1
AMERICAN BUSINESS INFORMATION, INC.
$115,000,000
9-1/2% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
June 12, 1998
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
c/o BT Alex. ▇▇▇▇▇ Incorporated
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
American Business Information, Inc. (the "Company"), a Delaware
corporation, hereby confirms its agreement with you (the "Initial Purchasers"),
as set forth below.
1. The Securities. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the Initial Purchasers $115,000,000
aggregate principal amount of its 9-1/2% Senior Subordinated Notes due 2008 (the
"Securities"). The Securities are to be issued under an indenture dated as of
June 18, 1998, between the Company and State Street Bank and Trust Company of
California, N.A., as trustee (the "Trustee") (the "Indenture").
The Securities will be offered and sold to you without being registered
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Act"), in reliance on exemptions therefrom.
In connection with the sale of the Securities, the Company has prepared
a preliminary offering memorandum dated May 28, 1998 (the "Preliminary
Memorandum") and a final offering memorandum dated June 12, 1998 (the "Final
Memorandum," the Preliminary
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Memorandum and the Final Memorandum each herein being referred to as a
"Memorandum") setting forth or including a description of the terms of the
Securities, the terms of the offering of the Securities, a description of the
Company and any material developments relating to the Company occurring after
the date of the most recent historical financial statements included therein.
Unless otherwise indicated, all references herein to the Preliminary Memorandum
or the Final Memorandum shall be deemed to include any documents filed under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (the "Exchange Act") which are incorporated by reference therein. As
used herein, the term "Incorporated Documents" means the documents which at the
time are incorporated by reference in the Preliminary Memorandum or the Final
Memorandum or any amendment or supplement thereto.
The Initial Purchasers and their direct and indirect transferees of the
Securities will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement"), pursuant to which the Company will agree,
among other things, to file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
registering the Exchange Notes (as defined in the Registration Rights Agreement)
under the Act.
2. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Initial Purchasers that:
(a) The Preliminary Memorandum as of the date thereof did not and the
Final Memorandum and any amendment or supplement thereto as of the date thereof
does not and at all times subsequent thereto up to the Closing Date (as defined
in Section 3 below) will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this Section 2(a) do not
apply to statements or omissions made in reliance upon and in conformity with
information relating to any of the Initial Purchasers furnished to the Company
in writing by the Initial Purchasers expressly for use in the Preliminary
Memorandum, the Final Memorandum or any amendment or supplement thereto.
(b) The Incorporated Documents heretofore filed were filed in a timely
manner under the Exchange Act and, when they were filed (or, if any amendment
with respect to any such document was filed, when such amendment was filed),
conformed in all material respects to the requirements of the Exchange Act and
did not contain 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 not misleading; and any further Incorporated Documents will, when so
filed, be filed in a timely manner under the
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Exchange Act and conform in all material respects to the requirements of the
Exchange Act and will not contain 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 not misleading.
(c) As of the Closing Date, the Company will have the authorized, issued
and outstanding capitalization set forth in the Final Memorandum; all of the
outstanding shares of capital stock of the Company and each of American Business
Information Marketing, Inc., CD Rom Technologies, Inc., Contacts Influential,
Inc., Database Companies of America, Inc. and County Data Corporation (each, a
"Subsidiary" and collectively, the "Subsidiaries") have been, and as of the
Closing Date will be, duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights; except as set forth in the Final Memorandum, all of the outstanding
shares of capital stock of the Company and the Subsidiaries will be free and
clear of all liens, encumbrances, equities and claims (other than those under
the Company's existing credit agreement dated as of February 14, 1997 among the
Company and the lenders party thereto and First Union National Bank, as agent
(the "Existing Credit Agreement")) or restrictions on transferability (other
than those imposed by the Act and the securities or "Blue Sky" laws of certain
jurisdictions) or voting; except as set forth in the Final Memorandum, there are
no (i) options, warrants or other rights to purchase, (ii) agreements or other
obligations to issue or (iii) other rights to convert any obligation into, or
exchange any securities for, shares of capital stock of or ownership interests
in the Company or any of the Subsidiaries outstanding. Except for the Company's
direct and indirect interests in the Subsidiaries, the Company does not own,
directly or indirectly, more than 10% of the total outstanding shares of capital
stock or any other equity or long-term debt securities or have more than a 10%
equity interest in any firm, partnership, joint venture or other entity.
(d) Each of the Company and the Subsidiaries is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has all requisite corporate or other power and authority to own its
properties and conduct its business as now conducted and as described in the
Final Memorandum; each of the Company and the Subsidiaries is duly qualified to
do business and is in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the general
affairs, management, business, condition (financial or otherwise), prospects or
results of operations of the Company and the Subsidiaries, taken as a whole (any
such event, a "Material Adverse Effect").
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(e) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Securities, the
Exchange Notes and the Private Exchange Notes (as defined in the Registration
Rights Agreement). The Securities, when issued, will be in the form contemplated
by the Indenture. The Securities and the Exchange Notes have each been duly and
validly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in accordance with the provisions of the Indenture
and, in the case of the Securities, when delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, will have
been duly executed, issued and delivered 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 that
the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is considered in
a proceeding in equity or at law).
(f) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The Indenture
meets the requirements for qualification under the Trust Indenture Act of 1939,
as amended (the "TIA"). The Indenture has been duly and validly authorized by
the Company and, when executed and delivered in accordance with its terms
(assuming the due authorization, execution and delivery by the Trustee), will
have been duly executed and delivered and will constitute a valid and legally
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is considered in
a proceeding in equity or at law).
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration Rights
Agreement. The Registration Rights Agreement has been duly and validly
authorized by the Company and, when executed and delivered by the Company
(assuming due authorization, execution and delivery by the other parties
thereto), will have been duly executed and delivered and will constitute a valid
and legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that (A) the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect
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relating to creditors' rights generally and (ii) general principles of equity
and the discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a proceeding in
equity or at law) and (B) any rights to indemnity or contribution thereunder may
be limited by federal and state securities laws and public policy
considerations.
