Exhibit 4.2
$135,000,000
ANACOMP, INC.
10 7/8% SERIES C SENIOR SUBORDINATED NOTES DUE 2004
PURCHASE AGREEMENT
June 12, 1998
PURCHASE AGREEMENT
June 12, 1998
NatWest Capital Markets Limited
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Ladies and Gentlemen:
Anacomp, Inc., an Indiana corporation (the "Company"), hereby confirms
its agreement with you (the "Initial Purchaser"), as set forth below.
1. The Notes. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the Initial Purchaser $135,000,000
aggregate principal amount of its 10 7/8% Series C Senior Subordinated Notes
due 2004 (the "Notes"). The Notes are to be issued under an indenture (the
"Indenture") to be dated as of June 18, 1998 between the Company and IBJ
▇▇▇▇▇▇▇▇ Bank & Trust Company, as trustee (the "Trustee").
The Notes will be offered and sold to the Initial Purchaser 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 Notes, the Company has prepared a
preliminary offering memorandum dated June 3, 1998 (the "Preliminary
Memorandum") and will prepare a final offering memorandum dated June 12, 1998
(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 Notes
(the "Offering"), a description of the Company and any material developments
relating to the Company occurring after the date of the most recent
historical financial statements included therein.
The Offering is being made in connection with the acquisition (the
"Acquisition") by the Company of assets constituting substantially all of the
business and operations (the "First Image Businesses") of First Image
Management Company ("First Image"), a division of First Financial Management
Corporation ("FFMC"), a wholly-owned subsidiary of First Data Corporation
("FDC"), and the assumption of substantially all of the ongoing liabilities
of the First Image Businesses. Except as the context otherwise requires,
references herein to the Company shall be deemed to be references to the
Company after giving effect to the Acquisition. References herein to the
transactions contemplated hereby shall be deemed to include references to the
Acquisition.
The Company and the Initial Purchaser will enter into an Exchange and
Registration Rights Agreement (the "Registration Rights Agreement") prior to
or concurrently
with the issuance of the Notes. Pursuant to the Registration Rights
Agreement, under the circumstances and the terms set forth therein, the
Company will agree to file with the Securities and Exchange Commission (the
"Commission"): (i) a registration statement on Form S-4 (the "Exchange Offer
Registration Statement") relating to a registered Exchange Offer (as defined
in the Registration Rights Agreement) for the Notes under the Act to offer to
the holders of the Notes the opportunity to exchange their Notes for an issue
of notes substantially identical to the Notes (except that (a) interest
thereon will accrue from the last date on which interest was paid on the
Notes, or if no such interest has been paid, from June 18, 1998, (b) such
Notes will not contain restrictions on transfer, and (c) such Notes will not
contain provisions relating to an increase in their interest rate under
certain circumstances) that would be registered under the Act (the "Exchange
Notes"); or (ii) alternatively, in the event that applicable interpretations
of the Commission do not permit the Company to effect the Exchange Offer or
do not permit any holder of the Notes to participate in the Exchange Offer, a
shelf registration statement (the "Shelf Registration Statement") to cover
resales of Notes by such holders who satisfy certain conditions relating to,
including the provision of information in connection with the Shelf
Registration Statement.
2. Representations and Warranties. The Company represents and warrants
to, and agrees with, the Initial Purchaser that prior to and after giving
effect to the Acquisition:
(a) Neither the Preliminary Memorandum, as of the date thereof,
nor the Final Memorandum or 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 the Initial Purchaser furnished to the
Company in writing by the Initial Purchaser 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 capitalization
set forth in the Final Memorandum; all of the outstanding shares of
capital stock of the Company have been, and as of the Closing Date will
be, duly authorized and validly issued, are fully paid and nonassessable
and were not issued in violation of any preemptive or similar rights;
except as set forth in the Final Memorandum, there are no outstanding
(i) options, warrants or other rights to purchase from the Company, (ii)
agreements or other obligations of the Company 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. The
entities listed on Schedule 2(b) hereto are the only subsidiaries,
direct or indirect of the Company (collectively, the "Subsidiaries").
Except as disclosed on Schedule 2(b) or as disclosed in the Final
Memorandum, the Company does not own, directly or indirectly, any
capital stock or any other equity or long-term debt securities or have
any equity interest in any firm, partnership, joint venture, limited
liability company or other entity.
2
(c) Each of the Company and the Subsidiaries has been duly
incorporated, is validly existing and is in good standing as a
corporation under the laws of its jurisdiction of incorporation, with
all requisite corporate 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 in good standing in all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not, individually or in the aggregate,
have a material adverse effect on the general affairs, management,
business, condition (financial or otherwise), prospects or results of
operations of the Company and the Subsidiaries, taken as a whole (any
such event, a "Material Adverse Effect").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the
Registration Rights Agreement). The Notes, the Exchange Notes and the
Private Exchange Notes have each been duly and validly authorized by the
Company and, when executed by the Company and authenticated by the
Trustee in accordance with the provisions of the Indenture and, in the
case of the Notes, when delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, will have been
duly executed, issued and delivered and will constitute valid and
legally binding obligations of the Company, entitled to the benefits of
the Indenture and enforceable against the Company in accordance with
their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization or other similar laws now or
hereafter in effect relating to creditors' rights generally, (ii)
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought, (iii) the extent that a
waiver of rights under any usury laws may be unenforceable and (iv)
limitations on rights to indemnity and contribution under federal or
state securities laws or the public policy underlying such laws.
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The
Indenture meets the requirements for qualification under the Trust
Indenture Act of 1939, as amended (the "TIA"). The Indenture has been
duly and validly authorized by the Company and, when executed and
delivered by the Company (assuming the due authorization, execution and
delivery by the Trustee), will constitute a valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization or other similar laws now or
hereafter in effect relating to creditors' rights generally, (ii)
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought, (iii) the extent that a
waiver of rights under any usury laws may be unenforceable and (iv)
limitations on rights to indemnity and contribution under federal or
state securities laws or the public policy underlying such laws.
