Exhibit 1.1
$175,000,000
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ FLOORCOVERINGS, INC.
9 3/4% SENIOR SUBORDINATED NOTES DUE 2010
PURCHASE AGREEMENT
February 14, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION,
BANC OF AMERICA SECURITIES LLC,
BNP PARIBAS SECURITIES CORP.
FIRST UNION SECURITIES, INC.
FLEET SECURITIES, INC.
As Representatives of the Several Purchasers,
c/o Credit Suisse First Boston Corporation,
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
1. INTRODUCTORY. ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Floorcoverings, Inc., a Delaware
corporation (the "COMPANY"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several initial purchasers named in
Schedule A hereto (the "PURCHASERS") U.S.$175,000,000 principal amount of its
9 3/4% Senior Subordinated Notes Due 2010 (the "OFFERED SECURITIES"). The
Offered Securities will be unconditionally guaranteed (each, a "GUARANTY") on a
senior subordinated basis by each of the Company's subsidiaries listed on
Schedule B hereto (the "GUARANTORS"). The Offered Securities and the Guaranties
will be issued under an indenture, dated as of February 15, 2002 (the
"INDENTURE"), between the Company, the Guarantors and The Bank of New York, as
Trustee. The United States Securities Act of 1933 is herein referred to as the
"SECURITIES ACT".
Holders (including subsequent transferees) of the Offered Securities
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date (as defined
below), in substantially the form of Exhibit I hereto, for so long as such
Offered Securities constitute "TRANSFER RESTRICTED SECURITIES" (as defined in
the Registration Rights Agreement). Pursuant to the Registration Rights
Agreement, the Company and the Guarantors will agree to file with the Securities
and Exchange Commission (the "COMMISSION") under the circumstances set forth
therein, (i) a registration statement under the Securities Act (the "EXCHANGE
OFFER REGISTRATION STATEMENT") relating to the Company's 9 3/4% Senior
Subordinated Notes in a like aggregate principal amount as the Offered
Securities issued by the Company under the Indenture, identical in all material
respects to the Initial Securities (as defined in the Registration Rights
Agreement) and registered under the Securities Act (the "EXCHANGE SECURITIES"),
to be offered in exchange for the Offered Securities (such offer to exchange
being referred to as the "EXCHANGE OFFER") and the Guaranties thereof and
(ii) a shelf registration statement pursuant to Rule 415 under the Securities
Act (the "SHELF REGISTRATION STATEMENT" and, together with the Exchange Offer
Registration Statement, the "REGISTRATION STATEMENTS") relating to the resale by
certain holders of the Offered Securities and to use their reasonable best
efforts to cause such Registration Statements to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. The Offered Securities and the
Exchange Securities are referred to collectively as the "SECURITIES".
The Company and the Guarantors hereby agree with the several Purchasers
as follows:
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS. The
Company and the Guarantors represent and warrant to, and agree with, the several
Purchasers that:
(a) A preliminary offering circular and an offering circular
relating to the Offered Securities to be offered by the Purchasers have
been prepared by the Company. Such preliminary offering circular (the
"PRELIMINARY OFFERING CIRCULAR") and offering circular (the "OFFERING
CIRCULAR"), as supplemented as of the date of this Agreement are
hereinafter collectively referred to as the "OFFERING DOCUMENT". On the
date of this Agreement, the Offering Document does not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the Offering
Document based upon written information furnished to the Company by any
Purchaser through Credit Suisse First Boston Corporation ("CSFBC")
specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 7(b) hereof.
(b) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the jurisdiction of its
state of incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Offering
Document. The Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified and in
good standing would not reasonably be expected to result, individually
or in aggregate, in a material adverse effect on the prospects,
financial condition, business, properties or results of operations of
the Company and its subsidiaries taken as a whole (A "MATERIAL ADVERSE
EFFECT").
(c) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation (to the extent such concept exists in
that jurisdiction), with corporate power and authority to own its
properties and conduct its business as described in the Offering
Document; and each subsidiary of the Company is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct
of its business requires such qualification, except where the failure to
be so qualified would not reasonably be expected to have a Material
Adverse Effect. All of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and validly issued
and is fully paid and nonassessable; and the capital stock of each
subsidiary owned by the Company, directly or through subsidiaries, is
owned free from liens, encumbrances and defects, except for liens and
encumbrances created by or under the Senior Credit Facility (as defined
in the Offering Document).
(d) The entities listed on Schedule C hereto are the only
subsidiaries, direct or indirect, of the Company.