(h) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.
(i) No consent, approval, authorization or order of any court or
governmental agency or body, or third party is required for the performance of
this Agreement by the Company or the consummation of the other transactions
contemplated hereby, except such as have been obtained (including the Waiver
Agreement dated as of May 27, 1998 by and among the Company and the required
lenders (the "Waiver") under the Existing Credit Agreement) and such as may be
required under state securities or "Blue Sky" laws in connection with the
purchase and resale of the Securities by the Initial Purchasers. Neither the
Company nor any of the Subsidiaries is (i) in violation of its certificate of
incorporation or bylaws, (ii) in breach or violation of any statute, judgment,
decree, order, rule or regulation applicable to any of them or any of their
respective properties or assets, except for any such breach or violation which
would not, individually or in the aggregate, have a Material Adverse Effect, or
(iii) in breach of or default under (nor has any event occurred which, with
notice or passage of time or both, would constitute a default under) or in
violation of any of the terms or provisions of any indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise agreement, permit,
certificate, contract or other agreement or instrument to which any of them is a
party or to which their respective properties or assets are subject, except for
(x) any such breach, default, violation or event which would not, individually
or in the aggregate, have a Material Adverse Effect or (y) any such breach,
default or violation waived by the Waiver.
(j) The execution, delivery and performance by the Company of this
Agreement, the Indenture, the Securities, the Exchange Notes, and the
Registration Rights Agreement and the consummation of the transactions
contemplated hereby and thereby, and the fulfillment of the terms hereof and
thereof, will not conflict with or constitute or result in a breach of or a
default under (or an event which, with notice or passage of time or both, would
constitute a default under) or violation of or cause an acceleration of any
obligation under, or result in the imposition or creation of (or the
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obligation to create or impose) a lien on any property or assets of the Company
or any Subsidiary with respect to (i) the terms or provisions of any Contract,
except for (x) any such conflict, breach, violation, default or event which
would not, individually or in the aggregate, have a Material Adverse Effect or
(y) any such breach, default or violation waived by the Waiver, (ii) the
certificate of incorporation or bylaws of the Company or any of the
Subsidiaries, or (iii) (assuming compliance with all applicable state securities
or "Blue Sky" laws and assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 8 hereof) any statute, judgment,
decree, order, rule or regulation of any court or governmental agency or body
applicable to the Company, the Subsidiaries or any of their respective
properties or assets, except for any such conflict, breach or violation which
would not, individually or in the aggregate, have a Material Adverse Effect.
(k) Each of the Indenture, the Securities, the Exchange Notes, the
Registration Rights Agreement and this Agreement conforms in all material
respects to the description thereof in the Final Memorandum.
(l) The consolidated financial statements of the Company and the related
notes thereto included in the Final Memorandum present fairly in all material
respects the financial position, results of operations and cash flows of the
Company at the dates and for the periods to which they relate and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, except as otherwise stated therein, and comply as to form in
all material respects with the applicable accounting requirements of the Act and
the rules and regulations thereunder, except as otherwise stated therein. The
summary and selected financial and statistical data included in the Final
Memorandum present fairly in all material respects the information shown therein
and have been prepared and compiled on a basis consistent with the audited
financial statements included therein and comply as to form in all material
respects with the applicable accounting requirements of the Act and the rules
and regulations thereunder, except as otherwise stated therein. Coopers &
▇▇▇▇▇▇▇ L.L.P. is an independent public accounting firm within the meaning of
the Act.
(m) (i) The pro forma financial information included in the Final
Memorandum (A) complies as to form in all material respects with the applicable
requirements of Regulation S-X promulgated under the Exchange Act, (B) has been
prepared in accordance with the Commission's rules and guidelines with respect
to pro forma financial statements and (C) has been properly computed on the
bases described therein, and (ii) the assumptions used in the preparation of the
pro forma financial information included in the Final Memorandum are reasonable
and the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred
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to therein.
(n) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company believes to be
reliable and accurate.
(o) Except as described in the Final Memorandum, there is not pending
or, to the best knowledge of the Company, threatened any action, suit,
proceeding, inquiry or investigation to which the Company is a party, or to
which any of its properties or assets are subject, before or brought by any
court, arbitrator or governmental agency or body, which could reasonably be
expected to have a Material Adverse Effect, or which seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or sale of the
Securities to be sold hereunder or the consummation of the other transactions
described in the Final Memorandum.
(p) Each of the Company and the Subsidiaries owns or possesses adequate
licenses or other rights to use all patents, trademarks, service marks, trade
names, copyrights and know-how necessary to conduct the businesses now or
proposed to be operated by it as described in the Final Memorandum, and neither
the Company nor any of the Subsidiaries has received any notice of infringement
of or conflict with (or knows of any such infringement of or conflict with)
asserted rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, would, individually or in the
aggregate, have a Material Adverse Effect.
(q) Each of the Company and the Subsidiaries possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made or will have made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals presently required or necessary
to own or lease, as the case may be, and to operate its properties and to carry
on its business as now or proposed to be conducted as set forth in the Final
Memorandum ("Permits"), except where the failure to obtain such Permits would
not, individually or in the aggregate, have a Material Adverse Effect; each of
the Company and the Subsidiaries has fulfilled and performed all of its
obligations with respect to such Permits and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or termination thereof
or results in any other material impairment of the rights of the holder of any
such Permit, except such as would not have a Material Adverse Effect; and
neither the Company nor any Subsidiary has received any notice of any proceeding
relating to revocation or modification of any such Permit, except as described
in the Final Memorandum or except where such revocation or modification would
not, individually or in the
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aggregate, have a Material Adverse Effect.
