EXHIBIT 1.1
PURCHASE AGREEMENT, DATED AS OF FEBRUARY 14, 2002, AMONG
AMERICAN ACHIEVEMENT CORPORATION, THE GUARANTORS AND THE
INITIAL PURCHASERS
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AMERICAN ACHIEVEMENT CORPORATION
$ 177,000,000
11-5/8% SENIOR NOTES DUE 2007
PURCHASE AGREEMENT
February 14, 2002
DEUTSCHE BANC ALEX. ▇▇▇▇▇ INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
SCOTIA CAPITAL (USA) INC.
c/o Deutsche Banc Alex. ▇▇▇▇▇ Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
American Achievement Corporation, a Delaware corporation (the
"COMPANY"), and the Company's subsidiaries listed on the signature pages hereof
(collectively, and together with any subsidiary that in the future executes a
supplemental indenture pursuant to which such subsidiary agrees to guarantee the
Notes (as defined below), the "SUBSIDIARY GUARANTORS") hereby confirm their
agreement with you (the "INITIAL PURCHASERS"), as set forth below.
I.1. THE SECURITIES. Subject to the terms and conditions herein contained, the
Company proposes to issue and sell to the Initial Purchasers $177,000,000
aggregate principal amount of its 11-5/8% Senior Notes due 2007, Series A (the
"NOTES"). The Notes will be unconditionally guaranteed (collectively the
"GUARANTEES") on a senior basis by each of the Subsidiary Guarantors. The Notes
and the Guarantees are collectively referred to herein as the "SECURITIES." The
Securities are to be issued under an indenture (the "INDENTURE") to be dated as
of February 20, 2002 by and among the Company, the Subsidiary Guarantors and The
Bank of New York, as Trustee (the "TRUSTEE").
The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"ACT"), in reliance on exemptions therefrom.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum dated January 31, 2002 (the
"PRELIMINARY MEMORANDUM")
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and a final offering memorandum dated February 14, 2002 (the "FINAL MEMORANDUM";
the Preliminary Memorandum and the Final Memorandum each herein being referred
to as a "MEMORANDUM") setting forth or including a description of the terms of
the Notes, the terms of the offering of the Securities, a description of the
Company and its subsidiaries and any material developments relating to the
Company and its subsidiaries occurring after the date of the most recent
historical financial statements included therein.
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 and the
Subsidiary Guarantors have agreed, among other things, to file a registration
statement (the "REGISTRATION STATEMENT") with the Securities and Exchange
Commission (the "COMMISSION") registering the Notes or the Exchange Notes (as
defined in the Registration Rights Agreement) under the Act.
Concurrently with the offering of the Notes, the Company and the
Subsidiary Guarantors will enter into a credit agreement (the "CREDIT
AGREEMENT") with The Bank of Nova Scotia, as administrative agent, and certain
lenders thereto whereby the Company will have available a $40 million revolving
credit facility.
II.2. REPRESENTATIONS AND WARRANTIES. The Company and each of the Subsidiary
Guarantors, jointly and severally, represent to and warrant to and agree with
each of the Initial Purchasers that:
(a) Neither the Preliminary Memorandum as of the date thereof nor the
Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date (as
defined in Section 3 below) contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this Section 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with information relating
to 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) As of the Closing Date the Company will have the authorized,
issued and outstanding capitalization set forth in the Final Memorandum;
all of the subsidiaries of the Company are listed in SCHEDULE 2 attached
hereto (each, a "SUBSIDIARY" and collectively, the "SUBSIDIARIES"); all of
the outstanding shares of capital stock of the Company and 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
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violation of any preemptive or similar rights; as of the Closing Date, all
of the outstanding shares of capital stock of the Company and of each of
the Subsidiaries will be free and clear of all liens, encumbrances,
equities and claims or restrictions on transferability (other than those
imposed by the Act and the securities or "Blue Sky" laws of certain
jurisdictions and those imposed by the Credit Agreement) 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 Subsidiaries
or as disclosed in the Final Memorandum, the Company does not own, directly
or indirectly, any shares of capital stock or any other equity or long-term
debt securities or have any equity interest in any firm, partnership, joint
venture or other entity.
(c) Each of the Company and the Subsidiary Guarantors is duly
incorporated or formed, as the case may be, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation or
formation and has all requisite corporate and/or other requisite 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 as a foreign corporation or
partnership 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
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").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the
Registration Rights Agreement). The Notes, when issued, will be in the form
contemplated by the Indenture. The Notes, the Exchange Notes and the
Private Exchange Notes have each been duly and validly authorized by the
Company and the Subsidiary Guarantors 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 Notes, when delivered to and paid for by
the Initial Purchasers in accordance with the terms of this Agreement, will
constitute valid and legally binding obligations of the Company, entitled
to the benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except that 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.
(e) Each of the Subsidiary Guarantors has all requisite corporate
and/or other requisite power and authority to execute, deliver and perform
each of its obligations under the Guarantees and the guarantees of the
Exchange Notes and the Private Exchange Notes. The Guarantees, when issued,
will be in the form contemplated by the Indenture. The Guarantees and the
guarantees of the Exchange Notes and the Private Exchange Notes have been
duly and validly authorized by each of the Subsidiary Guarantors and, when
executed by each of the Subsidiary Guarantors (and when the Note, the
Exchange Notes or the Private Exchange Notes, as the case may be, are
authenticated by the Trustee in accordance with the provisions of the
Indenture), will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Subsidiary
Guarantors, entitled to the benefits of the Indenture and enforceable
against the Subsidiary Guarantors 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.