(f) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and
validly authorized by the Company and,
3
when executed and delivered by the Company (assuming the due
authorization, execution and delivery thereof by the Initial Purchaser),
will constitute a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except
that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization or other similar laws now or hereafter in
effect relating to creditors' rights generally, (ii) general principles
of equity and the discretion of the court before which any proceeding
therefor may be brought, (iii) the extent that a waiver of rights under
any usury laws may be unenforceable and (iv) limitations on rights to
indemnity and contribution under federal or state securities laws or the
public policy underlying such laws.
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement has
been duly and validly authorized, executed and delivered by the Company.
(h) No consent, approval, authorization or order of any court or
governmental agency or body, or third party is required for the
performance of this Agreement by the Company or the consummation by the
Company of the transactions contemplated hereby that are to be completed
on or before the Closing Date, except such as have been obtained or
disclosed in the Final Memorandum and such as may be required under
state securities or "Blue Sky" laws in connection with the purchase and
resale of the Notes by the Initial Purchaser. None of the Company or
the Subsidiaries is (i) in violation of its certificate of incorporation
or bylaws (or similar organizational document), (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, or (iii) in breach of or in default under (nor has any event
occurred which, with notice or passage of time or both, would constitute
a default under) or in violation of any of the terms or provisions of
any indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, permit, certificate, contract or other
agreement or instrument to which any of them is a party or to which any
of them or their respective properties or assets is subject
(collectively, "Contracts") except such violations, breaches or defaults
that would not, individually or in the aggregate, have a Material
Adverse Effect.
(i) The execution, delivery and performance by the Company of this
Agreement, the Indenture, and the Registration Rights Agreement and the
consummation by the Company of the transactions contemplated hereby and
thereby, and the fulfillment of the terms hereof and thereof, will not
conflict with or constitute or result in a breach of or a default under
(or an event which with notice or passage of time or both would
constitute a default under) or violation of any of (i) the terms or
provisions of any Contract, except such conflicts, breaches, defaults or
violations, that would not, individually or in the aggregate, have a
Material Adverse Effect (ii) the certificate of incorporation or by-laws
(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 Purchaser 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 such
4
conflicts, breaches, defaults or violations that would not, individually
or in the aggregate, have a Material Adverse Effect.
(j) The audited consolidated financial statements of the Company
and the Subsidiaries and of First Image, each 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 and of First Image at the dates and for the periods to
which they relate and have (i) been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
and (ii) except with respect to those of First Image, comply in all
material respects with Statement of Position 90-7 with regards to Fresh
Start Reporting, 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. Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and Ernst & Young LLP is an
independent public accounting firm within the meaning of the Act and the
rules and regulations promulgated thereunder.
(k) The 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.
(l) Except as disclosed in the Preliminary Memorandum and the
Final Memorandum, there is not pending or, to the knowledge of the
Company and 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 government agency or body which, if determined adversely to the
Company or any of the Subsidiaries would, individually or in the
aggregate, have a Material Adverse Effect or which seeks 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.
(m) Except as disclosed in the Preliminary Memorandum and the
Final Memorandum, each of the Company and the Subsidiaries owns or
possesses adequate licenses or other rights to use all material patents,
trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by it
as described in the Final Memorandum, and none of the Company or the
Subsidiaries has received any notice of infringement of or conflict with
(or knows of any such infringement of or conflict with) asserted rights
of others with respect to any patents, trademarks, service marks, trade
names, copyrights or know-how which, if such assertion
5
of infringement or conflict were sustained, would, individually or in
the aggregate, have a Material Adverse Effect.
(n) 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 (collectively, the "Permits"), except where the failure to
obtain such Permits would not, individually or in the aggregate, have a
Material Adverse Effect; each of the Company and the Subsidiaries has
fulfilled and performed all of its obligations with respect to such
Permits and no event has occurred which allows, or after notice or lapse
of time would allow, revocation or termination thereof or results in any
other material impairment of the rights of the holder of any such Permit
except where such revocation, termination or impairment would not,
individually or in the aggregate, have a Material Adverse Effect; and
none of the Company or the Subsidiaries has received any notice of any
proceeding relating to revocation or modification of any such Permit,
except as described in the Final Memorandum and except where such
revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect.
(o) Since the date of the most recent financial statements
appearing in the Final Memorandum and, except as described in the Final
Memorandum, (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,
constitute a material change in the general affairs, management,
business, condition (financial or otherwise), prospects or results of
operations of the Company and the Subsidiaries, taken as a whole (a
"Material Change"), (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 and (iii) there has been no change in the capital stock or
long-term indebtedness of the Company or the Subsidiaries which would,
individually or in the aggregate, constitute a Material Change.
(p) Except as disclosed in the Preliminary Memorandum and the
Final Memorandum, there has not occurred any material adverse change, or
any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and the Subsidiaries, either individually or
taken as a whole, from that set forth in the Final Memorandum (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).
(q) Each of the Company and the Subsidiaries has filed all
necessary federal, state, local and foreign income and franchise tax
returns, and has paid all taxes shown as due thereon; and other than tax
deficiencies which the Company or any Subsidiary is contesting in good
faith and for which the Company or such Subsidiary has provided
6
adequate reserves, there is no tax deficiency that has been asserted
against the Company or any of the Subsidiaries.
(r) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which 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 Notes 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 any leasehold estate 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, have a
Material Adverse Effect. All Contracts 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, 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 which 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
which would be required to be described in a prospectus pursuant to the
Act that are not described in the Final Memorandum.
(v) Except as would not, individually or in the aggregate, be
reasonably 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 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
7
potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"),
or any comparable state law, (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, law 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 which 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 adequate in accordance with
customary industry practice for the conduct of its business and the
value of its properties. Neither the Company nor any of the
Subsidiaries has received notice from any insurer or agent of such
insurer that capital improvements of other expenditures are required or
necessary to be made in order to continue such insurance.
(y) None of the Company or the Subsidiaries has any material
liability for any prohibited transaction (within the meaning of Section
4975(c) of the Internal Revenue Code of 1986, as amended (the "Code"),
or Part 4 of Title I of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) (or an accumulated funding deficiency within
the meaning of Section 412 of the Code or Section 302 of ERISA) or any
complete or partial withdrawal liability (within the meaning of Section
4201 of ERISA) with respect to any pension, profit sharing or other plan
which is subject to ERISA, to which the Company or any of the
Subsidiaries makes or ever 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.
