Exhibit 1.1.
AMPEX CORPORATION
(a Delaware corporation)
$14,000,000
12% Senior Notes Due 2003
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PURCHASE AGREEMENT
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Dated: July 17, 1998
739869.1
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Table of Contents
SECTION 1. Representations and Warranties.........................................................2
(a) Representations and Warranties by the Company..........................................2
(b) Officer's Certificates.................................................................9
SECTION 2. Sale and Delivery to Initial Purchaser; Closing........................................9
(a) Notes..................................................................................9
(b) Payment................................................................................9
(c) Qualified Institutional Buyer.........................................................10
SECTION 3. Covenants of the Company..............................................................10
(a) Offering Memorandum...................................................................10
(b) Notice and Effect of Material Events..................................................10
(c) Amendment to Offering Memorandum and Supplements......................................10
(d) Qualification of Notes for Offer and Sale.............................................11
(e) DTC...................................................................................11
(f) Use of Proceeds.......................................................................11
SECTION 4. Payment of Expenses...................................................................11
(a) Expenses..............................................................................11
(b) Termination of Agreement..............................................................11
SECTION 5. Conditions of Initial Purchaser's Obligations.........................................12
(a) Opinion of Counsel for the Company....................................................12
(b) Opinion of Patent Counsel for the Company. ...........................................12
(c) Opinion of Counsel for Initial Purchaser..............................................12
(d) Officers' Certificate.................................................................12
(e) Accountant's Comfort Letter...........................................................13
(f) Bring-down Comfort Letter.............................................................13
(g) Registration Rights Agreement.........................................................13
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(h) PORTAL. ..............................................................................13
(i) Additional Documents..................................................................13
(j) Termination of Agreement..............................................................13
SECTION 6. Subsequent Offers and Resales of the Notes............................................13
(a) Offer and Sale Procedures.............................................................13
(b) Covenants of the Company..............................................................15
SECTION 7. Indemnification.......................................................................16
(a) Indemnification of Initial Purchaser..................................................16
(b) Indemnification of Company, Directors and Officers....................................16
(c) Actions against Parties; Notification.................................................17
SECTION 8. Contribution..........................................................................17
SECTION 9. Representations, Warranties and Agreements to Survive Delivery........................18
SECTION 10. Termination of Agreement..............................................................18
(a) Termination; General..................................................................18
(b) (b)Liabilities........................................................................19
SECTION 11. Notices...............................................................................19
SECTION 12. Parties...............................................................................19
SECTION 13. GOVERNING LAW AND TIME................................................................20
SECTION 14. Effect of Headings....................................................................20
739869.1
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$14,000,000
12% Senior Notes Due 2003
AMPEX CORPORATION
(a Delaware corporation)
PURCHASE AGREEMENT
July 17, 1998
FIRST ALBANY CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Ampex Corporation, a Delaware corporation (the "Company"), confirms its
agreement with First Albany Corporation (the "Initial Purchaser"), with respect
to the issue and sale by the Company and the purchase by the Initial Purchaser
of $14,000,000 aggregate principal amount of the Company's 12% Senior Notes Due
2003 (the "Notes"). The Notes are to be issued pursuant to an Indenture dated as
of January 28, 1998, between the Company and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company,
as trustee (the "Trustee"), as amended by First Amendment to Indenture, dated as
of July 2, 1998 (the "Indenture"). Notes issued in book-entry form will be
issued to Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant
to a letter agreement, to be dated as of the Closing Time (as defined below in
Section 2(b)) (the "DTC Agreement"), among the Company, the Trustee and DTC.
The Company understands that the Initial Purchaser proposes to make an
offering of the Notes on the terms and in the manner set forth herein and agrees
that the Initial Purchaser may resell, subject to the conditions set forth
herein, all or a portion of the Notes to purchasers ("Subsequent Purchasers") at
any time after the date of this Agreement. The Notes are to be offered and sold
through the Initial Purchaser without being registered under the Securities Act
of 1933, as amended (the "1933 Act"), in reliance upon exemptions therefrom.
Pursuant to the terms of the Notes and the Indenture, investors that acquire
Notes may only resell or otherwise transfer such Notes if such Notes are
hereafter registered under the 1933 Act or if an exemption from the registration
requirements of the 1933 Act is available (including the exemption afforded by
Rule 144A ("Rule 144A") of the rules and regulations promulgated under the 1933
Act by the Securities and Exchange Commission (the "Commission")).
The Company has prepared and delivered to the Initial Purchaser copies
of a preliminary offering memorandum dated July 6, 1998 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to the Initial
Purchaser, on the date hereof or the next succeeding day, copies of a final
offering memorandum dated July 17, 1998 (the "Final Offering Memorandum"), each
for use by the Initial Purchaser in connection with its solicitation of
purchases of, or offering
739869.1
of, the Notes. "Offering Memorandum" means, with respect to any date or time
referred to in this Agreement, the most recent offering memorandum (whether the
Preliminary Offering Memorandum or the Final Offering Memorandum, or any
amendment or supplement to either such document), including exhibits thereto,
which has been prepared and delivered by the Company to the Initial Purchaser in
connection with its solicitation of purchases of, or offering of, the Notes.