(f) Each of the Company and the Subsidiary Guarantors has all
requisite corporate and/or other requisite 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 each of the Subsidiary Guarantors and, when
executed and delivered by the Company and the Subsidiary Guarantors
(assuming the due authorization, execution and delivery by the Trustee),
will constitute a valid and legally binding agreement of the Company and
each of the Subsidiary Guarantors, enforceable against the Company and the
Subsidiary Guarantors in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(g) Each of the Company and the Subsidiary Guarantors 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
each of the Subsidiary Guarantors and, when executed and delivered by the
Company and each of the Subsidiary Guarantors
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(assuming the due authorization, execution and delivery by the Initial
Purchasers), will constitute a valid and legally binding agreement of the
Company enforceable against the Company and each of the Subsidiary
Guarantors 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 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 and (B) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public
policy considerations.
(h) The Credit Agreement has been duly authorized by the Company and
each of the Subsidiary Guarantors and, on the Closing Date, will have been
duly executed and delivered by the Company and each of the Subsidiary
Guarantors. When the Credit Agreement has been duly executed and delivered,
the Credit Agreement will be a valid and binding agreement of the Company
and each of the Subsidiary Guarantors, enforceable against the Company and
each Subsidiary Guarantor 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 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 and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations.
(i) Each of the Company and the Subsidiary Guarantors has all
requisite corporate and/or other requisite 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 and each of the Subsidiary Guarantors of the transactions
contemplated hereby have been duly and validly authorized by the Company
and each of the Subsidiary Guarantors. This Agreement has been duly
executed and delivered by the Company and each of the Subsidiary
Guarantors.
(j) Assuming the accuracy of the representations and warranties of the
Initial Purchasers and compliance by the Initial Purchasers with the
covenants set forth in Section 8 hereof, no consent, approval,
authorization or order of any court or governmental agency or body, or
third party is required for the issuance and sale by the Company of the
Securities to the Initial Purchasers or the consummation by the Company and
the Subsidiary Guarantors of the other transactions contemplated hereby,
except such as have been obtained and such as may be required under state
securities or "Blue Sky" laws in connection with the purchase and resale of
the Securities by the Initial Purchasers. None of the Company or the
Subsidiaries is (i) in
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violation of its certificate of incorporation or bylaws (or similar
organizational documents), (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 that 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 that, 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 any of them or their
respective properties or assets is subject (collectively, "CONTRACTS"),
except for any such breach, default, violation or event that would not,
individually or in the aggregate, have a Material Adverse Effect.
(k) The execution, delivery and performance by the Company and the
Subsidiary Guarantors of this Agreement, the Indenture and the Registration
Rights Agreement and the consummation by the Company and the Subsidiary
Guarantors of the transactions contemplated hereby and thereby (including,
without limitation, the issuance and sale of the Securities to the Initial
Purchasers) will not conflict with or constitute or result in a breach of
or a default under (or an event that with notice or passage of time or both
would constitute a default under) or violation of any of (i) the terms or
provisions of any Contract, except for any such conflict, breach,
violation, default or event that would not, individually or in the
aggregate, have a Material Adverse Effect, (ii) the certificate of
incorporation or bylaws (or similar organizational document) 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 applicable
to the Company or any of the Subsidiaries or any of their respective
properties or assets, except for any such conflict, breach or violation
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(l) The audited consolidated financial statements of the Company and
the Subsidiaries included in the Final Memorandum present fairly in all
material respects the financial position, results of operations and cash
flows of the Company and the Subsidiaries 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. The summary and selected financial and
statistical data in the Final Memorandum present fairly in all material
respects the information shown therein and have been prepared and compiled
on a basis consistent with the audited financial statements included
therein, except as otherwise stated therein. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, KPMG LLP
and ▇▇▇▇▇▇▇▇▇▇, Melvoin
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and ▇▇▇▇▇▇▇ LLP (the "INDEPENDENT ACCOUNTANTS") are independent public
accounting firms within the meaning of the Act and the rules and
regulations promulgated thereunder.
(m) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final
Memorandum (i) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), (ii) have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and (iii) have been properly
computed on the bases described therein; the assumptions used in the
preparation of the pro forma financial data and other 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 to therein.
(n) There is not pending or, to the knowledge of the Company or any of
the Subsidiaries, threatened any action, suit, proceeding, inquiry or
investigation to which the Company or any of the Subsidiaries is a party,
or to which the property or assets of the Company or any of the
Subsidiaries are subject, before or brought by any court, arbitrator or
governmental agency or body that, if determined adversely to the Company or
any of the Subsidiaries, would reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect or that 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.
(o) Each of the Company and the Subsidiaries possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has 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 respective properties and
to carry on its respective businesses 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, reasonably
be expected to 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 that allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other impairment of the rights of the holder of any such
Permit, except where any nonfulfillment or nonperformance would not have a
Material Adverse Effect; and none of the Company or the Subsidiaries has
received any notice of any proceeding relating to revocation or
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modification of any such Permit, except (i) as described in the Final
Memorandum and (ii) where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.
(p) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein, (i) none of the
Company or the Subsidiaries has incurred any liabilities or obligations,
direct or contingent, or entered into or agreed to enter into any
transactions or contracts (written or oral) not in the ordinary course of
business, which liabilities, obligations, transactions or contracts would,
individually or in the aggregate, be material to the business, condition
(financial or otherwise), prospects or results of operations of the
Companies and its Subsidiaries, taken as a whole, (ii) none of the Company
or the Subsidiaries has purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock (other than with respect to any of such Subsidiaries,
the purchase of, or dividend or distribution on, capital stock owned by the
Company), (iii) there has been no material change in the capital stock or
long-term indebtedness of the Company or the Subsidiaries taken as a whole
and (iv) there has been no event, development or occurrence that,
individually or in the aggregate, has or would be reasonably likely to have
a Material Adverse Effect.