(r) Since the respective dates as of which information is given in the
Final Memorandum and except as described therein, there has been no material
adverse change, or any fact known to the Company which could reasonably be
expected to result in a material adverse change, in the general affairs,
management, business, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, or any loss of, or
damage to, properties (whether or not insured) which could reasonably be
expected to affect materially and adversely the general affairs, management,
business, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole. Since the date of the latest
balance sheet presented in the Final Memorandum, neither the Company nor any of
its Subsidiaries has (i) incurred or undertaken any liabilities or obligations,
direct or contingent, that are material to the Company and its Subsidiaries
taken as a whole, (ii) entered into any material transaction not in the ordinary
course of business and consistent with past practice, except as disclosed in the
Final Memorandum, or (iii) declared or paid any dividend or made any
distribution on any shares of its capital stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares
of its capital stock (other than any dividends or distributions to the Company).
(s) Each of the Company and Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, and has paid all
taxes shown as due thereon, except where the failure to so file such returns or
pay such taxes would not, individually or in the aggregate, have a Material
Adverse Effect. Other than tax deficiencies which the Company or any of the
Subsidiaries is contesting in good faith and for which the Company or such
Subsidiary has provided adequate reserves, there are no tax deficiencies that
have been asserted against the Company or any Subsidiary that would have,
individually or in the aggregate, a Material Adverse Effect.
(t) None of the Company or any of the Subsidiaries or any agent acting
on their behalf has taken or will take any action that might cause this
Agreement or the sale of the Securities to violate Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System, in each case as in effect,
or as the same may hereafter be in effect, on the Closing Date.
(u) Each of the Company and the Subsidiaries has good title to all
personal property described in the Final Memorandum as being owned by it, good
and defensible title to all real property described in the Final Memorandum as
being owned by it and good and defensible title to each leasehold estate in the
real and
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personal property described in the Final Memorandum as being leased by it free
and clear of all liens, charges, encumbrances or restrictions, except as
described in the Final Memorandum or to the extent the failure to have such
title or the existence of such liens, charges, encumbrances or restrictions
would not have, individually or in the aggregate, a Material Adverse Effect. All
leases, contracts and agreements to which the Company or any Subsidiary is a
party or by which the Company or such Subsidiary is bound are valid and
enforceable against the Company or such Subsidiary and, to the knowledge of the
Company, are valid and enforceable against the other party or parties thereto
and are in full force and effect with only such exceptions as would not have,
individually or in the aggregate, a Material Adverse Effect.
(v) There are no legal or governmental proceedings involving or
affecting the Company, any of the Subsidiaries or any of their respective
properties or assets that would be required to be described in a prospectus
pursuant to the Act that are not described in the Final Memorandum, nor are
there any material contracts or other documents that would be required to be
described in a prospectus pursuant to the Act that are not described in the
Final Memorandum.
(w) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, (A) each of the Company and the Subsidiaries is in
compliance with and not subject to liability under applicable Environmental Laws
(as defined below), (B) each of the Company and the Subsidiaries has made all
filings and provided all notices required under any applicable Environmental
Law, and has in full force and effect and is in compliance with all Permits
required under any applicable Environmental Law, (C) there is no civil, criminal
or administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for information
pending or, to the knowledge of the Company, threatened against the Company or
any Subsidiary under any Environmental Law, (D) no lien, charge, encumbrance or
restriction has been recorded under any Environmental Law with respect to any
assets, facility or property owned, operated, leased or controlled by the
Company or any Subsidiary, (E) neither the Company nor any Subsidiary has
received notice that it has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA"), or any comparable state law, and (F) no property
or facility of the Company or any Subsidiary is (i) listed or proposed for
listing on the National Priorities List under CERCLA or (ii) listed in the
Comprehensive Environmental Response, Compensation, Liability Information System
List promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common law and
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all applicable federal, state and local laws or regulations, codes, orders,
decrees, judgments or injunctions issued, promulgated, approved or entered
thereunder, relating to pollution or protection of public or employee health and
safety or the environment, including, without limitation, laws relating to (i)
emissions, discharges, releases or threatened releases of hazardous materials,
into the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of hazardous materials, and (iii) underground and
aboveground storage tanks, and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(x) There is no strike, labor dispute, slowdown or work stoppage
with the employees of the Company or the Subsidiaries which is pending
or, to the knowledge of the Company, threatened.
(y) Each of the Company and the Subsidiaries carries insurance
in such amounts and covering such risks as is adequate for the conduct
of its business and the value of its properties.
(z) Neither the Company nor any Subsidiary has any liability for
any prohibited transaction or funding deficiency or any complete or
partial withdrawal liability with respect to any pension, profit sharing
or other plan which is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), to which the Company or any
Subsidiary makes or ever has made a contribution and in which any
employee of the Company or any Subsidiary is or has ever been a
participant except any such liability which would not have a Material
Adverse Effect. With respect to such plans, each of the Company and the
Subsidiaries is in compliance in all material respects with all
applicable provisions of ERISA.
(aa) Each of the Company and the Subsidiaries (i) makes and
keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to
its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(ab) Neither the Company nor any Subsidiary will be an
"investment company" or "promoter" or "principal underwriter" for an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder.
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(ac) No holder of securities of the Company (other than the
Registrable Notes (as defined in the Registration Rights Agreement))
will be entitled to have such securities registered under the
registration statements required to be filed by the Company pursuant to
the Registration Rights Agreement.
(ad) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable
value of the assets of each of the Company and the Subsidiaries will
exceed the sum of its stated liabilities and identified contingent
liabilities; the Company and its Subsidiaries on a consolidated basis
are not, and will not be after giving effect to the execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby, (a) left with unreasonably small
capital with which to carry on their business as it is proposed to be
conducted, (b) unable to pay their debts (contingent or otherwise) as
they mature, or (c) otherwise insolvent.
(ae) Neither the Company nor any of the Subsidiaries nor any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D
under the Act) has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of any
"security" (as defined in the Act) which is or could be integrated with
the sale of the Securities in a manner that would require the
registration under the Act of the Securities or (ii) engaged in any form
of general solicitation or general advertising (as those terms are used
in Regulation D under the Act) in connection with the offering of the
Securities or in any manner involving a public offering within the
meaning of Section 4(2) of the Act.
