credit Facilities, conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, or, except as created in connection with the Senior Credit
Facilities or as described in the Offering Memorandum under the heading
"Business--Trademarks, Copyrights and Patents", result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or Holdings pursuant to, any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or Holdings is a party or by which the Company or Holdings is bound
or to which any of the property or assets of the Company or Holdings is
subject except for such conflicts, breaches violations or defaults as would
not have a Material Adverse Effect or any material adverse effect on the
ability of the Company or Holdings to perform its obligations under each of
the Transaction Documents to which it is a party, nor will such actions
result in any violation of the provisions of the charter or by-laws of the
Company or Holdings or (assuming compliance by the Initial Purchasers with
all applicable federal and state securities laws) any New York or federal
statute, judgment, order, decree, rule or regulation of any court or
arbitrator or governmental agency or body having jurisdiction over the
Company or Holdings or any of its properties or assets; and no consent,
approval, authorization or order of, or filing or registration with, any
such court or arbitrator or governmental agency or body under any such
statute, judgment, order, decree, rule or regulation is required for the
execution, delivery and performance by the Company or Holdings of each of
the Transaction Documents to which it is a party, the issuance,
authentication, sale and delivery of the Securities and compliance by the
Company and Holdings with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, filings, registrations or
qualifications (A) which shall have been obtained or made prior to the
Closing Date and (B) as may be required to be obtained or made under the
Securities Act and applicable state securities laws as provided in the
Registration Rights Agreement;
(xi) neither the Company nor Holdings is, and, immediately upon
consummation of the Transactions, neither the Company nor Holdings will be,
(A) an "investment company" or a company "controlled by" an investment
company within the meaning of
29
the Investment Company Act and the rules and regulations of the Commission
thereunder, without taking account of any exemption under the Investment
Company Act arising out of the number of holders of the Company's
securities or (B) a "holding company" or a "subsidiary company" of a
holding company or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended; and
(xii) assuming the accuracy of the representations, warranties and
agreements of the Company and Holdings and of the Initial Purchasers
contained in the Purchase Agreement, no registration of the Securities
under the Securities Act or qualification of the Indenture under the Trust
Indenture Act of 1939 is required in connection with the issuance and sale
of the Securities by the Company and the offer, initial resale and delivery
of the Securities by the Initial Purchasers in the manner contemplated by
the Purchase Agreement and the Offering Memorandum.
In addition, such opinion shall state that the Initial Purchasers
shall be entitled to rely upon the (i) opinion as to the enforceability of the
Asset Purchase Agreement issued by such counsel to ▇▇▇▇▇▇ Foods Corporation and
BFC Investments, L.P. dated the Closing Date and (ii) the opinion as to the
enforceability of the documents relating to the Senior Credit Facilities issued
by such counsel to the Administrative Agent, the Documentation Agent, the
Collateral Agent, the Issuing Bank and each of the lenders party thereto,
subject, in each of (i) and (ii), to the assumptions, limitations,
qualifications and exceptions set forth therein.
Such counsel shall also state that they have participated in
conferences with representatives of the Company and Holdings, representatives of
their independent accountants and counsel and representatives of the Initial
Purchasers and their counsel at which conferences the contents of the
Preliminary Offering Memorandum and the Offering Memorandum and any amendment
and supplement thereto and related matters were discussed and, although such
counsel assumes no responsibility for the accuracy, completeness or fairness of
the Offering Memorandum or any amendment or supplement thereto (except as
expressly provided above), nothing has come to the attention of such counsel to
cause such counsel to believe that the Offering Memorandum or any amendment or
supplement thereto (other than the financial statements and other financial and
statistical information contained therein, as to which such counsel need express
no belief), as of the date thereof and as of the Closing Date, 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.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials which are furnished to the Initial
Purchasers.