The holders of Notes will be entitled to the benefits of an Exchange
and Registration Rights Agreement between the Company and the Initial Purchaser
(the "Registration Rights Agreement"), pursuant to which the Company will file a
registration statement (the "Registration Statement") with the Commission
registering the Notes or the Exchange Notes referred to in the Registration
Rights Agreement under the 1933 Act.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Initial Purchaser as of the date hereof and as of
the Closing Time referred to in Section 2(b) hereof, and agrees with the Initial
Purchaser as follows:
(i) Similar Offerings. The Company has not, directly or
indirectly, solicited any offer to buy or offered to sell, and will not,
directly or indirectly, solicit any offer to buy or offer to sell, in the United
States or to any United States citizen or resident, any security which is or
would be integrated with the sale of the Notes in a manner that would require
the Notes to be registered under the 1933 Act.
(ii) Offering Memorandum. The Offering Memorandum does
not, and at the Closing Time 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 under which they were made, not
misleading; provided that this representation, warranty and agreement shall not
apply to statements in or omissions from the Offering Memorandum made in
reliance upon and in conformity with written information furnished to the
Company in writing by the Initial Purchaser expressly for use in the Offering
Memorandum.
(iii) Incorporated Documents. The documents incorporated
or deemed to be incorporated by reference in the Offering Memorandum at the time
they were or hereafter are filed with the Commission complied and will comply in
all material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder, and when read together with the other
information in the Offering Memorandum, at the date of the Offering Memorandum
and at the Closing Time, do not and will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(iv) Independent Accountants. The accountants who
certified certain of the financial statements and supporting schedules included
in the Offering Memorandum are independent certified public accountants with
respect to the Company and its subsidiaries within the
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meaning of Regulation S-X under the 1933 Act.
(v) Financial Statements. The financial statements,
together with the related schedules and notes, included in the Offering
Memorandum present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of income,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved, except as
indicated therein or in the notes thereto. The supporting schedules, if any,
included in the Offering Memorandum present fairly in accordance with GAAP the
information required to be stated therein. The selected consolidated historical
financial data included in the Offering Memorandum present fairly the
information shown therein and have been compiled on a basis consistent with that
of the audited financial statements included in the Offering Memorandum. The pro
forma financial information of the Company and its subsidiaries and the related
notes thereto included in the Offering Memorandum present fairly the information
shown therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein.
(vi) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Offering Memorandum,
except as otherwise stated therein, (A) there has been no material adverse
change, and no development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings or business of the
Company and its subsidiaries considered as one enterprise (a "Material Adverse
Effect"), whether or not arising in the ordinary course of business, (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(vii) Good Standing of the Company. The Company has been
duly organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Offering Memorandum and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(viii) Good Standing of Significant Subsidiaries. Each
"significant subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Significant Subsidiary") has been duly organized and is
validly existing as a corporation in good standing under
739869.1
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the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Offering Memorandum and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect;
all of the issued and outstanding capital stock of each Significant Subsidiary
has been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity;
none of the outstanding shares of capital stock of the Significant Subsidiaries
was issued in violation of any preemptive or similar rights arising by operation
of law, or under the charter or by-laws of any Significant Subsidiary or under
any agreement to which the Company or any Significant Subsidiary is a party.
(ix) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Offering
Memorandum under the caption "Capitalization" as of the date set forth therein,
and except as set forth in the Offering Memorandum, there have been no material
changes thereto.
(x) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(xi) Authorization of Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized by the Company and, at
the Closing Time, will have been duly executed and delivered by the Company and
will constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws relating to or affecting enforcement of creditors' rights generally, or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law), and except that rights to indemnification and
contribution thereunder may be limited by applicable law.
(xii) Authorization of the Indenture. The Indenture has
been duly authorized, executed and delivered by the Company and constitutes a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally, or by general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xiii) Authorization of the Notes. The Notes have been
duly authorized and, at the Closing Time, will have been duly executed by the
Company and, when authenticated in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by
bankruptcy,
739869.1
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insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditors' rights generally, or by general principles
of equity (regardless of whether enforcement is considered in a proceeding in
equity or at law), and will be in the form contemplated by, and entitled to the
benefits of, the Indenture.
(xiv) Description of the Notes, the Indenture and the
Registration Rights Agreement. The Notes, the Indenture and the Registration
Rights Agreement will conform in all material respects to the respective
statements relating thereto contained in the Offering Memorandum and will be in
substantially the respective forms previously delivered to the Initial
Purchaser.
(xv) Absence of Defaults and Conflicts. Neither the
Company nor any of its subsidiaries is in violation of its charter or by-laws or
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the Company or
any of its subsidiaries is subject (collectively, "Agreements and Instruments")
and except for such defaults and, in the case of the Company's subsidiaries
only, such violations that would not result in a Material Adverse Effect; and
the execution, delivery and performance of this Agreement, the Registration
Rights Agreement, the Indenture and the Notes and any other agreement or
instrument entered into or issued or to be entered into or issued by the Company
in connection with the transactions contemplated hereby or thereby or in the
Offering Memorandum and the consummation of the transactions contemplated
herein, therein and in the Offering Memorandum (including the issuance and sale
of the Notes, the use of the proceeds from the sale of the Notes as described in
the Offering Memorandum under the caption "Use of Proceeds" and the filing of
the Registration Statement) and compliance by the Company with its obligations
hereunder, and under the Registration Rights Agreement, the Indenture and the
Notes have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or a Repayment Event
(as defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or liens, charges or encumbrances that, singly
or in the aggregate, would not result in a Material Adverse Effect, nor will
such action result in any violation of the provisions of the charter or by-laws
of the Company or any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets or properties. As used
herein, a "Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person acting
on such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of its
subsidiaries.