(e) The Indenture has been duly authorized by the Company and
the Guarantors; the Offered Securities have been duly authorized by the
Company; the Guaranties have been duly authorized by the Guarantors; and
when the Offered Securities are delivered and paid for pursuant to this
Agreement on the Closing Date (as defined below), the Indenture will
have been duly executed and delivered by the Company and the Guarantors,
such Offered Securities will have been duly executed, authenticated,
issued and delivered and will conform in all material respects to the
description thereof contained in the Offering Document and the Indenture
and such Offered Securities and Guaranties will constitute valid and
legally binding obligations of the Company and the Guarantors,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors rights
and to general equity principles.
(f) On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of
1939, as amended (the "TRUST INDENTURE ACT"), and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder.
(g) The Guaranty to be endorsed on the Offered Securities by
each Guarantor has been duly authorized by such Guarantor, and has been
duly executed and delivered by each such Guarantor and
conforms in all material respects to the description thereof contained
in the Offering Document. When the Offered Securities have been issued,
executed and authenticated in accordance with the Indenture and
delivered to and paid for by the Purchasers in accordance with the terms
of this Agreement, the Guaranty of each Guarantor endorsed thereon will
constitute valid and legally binding obligations of such Guarantor,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(h) On the Closing Date, the Exchange Securities will have been
duly authorized by the Company and the Guarantors; and when the Exchange
Securities are issued, executed and authenticated in accordance with the
terms of the Exchange Offer and the Indenture, the Exchange Securities
will be entitled to the benefits of the Indenture and will be the valid
and legally binding obligations of the Company and the Guarantors,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(i) The Guaranty to be endorsed on the Exchange Securities by
each Guarantor has been duly authorized by such Guarantor; and, when
issued, will have been duly executed and delivered by each such
Guarantor and will conform in all material respects to the description
thereof contained in the Offering Document. When the Exchange Securities
have been issued, executed and authenticated in accordance with the
terms of the Exchange Offer and the Indenture, the Guaranty of each
Guarantor endorsed thereon will constitute valid and legally binding
obligations of such Guarantor, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(j) The Registration Rights Agreement has been duly authorized
by the Company and each of the Guarantors and, on the Closing Date, will
have been duly executed and delivered by the Company and each of the
Guarantors. When the Registration Rights Agreement has been duly
executed and delivered, the Registration Rights Agreement will be a
valid and binding agreement of the Company and each of the Guarantors,
enforceable against the Company and each Guarantor in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles or to public policy considerations which could limit rights
to indemnity and contribution. On the Closing Date, the Registration
Rights Agreement will conform in all material respects as to legal
matters to the description thereof in the Offering Circular.
(k) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between the Company or any
Guarantor and any person that would give rise to a valid claim against
the Company, such Guarantor or any Purchaser for a brokerage commission,
finder's fee or other like payment.
(l) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective charter or by-laws or (ii) in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, except for in the
case of clause (ii) such defaults that would not reasonably be expected
to have a Material Adverse Effect.
(m) There are no contracts, agreements or understandings between
the Company or any Guarantor and any person granting such person the
right to require the Company or such Guarantor to file a registration
statement under the Securities Act with respect to any securities of the
Company or such Guarantor other than as described in the Offering
Circular or to require the Company or such Guarantor to include such
securities with the Securities and Guaranties registered pursuant to any
Registration Statement.
(n) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement and the
Registration Rights Agreement in connection with the issuance and sale
of the Offered Securities by the
Company and the Guarantors, except (i) for the order of the Commission
declaring the Exchange Offer Registration Statement or the Shelf
Registration Statement (each as defined in the Registration Rights
Agreement) effective, (ii) in connection with the qualification of the
Indenture under the Trust Indenture Act in connection with the filing of
the Registration Statements and (iii) pursuant to state securities or
"Blue Sky" laws in connection with the purchase and resale of the
Offered Securities by the Purchasers.
(o) The execution, delivery and performance by the Company and
the Guarantors of the Indenture, this Agreement and the Registration
Rights Agreement, and the issuance and sale of the Offered Securities
and compliance with the terms and provisions thereof will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any subsidiary of the Company or
any of their properties, or any agreement or instrument to which the
Company or any such subsidiary is a party or by which the Company or any
such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or by-laws of
the Company or any such subsidiary, except breaches, violations or
defaults as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, and the Company has full
power and authority to authorize, issue and sell the Offered Securities
as contemplated by this Agreement.
(p) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors.
(q) Except as disclosed in the Offering Document, the Company
and its subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each
case free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made or to
be made thereof by them; and except as disclosed in the Offering
Document, Holdings and the Company and its subsidiaries hold any leased
real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to be
made thereof by them.