(q) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where
the failure to so file such returns would not, individually or in the
aggregate, have a Material Adverse Effect, and has paid all taxes shown as
due thereon; and other than tax deficiencies that the Company or any
Subsidiary is contesting in good faith and for which the Company or such
Subsidiary has provided adequate reserves, there is no tax deficiency that
has been asserted against the Company or any of the Subsidiaries that would
have, individually or in the aggregate, a Material Adverse Effect.
(r) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources that the Company and the
Subsidiaries believe to be reliable and accurate.
(s) None of the Company, 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 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.
(t) Each of the Company and the Subsidiaries has good and marketable
title to all real property and good title to all personal property
described in the Final Memorandum as being owned by it and good and
marketable title to a leasehold estate
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in the real and 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, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. All leases,
contracts and agreements to which the Company or any of the Subsidiaries is
a party or by which any of them is bound are valid and enforceable against
the Company or such Subsidiary, and are valid and enforceable against the
other party or parties thereto and are in full force and effect with only
such exceptions as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. The Company and the
Subsidiaries own or possess 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 them
as described in the Final Memorandum, and none of the Company or the
Subsidiaries has received any notice of infringement of or conflict with
(or knows of any such infringement except where the failure to so own or
possess any of the foregoing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect of or conflict
with) asserted rights of others with respect to any patents, trademarks,
service marks, trade names, copyrights or know-how that, if such assertion
of infringement or conflict were sustained, would reasonably be expected to
have a Material Adverse Effect.
(u) There are no legal or governmental proceedings involving or
affecting the Company or any Subsidiary 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.
(v) Except as set forth in the Final Memorandum or except as would
not, individually or in the aggregate, reasonably be expected to 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 and is in compliance with all Permits required
under any applicable Environmental Laws and each of them is in full force
and effect, (C) there is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for information pending or, to the
knowledge of the Company or any of the Subsidiaries, threatened against the
Company or any of the Subsidiaries under any Environmental Law, (D) no
lien, charge, encumbrance or restriction has
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been recorded under any Environmental Law with respect to any assets,
facility or property owned, operated, leased or controlled by the Company
or any of the Subsidiaries, (E) none of the Company or the Subsidiaries 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 of the Subsidiaries
is (i) listed or proposed for listing on the National Priorities List under
CERCLA or is (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 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, ground water, land surface
or subsurface strata), (ii) the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling of
hazardous materials, and (iii) underground and above ground storage tanks
and related piping, and emissions, discharges, releases or threatened
releases therefrom.
(w) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of the Subsidiaries that is pending or,
to the knowledge of the Company or any of the Subsidiaries, threatened.
(x) Each of the Company and the Subsidiaries carries insurance in such
amounts and covering such risks as is consistent with industry practice to
protect the Company and its Subsidiaries and their respective businesses.
(y) None of the Company or the Subsidiaries 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 that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company or any of the Subsidiaries
makes (or within the preceding six years has made) a contribution and in
which any employee of the Company or of any Subsidiary is or has ever been
a participant. With respect to such plans, the Company and each Subsidiary
is in compliance in all material respects with all applicable provisions of
ERISA.
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(z) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
that 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.
(aa) None of the Company or the Subsidiaries is, or immediately after
the sale of the Notes to be sold hereunder and the application of the
proceeds from such sale (as described in the Final Memorandum under the
caption "Use of Proceeds") will be, an "investment company" 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.
(bb) The Notes, the Guarantees, the Indenture, the Credit Agreement
and the Registration Rights Agreement will conform in all material respects
to the descriptions thereof in the Final Memorandum.
(cc) No holder of securities of the Company or any Subsidiary will be
entitled to have such securities registered under the registration
statements required to be filed by the Company and the Subsidiary
Guarantors pursuant to the Registration Rights Agreement other than as
expressly permitted thereby.
(dd) 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 (on a
consolidated basis) will exceed the sum of its stated liabilities and
identified contingent liabilities; none of the Company or the Subsidiaries
(each on a consolidated basis) is, nor will any of the Company or the
Subsidiaries (each on a consolidated basis) be, after giving effect to the
execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby, (a) left with unreasonably small
capital with which to carry on its business as it is proposed to be
conducted, (b) unable to pay its debts (contingent or otherwise) as they
mature or (c) otherwise insolvent.
(ee) None of the Company, the Subsidiaries or 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) that 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
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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. Assuming the accuracy of the representations and warranties of
the Initial Purchasers and compliance by the Initial Purchasers with the
covenants set forth 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.
(ff) No securities of the Company or any Subsidiary 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.
(gg) None of the Company or the Subsidiaries has taken, nor will any
of them 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.
(hh) None of the Company, the Subsidiaries, any of their respective
Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers) has engaged in any directed selling efforts (as that
term is defined in Regulation S under the Act ("REGULATION S")) with
respect to the Securities; the Company, the Subsidiaries and their
respective Affiliates and any person acting on its or their behalf (other
than the Initial Purchasers) have complied with the offering restrictions
requirement of Regulation S.
Any certificate signed by any officer of the Company or any Subsidiary
and 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.
III.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 the Initial Purchasers, acting
severally and not jointly, agree to purchase the Securities in the respective
amounts set forth on SCHEDULE 1 hereto from the Company at 96.128% of their
principal amount. 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 36 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
-14-
of the purchase price therefor by wire transfer (same day funds), 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 10:00 A.M., New
York time, on February 20, 2002, or at such other place, time or date as the
Initial Purchasers, on the one hand, and the Company, on the other hand, 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 Deutsche Banc Alex. ▇▇▇▇▇ Inc. in New York, New
York, or at such other place as Deutsche Banc Alex. ▇▇▇▇▇ Inc. may designate, at
least 24 hours prior to the Closing Date.
IV.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 judgment of the Initial Purchasers is advisable.