739869.1
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(xvi) Absence of Labor Dispute. To the Company's
knowledge, no labor dispute with the employees of the Company or any of its
subsidiaries exists or is imminent, and to the Company's knowledge (without
independent investigation), there is no existing or imminent labor disturbance
by the employees of any if its principal suppliers which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xvii) Absence of Proceedings. Except as disclosed in the
Offering Memorandum, there is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened, against
or affecting the Company or any of its subsidiaries which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets of the
Company or any of its subsidiaries or the consummation of this Agreement or the
performance by the Company of its obligations hereunder. The aggregate of all
pending legal or governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of their respective property or assets
is the subject which are not described or generally referred to in the Offering
Memorandum, including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse Effect.
(xviii) Possession of Intellectual Property. The Company
and its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them, and, except
as disclosed in the Offering Memorandum, neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict or invalidity or
inadequacy, singly or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect; and the use, in connection with the business and
operations of the Company and its subsidiaries, of such trademarks, service
marks, trade names, patents, patent rights, licenses, inventions, copyrights and
know-how does not violate or infringe any trademark, trade name, contract,
agreement, patent, patent right, copyright or license of any person, firm,
corporation or association whatsoever.
(xix) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency (other than under state
securities laws, or the 1933 Act and the rules and regulations thereunder or the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the Registration Rights Agreement and the
transactions contemplated hereunder or thereunder) is necessary or required for
the performance by the Company of its obligations hereunder, in connection with
the offering, issuance or sale of the Notes hereunder
739869.1
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or the consummation of the transactions contemplated by this Agreement.
(xx) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them, except where the failure to possess
any such Governmental Licenses could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect; the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect could not reasonably be expected to have
a Material Adverse Effect; and neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to result in a Material Adverse Effect.
(xxi) Title to Property. The Company and its subsidiaries
have good title to all material property owned by the Company and its
subsidiaries, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Offering Memorandum or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the Company or any
of its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise, and
under which the Company or any of its subsidiaries holds properties described in
the Offering Memorandum, are in full force and effect, and neither the Company
nor any of its subsidiaries has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or any of
its subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or any of its subsidiaries to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(xxii) Tax Returns. The Company and its subsidiaries have
filed all federal, state, local and foreign tax returns that are required to be
filed or have duly requested extensions thereof and have paid all taxes required
to be paid by any of them and any related assessments, fines or penalties,
except for any such tax, assessment, fine or penalty that is being contested in
good faith and by appropriate proceedings; and adequate charges, accruals and
reserves have been provided for in the financial statements referred to in
Section 1(a)(v) above in respect of all federal, state, local and foreign taxes
for all periods as to which the tax liability of the Company or any of its
subsidiaries has not been finally determined or remains open to examination by
applicable taxing authorities.
(xxiii) Insurance. The Company and each of its subsidiaries
and their respective
739869.1
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properties are insured in such amounts against such losses and with such
insurers as the Company believes are prudent when considered in light of the
nature of the properties and businesses of the Company and its subsidiaries.
(xxiv) ERISA Matters. The Company is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company would have any liability 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
would cause the loss of such qualification.
(xxv) Environmental Laws. Except as described or
generally referred to in the Offering Memorandum and except such matters as
could not, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, to the best of the Company's knowledge, (A) neither the
Company nor any of its subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the
Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any of its subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous Materials
or Environmental Laws.
(xxvi) Investment Company Act. The Company is not, and
upon the issuance and sale of the Notes as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
739869.1
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(xxvii) Rule 144A Eligibility. The Notes are not, and at
the Closing Time will not be, of the same class as securities listed on a
national securities exchange registered under Section 6 of the 1934 Act or
quoted in a U.S. automated interdealer quotation system.
(xxviii) No General Solicitation. None of the Company, its
affiliates, as such term is defined in Rule 501(b) under the 1933 Act
("Affiliates"), or any person acting on its or any of their behalf (other than
the Initial Purchaser, as to whom the Company makes no representation) has
engaged or will engage, in connection with the offering of the Notes, in any
form of general solicitation or general advertising within the meaning of Rule
502(c) under the 1933 Act.
(xxix) No Registration Required. Subject to compliance by
the Initial Purchaser with the representations and warranties set forth in
Section 2 and the procedures set forth in Section 6 hereof, it is not necessary
in connection with the offer, sale and delivery of the Notes to the Initial
Purchaser and to each Subsequent Purchaser in the manner contemplated by this
Agreement and the Offering Memorandum to register the Notes under the 1933 Act
or to qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "1939 Act").
(b) Officer's Certificates. Any certificate signed by any
officer of the Company or any of its subsidiaries delivered to the Initial
Purchaser or to counsel for the Initial Purchaser shall be deemed a
representation and warranty by the Company to the Initial Purchaser as to the
matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchaser; Closing.
(a) Notes. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to the Initial Purchaser, and the Initial
Purchaser agrees to purchase from the Company, at the price set forth in
Schedule A, $14,000,000 aggregate principal amount of Notes.