(r) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or any of its subsidiaries,
would reasonably be expected to, individually or in the aggregate, have
a Material Adverse Effect.
(s) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
would reasonably be expected to have a Material Adverse Effect.
(t) The Company and its subsidiaries own, possess or can acquire
on reasonable terms, adequate trademarks, trade names and other rights
to inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "INTELLECTUAL PROPERTY
RIGHTS") necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect
to any intellectual property rights that, if determined adversely to the
Company or any of its subsidiaries, would reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect.
(u) Except as disclosed in the Offering Document, none of
Holdings or the Company or any of its subsidiaries is in violation of
any statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "ENVIRONMENTAL LAWS"), owns
or operates any real property contaminated with any substance that is
subject to any environmental laws, is liable for any off-site disposal
or contamination pursuant to any environmental laws, or is subject to
any claim relating to any environmental laws, which violation,
contamination, liability or claim would reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect; and
the Company is not aware of any pending investigation which might lead
to such a claim.
(v) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Company,
any of the Company's subsidiaries or any of their respective properties
that, if determined adversely to the Company or any of its subsidiaries,
would reasonably be expected to, individually or in the aggregate, have
a Material Adverse Effect, or would materially and adversely affect the
ability of the Company or the Guarantors to perform its obligations
under the Indenture, this Agreement or the Registration Rights
Agreement, or which are otherwise material in the context of the sale of
the Offered Securities; and no such actions, suits or proceedings are
threatened or, to the Company's knowledge, contemplated.
(w) The financial statements included in the Offering Document,
together with all related notes, present fairly the financial position
of the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown,
and, except as otherwise disclosed in the Offering Document, such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a
consistent basis; and the assumptions used in preparing the pro forma
financial statements included in the Offering Document provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(x) Except as disclosed in the Offering Document, since the date
of the latest audited financial statements included in the Offering
Document there has been no material adverse change, nor any development
or event involving a prospective material adverse change, in the
financial condition, business, properties or results of operations of
the Company and its subsidiaries taken as a whole, and, except as
disclosed in or contemplated by the Offering Document, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(y) Neither the Company nor any Guarantor is an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the
United States Investment Company Act of 1940 (the "INVESTMENT COMPANY
ACT"); and neither the Company nor any Guarantor is and, after giving
effect to the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the Offering
Document, will be an "investment company" as defined in the Investment
Company Act.
(z) Neither the Company nor any of its subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them
will take, any action that might cause this Agreement or the issuance or
sale of the Offered Securities to violate Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System.
(aa) No "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act (i) has imposed (or has informed the Company or any
Guarantor that it is considering imposing) any condition (financial or
otherwise) on the Company's or any Guarantor's retaining any rating
assigned to the Company or any Guarantor, any securities of the Company
or any Guarantor or (ii) has indicated to the Company or any Guarantor
that it is considering (a) the DOWNGRADING, suspension, or withdrawal
of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any
change in the outlook for any rating of the Company, any Guarantor or
any securities of the Company or any Guarantor.
(bb) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Offered Securities are
listed on any national securities exchange registered under Section 6 of
the United States Securities Exchange Act of 1934 or quoted in a U.S.
automated inter-dealer quotation system.
(cc) Assuming that the representations and warranties by the
Purchasers set forth in Section 4 hereof are true in all material
respects, and assuming compliance in all material respects by the
Purchasers with their covenants set forth in Section 4 hereof, the offer
and sale of the Offered Securities in the manner contemplated by this
Agreement will be exempt from the registration requirements of the
Securities Act by reason of Section 4(2) thereof and Regulation S
thereunder ("REGULATION S"), and it is not necessary to
qualify an indenture in respect of the Offered Securities under the
United States Trust Indenture Act of 1939, as amended (the "TRUST
INDENTURE ACT").
(dd) None of the Company, nor any of their affiliates, nor any
person acting on its or their behalf (i) has, within the six-month
period prior to the date hereof, offered or sold in the United States or
to any U.S. person (as such terms are defined in Regulation S) the
Offered Securities or any security of the same class or series as the
Offered Securities or (ii) has offered or will offer or sell the Offered
Securities (A) in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act (including, but not limited to, articles,
notices or other communications published in any newspaper, magazine, or
similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or
general advertising) or (B) with respect to any such securities sold in
reliance on Rule 903 of Regulation S under the Securities Act, by means
of any directed selling efforts within the meaning of Rule 902(c) of
Regulation S. The Company, its affiliates and any person acting on its
or their behalf have complied and will comply with the offering
restrictions requirement of Regulation S. None of the Company or any of
its subsidiaries has entered, and none of the Company or any of its
subsidiaries will enter, into any contractual arrangement with respect
to the distribution of the Offered Securities except for this Agreement.