(z) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's
8
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 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 Exchange Notes, the Indenture 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 will be entitled to
have such securities registered under the registration statements
required to be filed by the Company pursuant to the Registration Rights
Agreement 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 (each 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 currently or proposed to be conducted, (b) unable to
pay its debts (contingent or otherwise) as they mature or otherwise
become due 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) which is or could be integrated with
the sale of the Notes in a manner that would require the registration
under the Act of the Notes or (ii) engaged in any form of general
solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the Offering or in any
manner involving a public offering within the meaning of Section 4(2) of
the Act. The Company has not distributed and will not distribute any
offering material in connection with the Offering other than the Final
Memorandum and any Preliminary Memorandum. No securities of the same
class as the Notes have been issued and sold by the Company within the
six-month period immediately prior to the date hereof.
(ff) Assuming the accuracy of the representations and warranties
of the Initial Purchaser in Section 8 hereof, it is not necessary in
connection with the offer, sale and delivery of the Notes to the Initial
Purchaser in the manner contemplated by this
9
Agreement to register any of the Notes under the Act or to qualify the
Indenture under the TIA.
(gg) No securities of the Company or any Subsidiary are of the
same class (within the meaning of Rule 144A as promulgated under the Act
("Rule 144A")) as the Notes 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.
(hh) 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 Notes.
(ii) None of the Company or the Subsidiaries, or any person acting
on behalf of any of them (other than the Initial Purchaser) has engaged
in any directed selling efforts (as that term is defined in Regulation S
under the Act ("Regulation S")) with respect to the Notes; the Company
and its respective Affiliates and any person acting on behalf of any of
them (other than the Initial Purchaser or any Affiliate of the Initial
Purchaser) have complied with the offering restrictions requirement of
Regulation S.
(jj) Each of the Preliminary Memorandum and the Final Memorandum,
as of its respective date, contains all of the information that, if
requested by a prospective purchaser of the Notes, would be required to
be provided to such prospective purchaser to Rule 144A(d)(4) under the
Act.
(kk) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(ll) Neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any officer or director purporting to act on behalf
of the Company or any of the Subsidiaries has at any time: (i) made any
contributions to any candidate for political office, or failed to
disclose fully any such contributions, in violation of law, (ii) made
any payment of funds to, or received or retained any funds from, any
state, federal or foreign governmental officer or official, or other
person charged with similar public or quasi-public duties, other than
payments required or allowed by applicable law, or (iii) engaged in any
transactions, maintained any bank account or used any corporate funds
except for transactions, bank accounts and funds which have been and are
reflected in the normally maintained books and records of the Company
and the Subsidiaries.
(mm) Except as disclosed in any Memorandum, there are no material
outstanding loans or advances or material guarantees of indebtedness by
the Company or any of the Subsidiaries to or for the benefit of any of
the officers or directors of the Company or any of the Subsidiaries or
any of the members of the families of any of them.
(nn) Neither the Company nor any affiliate of the Company does
business with the government of Cuba or with any person or affiliate
located in Cuba.
10
(oo) None of the Company or the Subsidiaries has engaged or
retained any person, other than NatWest Capital Markets Limited as the
Initial Purchaser, to act as a financial advisor, underwriter or
placement agent in connection with the issuance of the Notes and, except
for the fees and expenses payable in connection with the issuance of the
Notes as described in the Final Memorandum, no person has the right to
receive a material amount of financial advisory, underwriting,
placement, finder's or similar fees in connection with, or as a result
of, the issuance of the Notes and the purchase of the Notes by the
Initial Purchaser or the consummation of the other transactions
contemplated hereby.
(pp) The Company, FFMC and FDC have entered into an Asset Purchase
Agreement, dated as of May 5, 1998 (the "Asset Purchase Agreement"),
pursuant to which the Company has agreed to acquire the First Image
Businesses. The Company had all requisite corporate power and authority
to execute and deliver, and has all requisite corporate power and
authority to perform its obligations under, the Asset Purchase
Agreement. The Asset Purchase Agreement has been duly and validly
authorized, executed and delivered by the Company and, to the Company's
knowledge after reasonable investigation, by each of the other parties
thereto and constitutes the valid and legally binding agreement of the
Company and, to the Company's knowledge after reasonable investigation,
of each of the other parties thereto enforceable against each of the
parties thereto in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization or other similar laws now or hereafter in effect relating
to creditors' rights generally, (ii) general principles of equity and
the discretion of the court before which any proceeding therefor may be
brought, (iii) the extent that a waiver of rights under any usury laws
may be unenforceable and (iv) limitations on rights to indemnity and
contribution under federal or state securities laws or the public policy
underlying such laws.
(qq) The Company and Southern Micrographix Company LLC ("SMC")
have entered into a letter of intent, dated May 15, 1998, confirming an
agreement in principle between the Company and SMC, pursuant to which
SMC will purchase from the Company the document print and distribution
services segment of the First Image Businesses at a purchase price of
$26.1 million, subject to downward adjustment to an amount not less than
$24.8 million under certain circumstances.
(rr) The Company and Dataplex Corporation ("Dataplex") have
entered into a letter of intent, dated May 21, 1998, confirming an
agreement in principle between the Company and Dataplex, pursuant to
which Dataplex will purchase from the Company the document acquisition
services segment of the First Image Businesses at a purchase price of
$22.0 million, subject to downward adjustment to an amount not less than
$20.9 million under certain circumstances.
(ss) All of the representations and warranties of the Company and,
to the Company's knowledge after reasonable investigation, the other
parties to the Asset Purchase Agreement made in the Asset Purchase
Agreement are true and correct as if made on and as of the date hereof
and the Closing Date.