(af) Assuming the accuracy of the representations and warranties
of the Initial Purchasers in Section 8 hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Initial Purchasers in the manner contemplated by this Agreement to
register any of the Securities under the Act or to qualify the Indenture
under the TIA.
(ag) No securities of the Company are of the same class (within
the meaning of Rule 144A under the Act) as the Securities and listed on
a national securities exchange registered under Section 6 of the
Exchange Act, or quoted in a U.S. automated inter-dealer quotation
system.
(ah) Neither the Company nor any Subsidiary has taken, or will
take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation
of the price of the Securities.
Any certificate signed by any officer of the Company or any
Subsidiary and
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delivered to any Initial Purchaser or to counsel for the Initial Purchasers
shall be deemed a joint and several representation and warranty by the Company
and each of the Subsidiaries to each Initial Purchaser as to the matters covered
thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchasers, and each of the Initial Purchasers
agrees, acting severally and not jointly, to purchase the Securities, at 100% of
their principal amount, in the respective principal amounts set forth opposite
their names on Schedule I hereto.
One or more certificates in definitive form for the Securities that the
Initial Purchasers have agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the Initial Purchasers
request upon notice to the Company at least 48 hours prior to the Closing Date,
shall be delivered by or on behalf of the Company to the Initial Purchasers,
against payment by or on behalf of the Initial Purchasers of the purchase price
therefor by wire transfer of immediately available funds payable to such account
or accounts as the Company shall specify prior to the Closing Date, or by such
means as the parties hereto shall agree prior to the Closing Date. Such delivery
of and payment for the Securities shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 9:00 A.M., New York time, on
9:00 A.M., 1998, or at such other place, time or date as the Initial Purchasers
and the Company may agree upon, such time and date of delivery against payment
being herein referred to as the "Closing Date." The Company will make such
certificate or certificates for the Securities available for checking and
packaging by the Initial Purchasers at the offices of BT Alex. ▇▇▇▇▇
Incorporated in New York, New York or such other place as BT Alex. ▇▇▇▇▇
Incorporated may designate, at least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers propose to
make an offering of the Securities at the price and upon the terms set forth in
the Final Memorandum as soon as practicable after this Agreement is entered into
and as in the sole judgment of the Initial Purchasers is advisable.
5. Covenants of the Company. The Company covenants and agrees with each
of the Initial Purchasers that:
(a) The Company will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers and counsel to the Initial Purchasers shall not previously
have been advised and furnished a copy a reasonable period of time prior
to the proposed amendment or supplement and unless the Company is
required by the Act or the Exchange Act to make such amendment or
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supplement, as to which the Initial Purchasers shall not have given
their consent, which consent shall not be unreasonably withheld. The
Company will promptly, upon the reasonable request of the Initial
Purchasers or counsel for the Initial Purchasers, make any amendments or
supplements to the Final Memorandum that may be necessary or advisable
in connection with the resale of the Securities by the Initial
Purchasers.
(b) The Company will cooperate with the Initial Purchasers in
arranging for the qualification of the Securities for offering and sale
under the securities or "Blue Sky" laws of such jurisdictions as the
Initial Purchasers may designate and will continue such qualification in
effect for as long as may be necessary to complete the resale of the
Securities by the Initial Purchasers; provided, however, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject the Company to any tax in any
such jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the distribution
by the Initial Purchasers of the Securities or the Private Exchange
Notes (if any), any event occurs or information becomes known as a
result of which the Final Memorandum as then amended or supplemented
would include an untrue statement of a material fact, or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement the
Final Memorandum in order to comply with applicable law, the Company
will promptly notify the Initial Purchasers thereof and will prepare, at
the Company's expense, an amendment to the Final Memorandum that
corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of
the Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Securities substantially as set forth under "Use of Proceeds" in the
Final Memorandum.
(f) For so long as any Securities remain outstanding, the
Company will furnish to the Initial Purchasers copies of all reports and
other communications (financial or otherwise) furnished by the Company
to the Trustee or the holders of the Securities and, as soon as
available, copies of any reports or financial statements furnished to or
filed by the Company with the Commission or any national securities
exchange
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-14-
or quotation system on which any class of securities of the Company may
be listed.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim consolidated
financial statements of the Company for any period subsequent to the
period covered by its most recent financial statements appearing in the
Final Memorandum.
(h) Neither the Company nor any of its Affiliates will sell,
offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) that could be
integrated with the sale of the Securities in a manner that would
require the registration under the Act of the Securities.
(i) The Company will not, nor will the Company allow any of the
Subsidiaries to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) in
connection with the offering of the Securities or in any manner
involving a public offering within the meaning of Section 4(2) of the
Act.
(j) For so long as any of the Securities remain outstanding, the
Company will make available, upon request, to any holder of such
Securities and any prospective purchasers thereof the information
specified in Rule 144A(d)(4) under the Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
(k) The Company will use its best efforts to (i) permit the
Securities to be designated PORTAL securities in accordance with the
rules and regulations adopted by the NASD relating to trading in the
Private Offerings, Resales and Trading through Automated Linkages market
(the "PORTAL Market") and (ii) permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(l) The Company will authorize, execute and deliver the Private
Exchange Notes if such notes are required to be issued pursuant to the
terms and conditions of the Registration Rights Agreement.