V.5. COVENANTS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS. The Company and
each of the Subsidiary Guarantors 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 shall
not previously have been advised and furnished a copy for a reasonable
period of time prior to the proposed amendment or supplement and as to
which the Initial Purchasers shall not have given their consent. 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 Preliminary Memorandum or the Final Memorandum that may
be necessary or advisable in connection with the resale of the Securities
by the Initial Purchasers.
(b) The Company and the Subsidiary Guarantors 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 qualifications in effect for as long as may be necessary to complete
the resale of the Securities; PROVIDED, HOWEVER, that in connection
therewith, neither the Company nor the Subsidiary Guarantors shall be
required to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction or subject itself to
taxation in excess of $1,000 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 all of the Securities or the Private Exchange Notes,
any event occurs or
-15-
information becomes known as a result of which the Final Memorandum as then
amended or supplemented would include 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, or if for any other reason it is necessary at any time to amend
or supplement the Final Memorandum to comply with applicable law, the
Company will promptly notify the Initial Purchasers thereof and will
prepare, at the expense of the Company, an amendment or supplement to the
Final Memorandum that corrects such statement or omission or effects such
compliance.
(d) The Company will, without charge, promptly 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 as set forth under "Use of Proceeds" in the Final Memorandum.
(f) Until the second anniversary of the Closing Date, 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 to 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 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, a copy of any unaudited
interim financial statements of the Company and the Subsidiaries for any
period subsequent to the period covered by the most recent financial
statements appearing in the Final Memorandum.
(h) None of the Company, the Subsidiaries or any of their 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 which would require
the registration under the Act of the Securities.
(i) The Company will not, and will not permit 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.
-16-
(j) For so long as any of the Securities remain outstanding, the
Company will make available at its expense, 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 as PORTAL-eligible securities in accordance with the rules
and regulations adopted by the National Association of Securities Dealers,
Inc. ("NASD") relating to trading in the NASD's Portal Market (the "PORTAL
MARKET") and (ii) permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(l) In connection with Securities offered and sold in an offshore
transaction (as defined in Regulation S) the Company will not register any
transfer of such Securities not made in accordance with the provisions of
Regulation S and will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Securities in the form of
definitive securities.
VI.6. EXPENSES. The Company and each of the Subsidiary Guarantors, jointly and
severally, agree 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 or 12 hereof, including all costs and expenses incident to (i) the
printing, word processing or other production of documents with respect to the
transactions contemplated hereby, including any costs of printing the
Preliminary Memorandum and the Final Memorandum and any amendment or supplement
thereto, and any "Blue Sky" memoranda, (ii) all arrangements relating to the
delivery to the 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) preparation (including printing),
issuance and delivery to the Initial Purchasers of 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) expenses in connection with the
"roadshow" and any other meetings with prospective investors in the Securities,
(vii) fees and expenses of the Trustee including fees and expenses of counsel,
(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; provided,
however, that except as expressly provided in this Section 6, the Initial
Purchasers shall pay their own costs and expenses, including the costs and
expenses of their counsel. 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
-17-
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 to be
satisfied by the Company and the Guarantors hereunder have been satisfied in
accordance herewith), the Company and the Subsidiary Guarantors, jointly and
severally, agree to promptly reimburse the Initial Purchasers upon demand for
all out-of-pocket expenses (including reasonable fees, disbursements and charges
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchasers) that shall have
been incurred by the Initial Purchasers in connection with the proposed purchase
and sale of the Securities.
VII.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 ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for the Company, in form
and substance reasonably satisfactory to counsel for the Initial
Purchasers, substantially to the effect that:
(i) Each of the Company and the Subsidiary Guarantors, (other
than Educational Communications Inc. ("ECI")), is validly existing and
in good standing under the laws of the State of Delaware and has the
corporate and/or other requisite power and authority to own its
properties and to conduct its business as described in the Final
Memorandum. Each of the Company and the Subsidiary Guarantors is duly
qualified to do business as a foreign corporation or partnership, as
the case may be, in good standing in all jurisdictions set forth
opposite their respective names on a schedule reasonably acceptable to
the Initial Purchasers.
(ii) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum; all of the
outstanding shares of capital stock of the Company and the Subsidiary
Guarantors (other than ECI, ▇▇▇▇▇▇ Publishing Company and ▇▇▇▇▇▇
Production Services, L.P.) have been duly authorized and validly
issued, are fully paid and nonassessable and, to the knowledge of such
counsel, were not issued in violation of any preemptive or similar
rights; except as disclosed in the Final Memorandum, all of the
outstanding shares of capital stock of the Subsidiary Guarantors are
owned of record, directly or indirectly, by the Company, free and
clear of all perfected security interests.
(iii) Except as set forth in the Final Memorandum, to the
knowledge of such counsel (A) no options, warrants or other rights to
purchase from the Company or any Subsidiary Guarantor shares of
capital stock or ownership
-18-
interests in the Company or any Subsidiary Guarantor are outstanding,
(B) no agreements or other obligations to issue, or other rights to
convert, any obligation into, or exchange any securities for, shares
of capital stock or ownership interests in the Company or any
Subsidiary Guarantor are outstanding and (C) no holder of securities
of the Company or any Subsidiary Guarantor is entitled to have such
securities registered under a registration statement filed by the
Company pursuant to the Registration Rights Agreement.
(iv) Each of the Company and the Subsidiary Guarantors (other
than ECI) has all requisite corporate and/or other requisite power and
authority to execute, deliver and perform each of its obligations
under the Indenture, the Notes, the Exchange Notes and the Private
Exchange Notes; the Indenture complies as to form in all material
respects with the requirements of the TIA; the Indenture has been duly
and validly authorized, executed and delivered by the Company and the
Subsidiary Guarantors (other than ECI) and (assuming the due
authorization, execution and delivery thereof by the Trustee)
constitutes the valid and legally binding agreement of each of the
Company and the Subsidiary Guarantors, enforceable against each of the
Company and the Subsidiary Guarantors in accordance with its terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought.