11
(tt) The Company has undertaken a comprehensive review of its
computer systems (except with respect to those of the First Image
Businesses) to identify the systems that could be affected by the risk
that the computer hardware and software used by it may be unable to
recognize and properly execute date-sensitive functions involving
certain dates prior to and any dates after December 31, 1999 (the "Year
2000 Problem") and has developed and is implementing a plan to resolve
the issue; the Company believes that the Year 2000 Problem will not have
a Material Adverse Effect and that the costs of implementing and
effectuating such plan will not be material.
(uu) The Company has secured a commitment for the New Revolving
Credit Facility (as defined in the Final Memorandum). The Credit
Agreement (as defined in the Final Memorandum) has been duly and validly
authorized by the Company, and to the Company's knowledge after
reasonable investigation, by each of the other parties thereto, and when
executed and delivered by the Company will constitute a valid and
legally binding agreement of the Company, and to the Company's knowledge
after reasonable investigation, of each of the other parties thereto,
enforceable against the Company, and to the Company's knowledge after
reasonable investigation, enforceable against each of the other parties
thereto, in accordance with its terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization 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. The Final Memorandum contains a summary of the terms of the
Credit Agreement which is accurate in all material respects.
Any certificate signed by any officer of the Company or any Subsidiary
and delivered to the Initial Purchaser or to counsel for the Initial
Purchaser shall be deemed a joint and several representation and warranty by
the Company and each of the Subsidiaries to the Initial Purchaser as to the
matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. 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 Purchaser, and the Initial Purchaser agrees to
purchase from the Company all of the Notes at 100.037% of their principal
amount. One or more certificates in definitive form for the Notes that the
Initial Purchaser has agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the Initial
Purchaser requests 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 Purchaser, against payment by or on behalf of the Initial Purchaser
of the purchase price therefor by wire transfer 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 Notes shall be made at the offices of White & Case LLP,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 A.M., New York time,
on June 18, 1998, or at such other place, time or date as the Initial
Purchaser, 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 Notes
12
available for inspection and packaging by the Initial Purchaser at such place
as designated by the Initial Purchaser at least 24 hours prior to the Closing
Date.
4. Offering by the Initial Purchaser. The Initial Purchaser proposes
to make an offering of the Notes 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 Purchaser is advisable.
5. Covenants of the Company and the Subsidiaries. Each of the Company
and the Subsidiaries, jointly and severally, covenants and agrees with the
Initial Purchaser that:
(a) The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchaser 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 Purchaser shall not have consented. The Company will
promptly, upon the reasonable request of the Initial Purchaser or counsel
for the Initial Purchaser, 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 Notes by the Initial
Purchaser.
(b) The Company will cooperate with the Initial Purchaser in
arranging for the qualification of the Notes for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Initial
Purchaser may designate and will continue such qualifications in effect for
as long as may be necessary to complete the resale of the Notes; provided,
however, that in connection therewith, none of the Company or any
Subsidiary 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 a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the resale by the
Initial Purchaser of the Notes or the Private Exchange Notes, any event
occurs or information becomes known as a result of which the Final
Memorandum as then amended or supplemented would, in the judgment of the
Company or its counsel or in the reasonable opinion of the Initial
Purchaser or its counsel 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 and the Subsidiaries will promptly notify the Initial Purchaser
thereof and will prepare, at the expense of the Company and the
Subsidiaries, an amendment or supplement to the Final Memorandum that
corrects such statement or omission or effects such compliance.
(d) The Company and the Subsidiaries will, without charge, provide
to the Initial Purchaser and to counsel for the Initial Purchaser as many
copies of the Preliminary Memorandum and the Final Memorandum or any
amendment or supplement thereto as the Initial Purchaser may reasonably
request.
13
(e) The Company will apply the net proceeds from the sale of the
Notes as set forth under "Use of Proceeds" in the Final Memorandum.
(f) From the Closing Date until the date that no Notes are
outstanding under the Indenture, the Company will furnish to the Initial
Purchaser copies of all reports and other communications (financial or
otherwise) furnished by the Company to the Trustee, or the holders of the
Notes 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 and the Subsidiaries will
furnish to the Initial Purchaser, 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) which could be
integrated with the sale of the Notes in a manner which would require the
registration under the Act of the Notes.
(i) None of the Company or the Subsidiaries will 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 or in any
manner involving a public offering of the Notes within the meaning of
Section 4(2) of the Act.
(j) None of the Company, the Subsidiaries, their respective
Affiliates or any person acting on behalf of any of them will engage in any
directed selling efforts (as that term is defined in Regulation S) with
respect to the Notes, and the Company and the Subsidiaries will comply, and
will cause their respective Affiliates and each person acting on behalf of
any of them to comply, with the offering restrictions requirements of
Regulation S.
(k) For so long as any of the Notes remain outstanding, the Company
and the Subsidiaries will make available, upon request, to any seller of
such Notes the information specified in Rule 144A(d)(4) under the Act,
unless the Company and the Subsidiaries are then subject to Section 13 or
15(d) of the Exchange Act.
(l) For a period of 90 days from the date of the Final Memorandum,
the Company and the Subsidiaries will not offer for sale, sell, contract
to sell or otherwise dispose of, directly or indirectly, or file a
registration statement for, or announce any offer, sale, contract for sale
of or other disposition of any debt securities issued or guaranteed by the
Company or any of the Subsidiaries (other than the Notes or the Exchange
Notes or the Private Exchange Notes) without the prior written consent of
the Initial Purchaser;
14
(m) During the period from the Closing Date until two years after
the Closing Date, without the prior written consent of the Initial
Purchaser, the Company and the Subsidiaries will not, and will not permit
any of their affiliates (as defined in Rule 144 under the Act) to, resell
any of the Notes that have been reacquired by them, except for Notes
purchased by the Company or any of its affiliates and resold in a
transaction registered under the Act;
(n) In connection with the Offering, until the Initial Purchaser
shall have notified the Company of the completion of the resale of the
Notes, the Company and the Subsidiaries will not, and will cause their
affiliated purchasers (as defined in Rule 10b-6 under the Exchange Act)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Notes, or attempt to induce any person to
purchase any Notes; and not to, and to cause its affiliated purchasers not
to, make bids or purchase for the purpose of creating actual, or apparent,
active trading in, or of raising the price of, the Notes;
(o) The Company and the Subsidiaries will not take any action prior
to the execution and delivery of the Indenture which, if taken after such
execution and delivery, would have violated any of the covenants contained
in the Indenture;
(p) The Company and the Subsidiaries will not take any action prior
to Closing Date which would require the Final Memorandum to be amended or
supplemented pursuant to Section 5(c);
(q) Prior to the Closing Date, the Company and the Subsidiaries will
not issue any press release or other communication directly or indirectly
or hold any press conference with respect to the Company, its condition,
financial or otherwise, or earnings, business affairs or business prospects
(except for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and of which
the Initial Purchaser is notified), without the prior written consent of
the Initial Purchaser, unless in the judgment of the Company and its
counsel, after notification to the Initial Purchasers, such press release
or communication is required by law; and
(r) The Company will use its best efforts to (i) permit the Notes to
be designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
(the "NASD") relating to trading in the PORTAL Market and (ii) permit the
Notes to be eligible for clearance and settlement through The Depository
Trust Company.