(b) Payment. Payment of the purchase price for, and
delivery of certificates for, the Notes shall be made at the office of Battle
▇▇▇▇▇▇ LLP, 75 East 55th Street, New York, New York, or at such other place as
shall be agreed upon by the Initial Purchaser and the Company, at 10:00 A.M. on
the first business day after the date hereof, or such other time not later than
ten (10) business days after such date as shall be agreed upon by the Initial
Purchaser and the Company (such time and date of payment and delivery being
herein called the "Closing Time").
Payment of the purchase price for the Notes shall be made to the
Company by wire transfer of immediately available funds to a bank account
designated by the Company, against delivery to the Initial Purchaser of
certificates for the Notes to be purchased by it. Certificates for Notes shall
be in such denominations, not less than $1,000 each, and registered in such
names as the Initial Purchaser may request in writing at least one full business
day before the Closing Time, which writing shall specify the denomination of any
certificate to be issued in global form representing Notes resold to Qualified
Institutional Buyers (as defined in Section 6(a)(i)) and the denomination of any
certificate to be issued in registered, certificated form representing the Notes
resold to
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Accredited Investors (as defined in Section 6(a)(i)). Any certificates
representing the Notes resold to Qualified Institutional Buyers shall be shall
be registered in the name of Cede & Co. as nominee of DTC pursuant to the DTC
Agreement. All certificates for the Notes shall be made available for
examination and packaging by the Initial Purchaser in The City of New York not
later than 10:00 A.M. on the last business day prior to the Closing Time.
(c) Qualified Institutional Buyer. The Initial Purchaser
represents and warrants to, and agrees with, the Company that it is a "qualified
institutional buyer" within the meaning of Rule 144A under the 1933 Act and an
"accredited investor" within the meaning of Rule 501(a) under the 1933 Act.
SECTION 3. Covenants of the Company. The Company covenants with the
Initial Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as
possible, will furnish to the Initial Purchaser, without charge, such number of
copies of the Preliminary Offering Memorandum, the Final Offering Memorandum and
any amendments and supplements thereto and documents incorporated by reference
therein as the Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events. The Company will
promptly notify the Initial Purchaser, and confirm such notice in writing, of
(x) any filing made by the Company of information relating to the offering of
the Notes with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (y) prior to the completion of the
placement of the Notes by the Initial Purchaser as evidenced by a notice in
writing from the Initial Purchaser to the Company, which the Initial Purchaser
hereby undertakes to deliver to the Company as promptly as practicable, any
material changes in or affecting, or any developments involving prospective
material changes in or affecting, the earnings or business of the Company and
its subsidiaries considered as one enterprise which (i) make any statement in
the Offering Memorandum false or misleading or (ii) are not disclosed in the
Offering Memorandum. In such event or if during such time any event shall occur
as a result of which it is necessary, in the reasonable opinion of the Company,
its counsel, the Initial Purchaser or counsel for the Initial Purchaser, to
amend or supplement the Final Offering Memorandum in order that the Final
Offering Memorandum not include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances then existing, the Company will
forthwith amend or supplement the Final Offering Memorandum by preparing and
furnishing to the Initial Purchaser an amendment or amendments of, or a
supplement or supplements to, the Final Offering Memorandum (in form and
substance satisfactory in the reasonable opinion of counsel for the Initial
Purchaser) so that, as so amended or supplemented, the Final 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 Subsequent
Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The
Company will advise the Initial Purchaser promptly of any proposal to amend or
supplement the Offering
739869.1
10
Memorandum and will not effect such amendment or supplement without the consent
of the Initial Purchaser. Neither the consent of the Initial Purchaser, nor the
Initial Purchaser's delivery of any such amendment or supplement, shall
constitute a waiver of any of the conditions set forth in Section 5 hereof.
(d) Qualification of Notes for Offer and Sale. The Company
will use its best efforts, in cooperation with the Initial Purchaser, to qualify
the Notes for offering and sale under the applicable securities laws of such
jurisdictions as the Initial Purchaser may designate and will maintain such
qualifications in effect as long as required for the sale of the Notes;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.
(e) DTC. The Company will cooperate with the Initial
Purchaser and use its best efforts to permit the Notes to be eligible for
clearance and settlement through the facilities of DTC.
(f) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Notes in the manner specified in the
Offering Memorandum under "Use of Proceeds".
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
preparation, printing and any filing of the Offering Memorandum (including
financial statements and any schedules or exhibits and any document incorporated
therein by reference) and of each amendment or supplement thereto, (ii) the
preparation, printing and delivery to the Initial Purchaser of this Agreement,
the Indenture and such other documents as may be required in connection with the
offering, purchase, sale and delivery of the Notes, (iii) the preparation,
issuance and delivery of the certificates for the Notes to the Initial
Purchasers, including any charges of DTC in connection therewith; (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Notes under securities laws in accordance with the
provisions of Section 3(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Initial Purchaser in connection therewith
and in connection with the preparation of the Blue Sky Survey, any supplement
thereto and any Legal Investment Survey, (vi) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Notes, and (vii) any fees and expenses
relating to the eligibility of the Notes for clearance and settlement through
the facilities of DTC and (vi) fees and expenses relating to the initial and
continued designation of the Notes as PORTAL securities under the PORTAL Market
Rules pursuant to NASD Rule 5322.