(v) The Notes are in the form contemplated by the Indenture.
The Notes have each been duly and validly authorized, executed and
delivered by the Company, and when paid for by the Initial Purchasers
in accordance with the terms of this Agreement (assuming the due
authorization, execution and delivery of the Indenture by the Trustee
and due authentication and delivery of the Notes by the Trustee in
accordance with the Indenture), will constitute the valid and legally
binding obligations of the Company, entitled to the benefits of the
Indenture, and enforceable against the Company in accordance with
their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) general principles of equity
and the discretion of the court before which any proceeding therefor
may be brought.
-19-
(vi) The Exchange Notes and the Private Exchange Notes have
been duly and validly authorized by the Company, and when the Exchange
Notes and the Private Exchange Notes are duly executed and delivered
by the Company in accordance with the terms of the Registration Rights
Agreement and the Indenture (assuming the due authorization, execution
and delivery of the Indenture by the Trustee and due authentication
and delivery of the Exchange Notes and the Private Exchange Notes by
the Trustee in accordance with the Indenture), will constitute the
valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, 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.
(vii) The Guarantees are in the form contemplated by the
Indenture. (a) The Guarantees have been duly and validly authorized
and executed by each of the Subsidiary Guarantors (other than ECI)
and, when the Notes are authenticated by the Trustee in accordance
with the provisions of the Indenture, the Guarantees and (b) the
guarantees of the Exchange Notes and the Private Exchange Notes have
been duly and validly authorized by each of the Subsidiary Guarantors
(other than ECI) and when duly executed by each of the Subsidiary
Guarantors (and when the Exchange Notes or the Private Exchange Notes,
as the case may be, are authenticated by the Trustee in accordance
with the provisions of the Indenture), in each case (a) and (b), will
have been duly executed, issued and delivered and will constitute
valid and legally binding obligations of the Subsidiary Guarantors,
entitled to the benefits of the Indenture and enforceable against the
Subsidiary Guarantors in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
fraudulent conveyance, 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.
(viii) Each of the Company and the Subsidiary Guarantors (other
than ECI) has all requisite corporate and/or other requisite 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, executed and delivered by the
Company and the Subsidiary Guarantors (other than ECI) and (assuming
due authorization, execution and
-20-
delivery thereof by the other parties thereto) constitutes the valid
and legally binding agreement of the Company and the Subsidiary
Guarantors, enforceable against the Company and the Subsidiary
Guarantors in accordance with its terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
fraudulent conveyance, 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 and (B)
any rights to indemnity or contribution thereunder may be limited by
federal and state securities laws and public policy considerations.
(ix) Each of the Company and the Subsidiary Guarantors (other
than ECI) has all requisite corporate and/or other requisite power and
authority to execute, deliver and perform its obligations under the
Credit Agreement; the Credit Agreement has been duly and validly
authorized, executed and delivered by the Company and the Subsidiary
Guarantors (other than ECI) and (assuming due authorization, execution
and delivery thereof by the other parties thereto) constitutes the
valid and legally binding agreement of the Company and the Subsidiary
Guarantors, enforceable against the Company and the Subsidiary
Guarantors 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 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 and (B)
any rights to indemnity or contribution thereunder may be limited by
federal and state securities laws and public policy considerations.
(x) Each of the Company and the Subsidiary Guarantors (other
than ECI) has all requisite corporate and/or other requisite power and
authority to execute, deliver and perform their obligations under this
Agreement and to consummate the transactions contemplated hereby; this
Agreement and the consummation by the Company and the Subsidiary
Guarantors (other than ECI) of the transactions contemplated hereby
have been duly and validly authorized by the Company and the
Subsidiary Guarantors (other than ECI). This Agreement has been duly
executed and delivered by the Company and the Subsidiary Guarantors
(other than ECI).
(xi) The statements under the captions "Description of Certain
Indebtedness," "Description of the Notes," and "Exchange Offer;
Registration Rights" in the Final Memorandum insofar as such
statements constitute an
-21-
accurate summary of the legal matters, documents or proceedings
referred to therein, fairly present in all material respects such
legal matters, documents and proceedings, and the statements made in
the Final Memorandum under the heading "Certain United States Federal
Income Tax Considerations," insofar as they summarize certain federal
income tax laws of the United States, constitute an accurate summary
of the principal U.S. federal income tax consequences of an investment
in the Notes;
(xii) To the knowledge of such counsel, no legal or governmental
proceedings are pending or threatened that seek to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or
sale of the Notes to be sold hereunder or the consummation of the
other transactions described in the Final Memorandum under the caption
"Use of Proceeds."
(xiii) The execution, delivery and performance of this Agreement,
the Indenture, the Credit Agreement, the Registration Rights Agreement
and the consummation of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and sale of the
Notes to the Initial Purchasers) will not conflict with or constitute
or result in a breach or a default under (or an event that with notice
or passage of time or both would constitute a default under) or
violation of any of (i) the terms or provisions of any Contract listed
on a schedule reasonably acceptable to the Initial Purchasers, except
for any such conflict, breach, violation, default or event that would
not, individually or in the aggregate, have a Material Adverse Effect,
(ii) the certificate of incorporation or bylaws (or similar
organizational documents) of the Company or any of the Subsidiary
Guarantors, 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 known
to such counsel to be applicable to the Company or any of the
Subsidiaries or any of their respective properties or assets, except
for any such conflict, breach or violation that would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(xiv) No consent, approval, authorization or order of any
governmental authority is required for the issuance and sale by the
Company of the Notes to the Initial Purchasers or the consummation by
the Company of the other transactions contemplated hereby, except such
as may be required under Blue Sky laws, as to which such counsel need
express no opinion, and those which have previously been obtained.