6. Expenses. The Company agrees to pay all costs and expenses incident to
the performance of their obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to (i)
the printing, word processing or other production of documents with respect to
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 Purchaser of copies of the foregoing documents, (iii)
the fees and disbursements of counsel, accountants and any other experts or
advisors retained by the Company, (iv) preparation (including printing),
issuance and delivery
15
to the Initial Purchaser of the Notes, (v) the qualification of the Notes under
state securities and "Blue Sky" laws, including filing fees and fees and
disbursements of counsel for the Initial Purchaser relating thereto, (vi) the
Company's expenses in connection with any meetings with prospective investors in
the Notes, (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 Notes on the PORTAL Market, (ix) any fees
charged by investment rating agencies for the rating of the Notes. If the sale
of the Notes provided for herein is not consummated because any condition to the
obligations of the Initial Purchaser set forth in Section 7 hereof is not
satisfied, because this Agreement is terminated or because of any failure,
refusal or inability on the part of the Company to perform all obligations and
satisfy all conditions on their part to be performed or satisfied hereunder
(other than solely by reason of a default by the Initial Purchaser of their
obligations hereunder after all conditions hereunder have been satisfied in
accordance herewith), the Company agrees to promptly reimburse the Initial
Purchaser upon demand for all out-of-pocket expenses (including all fees,
disbursements and charges of White & Case LLP, counsel for the Initial
Purchaser) that shall have been incurred by the Initial Purchaser in connection
with the proposed purchase and sale of the Notes.
7. Conditions of the Initial Purchaser's Obligations. The obligation of
the Initial Purchaser to purchase and pay for the Notes shall, in its 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 Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, counsel for the Company, in
form and substance satisfactory to counsel for the Initial Purchaser,
substantially to the effect that:
(i) Each of the Company and the material Subsidiaries is
incorporated, validly existing and in good standing under the laws of
its respective jurisdiction of incorporation and has all requisite
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Final Memorandum.
Each of the Company and the material Subsidiaries is duly qualified as
a foreign corporation and is in good standing in the jurisdictions set
forth below such Subsidiaries' name on Schedule A attached to such
opinion.
(ii) All of the outstanding shares of capital stock of the
Company and the material Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable and were not issued
in violation of any preemptive or similar rights; all of the
outstanding shares of capital stock of the material Subsidiaries are
owned, directly or indirectly, by the Company, free and clear of all
security interests perfected, or otherwise, and free and clear of all
other liens, encumbrances, equities and claims or restrictions on
transferability or voting.
16
(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 shares of capital stock or
ownership interests in the Company or any Subsidiary are outstanding,
(B) no agreements or other obligations of the Company or any
Subsidiary to issue, or other rights to cause the Company or any
Subsidiary to convert, any obligation into, or exchange any securities
for, shares of capital stock or ownership interests in the Company or
any Subsidiary are outstanding and (C) no holder of securities of the
Company or any Subsidiary is entitled to have such securities
registered under a registration statement filed by the Company or the
Subsidiaries pursuant to the Registration Rights Agreement.
(iv) The Company has all requisite corporate power and authority
to execute, deliver and perform its respective obligations under the
Indenture, the Notes, the Exchange Notes and the Private Exchange
Notes; the Indenture is in sufficient form for qualification under the
TIA; the Indenture has been duly and validly authorized, executed and
delivered by the Company and (assuming the due authorization,
execution and delivery thereof by the Trustee) constitutes the valid
and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
or other similar laws now or hereafter in effect relating to
creditors' rights generally, (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought, (iii) the extent that a waiver of rights under any usury laws
may be unenforceable and (iv) limitations on rights to indemnity and
contribution under federal or state securities laws or the public
policy underlying such laws.
(v) The Global Note (as such term is defined in the Indenture)
is in the form contemplated by the Indenture. The Global Note has
been duly and validly authorized, executed and delivered by the
Company and (assuming the due authorization, execution and delivery of
the Indenture by the Trustee, the due authentication and delivery of
the Notes by the Trustee in accordance with the Indenture and the
payment therefor by the Initial Purchaser in accordance with the terms
of this Agreement) constitutes the valid and legally binding
obligation of the Company, entitled to the benefits of the Indenture,
and enforceable against the Company in accordance with its terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization or other similar laws now or hereafter in
effect relating to creditors' rights generally, (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought, (iii) the extent that a waiver of
rights under any usury laws may be unenforceable and (iv) limitations
on rights to indemnity and contribution under federal or state
securities laws or the public policy underlying such laws.
(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 have been duly executed and
delivered by the Company in accordance
17
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 the 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 or other similar laws now or
hereafter in effect relating to creditors' rights generally, (ii)
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought, (iii) the extent that a
waiver of rights under any usury laws may be unenforceable and (iv)
limitations on rights to indemnity and contribution under federal or
state securities laws or the public policy underlying such laws.
(vii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement; the Registration Rights Agreement has
been duly and validly authorized, executed and delivered by the
Company and (assuming due authorization, execution and delivery
thereof by the Initial Purchaser) constitutes the valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization or other similar
laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought, (iii) the
extent that a waiver of rights under any usury laws may be
unenforceable and (iv) limitations on rights to indemnity and
contribution under federal or state securities laws or the public
policy underlying such laws.