(b) Termination of Agreement. If this Agreement is
terminated by the Initial Purchaser in accordance with the provisions of Section
5 or Section 10(a)(i) hereof (except by reason of a default by the Initial
Purchaser), the Company shall reimburse the Initial Purchaser for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the
739869.1
11
Initial Purchaser.
SECTION 5. Conditions of Initial Purchaser's Obligations. The
obligations of the Initial Purchaser hereunder are subject to the accuracy of
the representations and warranties of the Company contained in Section 1 hereof
or in certificates of any officer of the Company or any of its subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Opinion of Counsel for the Company. At the Closing
Time, the Initial Purchaser shall have received the favorable opinions, dated as
of the Closing Time, of (i) Battle ▇▇▇▇▇▇, counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Initial Purchaser, to the
effect set forth in Exhibit A hereto (with such changes as may be agreed to by
the parties after the date hereof) and (ii) the General Counsel of the Company,
in form and substance reasonably satisfactory to counsel for the Initial
Purchaser, to the effect set forth in Exhibit B hereto (with such changes as may
be agreed to by the parties after the date hereof).
(b) Opinion of Patent Counsel for the Company. At the
Closing Time, the Initial Purchaser shall have received a favorable opinion,
dated as of the Closing Time, of the Patent Counsel of the Company, in form and
substance reasonably satisfactory to counsel for the Initial Purchaser, to the
effect set forth in Exhibit C hereto (with such changes as may be agreed to by
the parties after the date hereof).
(c) Opinion of Counsel for Initial Purchaser. At the
Closing Time, the Initial Purchaser shall have received the favorable opinion,
dated as of the Closing Time, of ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Initial
Purchaser, with respect to the issuance of the Notes and such other related
matters as the Initial Purchaser may require. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York, the federal law of the United States and
the General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the Initial Purchaser. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(d) Officers' Certificate. At the Closing Time, there
shall not have been, since the date hereof or since the respective dates as of
which information is given in the Offering Memorandum, any material adverse
change, or any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings or business of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Initial Purchaser shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
the Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1 hereof are true and
correct with the same force and effect as though expressly made at and as of the
Closing Time, and (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the Closing Time.
739869.1
12
(e) Accountant's Comfort Letter. At the time of the
execution of this Agreement, the Initial Purchaser shall have received from
Coopers & ▇▇▇▇▇▇▇ L.L.P. a letter dated such date, in form and substance
reasonably satisfactory to the Initial Purchaser, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
Initial Purchaser with respect to the financial statements and certain financial
information contained in the Offering Memorandum.
(f) Bring-down Comfort Letter. At the Closing Time, the
Initial Purchaser shall have received from Coopers & ▇▇▇▇▇▇▇ L.L.P. a letter,
dated as of the Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (d) of this Section, except
that the specified date referred to shall be a date not more than three business
days prior to the Closing Time.
(g) Registration Rights Agreement. At the Closing Time,
the Registration Rights Agreement shall have been fully executed and delivered
by the Company.
(h) PORTAL. At the Closing Time, the Notes shall have been
designated for trading on PORTAL.
(i) Additional Documents. At the Closing Time, counsel for
the Initial Purchaser shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Notes as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Notes as herein
contemplated shall be reasonably satisfactory in form and substance to the
Initial Purchaser and counsel for the Initial Purchaser.
(j) Termination of Agreement. If any condition specified
in this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by the Initial Purchaser by notice
to the Company at any time at or prior to the Closing Time, and such termination
shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 7 and 8 shall survive any such termination
and remain in full force and effect.
SECTION 6. Subsequent Offers and Resales of the Notes.
(a) Offer and Sale Procedures. The Initial Purchaser and
the Company hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Notes:
(i) Offers and Sales only to Institutional Accredited
Investors and Qualified Institutional Buyers. Offers and sales of the Notes will
be made only by the Initial Purchaser or Affiliates thereof qualified to do so
in the jurisdictions in which such offers or sales are made. Each such offer or
sale shall only be made to (A) persons whom the offeror or seller, or any person
acting
739869.1
13
on behalf of the offeror or seller, reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the 1933 Act, "Qualified
Institutional Buyers") or (B) a limited number of other institutional accredited
investors (as such term is defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D, "Institutional Accredited Investors") that, with respect to
offers, the offeror or seller reasonably believes to be, and with respect to
sales and deliveries, that are such Institutional Accredited Investors.
(ii) No General Solicitation. The Notes will be
offered by approaching prospective Subsequent Purchasers on an individual basis.
No general solicitation or general advertising (within the meaning of Rule
502(c) under the ▇▇▇▇ ▇▇▇) will be used in the United States in connection with
the offering of the Notes.
(iii) Purchases by Non-Bank Fiduciaries. In the case
of a non-bank Subsequent Purchaser of a Security acting as a fiduciary for one
or more third parties, in connection with an offer and sale to such purchaser
pursuant to clause (a) above, each such third party shall, in the judgment of
the applicable Initial Purchaser, be a Qualified Institutional Buyer.