-22-
(xv) None of the Company or the Subsidiaries is, or immediately
after the sale of the Notes to be sold hereunder and the application
of the proceeds from such sale (as described in the Final Memorandum
under the caption "Use of Proceeds") will be, an "investment company"
as such term is defined in the Investment Company Act of 1940, as
amended.
(xvi) No registration under the Act of the Securities is
required in connection with the sale of the Notes to the Initial
Purchasers as contemplated by this Agreement and the Final Memorandum
or in connection with the initial resale of the Notes by the Initial
Purchasers in accordance with Section 8 of this Agreement, and prior
to the commencement of the Exchange Offer (as defined in the
Registration Rights Agreement) or the effectiveness of the Shelf
Registration Statement (as defined in the Registration Rights
Agreement), the Indenture is not required to be qualified under the
TIA, in each case assuming (i)(A) that the purchasers who buy such
Notes in the initial resale thereof are qualified institutional buyers
as defined in Rule 144A promulgated under the Act ("QIBS") or (B) that
the offer or sale of the Notes is made in an offshore transaction as
defined in Regulation S, (ii) the accuracy of the Initial Purchasers'
representations in Section 8 and those of the Company contained in
this Agreement regarding the absence of a general solicitation in
connection with the sale of such Notes to the Initial Purchasers and
the initial resale thereof and (iii) the due performance by the
Initial Purchasers of the agreements set forth in Section 8 hereof.
(xvii) Neither the consummation of the transactions contemplated
by this Agreement nor the sale, issuance, execution or delivery of the
Securities will violate Regulation T, U or X of the Board of Governors
of the Federal Reserve System.
The opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP may be subject to customary
exceptions, assumptions and qualifications reasonably acceptable to the
Initial Purchasers. At the time the foregoing opinion is delivered, ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇ LLP shall additionally state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
representatives of the Initial Purchasers and counsel for the Initial
Purchasers, at which conferences the contents of the Final Memorandum and
related matters were discussed, and, although it has not independently
verified and is not passing upon and assumes no responsibility for the
accuracy, completeness or fairness of the statements contained in the Final
Memorandum (except to the extent specified in subsection 7(a)(xi)), 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,
-23-
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which
they were made, not misleading (it being understood that such firm need
express no opinion with respect to the financial statements and related
notes thereto and the other financial and accounting data derived from the
Company's books and records included in the Final Memorandum). The opinion
of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP 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.
(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 Schwartz, Cooper, ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Chartered, special
counsel Illinois for ECI, in form and substance reasonably satisfactory to
counsel for the Initial Purchasers, substantially to the effect that:
(i) ECI is validly existing and in good standing under the laws
of the State of Illinois and has all requisite corporate power and
authority to own its properties and to conduct its business as
described in the Final Memorandum.
(ii) All of the outstanding shares of capital stock of ECI have
been duly authorized and validly issued, are fully paid and
nonassessable and, to the knowledge of such counsel were not issued in
violation of any preemptive or similar rights.
(iii) ECI has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the
Indenture and the Indenture has been duly and validly authorized
executed and delivered by ECI.
(iv) The Guarantees have been duly and validly authorized and
executed by ECI and, when authenticated by the Trustee in accordance
with the provisions of the Indenture, will have been duly executed,
issued and delivered. The guarantees of the Exchange Notes and the
Private Exchange Notes have been duly and validly authorized by ECI.
(v) ECI has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration
Rights Agreement;
-24-
the Registration Rights Agreement has been duly and validly
authorized, executed and delivered by ECI.
(vi) ECI has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Credit
Agreement; the Credit Agreement has been duly and validly authorized,
executed and delivered by ECI.
(vii) ECI 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 ECI of the transactions contemplated hereby have
been duly and validly authorized by ECI. This Agreement has been duly
executed and delivered by ECI.
(c) On the Closing Date, the Initial Purchasers shall have received
the opinion, in form and substance satisfactory to the Initial Purchasers,
dated as of the Closing Date and addressed to the Initial Purchasers, of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchasers, with respect
to certain legal matters relating to this Agreement and such other related
matters as the Initial Purchasers may reasonably require. In rendering such
opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have received and may rely upon such
certificates and other documents and information as it may reasonably
request to pass upon such matters.
(d) The Initial Purchasers shall have received from the Independent
Accountants a comfort letter or letters dated the date hereof and the
Closing Date, in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.
(e) The representations and warranties of the Company and the
Subsidiary Guarantors contained in this Agreement shall be true and correct
on and as of the date hereof and on and as of the Closing Date as if made
on and as of the Closing Date; the statements of the Company's and the
Subsidiary Guarantors' officers made pursuant to any certificate delivered
in accordance with the provisions hereof shall be true and correct on and
as of the date made and on and as of the Closing Date; the Company and the
Subsidiary Guarantors shall have performed all covenants and agreements and
satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date; and, except as described 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, and no information shall have become known, that, individually
or in the aggregate, has or would be reasonably likely to have a Material
Adverse Effect.
-25-
(f) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(g) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto
after the date hereof), none of the Company or any of the Subsidiaries
shall have sustained any loss or interference with respect to its business
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 from any legal or governmental proceeding,
order or decree, which loss or interference, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse
Effect.
(h) The Initial Purchasers shall have received a certificate of the
Company and the Subsidiary Guarantors, dated the Closing Date, signed on
behalf of each of the Company and the Subsidiary Guarantors by its Chairman
of the Board, Chief Executive Officer, President or any Senior Vice
President and the Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Company and the
Subsidiary Guarantors contained in this Agreement are true and correct
on and as of the date hereof and on and as of the Closing Date, and
the Company and the Subsidiary Guarantors have performed all covenants
and agreements and satisfied all conditions on their 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 development has occurred, and no information has
become known, that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect; and
(iii) The sale of the Securities hereunder has not been enjoined
(temporarily or permanently).