(viii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby
(including the Acquisition); this Agreement and the consummation by
the Company of the transactions contemplated hereby have been duly and
validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.
(ix) The Indenture, the Notes (when issued, authenticated and
delivered), the Exchange Notes (when issued, authenticated and
delivered) and the Registration Rights Agreement conform in all
material respects to the descriptions thereof contained in the Final
Memorandum.
(x) No legal or governmental proceedings are pending or, to the
knowledge of such counsel, threatened to which any of the Company or
the material Subsidiaries is a party or to which the property or
assets of the Company or the material Subsidiaries is subject which,
if determined adversely to the Company or such material Subsidiaries,
would result, individually or in the aggregate, in a Material Adverse
Effect, or which seeks to restrain, enjoin, prevent
18
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."
(xi) None of the Company or any material Subsidiary is (i) in
violation of its certificate of incorporation or bylaws (or similar
organizational document) or (ii) to the knowledge of such counsel, in
breach or violation of any judgment, decree or order applicable to any
of them or any of their respective properties or assets.
(xii) The execution and delivery of this Agreement, the
Indenture, the Registration Rights Agreement and the consummation of
the transactions contemplated hereby and thereby (including the
Acquisition) will not conflict with or constitute or result in a
breach or a default under (or an event which 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 known to such counsel,
(ii) the certificate of incorporation or bylaws (or similar
organizational document) of the Company or any material Subsidiary, 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 Purchaser in Section 8 hereof) any statute,
judgment, decree, order, rule or regulation which, in such counsel's
experience, is normally applicable both to general business
corporations which are not engaged in regulated business activities
and to transactions of the type contemplated by the Final Memorandum.
(xiii) 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 Purchaser or the other
transactions contemplated hereby (including the Acquisition), except
such as are disclosed in the Final Memorandum or as may be required
under Blue Sky laws, as to which such counsel need express no opinion,
and those which have previously been obtained.
(xiv) There are no legal or governmental proceedings involving
or affecting the Company or the Subsidiaries or any of their
respective properties or assets which 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 which would be required to be described in a prospectus
pursuant to the Act that are not described in the Final Memorandum.
(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.
19
(xvi) No registration of the Notes under the Act is required in
connection with the sale of the Notes to the Initial Purchaser as
contemplated by this Agreement and the Final Memorandum or in
connection with the initial resale of the Notes by the Initial
Purchaser in accordance with Section 8 of this Agreement, and prior to
the commencement of the Exchange Offer or the effectiveness of the
Shelf Registration Statement, the Indenture is not required to be
qualified under the TIA, in each case assuming (i) that the purchasers
who buy such Notes in the initial resale thereof are (A) qualified
institutional buyers as defined in Rule 144A promulgated under the Act
("QIBs"), (B) accredited investors as defined in Rule 501(a) (1), (2),
(3) or (7) promulgated under the Act ("Accredited Investors"), or (C)
not "U.S. persons" or purchasing for the account or benefit of "U.S.
persons" as defined in Regulation S, and are purchasing Notes in
offshore transactions in accordance with Regulation S, (ii) the
accuracy of the Initial Purchaser's representations in Section 8
hereof 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 Purchaser and the initial resale thereof and
(iii) the due performance by the Initial Purchaser 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
Notes will violate Regulation T, U or X of the Board of Governors of
the Federal Reserve System.
(xviii) The Company had all requisite corporate power and
authority to execute and deliver, and has all requisite corporate
power and authority to perform its obligations under, the Asset
Purchase Agreement. The Asset Purchase Agreement has been duly and
validly authorized, executed and delivered by the Company and, to the
knowledge of such counsel, the other parties thereto, and constitutes
the valid and legally binding agreement of the Company and, to the
knowledge of such counsel, the other parties thereto, enforceable
against the Company in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization or other similar laws now or hereafter in effect
relating to creditors' rights generally, (ii) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought, (iii) the extent that a waiver of rights
under any usury laws may be unenforceable and (iv) limitations on
rights to indemnity and contribution under federal or state securities
laws or the public policy underlying such laws.
(xx) The statements contained in the Final Memorandum under the
caption "Certain U.S. Federal Tax Considerations," insofar as such
statements purport to summarize certain federal income tax laws of the
United States, constitute a fair summary of the principal U.S. federal
income tax consequences of an investment in the Notes.
(xxi) The Credit Agreement has been duly and validly authorized,
by the Company and, to the knowledge of such counsel, by each of the
other parties
20
thereto, and, when duly executed by the Company and the other parties
thereto, will constitute the valid and legally binding agreement of
the Company, and to the knowledge of such counsel, of each of the
other parties thereto, enforceable against the Company and, to the
knowledge of such counsel, each of the other parties thereto, in
accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization or other similar
laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought, (iii) the
extent that a waiver of rights under any usury laws may be
unenforceable and (iv) limitations on rights to indemnity and
contribution under federal or state securities laws or the public
policy underlying such laws. The Final Memorandum contains a summary
of the terms of the Credit Agreement which is accurate in all material
respects.
At the time the foregoing opinion is delivered, Cadwalader, ▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇ shall additionally state that it has participated in conferences
with officers and other representatives of the Company and the
Subsidiaries, representatives of the independent public accountants for the
Company, representatives of the Initial Purchaser and counsel for the
Initial Purchaser, 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, no facts have come to its attention
which lead it to believe that the Final Memorandum, on the date thereof or
at the Closing Date, contained 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 the 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, statistical and accounting
data included in the Final Memorandum). In rendering such opinion,
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ shall have received and may rely upon such
certificates and other documents and information as it may reasonably
request to pass on such matters. The opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇ described in this Section shall be rendered to the Initial Purchaser
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 Purchaser shall have received
the opinion, in form and substance satisfactory to the Initial Purchaser,
dated as of the Closing Date and addressed to the Initial Purchaser, of
White & Case LLP, counsel for the Initial Purchaser, with respect to
certain legal matters relating to this Agreement and such other related
matters as the Initial Purchaser may reasonably require. In rendering such
opinion, White & Case LLP shall have received and may rely upon such
certificates and other documents and information as it may reasonably
request to pass upon such matters.