(iv) Subsequent Purchaser Notification. The Initial
Purchaser will take reasonable steps to inform persons acquiring Notes from the
Initial Purchaser that the Notes (A) have not been and will not be registered
under the 1933 Act, (B) are being sold to them without registration under the
1933 Act in reliance on Rule 144A or in accordance with another exemption from
registration under the 1933 Act, as the case may be, and (C) may not be offered,
sold or otherwise transferred prior to the earlier of (x) the date when such
Notes can be sold pursuant to Rule 144 under the 1933 Act without any
limitations under clauses (c), (e), (f) and (h) of Rule 144 and (y) the date
which is three years after the later of the original issuance date thereof and
the last date on which the Company or any "affiliate" of the Company was the
owner of such Notes (or any predecessor Notes), except (1) to the Company, (2)
pursuant to a registration statement which has been declared effective under the
1933 Act, (3) as long as the Notes are eligible for resale pursuant to Rule
144A, to a person whom the seller reasonably believes is a Qualified
Institutional Buyer that is purchasing such Notes for its own account or for the
account of a Qualified Institutional Buyer to whom notice is given that the
offer, sale or transfer is being made in reliance on Rule 144A or (4) pursuant
to any other available exemption from the registration requirements of the 1933
Act.
(v) Minimum Principal Amount. No sale of the Notes to
any one Subsequent Purchaser will be for less than U.S. $1,000 principal amount
and no Note will be issued in a smaller principal amount. If the Subsequent
Purchaser is a non-bank fiduciary acting on behalf of others, each person for
whom it is acting must purchase at least U.S. $1,000 principal amount of the
Notes.
(vi) Restrictions on Transfer. The transfer
restrictions and the other provisions set forth in Section 1.5 of the Indenture,
including the legend required thereby, shall apply to the Notes, except as
otherwise agreed by the Company and the Initial Purchaser. Following the sale of
the Notes by the Initial Purchaser to Subsequent Purchasers pursuant to the
terms hereof, the Initial Purchaser shall not be liable or responsible to the
Company for any losses, damages or liabilities suffered or incurred by the
Company, including any losses, damages or liabilities under the 1933
739869.1
14
Act, arising from or relating to any resale or transfer of any Security, except
those arising from or relating to any breach of the obligations hereunder of the
Initial Purchaser.
(vii) Delivery of Offering Memorandum. The Initial
Purchaser will deliver to each purchaser of the Notes from the Initial
Purchaser, in connection with its original distribution of the Notes, a copy of
the Offering Memorandum, as amended and supplemented at the date of such
delivery.
(b) Covenants of the Company. The Company covenants with
the Initial Purchaser as follows:
(i) Due Diligence. In connection with the original
distribution of the Notes , the Company agrees that, prior to any offer or
resale of the Notes by the Initial Purchaser, the Initial Purchaser and counsel
for the Initial Purchaser shall have the right to make reasonable inquiries into
the business of the Company and its subsidiaries. The Company also agrees to
provide answers to each prospective Subsequent Purchaser of Notes who so
requests concerning the Company and its subsidiaries (to the extent that such
information is available or can be acquired and made available to prospective
Subsequent Purchasers without unreasonable effort or expense and to the extent
the provision thereof is not prohibited by applicable law) and the terms and
conditions of the offering of the Notes , as provided in the Offering
Memorandum.
(ii) Integration. The Company agrees that it will not
and will cause its Affiliates not to make any offer or sale of securities of the
Company of any class if, as a result of the doctrine of "integration" referred
to in Rule 502 under the 1933 Act, such offer or sale would render invalid (for
the purpose of (i) the sale of the Notes by the Company to the Initial
Purchaser, (ii) the resale of the Notes by the Initial Purchaser to Subsequent
Purchasers or (iii) the resale of the Notes by such Subsequent Purchasers to
others) the exemption from the registration requirements of the 1933 Act
provided by Section 4(2) thereof or by Rule 144A thereunder or otherwise.
(iii) Rule 144A Information. The Company agrees that,
in order to render the Notes eligible for resale pursuant to Rule 144A under the
1933 Act, while any of the Notes remain outstanding, it will make available,
upon request, to any holder of Notes or prospective purchasers of Notes the
information specified in Rule 144A(d)(4), unless the Company furnishes
information to the Commission pursuant to Section 13 or 15(d) of the 1934 Act
(such information, whether made available to holders or prospective purchasers
or furnished to the Commission, is herein referred to as "Additional
Information").
(iv) Restriction on Repurchases. Until the expiration
of three years after the original issuance of the Notes, the Company will not,
and will cause its Affiliates not to, purchase or agree to purchase or otherwise
acquire any Notes which are "restricted securities" (as such term is defined
under Rule 144(a)(3) under the 1933 Act), whether as beneficial owner or
otherwise (except as agent acting as a securities broker on behalf of and for
the account of customers in the ordinary course of business in unsolicited
broker's transactions) unless, immediately upon any such purchase, the Company
or any Affiliate shall submit such Notes to the Trustee for cancellation.
739869.1
15
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchaser. The Company
agrees to indemnify and hold harmless the Initial Purchaser and each person, if
any, who controls the Initial Purchaser within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum or the
Final Offering Memorandum (or any amendment or supplement
thereto) or in any Additional Information, or the omission
or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency
or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or
omission; provided that (subject to Section 7(d) below)
any such settlement is effected with the written consent
of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by
the Initial Purchaser), reasonably incurred in
investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Initial Purchaser expressly for use in the Offering Memorandum (or any amendment
or supplement thereto).
(b) Indemnification of Company, Directors and Officers.
The Initial Purchaser agrees to indemnify and hold harmless the Company, its
directors and officers, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Offering Memorandum in reliance upon and in conformity
with written information furnished to the Company by the Initial Purchaser
expressly for use in the Offering Memorandum (or any amendment or
739869.1
16
supplement thereto).