(ee) The sale of the Offered Securities pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of
the Securities Act.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Purchasers, and the Purchasers agree, severally and not jointly, to purchase
from the Company, at a purchase price of 97% of the principal amount thereof
plus accrued interest from February 20, 2002 to the Closing Date (as hereinafter
defined), the respective principal amounts of the Offered Securities set forth
opposite the names of the several Purchasers in Schedule A hereto.
The Company will deliver against payment of the purchase price the
Offered Securities to be offered and sold by the Purchasers in reliance on
Regulation S (the "REGULATION S SECURITIES") in the form of one or more
permanent global Securities in registered form without interest coupons (the
"OFFERED REGULATION S GLOBAL SECURITIES") which will be deposited with the
Trustee as custodian for The Depository Trust Company ("DTC") for the respective
accounts of the DTC participants for Euroclear Bank S.A./N.V,. as operator of
the Euroclear System ("EUROCLEAR"), and Clearstream Banking, societe anonyme
("CLEARSTREAM, LUXEMBOURG") and registered in the name of Cede & Co., as nominee
for DTC. The Company will deliver against payment of the purchase price the
Offered Securities to be purchased by each Purchaser hereunder and to be offered
and sold by each Purchaser in reliance on Rule 144A under the Securities Act
(the "144A SECURITIES") in the form of one permanent global security in
definitive form without interest coupons (the "RESTRICTED GLOBAL SECURITIES")
deposited with the Trustee as custodian for DTC and registered in the name of
Cede & Co., as nominee for DTC. The Regulation S Global Securities and the
Restricted Global Securities shall be assigned separate CUSIP numbers. The
Restricted Global Securities shall include the legend regarding restrictions on
transfer set forth under "Transfer Restrictions" in the Offering Document. Until
the termination of the restricted period (as defined in Regulation S) with
respect to the offering of the Offered Securities, interests in the Regulation S
Global Securities may only be held by the DTC participants for Euroclear and
Clearstream, Luxembourg. Interests in any permanent global Securities will be
held only in book-entry form through Euroclear, Clearstream, Luxembourg or DTC,
as the case may be, except in the limited circumstances described in the
Offering Document.
Payment for the Regulation S Securities and the 144A Securities shall be
made by the Purchasers in Federal (same day) funds by official check or checks
or wire transfer to an account at a bank acceptable to CSFBC drawn to the order
of the Company at the office of Cravath, Swaine & ▇▇▇▇▇ at 9:00 A.M., (New York
time), on February 20, 2002, or at such other time not later than seven full
business days thereafter as CSFBC and the Company determine, such time being
herein referred to as the "Closing Date", against delivery to the Trustee as
custodian for DTC of (i) the Regulation S Global Securities representing all of
the Regulation S Securities for the respective accounts of the DTC participants
for Euroclear and Clearstream, Luxembourg and (ii) the Restricted Global
Securities representing all of the Offered 144A Securities. The Regulation S
Global Securities and the Restricted Global Securities will be made available
for checking at the office of Cravath, Swaine & ▇▇▇▇▇ at least 24 hours prior to
the Closing Date.
4. REPRESENTATIONS BY PURCHASERS; RESALE BY PURCHASERS. (a) Each
Purchaser severally represents and warrants to the Company and each Guarantor
that it is an "accredited investor" within the meaning of Regulation D under the
Securities Act.
(b) Each Purchaser severally acknowledges that the Offered
Securities have not been registered under the Securities Act and may not
be offered or sold within the United States except pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. Each Purchaser severally represents
and agrees that it has not offered or sold, and will not offer or sell,
any Offered Securities constituting part of its allotment within the
United States, except in accordance with Rule 903 or Rule 144A under the
Securities Act. Accordingly, neither such Purchaser nor its affiliates,
nor any persons acting on its or their behalf, have engaged or will
engage in any directed selling efforts with respect to the Offered
Securities. Terms used in this subsection (b) have the meanings given to
them by Regulation S.
(c) Each Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for any such arrangements with the other Purchasers or affiliates
of the other Purchasers with the prior written consent of the Company.