21
(c) (i) The Initial Purchaser shall have received from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP comfort letters dated the date hereof and the Closing Date,
in form and substance satisfactory to counsel for the Initial Purchaser.
(ii) The Initial Purchaser shall have received from Ernst & Young
LLP comfort letters dated the date hereof and the Closing Date, in form and
substance satisfactory to counsel for the Initial Purchaser.
(d) The representations and warranties of the Company 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 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 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 that,
individually or in the aggregate, has or would be reasonably likely to have
a Material Adverse Effect.
(e) The sale of the Notes hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(f) The Notes shall have been approved by the NASD for trading in the
PORTAL Market.
(g) There shall not have occurred any invalidation of Rule 144A under
the Act by any court or any withdrawal or proposed withdrawal of any rule
or regulation under the Act or the Exchange Act by the Commission or any
amendment or proposed amendment thereof by the Commission which in the
judgment of the Initial Purchaser would materially impair the ability of
the Initial Purchaser to purchase, hold or effect resales of the Notes as
contemplated hereby.
(h) There shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Company and the
Subsidiaries, taken as a whole, from that set forth in the Final Memorandum
that constitutes a Material Adverse Effect and that makes it, in the
Initial Purchaser's judgment, impracticable to market the Notes on the
terms and in the manner contemplated in the Final Memorandum.
(i) 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), the conduct of the business and operations of the
Company shall not have been interfered with by strike, fire, flood,
hurricane, accident or other calamity (whether or not insured) or by any
court or governmental action, order or decree, and, except as otherwise
stated
22
therein, the properties of the Company shall not have sustained any loss or
damage (whether or not insured) as a result of any such occurrence, except
any such interference, loss or damage which would not, individually or in
the aggregate, have a Material Adverse Effect.
(j) No securities of the Company shall have been downgraded or placed
on any "watch list" for possible downgrading by any nationally recognized
statistical rating organization.
(k) The Initial Purchaser shall have received certificates of the
Company, dated the Closing Date, signed by its Chairman of the Board,
President or any Executive or Senior Vice President and by the Chief
Financial Officer, Treasurer or any Assistant Treasurer, to the effect
that:
(i) The representations and warranties of the Company contained
in this Agreement are true and correct as of the date hereof and as of
the Closing Date, and the Company has 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 events have occurred, no information has become
known and no condition exists that, individually or in the aggregate,
would have a Material Adverse Effect;
(iii) The sale of the Notes hereunder has not been enjoined
(temporarily or permanently); and
(iv) such other information as the Initial Purchaser may
reasonably request.
(l) On the Closing Date, the Initial Purchaser shall have received
the Registration Rights Agreement executed by the Company and such
agreement shall be in full force and effect at all times pursuant to its
terms.
(m) On the Closing Date, the Company shall have consummated the
Acquisition.
On or before the Closing Date, the Initial Purchaser and counsel for the
Initial Purchaser 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 and the
Subsidiaries.
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 Purchaser and counsel for the Initial
23
Purchaser. The Company and the Subsidiaries shall furnish to the Initial
Purchaser such conformed copies of such documents, opinions, certificates,
letters, schedules and instruments in such quantities as the Initial Purchaser
shall reasonably request.
8. Offering of Notes; Restrictions on Transfer. The Initial Purchaser
agrees with the Company 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 Notes only from, and will
offer the Notes only to (A) in the case of offers inside the United States, (x)
persons whom the Initial Purchaser reasonably believes 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 Purchaser 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 or (y) other institutional investors
reasonably believed by the Initial Purchaser to be Accredited Investors that,
prior to their purchase of the Notes, deliver to the Initial Purchaser a letter
containing the representations and agreements set forth in Appendix A to the
Final Memorandum and (B) in the case of offers outside the United States, to
persons other than U.S. persons ("foreign purchasers," which term shall include
dealers or other professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than an estate or
trust)); provided, however, that, in the case of this clause (B), in purchasing
such Notes such persons are deemed to have represented and agreed as provided
under the caption "Transfer Restrictions" contained in the Final Memorandum.
The Initial Purchaser represents and warrants that it is a QIB, with such
knowledge and experience in financial and business matters as are necessary in
order to evaluate the merits and risks of an investment in the Notes. The
Initial Purchaser agrees to comply with the applicable provisions of Rule 144A
and Regulation S under the Act. The Initial Purchaser hereby acknowledges that
the Company and, for purposes of the opinions to be delivered to the Initial
Purchaser pursuant to Section 7(a) hereof, counsel to the Company will rely upon
the accuracy and truth of the representations contained in this Section 8 and
the Initial Purchaser hereby consents to such reliance.
9. Indemnification and Contribution. a)" \* MERGEFORMAT (a) The Company
and the Subsidiaries jointly and severally agree to indemnify and hold harmless
the Initial Purchaser and its respective affiliates, directors, officers,
agents, representatives general partners and employees of the Initial Purchaser
or its affiliates, and each other person, if any, who controls the Initial
Purchaser or its affiliates within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, to the full extent lawful against any losses,
claims, damages, expenses or liabilities (or action in respect thereof,
including, without, limitation, shareholder derivative actions and arbitration
proceedings) to which any Initial Purchaser or such other person may become
subject under the Act, the Exchange Act or otherwise, insofar as any such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto or
any application or other
24
document, or any amendment or supplement thereto, executed by the Company
or the Subsidiaries or based upon written information furnished by or on
behalf of the Company or the Subsidiaries filed in any jurisdiction in
order to qualify the Notes under the securities or "Blue Sky" laws thereof
or filed with any securities association or securities exchange (each an
"Application");
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto or any Application, a material fact
required to be stated therein or necessary to make the statements therein
not misleading; or
(iii) any breach of any of the representations and warranties of the
Company and the Subsidiaries set forth in this Agreement or the
Registration Rights Agreement,
and will reimburse, as incurred, the Initial Purchaser and each such other
person for any legal or other expenses incurred by the Initial Purchaser or such
other 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, the Company and the Subsidiaries 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 or any Application in reliance upon and in
conformity with written information concerning the Initial Purchaser furnished
to the Company by the Initial Purchaser specifically for use therein; provided,
further, that the foregoing indemnity agreement with respect to the any
Memorandum shall not inure to the benefit of the Initial Purchaser and its
respective affiliates, directors, officers, agents, representatives general
partners and employees of the Initial Purchaser or its affiliates or any person
who controls the Initial Purchaser if a copy of the Final Memorandum (as
theretofore amended or supplemented, if the Company shall have timely furnished
sufficient copies of the Final Memorandum as so amended or supplemented to the
Initial Purchaser) was not sent or given by or on behalf of the Initial
Purchaser to the purchaser of Notes asserting such loss, claim, damage or
liability at or prior to the written confirmation of the sale of Notes to such
person, and if the Final Memorandum (as so amended or supplemented) would have
cured the defect giving rise to the claimed loss, claim, damage or liability.