(c) Actions against Parties; Notification. Each
indemnified party shall give notice as promptly as reasonably practicable to
each indemnifying party of any action commenced or threatened against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 7(a) above, counsel to the indemnified parties shall be
selected by the Initial Purchaser, and, in the case of parties indemnified
pursuant to Section 7(b) above, counsel to the indemnified parties shall be
selected by the Company. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 7 or Section 8 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
SECTION 8. Contribution. If the indemnification provided for in Section
7 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchaser on the other hand from the offering of the Notes
pursuant to this Agreement and the relative fault of the Company on the one hand
and of the Initial Purchaser on the other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Initial Purchaser on the other hand in connection with the offering of the Notes
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Notes pursuant to
this Agreement (before deducting expenses) received by the Company and the total
underwriting discount received by the Initial Purchaser, bear to the aggregate
initial offering
739869.1
17
price of the Notes.
The relative fault of the Company on the one hand and the Initial
Purchaser on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchaser and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 8. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 8 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, the Initial Purchaser
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Notes underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which the
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Initial
Purchaser, and each director and officer of the Company, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Company.
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Initial Purchaser or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Notes to the Initial Purchaser.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Initial Purchaser may
terminate this Agreement, by notice to the Company, at any time at or prior to
the Closing Time (i) if there has been, since the
739869.1
18
time of execution of this Agreement or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change, or
any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings or business of the Company
and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the reasonable judgment
of the Initial Purchaser, impracticable to market the Notes or to enforce
contracts for the sale of the Notes, or (iii) if trading in the Notes has been
suspended or limited by the Commission, or if trading generally on the American
Stock Exchange or the New York Stock Exchange or in the NASDAQ National Market
System has been suspended or limited (other than in accordance with New York
Stock Exchange Rules 80A and 80B or any similar rules of the American Stock
Exchange or the NASDAQ National Market System regarding limitations on trading
during significant market declines and extraordinary market volatility), or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority or (iv) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) (b)Liabilities. If this Agreement is terminated
pursuant to this Section, such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof, and provided
further that Sections 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchaser shall be directed to the First Albany Corporation at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇▇▇▇, with a copy to ▇▇▇▇▇ & Wood
LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇.; notices to the Company shall be directed to it at ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of Chief Financial Officer, with
a copy to Battle ▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Initial Purchaser and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchaser and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchaser and the
Company and their
739869.1
19
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Notes from the Initial Purchaser
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
739869.1
20
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchaser and the Company in accordance with its terms.
Very truly yours,
AMPEX CORPORATION
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
FIRST ALBANY CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Authorized Signatory
739869.1
21
SCHEDULE A
AMPEX CORPORATION
$14,000,000
12% Senior Notes Due 2003
1. The initial offering price of the Notes shall be 100% of the
principal amount thereof, plus accrued interest, if any, from January 28, 1998.
2. The purchase price to be paid by the Initial Purchaser for the Notes
shall be 97% of the principal amount thereof.
3. The interest rate on the Notes shall be 12% per annum.
739869.1
22
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(i)
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Offering
Memorandum and to enter into and perform its obligations under the Purchase
Agreement, the Indenture and the Registration Rights Agreement.
3. Each Significant Subsidiary has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering
Memorandum and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, to the best
of our knowledge, is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital stock of the
Significant Subsidiaries was issued in violation of any preemptive or similar
rights arising by operation of law, or under the charter or by-laws of any
Significant Subsidiary or under any agreement to which the Company or any
Significant Subsidiary is a party.
4. The authorized, issued and outstanding capital stock of the Company
is as set forth in the Offering Memorandum under the caption "Capitalization" as
of the date set forth therein, and except as set forth in the Offering
Memorandum, there have been no material changes thereto; the shares of issued
and outstanding capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights of any securityholder of the Company.
5. The Notes, the Indenture and the Registration Rights Agreement
conform in all material respects to the descriptions thereof contained in the
Offering Memorandum.
6. The information in the Offering Memorandum under the caption
"Description of the
739869.1
23
Notes", to the extent that it constitutes summaries of legal matters, or legal
conclusions, has been reviewed by us and is correct in all material respects.
7. The statements in the Offering Memorandum, insofar as they purport
to describe certain aspects of contracts and other documents to which the
Company or any of its subsidiaries are a party, are accurate in all material
respects (as to such descriptions).
8. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign, (other than such as may be required under the
applicable securities laws of the various jurisdictions in which the Notes will
be offered or sold, as to which we express no opinion) is necessary or required
in connection with the due authorization, execution and delivery of the Purchase
Agreement or the Registration Rights Agreement or the due execution, delivery or
performance of the Indenture by the Company or for the offering, issuance, sale
or delivery of the Notes to the Initial Purchasers or the resale by the Initial
Purchasers in accordance with and in the manner contemplated by the Purchase
Agreement.
9. It is not necessary in connection with the offer, sale and delivery
of the Notes to the Initial Purchasers and to each Subsequent Purchaser in
accordance with and in the manner contemplated by the Purchase Agreement and the
Offering Memorandum to register the Notes under the 1933 Act (other than with
respect to the Registration Rights Agreement and the transactions contemplated
thereunder) or to qualify the Indenture under the Trust Indenture Act.