(i) On the Closing Date, the Initial Purchasers shall have received
the Registration Rights Agreement executed by the Company and the
Subsidiary Guarantors and such agreement shall be in full force and effect
at all times from and after the Closing Date subject to the terms and
conditions contained therein.
(j) On the Closing Date, the Initial Purchasers shall have received a
copy of the Credit Agreement executed by the Company, the Subsidiary
Guarantors and the
-26-
other parties thereto and such agreement shall be in full force and effect
at all times from and after the Closing Date subject to the terms and
conditions contained therein.
On or before the Closing Date, the Initial Purchasers and counsel for
the Initial Purchasers shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiaries as
they shall have heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters, 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, letters, schedules and instruments in such quantities as
the Initial Purchasers shall reasonably request.
VIII.8. OFFERING OF SECURITIES; RESTRICTIONS ON TRANSFER. (a) Each of the
Initial Purchasers agrees with the Company and the Subsidiary Guarantors (as to
itself only) that (i) it has not and will not solicit offers for, or offer or
sell, the Notes by any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act; and (ii) it has
and will solicit offers for the Securities only from, and will offer the
Securities only to (A) in the case of offers inside the United States, 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 and (B) in the case of offers outside the United
States, to persons other than U.S. persons ("non-U.S. purchasers," which term
shall include dealers or other professional fiduciaries in the United States
acting on a discretionary basis for non-U.S. beneficial owners (other than an
estate or trust)); PROVIDED, HOWEVER, that, in the case of this clause (B), in
purchasing such Securities such persons are deemed to have represented and
agreed as provided under the caption "Notice to Investors" contained in the
Final Memorandum (or, if the Final Memorandum is not in existence, in the most
recent Memorandum).
1.(b) Each of the Initial Purchasers represents and warrants (as to
itself only) with respect to offers and sales outside the United States that (i)
it has and will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Securities or has
in its possession or distributes any Memorandum or any such other material, in
all cases at its own expense; (ii) the Securities have not been and will not be
-27-
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except in accordance with Regulation S under the Act or
pursuant to an exemption from the registration requirements of the Act; and
(iii) it has offered the Securities and will offer and sell the Securities (A)
as part of its distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering and the Closing Date, only in
accordance with Rule 903 of Regulation S and, accordingly, neither it nor any
persons acting on its behalf have engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the Notes, and any
such persons have complied and will comply with the offering restrictions
requirement of Regulation S.
Terms used in this Section 8 and not defined in this Agreement have
the meanings given to them in Regulation S.
IX.9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and each of the
Subsidiary Guarantors agree, jointly and severally, to indemnify and hold
harmless each Initial Purchaser and each person, if any, who 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 to which any
Initial Purchaser or such 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:
(a) (i) any untrue statement or alleged untrue statement made by
the Company or the Subsidiary Guarantors in Section 2 hereof;
(b) (ii) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or supplementthereto;
or
(c) (iii) the omission or alleged omission to state, in any
Memorandum or any amendment or supplement thereto, a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any reasonable legal or other expenses incurred by the
Initial Purchasers 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 and the Subsidiary 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 any untrue statement or alleged untrue statement or omission or alleged
omission made in any Memorandum or any amendment or supplement thereto in
reliance upon and in conformity with written information concerning the Initial
Purchasers furnished to the Company by the Initial Purchasers specifically for
use therein. The indemnity provided for in this Section 9 will be in addition to
any liability that the Issuers may otherwise have to the indemnified
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parties. The Issuers shall not be liable under this Section 9 for any settlement
of any claim or action effected without its prior written consent, which shall
not be unreasonably withheld. In addition, Issuers will not be liable to any
Initial Purchaser or any person controlling such Initial Purchaser with respect
to any such untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Memorandum that is corrected in the Final
Memorandum (or any amendment or supplement thereto) if the person asserting any
such loss, claim, damage or liability purchased Notes from such Initial
Purchaser but was not sent or given a copy of the Final Memorandum (as amended
or supplemented) in any case where such delivery of the Final Memorandum (as
amended or supplemented) was required by the Act, unless such failure to deliver
the Final Memorandum (as amended or supplemented) was a result of noncompliance
by the Issuers with Section 5 hereof.
2.(b) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Company and the Subsidiary Guarantors, their
directors, their officers and each person, if any, who controls the Company or
any Subsidiary Guarantor 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, the Subsidiary Guarantors or any such director, officer 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 (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 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 incurred by the Company, the Subsidiary Guarantors or any such
director, officer 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. The indemnity
provided for in this Section 9 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 shall not be unreasonably
withheld. The Company and the Subsidiary Guarantors 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
-29-
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 any
Initial Purchaser.
3.(c) 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 the Initial Purchasers in the case
of paragraph (a) of this Section 9 or the Company or the Subsidiary Guarantors
in the case of paragraph (b) of this Section 9, representing the indemnified
parties under such paragraph (a) or paragraph (b),
-30-
as the case 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. All fees and
expenses reimbursed pursuant to this paragraph (c) shall be reimbursed as they
are incurred. 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.
4.(d) 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 and the Subsidiary
Guarantors 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
and the Subsidiary Guarantors 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 Subsidiary Guarantors and the Initial
Purchasers agree that it would not be 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
-31-
statements or the omissions or alleged omissions to state a material fact, and
no person guilty 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 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 of the
Company or any Subsidiary Guarantor, each officer of the Company or any
Subsidiary Guarantor 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 and the Subsidiary
Guarantors.