(d) Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United
States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation or
general advertising. Each Purchaser severally agrees, with respect to
resales made in reliance on Rule 144A of any of the Offered Securities,
to deliver either with the confirmation of such resale or otherwise
prior to settlement of such resale a notice to the effect that the
resale of such Offered Securities has been made in reliance upon the
exemption from the registration requirements of the Securities Act
provided by Rule 144A.
(e) Each of the Purchasers severally represents and agrees that
(i) it has not offered or sold and prior to the date six months after
the date of issue of the Offered Securities will not offer or sell any
Offered Securities to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted
and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995;
(ii) it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to
engage in investment activity (within the meaning of Section 21 of the
Financial Services and Markets Act 2000 (the "FSMA")) received by it in
connection with the issue or sale of any Offered Securities in
circumstances in which Section 21(1) of the FSMA does not apply to the
Issuer or any Guarantor; and (iii) it has complied and will comply with
all applicable provisions of the FSMA with respect to anything done by
it in relation to the Offered Securities in, from or otherwise involving
the United Kingdom.
5. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Purchasers that:
(a) The Company will advise CSFBC promptly of any proposal to
amend or supplement the Offering Circular and will not effect such
amendment or supplementation without CSFBC's consent (which consent
shall not be unreasonably witheld). If, at any time prior to the
completion of the resale of the Offered Securities by the Purchasers,
any event occurs as a result of which the Offering Circular as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, the Company promptly will notify CSFBC of
such event and promptly will prepare, at its own expense, an amendment
or supplement which will correct such statement or omission. Neither
CSFBC's consent to, nor the Purchasers' delivery to offerees or
investors of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 6.
(b) The Company will furnish to CSFBC copies of any preliminary
offering circular, the Offering Circular and all amendments and
supplements to such documents, in each case as soon as available and in
such quantities as CSFBC requests, and the Company will furnish to CSFBC
on the Closing Date dated as of the date hereof three copies of the
Offering Circular signed by a duly authorized officer of the Company,
one of which will include the independent accountants' reports therein
manually signed by such independent accountants. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, the
Company will promptly furnish or cause to be furnished to CSFBC (and,
upon request, to each of the other Purchasers) and, upon request of
holders and prospective purchasers of the Offered Securities, to such
holders and purchasers, copies of the information required to be
delivered to holders and prospective purchasers of the Offered
Securities pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) in order to permit compliance with Rule
144A in connection with resales by such holders of the Offered
Securities. The Company will pay the expenses of printing and
distributing to the Purchasers all such documents.
(c) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility
for investment under the laws of such jurisdictions in the United States
and Canada as CSFBC designates and will continue such qualifications in
effect so long as required for the resale of the Offered Securities by
the Purchasers, provided that the Company will not be required to
qualify as a foreign corporation or to file a general consent to service
of process in any such state or subject itself to taxation in respect of
doing business in any jurisdiction where it is not then so subject.
(d) During the period of five years hereafter, the Company will
furnish to CSFBC and, upon request, to each of the other Purchasers, as
soon as practicable after the end of each fiscal year, a copy of its
annual report to stockholders for such year; and the Company will
furnish to CSFBC and, upon request, to each of the other Purchasers
(i) as soon as available, a copy of each report and any definitive proxy
statement of the Company filed with the Commission under the Exchange
Act or mailed to stockholders, unless such document is publicly
available, and (ii) from time to time, such other information concerning
the Company as CSFBC may reasonably request.
(e) During the period of two years after the Closing Date, the
Company will, upon request, furnish to CSFBC, each of the other
Purchasers and any holder of Offered Securities a copy of the
restrictions on transfer applicable to the Offered Securities.
(f) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined
in Rule 144 under the Securities Act) to, resell any of the Offered
Securities that have been reacquired by any of them.
(g) During the period of two years after the Closing Date,
neither the Company nor any Guarantor will be or become, an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act.