10. The Company is not an "investment company" as such term is defined
in the 1940 Act.
Nothing has come to our attention that would lead us to
believe that the Offering Memorandum or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
or incorporated by reference therein, as to which we make no statement),
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Offering Memorandum or any amendment or supplement
thereto (except for financial statements and schedules and other financial data
included or incorporated by reference therein, as to which we make no statement
at the time the Offering Memorandum was issued), at the time the Offering
Memorandum was issued, at the time any such amended or supplemented Offering
Memorandum was issued or at the Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
24
Exhibit B
FORM OF OPINION OF CORPORATE COUNSEL
OF THE COMPANY TO BE DELIVERED
PURSUANT TO SECTION 5(a)(ii)
1. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
2. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
3. The Registration Rights Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws relating to or affecting enforcement of creditors'
rights generally, or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and except that
rights to indemnification and contribution thereunder may be limited by
applicable law.
4. The Indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting enforcement of
creditors' rights generally, or by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
5. The Notes are in the form contemplated by the Indenture, have been
duly authorized by the Company and, assuming that the Notes have been duly
authenticated by the Trustee pursuant to the Indenture and in the manner
described in its certificate delivered to you today, the Notes have been duly
executed, issued and delivered by the Company and constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditor's rights generally, or by general principles
of equity (regardless of whether enforcement is considered in a proceeding in
equity or at law), and will be entitled to the benefits of the Indenture.
25
6. To the best of my knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
of its subsidiaries is a party, or to which the property of the Company or any
of its subsidiaries is subject, before or brought by any court or governmental
agency or body, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets of the Company and its subsidiaries
considered as one enterprise or the consummation of the transactions
contemplated in the Purchase Agreement or the Registration Rights Agreement or
the performance by the Company of its obligations thereunder or the transactions
contemplated by the Offering Memorandum;
7. To the best of my knowledge, neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws (except in the case of
the Company's subsidiaries only, for such violations that, singly or in the
aggregate, would not result in a Material Adverse Effect) and no default by the
Company or any of its subsidiaries exists in the due performance or observance
of any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Offering Memorandum.
8. The execution, delivery and performance of the Purchase Agreement,
the DTC Agreement, the Registration Rights Agreement, the Indenture, the Notes
and the consummation of the transactions contemplated therein and in the
Offering Memorandum (including the issuance and sale of the Notes, the use of
the proceeds from the sale of the Notes as described in the Offering Memorandum
under the caption "Use Of Proceeds" and the filing of the Registration
Statement) and compliance by the Company with its obligations under the Purchase
Agreement, the Registration Rights Agreement, the Indenture, the Notes will not,
whether with or without the giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined in
Section 1(a) of the Purchase Agreement) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary thereof pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, known to me, to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any of its subsidiaries is
subject (except for such conflicts, breaches or defaults or liens, charges or
encumbrances that could not reasonably be expected to have a Material Adverse
Effect), nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to me, of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties, assets or operations.
Nothing has come to my attention that would lead me to believe that the
Offering Memorandum or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein, as to which I make no statement), contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Offering Memorandum or any amendment or supplement thereto (except for
financial statements and schedules and other financial
26
data included or incorporated by reference therein, as to which I make no
statement at the time the Offering Memorandum was issued), at the time the
Offering Memorandum was issued, at the time any such amended or supplemented
Offering Memorandum was issued or at the Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
27
Exhibit C
FORM OF OPINION OF PATENT COUNSEL
OF THE COMPANY TO BE DELIVERED
PURSUANT TO SECTION 5(b)
1. To the best of my knowledge, there is no basis for a finding that
the Company does not have clear title or valid license rights to the patents or
patent applications described in the Offering Memorandum as being owned by or
licensed to the Company, and I have not identified any basis for a finding of
unenforceability or invalidity of any such patents.
2. Other than as disclosed in the Offering Memorandum, to the best of
my knowledge, there are no legal or governmental proceedings pending (other than
patent applications pending) relating to patents or proprietary information
rights to which the Company is a party or of which any such property of the
Company is subject, and no such proceedings are threatened or contemplated by
governmental authorities or others.
3. The statements in the Offering Memorandum under the headings "Risk
Factors--Dependence on Licensed Patent Applications Proprietary Technology" and
"Business--Patents, Licenses and Trademarks" constitute an accurate summary of
the matters referred to therein and fairly present the information called for
with respect to such matters; and I have no reason to believe that the
statements under such headings in the Offering Memorandum contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
4. Other than as disclosed in the Offering Memorandum, based upon a
review of the third party rights made known to me and discussions with Company
scientific personnel, such counsel is not aware of any valid United States,
foreign patent or published foreign patent application that is or would be
infringed by the activities of the Company described in the Offering Memorandum
and relating to products currently manufactured, used or sold by the Company or
currently proposed to be manufactured, used or sold by the Company.
5. Except as disclosed in the Offering Memorandum, neither the Company
nor any of its subsidiaries is subject to any current claim or notice of
infringement or other violation of any asserted rights of others with respect to
any Intellectual Property, which, singly or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
28
6. There are no legal or governmental proceedings pending relating to
the Intellectual Property owned or used by the Company or its subsidiaries,
other than review of pending patent and trademark applications, which, singly or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect and no such proceedings, including without limitation interference
proceedings, are currently threatened by governmental authorities or others,
with such exceptions as could not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
29