X.10. SURVIVAL CLAUSE. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, the Subsidiary
Guarantors, their respective officers and the Initial Purchasers set forth in
this Agreement or made by or on behalf of them pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company, the Subsidiary Guarantors, any of their respective
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, 10, 15 and 16 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
XI.11. DEFAULT BY AN INITIAL PURCHASER. If any one or more Initial Purchasers
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in SCHEDULE 1 hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Initial Purchasers)
the Securities which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase; PROVIDED, HOWEVER, that in the event that the
amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the total aggregate
amount of Securities set forth in SCHEDULE 1 hereto, the remaining Initial
Purchasers shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting Initial
Purchasers do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Initial Purchaser or the Company except
as provided in Section 10 hereof. In the event of a default by any Initial
Purchaser as set forth in this Section 11, the Closing Date shall be postponed
for such period, not exceeding five business days, as the nondefaulting Initial
Purchasers shall determine in order that the required changes in the Final
Memorandum or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any
-32-
defaulting Initial Purchaser of its liability, if any, to the Company or any
nondefaulting Initial Purchaser for damages occasioned by its default hereunder.
XII.12. 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 all obligations and satisfy all conditions on its part to be performed
or satisfied hereunder at or prior thereto (other than solely as a result of any
failure of any Initial Purchaser to perform its obligations hereunder) or, if at
or prior to the Closing Date:
(a) (i) any of the Company or the Subsidiaries 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
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 or the Subsidiaries), except in
each case as described in the Final Memorandum (exclusive of any amendment or
supplement thereto);
(b) (ii) trading in securities of the Company or in securities
generally on the New York Stock Exchange, American Stock Exchange or the Nasdaq
National Market shall have been suspended or materially limited or minimum or
maximum prices shall have been established on any such exchange or market;
(c) (iii)a banking moratorium shall have been declared by New
York or United States authorities or a material disruption in commercial banking
or securities settlement or clearance services in the United States;
(d) (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 which, 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 Notes as contemplated by the Final Memorandum; or
(e) (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.
-33-
2.(b) Termination of this Agreement pursuant to Section 11 or this
Section 12 shall be without liability of any party to any other party except as
provided in Section 10 hereof.
XIII.13. INFORMATION SUPPLIED BY THE INITIAL PURCHASERS. The statements set
forth in the last paragraph on the front cover page and in the third sentence of
the third paragraph and the third sentence of the fifth paragraph under the
heading "Private Placement" in the Final Memorandum (to the extent such
statements relate to the Initial Purchasers) constitute the only information
furnished by the Initial Purchasers to the Company for the purposes of Sections
2(a) and 9 hereof.
XIV.14. NOTICES. All communications hereunder shall be in writing and, if sent
to the Initial Purchasers, shall be mailed or delivered to Deutsche Banc Alex.
▇▇▇▇▇ Inc., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Finance Department, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; if sent to the Company,
shall be mailed or delivered to the Company at ▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: Chief Financial Officer, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; and one business day
after being timely delivered to a next-day air courier.
-34-
XV.15. SUCCESSORS. This Agreement shall inure to the benefit of and be binding
upon the Initial Purchasers, the Company, the Subsidiary Guarantors and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company and the Subsidiary Guarantors contained in
Section 9 of this Agreement shall also be for the benefit of any person or
persons who control 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 directors of the Company and Subsidiary Guarantors, their
respective officers and any person or persons who control the Company or any of
the Subsidiary Guarantors within the meaning of Section 15 of the Act or Section
20 of the Exchange Act. No purchaser of Securities from the Initial Purchasers
will be deemed a successor because of such purchase.
XVI.16. 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 APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS
THEREOF RELATING TO CONFLICTS OF LAW.
XVII.17. 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.
S-1
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,
the Subsidiary Guarantors and the Initial Purchasers.
Very truly yours,
AMERICAN ACHIEVEMENT CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive
Officer
COMMEMORATIVE BRANDS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive
Officer
CBI NORTH AMERICA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive
Officer
▇▇▇▇▇▇ SENIOR HOLDINGS CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive
Officer
S-2
▇▇▇▇▇▇ PUBLISHING COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive
Officer
TP HOLDING CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive
Officer
▇▇▇▇▇▇ PRODUCTION SERVICES, L.P.
By: ▇▇▇▇▇▇ Publishing Company,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and Chief Executive
Officer
EDUCATIONAL COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. Bench
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Bench
Title: Chief Financial Officer
S-3
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
DEUTSCHE BANC ALEX. ▇▇▇▇▇ INC.
SCOTIA CAPITAL (USA) INC.
BY: Deutsche Banc Alex. ▇▇▇▇▇ Inc.
By: /s/ ▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ Silver
---------------------------------------
Name: ▇▇▇▇▇▇ Silver
Title: Managing Director
▇▇▇▇▇▇▇, SACHS & CO.
By: /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
---------------------------------------
(▇▇▇▇▇▇▇, Sachs & Co.)
SCHEDULE 1
PRINCIPAL
AMOUNT OF
INITIAL PURCHASER NOTES
Deutsche Banc Alex. ▇▇▇▇▇ Inc........................... $117,705,000
▇▇▇▇▇▇▇, Sachs & Co..................................... $ 50,445,000
Scotia Capital (USA) Inc................................ $ 8,850,000
Total $177,000,000
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SCHEDULE 2
SUBSIDIARIES OF THE COMPANY
Jurisdiction of
Name Incorporation/Formation
Commemorative Brands, Inc. Delaware
CBI North America, Inc. Delaware
▇▇▇▇▇▇ Senior Holdings Corp. Delaware
▇▇▇▇▇▇ Publishing Company Delaware
TP Holding Corp. Delaware
▇▇▇▇▇▇ Production Services, L.P. Delaware
Educational Communications, Inc. Illinois
EXHIBIT A