(h) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement, the Indenture and
the Registration Rights Agreement, including (i) the fees and expenses
of the Trustee and its professional advisers; (ii) all expenses in
connection with the preparation, execution, issue, authentication,
packaging and initial delivery of the Offered Securities and, as
applicable, the Exchange Securities (as defined in the Registration
Rights Agreement) and the printing of this Agreement, the Registration
Rights Agreement, the Offered Securities, the Indenture, the Offering
Document and amendments and supplements thereto, and any other document
relating to the issuance, offer, sale and delivery of the Offered
Securities and, as applicable, the Exchange Securities; (iii) the cost
of listing the Offered Securities and qualifying the Offered Securities
for trading in The Portal-SM- Market ("PORTAL") and any expenses
incidental thereto; (iv) the cost of any advertising approved by the
Company in connection with the issue of the Offered Securities; (v) any
expenses (including reasonable fees and disbursements of counsel)
incurred in connection with qualification of the Offered Securities or
the Exchange Securities for sale under the laws of such jurisdictions as
CSFBC designates and the printing of memoranda relating thereto;
(vi) any fees charged by investment rating agencies for the rating of
the Securities or the Exchange Securities; and (vii) any expenses
incurred in distributing preliminary offering circulars and the Offering
Document (including any amendments and supplements thereto) to the
Purchasers. The Company will also pay or reimburse the Purchasers (to
the extent incurred by them) for (x)
all travel expenses of the Company's officers and employees and any
other expenses of the Company in connection with attending or hosting
meetings with prospective purchasers of the Offered Securities from the
Purchasers and (y) all travel expenses and any other expenses of the
Purchasers in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities from the Purchasers;
PROVIDED, HOWEVER, that the Purchasers will not be paid or reimbursed
for their hotel expenses. It is understood that the only fees and
expenses of counsel to the Purchasers to be paid by the Company shall be
pursuant to the foregoing clause (v).
(i) In connection with the offering, until CSFBC shall have
notified the Company and the other Purchasers of the completion of the
resale of the Offered Securities, neither the Company nor any of its
affiliates has or will, either alone or with one or more other persons,
bid for or purchase for any account in which it or any of its affiliates
has a beneficial interest any Offered Securities or attempt to induce
any person to purchase any Offered Securities; and neither it nor any of
its affiliates will make bids or purchases for the purpose of creating
actual, or apparent, active trading in, or of raising the price of, the
Offered Securities.
(j) For a period of 90 days after the date of the initial
offering of the Offered Securities by the Purchasers, none of the
Company or any of the Company's subsidiaries will offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, or file
with the Commission a registration statement under the Securities Act
relating to, any United States dollar denominated debt securities (which
does not include borrowings under the Company's senior credit facility)
issued or guaranteed by the Company or any of the Company's subsidiaries
and having a maturity of more than one year from the date of issue, or
publicly disclose its intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of CSFBC, other
than debt securities delivered as consideration to a seller as part of
one or more acquisitions. None of the Company or any of the Company's
subsidiaries will at any time offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, pledge, contract or disposition
would cause the exemption afforded by Section 4(2) of the Securities Act
or the safe harbor of Regulation S thereunder to cease to be applicable
to the offer and sale of the Offered Securities.
6. CONDITIONS OF THE OBLIGATIONS OF THE PURCHASERS. The obligations of
the several Purchasers to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Company and the Guarantors herein, to the accuracy of the statements of officers
of the Company and the Guarantors made pursuant to the provisions hereof, to the
performance by the Company and each Guarantor of its obligations hereunder and
to the following additional conditions precedent:
(a) The Purchasers shall have received a customary "comfort
letter", dated the date of this Agreement, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP in
form and substance satisfactory to the Purchasers concerning the
financial information with respect to the Company set forth in the
Offering Document.
(b) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the prospects, financial
condition, business, properties or results of operations of the Company
and its subsidiaries taken as a whole which, in the reasonable judgment
of a majority in interest of the Purchasers including CSFBC, is material
and adverse and makes it impractical or inadvisable to proceed with
completion of the offering or the sale of and payment for the Offered
Securities; (ii) any downgrading in the rating of any debt securities or
preferred stock of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Securities Act), or any public announcement that any such organization
has under surveillance or review its rating of any debt securities or
preferred stock of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating) or any announcement that the Company has
been placed on negative outlook; (iii) any change in U.S. or
international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of a
majority in interest of the Purchasers including CSFBC, be likely to
prejudice materially the success of the proposed issue, sale or
distribution of the Offered Securities, whether in the primary market or
in respect of dealings in the secondary market, (iv) any material
suspension or material limitation of trading in securities generally on
the New York Stock Exchange, or any setting of minimum prices for
trading on such exchange, or any suspension of trading of any securities
of the Company on any exchange or in the over-
the-counter market; (v) any banking moratorium declared by U.S. Federal
or New York authorities; (vi) any major disruption of settlements of
securities or clearance services in the United States or (vii) any
attack on, outbreak or escalation of hostilities or act of terrorism
involving the United States, any declaration of war by Congress or any
other national or international calamity or emergency if, in the
judgment of a majority in interest of the Purchasers including CSFBC,
the effect of any such attack, outbreak, escalation, act, declaration,
calamity or emergency makes it impractical or inadvisable to proceed
with completion of the offering or sale of and payment for the Offered
Securities.