6. Expenses. The Company agrees to pay all costs and expenses incident
to the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to: (i)
the printing, word processing or other production of documents with respect to
such transactions, including any costs of printing the Preliminary Memorandum
and the Final Memorandum and any amendments or supplements thereto, and any
"Blue Sky" memoranda, (ii) all arrangements relating to the delivery to the
15
-15-
Initial Purchasers of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company, (iv) the preparation (including printing), issuance and
delivery to the Initial Purchasers of any certificates evidencing the
Securities, (v) the qualification of the Securities under state securities and
"Blue Sky" laws, including filing fees and reasonable fees and disbursements of
counsel for the Initial Purchasers relating thereto, (vi) the expenses of the
Company in connection with any meetings with prospective investors in the
Securities, (vii) the fees and expenses of the Trustee, including fees and
expenses of its counsel, and (viii) all expenses and listing fees incurred in
connection with the application for quotation of the Securities on the PORTAL
Market, and (ix) any fees charged by investment rating agencies for the rating
of the Securities. If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated or because of any failure, refusal or inability on the part of the
Company to perform all obligations and satisfy all conditions on their part to
be performed or satisfied hereunder (other than solely by reason of a default by
the Initial Purchasers of their obligations hereunder after all conditions
hereunder have been satisfied in accordance herewith), the Company agrees to
promptly reimburse the Initial Purchasers upon demand for all out-of-pocket
expenses of the Initial Purchasers (including reasonable fees and expenses of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchasers) incurred in
connection with the transactions contemplated hereby.
7. Conditions of the Initial Purchasers' Obligations. The obligation of
the Initial Purchasers to purchase and pay for the Securities shall, in their
sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have
received the opinion, dated as of the Closing Date and addressed to the
Initial Purchasers, of Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, a
Professional Corporation, special counsel for the Company, in form and
substance satisfactory to counsel for the Initial Purchasers, to the
effect that:
(i) The Company and each of the Subsidiaries is duly
incorporated and validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and
has the corporate authority to own or lease its properties and
to conduct its business as described in the Final Memorandum.
Each of the Company and the Subsidiaries is duly qualified to do
business and is in good standing as a foreign corporation in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except where the failure to be so qualified or be in good
standing could not reasonably be expected to have a Material
Adverse Effect.
16
-16-
(ii) The Company has the capitalization set forth in the
Final Memorandum; all of the outstanding shares of capital stock
of the Subsidiaries are owned, directly or indirectly, by the
Company, free and clear of any adverse claim or restriction upon
voting or transfer (other than those imposed by federal, state
or foreign securities laws and any lien securing the Existing
Credit Facility) and, to such counsel's knowledge, were not
issued in violation of any preemptive or similar rights
contained in the respective articles or certificate of
incorporation or bylaws of each Subsidiary.
(iii) To the knowledge of such counsel and except as
otherwise set forth in the Final Memorandum, (A) no options,
warrants or other rights to purchase from the Company or any
Subsidiary shares of capital stock or ownership interests in the
Company or any Subsidiary are outstanding, (B) no agreements or
other obligations of the Company or any Subsidiary to issue, or
other rights to cause the Company or any Subsidiary to convert,
any obligation into, or exchange any securities for, shares of
capital stock or ownership interests in the Company or any
Subsidiary are outstanding and (C) no holder of securities of
the Company or any Subsidiary (other than the Registrable Notes)
is entitled to have such securities registered under a
registration statement filed by the Company pursuant to the
Registration Rights Agreement.
(iv) The Company has the requisite corporate power and
authority to enter into and perform its obligations under this
Agreement, the Registration Rights Agreement and the Indenture
(including, without limitation, the corporate power to issue,
sell and deliver the Securities as contemplated by this
Agreement).
(v) This Agreement has been duly authorized, executed
and delivered by the Company. The statements in the Final
Memorandum under the caption "Private Placement," insofar as
such statements purport to summarize certain of the terms of
this Agreement, fairly summarize, in all material respects, such
terms of this Agreement.
(vi) The Indenture has been duly authorized, executed
and delivered by the Company. The statements in the Final
Memorandum under the caption "Description of Notes," insofar as
such statements purport to summarize the terms of the Indenture,
fairly summarize, in all material respects, the terms of the
Indenture.
(vii) The Securities have been duly authorized for
issuance and sale to the Initial Purchasers by the Company. The
statements in the Final Memorandum
17
-17-
under the caption "Description of Notes," insofar as such
statements purport to summarize the terms of the Securities,
fairly summarize, in all material respects, the terms of the
Securities. The Securities are in the form contemplated by the
Indenture.
(viii) The Exchange Notes have been duly authorized for
issuance and sale to the Initial Purchasers by the Company.
(ix) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company. The
statements in the Final Memorandum under the caption "Exchange
Offer; Registration Rights," insofar as such statements purport
to summarize the terms of the Registration Rights Agreement,
fairly summarize, in all material respects, the terms of the
Registration Rights Agreement.
(x) To such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company or any
Subsidiary is a party or to which the property or assets of the
Company or any Subsidiary are subject which (i) would be
required under the Act to be described in a registration
statement or in a prospectus delivered at the time of the
confirmation of the sale of an offering of securities registered
under the Act that are not described in the Final Memorandum, or
(ii) question the validity or enforceability of any of the
Agreements or any action taken or to be taken pursuant thereto;
and to such counsel's knowledge, no such proceedings are overtly
threatened in writing.
(xi) To the knowledge of such counsel, there is no
contract, agreement or other document to which the Company or
any Subsidiary is a party that would be required under the Act
to be described in a registration statement or prospectus that
is not described in the Final Memorandum.
(xii) The execution and delivery by the Company of, and
the performance by the Company of its obligations under, the
Agreements and the Securities, the issuance and sale of the
Securities by the Company and the consummation by the Company of
the transactions contemplated by the Agreements and the
Securities will not (i) conflict with the Certificate of
Incorporation or Bylaws of the Company, (ii) except as set forth
in the Final Memorandum, result in a material breach or
violation of any of the terms or provisions of, or constitute a
material default under any material agreements reviewed by such
counsel, or (iii) result in any material violation of any
provision of applicable United States federal or California
state law, or any judgment, order or decree known
18
-18-
to such counsel of any United States federal or California state
court or governmental agency or body having jurisdiction over
the Company or by which the Company or its properties or assets
is bound. Except for such consents, approvals, authorizations,
other orders, filings, or qualifications or registrations as may
be required under applicable state securities laws in connection
with the purchase and distribution of the Securities by the
Initial Purchasers or as set forth in the Registration Rights
Agreement or the Indenture, as to which such counsel need
express no opinion, no consent, approval, authorization, order,
filing, qualification or registration with any United States
federal or California state court or governmental body or agency
is required for the performance by the Company of its
obligations under the Agreements and the issuance and sale of
the Securities by the Company.
(xiii) The Company is not, or immediately after the sale
of the Securities to be sold hereunder and the application of
the proceeds from such sale (as described in the Final
Memorandum under the caption "Use of Proceeds") will not be,
subject to registration and regulation as an "investment
company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended.
(xiv) Assuming, without independent investigation, (a)
that the Securities are sold to the Initial Purchasers, and
initially resold by the Initial Purchasers, in accordance with
the terms of, and in the manner contemplated by, this Agreement
and the Final Memorandum, (b) the accuracy of the
representations and warranties of the Company set forth in this
Agreement and in certain certificates, (c) the accuracy of the
Initial Purchasers' representations and warranties set forth in
this Agreement, (d) the due performance by the Company and the
Initial Purchasers of their respective covenants and agreements
set forth in this Agreement, (e) the Initial Purchasers'
compliance with the terms of the offering of the Securities and
the transfer procedures and restrictions described in the Final
Memorandum, (f) the accuracy of any representations and
warranties made in accordance with this Agreement and the Final
Memorandum by each purchaser (each, a "Subsequent Purchaser") to
whom the Initial Purchasers initially resell Securities and (g)
that each Subsequent Purchaser to whom the Initial Purchasers
initially resell Securities receives a copy of the Final
Memorandum if requested by such Subsequent Purchaser prior to
such sale, then the offer, issuance, sale and delivery of the
Securities to the Initial Purchasers, and the initial reoffer,
resale and delivery of the Securities by the Initial Purchasers
to the Subsequent Purchasers, in accordance with the terms of,
and in the manner contemplated by, this Agreement and the Final
Memorandum, do not require registration under the
19
-19-
Act, or qualification of the Indenture under the TIA, it being
understood that no opinion is expressed as to any subsequent
resale of Securities or any resale of Securities by any person
other than the Initial Purchasers.
(xv) Neither the issuance and sale of the Securities nor
the application of the net proceeds thereof as set forth in the
Final Memorandum will violate Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System.
At the time the foregoing opinion is delivered, such counsel
shall additionally state that it has participated in conferences with
officers and other representatives of the Company, representatives of
the independent public accountants for the Company, and representatives
of the Initial Purchasers and their counsel, at which the contents of
the Final Memorandum were discussed, and, although it has not
independently verified and is not passing upon and assumes no
responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum (except to the extent
specified in subsection 7(a)(v), (vi) (vii), and (ix), no facts have
come to its attention which lead it to believe that the Final
Memorandum, on the date thereof or at the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made,
not misleading (it being understood that such counsel has not been
requested to and does not make any comment with respect to the financial
statements, the notes thereto and schedules or other financial or
statistical data included in the Final Memorandum). The opinion of such
counsel described in this Section shall be rendered to the Initial
Purchasers at the request of the Company and shall so state therein.
References to the Final Memorandum in this subsection (a) shall
include any amendment or supplement thereto prepared in accordance with
the provisions of this Agreement at the Closing Date.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
federal laws of the United States, the laws of the State of California
and the General Corporation Law of the State of Delaware. Such counsel
may also state that, insofar as such opinion involves factual matters,
such counsel have relied, to the extent they deem proper, upon
certificates of officers of the Company and certificates of public
officials; provided that such certificates have been provided to the
Initial Purchasers.
(b) On the Closing Date, the Initial Purchasers shall have
received the opinion, dated as of the Closing Date and addressed to the
Initial Purchasers, of Winthrop,
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-20-
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special New York counsel for the Company, in form and
substance satisfactory to counsel for the Initial Purchasers, to the
effect that:
(i) The Securities, when duly executed and authenticated
in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, will be valid and binding obligations
of the Company, entitled to the benefits of the Indenture, and
enforceable against the Company in accordance with their terms,
except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar
laws affecting creditors' rights generally, general principles
of equity (regardless of whether enforcement is sought in a
proceeding in equity or law) and an implied covenant of good
faith and fair dealing.
(ii) Each of the Indenture and the Registration Rights
Agreement is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar
laws affecting creditors' rights generally, general principles
of equity (regardless of whether enforcement is sought in a
proceeding in equity or law) and an implied covenant of good
faith and fair dealing, and except that, in the case of the
Registration Rights Agreement, such counsel expresses no opinion
regarding the indemnification and contribution provisions
contained in Section 7 thereof.
(iii) The Exchange Notes and the Private Exchange Notes,
when duly executed and delivered by the Company in accordance
with the terms of the Registration Rights Agreement and the
Indenture (assuming the due authorization, execution and
delivery of the Indenture by the Trustee and due authentication
and delivery of the Exchange Notes and the Private Exchange
Notes by the Trustee in accordance with the Indenture), will
constitute the valid and legally binding obligations of the
Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms,
except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar
laws affecting creditors' rights generally, general principles
of equity (regardless of whether enforcement is sought in a
proceeding in equity or law) and an implied covenant of good
faith and fair dealing.
(c) The Initial Purchasers shall have received an opinion, dated
the Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial
Purchasers, with respect to certain legal matters relating to this
Agreement, and such other related matters as the Initial
21
-21-
Purchasers may reasonably require. In rendering such opinion, ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have received and may rely upon such certificates
and other documents and information as they may reasonably request to
pass upon such matters.
(d) The Initial Purchasers shall have received from Coopers &
▇▇▇▇▇▇▇ L.L.P., independent public accountants for the Company, comfort
letters, dated the date hereof and the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers and counsel
for the Initial Purchasers.