(c) The Purchasers shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company and the
Guarantors substantially in the form attached hereto as EXHIBIT A.
(d) The Purchasers shall have received from Cravath, Swaine &
▇▇▇▇▇, counsel for the Purchasers, such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities, the Offering Circular, the exemption
from registration for the offer and sale of the Offered Securities by
the Company to the several Purchasers and the resales by the several
Purchasers as contemplated hereby and other related matters as CSFBC may
require, and the Company shall have furnished to such counsel such
documents as it reasonably requests for the purpose of enabling it to
pass upon such matters.
(e) The Purchasers shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company and the Guarantors in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
the Company and the Guarantors in this Agreement are true and correct,
that the Company and the Guarantors have in complied all material
respects with all agreements and satisfied all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date, and
that, subsequent to the date of the most recent financial statements in
the Offering Document there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in
the financial condition, business, properties or results of operations
of the Company and its subsidiaries taken as a whole except as set forth
in or contemplated by the Offering Circular or as described in such
certificate.
(f) The Purchasers shall have received a letter, dated the
Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three days prior to
the Closing Date for the purposes of this subsection.
The Company and the Guarantors will furnish the Purchasers with such
conformed copies of such opinions, certificates, letters and documents as the
Purchasers reasonably request. CSFBC may in its sole discretion waive on behalf
of the Purchasers compliance with any conditions to the obligations of the
Purchasers hereunder.
7. INDEMNIFICATION AND CONTRIBUTION. (a) Each of the Company and the
Guarantors will indemnify and hold harmless each Purchaser, its partners,
directors and officers, employees, agents and advisers and each person, if any,
who controls such Purchaser within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which such Purchaser may become subject, under the Securities Act or 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 any
breach of any of the representations and warranties of the Company or the
Guarantors contained herein or any untrue statement or alleged untrue statement
of any material fact contained in the Offering Circular, or any amendment or
supplement thereto, or any related preliminary offering circular, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, including any
losses, claims, damages or liabilities arising out of or based upon the
Company's failure to perform its obligations under Section 5(a) of this
Agreement, and will reimburse each Purchaser for any legal or other expenses
reasonably incurred by such Purchaser in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company and the Guarantors will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through CSFBC specifically for use therein, it being
understood and agreed that the only such information consists of the information
described as such in subsection (b) below; provided further that with respect to
any such untrue statement in or omission from the Prelimary Offering Circular,
the indemnity agreement contained in this Section 7(a) shall not inure to the
benefit of any such Purchaser to the extent that the sale to the person
asserting any such loss, claim, damage, liability or action was an initial
resale by such Purchaser and any such loss, claim, damage, liability or action
of or with respect to such Purchaser results from the fact that to the extent
required by applicable law, a copy of the Offering Circular was not sent or
given to such person at or prior to the written confirmation of the sale of such
Securities to such person, (provided that the Company had previously furnished
the requisite number of copies on a timely basis to such Purchaser) and the
loss, liability, claim, damage or action of such Purchaser results from an
untrue statement or omission of a material fact contained in the Preliminary
Offering Circular which was corrected in the Offering Circular.
(b) Each Purchaser will severally and not jointly indemnify and
hold harmless the Company and the Guarantors, their respective directors
and officers, employees, agents and advisers and each person, if any,
who controls the Company or the Guarantors within the meaning of Section
15 of the Securities Act, against any losses, claims, damages or
liabilities to which the Company or the Guarantors may become subject,
under the Securities Act or 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 any untrue statement or alleged
untrue statement of any material fact contained in the Offering
Circular, or any amendment or supplement thereto, or any related
preliminary offering circular, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, 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 furnished to
the Company by such Purchaser through CSFBC specifically for use
therein, and will reimburse any legal or other expenses reasonably
incurred by the Company or such Guarantor in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, it being understood and agreed
that the only such information furnished by any Purchaser consists of
the information as indicated by the circled paragraphs marked "A" with
respect to all Purchasers, "B" with respect to Credit Suisse First
Boston Corporation, "C" with respect to Banc of America Securities LLC,
"D" with respect to BNP Paribas Securities Corp., "E" with respect to
Fleet Securities, Inc. and "F" with respect to First Union Securities,
Inc., of the "Plan of Distribution" caption in the Offering Circular on
EXHIBIT B attached hereto, provided, however, that the Purchasers shall
not be liable for any losses, claims, damages or liabilities arising out
of or based upon the Company's failure to perform its obligations under
Section 5(a) of this Agreement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
subsection (a) or (b) above under and to the extent of any losses
suffered as a result of such failure. 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 satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation. In no event shall an
indemnifying party be liable for fees and expenses of more than one
counsel (in addition to any local counsel), separate from its 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. After such
notice from the indemnifying party to the indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of any action effected by such indemnified party without the
prior written consent of the indemnifying party (which consent shall not
be unreasonably withheld or delayed), unless such indemnified party
waived its rights in writing under this Section 7, in which case the
indemnified party may effect such settlement without such consent. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a
party and indemnity could have been
sought hereunder by such indemnified party unless such settlement
(i) includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and
(ii) does not include a statement as to or an admission of fault,
culpability or failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Guarantors
on the one hand and the Purchasers on the other from the offering of the
Offered Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the
Guarantors on the one hand and the Purchasers on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Guarantors on the one hand and the Purchasers on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the
total discounts and commissions received by the Purchasers from the
Company under this Agreement. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company and
the Guarantors or the Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred
to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by
which the total discounts, fees and commissions received by such
Purchaser exceeds the amount of any damages which such Purchaser has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchasers'
obligations in this subsection (d) to contribute are several in
proportion to their respective purchase obligations and not joint.
Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) The obligations of the Company and the Guarantors under this
Section shall be in addition to any liability which the Company or the
Guarantors may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Purchaser within
the meaning of the Securities Act or the Exchange Act; and the
obligations of the Purchasers under this Section shall be in addition to
any liability which the respective Purchasers may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls the Company and the Guarantors within the meaning of
the Securities Act or the Exchange Act.
8. DEFAULT OF PURCHASERS. If any Purchaser or Purchasers default in
their obligations to purchase Offered Securities hereunder and the aggregate
principal amount of Offered Securities that such defaulting Purchaser or
Purchasers agreed but failed to purchase does not exceed 10% of the total
principal amount of Offered Securities, CSFBC may make arrangements satisfactory
to the Company for the purchase of such Offered Securities by other persons,
including any of the Purchasers, but if no such arrangements are made by the
Closing Date, the non-defaulting Purchasers shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Offered
Securities that such defaulting Purchasers agreed but failed to purchase. If any
Purchaser or Purchasers so default and the aggregate principal amount of Offered
Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Offered Securities and arrangements satisfactory
to CSFBC and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Purchaser or the
Company, except as provided in Section 9. As used in this Agreement, the term
"Purchaser" includes any person substituted for a Purchaser under this Section.
Nothing herein will relieve a defaulting Purchaser from liability for its
default.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company and each Guarantor or their respective officers and of the several
Purchasers set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Purchaser, the Company, any
Guarantor or any of their respective representatives, officers or directors or
any controlling person, and will survive delivery of and payment for the Offered
Securities. If this Agreement is terminated pursuant to Section 8 or if for any
reason the purchase of the Offered Securities by the Purchasers is not
consummated, the Company and the Guarantors shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company, the Guarantors and the Purchasers pursuant to
Section 7 shall remain in effect. If the purchase of the Offered Securities by
the Purchasers is not consummated for any reason other than solely because of
the termination of this Agreement pursuant to Section 8 or the occurrence of any
event specified in clause (iii), (iv), (v), (vi) or (vii) of Section 6(b), the
Company and the Guarantors will reimburse the Purchasers for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Offered Securities.
10. NOTICES. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to
the Purchasers, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or,
if sent to the Company and the Guarantors, will be mailed, delivered or
telegraphed and confirmed to it at ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Floorcoverings, Inc.,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: President, with
copies to Oaktree Capital Management, LLC, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.;
provided, however, that any notice to a Purchaser pursuant to Section 7 will be
mailed, delivered or telegraphed and confirmed to such Purchaser.
11. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of Offered Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Company as if such
holders were parties thereto.
12. REPRESENTATION OF PURCHASERS. You will act for the several
Purchasers in connection with this purchase, and any action under this Agreement
taken by you jointly or by CSFBC will be binding upon all the Purchasers.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company and the Guarantors hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company, the Guarantors
and the several Purchasers in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ FLOORCOVERINGS, INC.,
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
MONTEREY CARPETS, INC.,
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
MONTEREY COLOR SYSTEMS, INC.,
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
The foregoing Purchase Agreement is hereby confirmed and accepted as of
the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION,
BANC OF AMERICA SECURITIES LLC,
BNP PARIBAS SECURITIES CORP.
FIRST UNION SECURITIES, INC.
FLEET SECURITIES, INC.
Acting on behalf of themselves and as
the Representatives of the several Purchasers
BY CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director