(e) The representations and warranties of the Company contained
in this Agreement shall be true and correct in all material respects on
and as of the Closing Date as if made on and as of the Closing Date; the
Company shall have performed all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date; and, except as set forth in the Final
Memorandum (exclusive of any amendment or supplement thereto after the
date hereof) subsequent to the date of the most recent financial
statements in such Final Memorandum, there shall have been no event or
development that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect.
(f) The issuance and sale of the Securities pursuant to this
Agreement shall not be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued or
any action, suit or proceeding shall have been commenced with respect to
this Agreement before any court or governmental authority.
(g) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed on behalf of the Company by its Chief
Executive Officer and Chief Financial Officer to the effect that:
(i) The representations and warranties of the Company in
this Agreement are true and correct in all material respects as
if made on and as of the Closing Date, and the Company has
performed in all material respects all covenants and agreements
and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since
the date of the most recent financial statements in the Final
Memorandum (exclusive of any amendment or supplement thereto
after the date hereof), no event or events have occurred, no
information has become known nor does any condition exist that,
individually or in the aggregate, would have a Material Adverse
Effect; and
22
-22-
(iii) The sale of the Securities hereunder has not been
enjoined (temporarily or permanently).
(h) On the Closing Date, the Initial Purchasers shall have
received the Registration Rights Agreement executed by the Company and
such agreement shall be in full force and effect at all times from and
after the Closing Date.
(i) The Indenture shall have been duly executed and delivered by
the Company and the Trustee, and the Securities shall have been duly
executed by the Company, and the Securities shall have been duly
authenticated by the Trustee.
(j) On or before the Closing Date, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such further
documents, certificates and schedules or instruments relating to the
business, corporate, legal and financial affairs of the Company as they
shall have heretofore reasonably requested from the Company.
All such documents, opinions, certificates and schedules or instruments
delivered pursuant to this Agreement will comply with the provisions hereof only
if they are reasonably satisfactory in all material respects to the Initial
Purchasers and counsel for the Initial Purchasers. The Company shall furnish to
the Initial Purchasers such conformed copies of such documents, opinions,
certificates and schedules or instruments in such quantities as the Initial
Purchasers shall reasonably request. For purposes of this Section 7, this
Agreement, the Registration Rights Agreement, the Indenture, the Securities and
the Exchange Notes may be referred to collectively as the "Agreements".
8. Offering of Securities; Restrictions on Transfer. Each of the Initial
Purchasers represents and warrants (as to itself only) that it is a QIB. Each of
the Initial Purchasers agrees with the Company (as to itself only) that (i) it
has not and will not solicit offers for, or offer or sell, the Securities by any
form of general solicitation or general advertising (as those terms are used in
Regulation D under the Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Act; and (ii) it has and will solicit offers
for the Securities only from, and will offer the Securities only to persons whom
the Initial Purchasers reasonably believe to be QIBs or, if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to the Initial
Purchasers that each such account is a QIB, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A, and, in each case,
in transactions under Rule 144A.
9. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless the Initial Purchasers and the affiliates, directors,
officers, agents, representatives and employees of the Initial Purchasers, and
each other person, if any, who
23
-23-
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities, joint or several, to which any Initial Purchaser or any such
affiliate, director, officer, agent, representative, employee or controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as any such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Memorandum or any amendment or
supplement thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company based upon
written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Securities under the securities
or "Blue Sky" laws thereof or filed with any securities association or
securities exchange (each, an "Application"); or
(ii) the omission or alleged omission to state, in any
Memorandum or any amendment or supplement thereto, or any Application, 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,
and will reimburse, as incurred, the Initial Purchasers and each such affiliate,
director, officer, agent, representative and employee and each such controlling
person for any legal or other expenses reasonably incurred by the Initial
Purchasers, such affiliate, director, officer, agent, representative or employee
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable (i) in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any Memorandum or any
amendment or supplement thereto, or any Application, in reliance upon and in
conformity with written information furnished to the Company by the Initial
Purchasers specifically for use therein or (ii) with respect to the Preliminary
Memorandum, to the extent that any such loss, claim, damage or liability arises
solely from the fact that the Initial Purchasers sold Securities to a person to
whom there was not sent or given a copy of the Final Memorandum (as amended or
supplemented) at or prior to the written confirmation of such sale if the
Company shall have previously furnished copies thereof to the Initial Purchasers
in accordance with Section 5(d) hereof and the Final Memorandum (as amended or
supplemented) would have corrected any such untrue statement or omission. This
indemnity agreement will be in addition to any liability that the Company may
otherwise have to the indemnified parties. The Company shall not be liable under
this paragraph (a) for any settlement of any claim or action effected without
their consent, which consent shall not be unreasonably withheld or delayed.
24
-24-
The Initial Purchasers shall not, without the prior written consent of
the Company, effect any settlement or compromise of any pending or threatened
proceeding in respect of which the Company is or could have been a party, or
indemnity could have been sought hereunder by the Company, unless such
settlement (A) includes an unconditional written release of the Company, in form
and substance reasonably satisfactory to the Company, from all liability on
claims that are the subject matter of such proceeding and (B) does not include
any statement as to an admission of fault, culpability or failure to act by or
on behalf of the Company.
(k) The Initial Purchasers agree, severally and not jointly, to
indemnify and hold harmless the Company, its affiliates, directors, officers,
agents, representatives and employees and each other person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such affiliate, director, officer, agent, representative,
employees or controlling person may become subject under the Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any
Memorandum or any amendment or supplement thereto, or any Application or (ii)
the omission or the alleged omission to state therein a material fact required
to be stated in any Memorandum or any amendment or supplement thereto, or any
Application, or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Initial
Purchaser furnished to the Company by such Initial Purchaser specifically for
use therein; and, subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses reasonably
incurred by the Company or any such affiliate, director, officer, agent,
representative, employee or controlling person in connection with investigating
or defending against or appearing as a third party witness in connection with
any such loss, claim, damage, liability or action in respect thereof. This
indemnity agreement will be in addition to any liability that the Initial
Purchasers may otherwise have to the indemnified parties. The Initial Purchasers
shall not be liable under this Section 9 for any settlement of any claim or
action effected without their consent, which consent shall not be unreasonably
withheld or delayed.
The Company shall not, without the prior written consent of the Initial
Purchasers, effect any settlement or compromise of any pending or threatened
proceeding in respect of which any Initial Purchaser is or could have been a
party, or indemnity could have been sought hereunder by any Initial Purchaser,
unless such settlement (A) includes an unconditional written release of the
Initial Purchasers, in form and substance reasonably satisfactory to the Initial
Purchasers, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to an admission of fault,
25
-25-
culpability or failure to act by or on behalf of any Initial Purchaser.
(l) Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action for which such indemnified party is
entitled to indemnification under this Section 9, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
this Section 9, notify the indemnifying party of the commencement thereof in
writing; but the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to the
extent such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a) and (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 9 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by BT Alex. ▇▇▇▇▇ Incorporated in the
case of paragraph (a) of this Section 9 or the Company in the case of paragraph
(b) of this Section 9, representing the indemnified parties under such paragraph
(a) or paragraph (b), as the case
26
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may be, who are parties to such action or actions) or (ii) the indemnifying
party has authorized in writing the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by
such indemnified party without the prior written consent of the indemnifying
party (which consent shall not be unreasonably withheld), unless such
indemnified party waived in writing its rights under this Section 9, in which
case the indemnified party may effect such a settlement without such consent.
(m) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to, or insufficient to
hold harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
offering of the Securities or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, not only such relative benefits
but also the relative fault of the indemnifying party or parties on the one hand
and the indemnified party on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
benefits received by the Company on the one hand and any Initial Purchaser on
the other shall be deemed to be in the same proportion as the total proceeds
from the offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by such Initial Purchaser. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand, or such Initial Purchaser on the other,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission or alleged statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Initial Purchasers agree that it would not be
just and equitable if the amount of such contribution were determined by pro
rata or per capita allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the first sentence
of this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Initial Purchaser shall be obligated to make contributions hereunder
that in the aggregate exceed the total discounts, commissions and other
compensation received by such Initial Purchaser under this Agreement, less the
aggregate amount of any damages that such Initial Purchaser has otherwise been
required to pay by reason of the untrue or alleged untrue statements or the
omissions or alleged omissions to state a material fact, and no person guilty
27
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of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each
affiliate, director, officer, agent, representative and employee of an Initial
Purchaser and each person, if any, who controls an Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Initial Purchasers, 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 Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the Initial Purchasers set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, the Initial Purchasers or any
controlling person referred to in Section 9 hereof and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 6, 9 and 15 hereof shall remain in
full force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Company given prior to the
Closing Date in the event that the Company shall have failed, refused or been
unable to perform, in all material respects, all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Closing Date:
(i) either (x) the Company shall have sustained any loss or
interference with respect to its businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any strike, labor dispute, slow down or work stoppage
or any legal or governmental proceeding, which loss or interference, in
the sole judgment of the Initial Purchasers, has had or has a Material
Adverse Effect, or (y) there shall have been, in the sole judgment of
the Initial Purchasers, any event or development that, individually or
in the aggregate, has or could be reasonably likely to have a Material
Adverse Effect (including, without limitation, a change in control of
the Company), except in each case as described in the Final Memorandum
(exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ National Market
shall have been suspended or maximum or minimum prices shall have been
established on any such exchange or market;
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(iii) a banking moratorium shall have been declared by New York
or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency or (C) any material change in the financial
markets of the United States that, in the case of (A), (B) or (C) above
and in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the
delivery of the Securities as contemplated by the Final Memorandum; or
(v) any securities of the Company shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(n) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. Information Supplied by the Initial Purchasers. The statements set
forth in the last paragraph of the cover page of the Final Memorandum, the first
paragraph on page (i) and the third, fifth, sixth and seventh paragraphs of the
section entitled "Private Placement" constitute the only information furnished
by the Initial Purchasers to the Company for the purposes of Sections 2(a) and 9
hereof.
13. Notices. All communications hereunder shall be in writing and, if
sent to the Initial Purchasers, shall be mailed or delivered or telecopied and
confirmed in writing to BT Alex. ▇▇▇▇▇ Incorporated, One Bankers Trust Plaza,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance
Department, and if sent to the Company, shall be mailed, delivered or telecopied
and confirmed in writing to the Company at American Business Information, Inc.,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇▇:
Chief Executive Officer.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Company and their respective
successors, assigns and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the Initial Purchasers, the Company and their respective successors,
assigns and legal representatives and for the benefit of no other person except
that (i) the indemnities of
29
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the Company contained in Section 9 of this Agreement shall also be for the
benefit of the affiliates, directors, officers, agents, representatives and
employees of the Initial Purchasers and any person or persons who control any of
the Initial Purchasers within the meaning of Section 15 of the Act or Section 20
of the Exchange Act and (ii) the indemnities of the Initial Purchasers contained
in Section 9 of this Agreement shall also be for the benefit of the affiliates,
directors, officers, agents, representatives and employees of the Company and
any person or persons who control the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act. No purchaser of any of the
Securities from the Initial Purchasers will be deemed a successor because of
such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
30
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company and
the Initial Purchasers.
Very truly yours,
AMERICAN BUSINESS INFORMATION, INC.
By:
------------------------------
Name:
Title:
31
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The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
BT ALEX. ▇▇▇▇▇ INCORPORATED
By:
Name:
Title:
▇▇▇▇▇▇▇, SACHS & CO.
By:
Name:
Title:
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
By:
Name:
Title:
32
SCHEDULE I
Principal Amount of
Initial Purchaser Securities To Be Purchased
----------------- --------------------------
BT Alex. ▇▇▇▇▇ Incorporated .............. $ 69,000,000
▇▇▇▇▇▇▇, Sachs & Co. ..................... $ 34,500,000
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC .................... $ 11,500,000
Total ............................ $115,000,000
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