This indemnity agreement will be in addition to any liabilities or obligations
that the Company and the Subsidiaries may otherwise have to such indemnified
parties, including without limitation the indemnification obligations of the
Company pursuant to the NatWest Engagement. The Company and the Subsidiaries
shall not be liable under this Section 9 for any settlement of any claim or
action effected without its prior consent, which shall not be unreasonably
withheld.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company and the Subsidiaries, their directors, their officers and each person,
if any, who controls the Company or the Subsidiaries 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 Subsidiaries 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 any Application,
25
or (ii) the omission or the alleged omission to state therein a material fact
required to be stated in any Memorandum or any amendment or supplement thereto
or any Application, or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning the Initial Purchaser
furnished to the Company or the Subsidiaries by the 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, 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. This indemnity agreement will
be in addition to any liability that the Initial Purchaser may otherwise have to
such indemnified parties. The Initial Purchaser shall not be liable under this
Section 9 for any settlement of any claim or action effected without their
written consent, which shall not be unreasonably withheld. The Company and the
Subsidiaries shall not, without the prior written consent of the Initial
Purchaser, effect any settlement or compromise of any pending or threatened
proceeding in respect of which the 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 Purchaser, in form and substance reasonably satisfactory to the Initial
Purchaser, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of the Initial Purchaser.
(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
26
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 Purchaser
in the case of paragraph (a) of this Section 9 or either the Company or any of
the Subsidiaries in the case of paragraph (b) of this Section 9, representing
the indemnified parties under such paragraph (a) or paragraph (b), 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. 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.
(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 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 Subsidiaries on the one hand and the Initial Purchaser on
the other shall be deemed to be in the same proportion as the total proceeds
from the Offering (net of discounts and commissions and before deducting
expenses) received by the Company and the Subsidiaries bear to the total
discounts and commissions received by the 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 or the Subsidiaries on the one hand, or the Initial Purchaser on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Initial Purchaser agree that it would not be
equitable if the amount of such
27
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), the Initial Purchaser
shall not be obligated to make contributions hereunder that in the aggregate
exceed the total discounts, commissions and other compensation received by the
Initial Purchaser under this Agreement, less the aggregate amount of any damages
that the Initial Purchaser has otherwise been required to pay by reason of the
untrue or alleged untrue statements or the omissions or alleged omissions to
state a material fact, and no person guilty 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 the 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 Purchaser, and each director of the Company or the Subsidiaries, each
officer of the Company or the Subsidiaries and each person, if any, who controls
the Company or the Subsidiaries 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 Subsidiaries.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, the
Subsidiaries, their respective officers and the Initial Purchaser 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 Subsidiaries, any of their respective officers or
directors, the Initial Purchaser or any other person referred to in Section 9
hereof and (ii) delivery of and payment for the Notes. The respective
agreements, covenants, indemnities and other statements set forth in Sections 6,
9 and 15 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchaser 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 their
respective part to be performed or satisfied hereunder at or prior thereto
or, if at or prior to the Closing any of the following shall have occurred:
(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 has had or has a Material Adverse Effect, or there
shall have been, in the sole judgment of the Initial Purchaser, 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);
(ii) there shall have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or
28
operations, of the Company and the Subsidiaries, taken as a whole,
from that set forth in the Final Memorandum that is material and
adverse and that makes it, in the Initial Purchasers' judgment,
impracticable to market the Notes on the terms and in the manner
contemplated in the Final Memorandum.
(iii) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock
Exchange, Inc. or the NASD or the setting of minimum prices for
trading on such exchange or market shall have occurred or trading of
any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market;
(iv) a banking moratorium shall have been declared by New York
or United States authorities;
(v) 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, (C) any material change in the financial
markets of the United States (D) or any other national or
international calamity or emergency which, in the case of (A), (B),
(C) or (D) above and in the sole judgment of the Initial Purchaser,
makes it impracticable or inadvisable to proceed with the Offering or
the delivery of the Notes as contemplated by the Final Memorandum;
(vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs that
has a material adverse effect on the financial markets in the United
States, and would, in the sole judgment of the Initial Purchaser, make
it impracticable or inadvisable to market the Notes;
(vii) the enactment, publication, decree, or other promulgation
of any federal or state statute, regulation, rule order of any court
or other governmental authority which, in your judgment, would have a
Material Adverse Effect;
(viii) 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.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
12. Information Supplied by the Initial Purchaser. The statements set
forth in the last paragraph on the cover page of the Final Memorandum, and the
third, sixth and seventh paragraphs under the heading "Private Placement" in the
Final Memorandum (to the extent such statements relate to the Initial Purchaser)
constitute the only information furnished by the Initial Purchaser to the
Company for the purposes of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and, if
sent to the Initial Purchaser, shall be mailed or delivered to (i) NatWest
Capital Markets Limited, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇; with a copy
to White & Case LLP, 1155 Avenue of
▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.; if sent
to the Company, shall be mailed or delivered to the Company at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ with a copy to Cadwalader,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, 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.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchaser, the Company 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 Subsidiaries contained in Section 9 of this Agreement
shall also be for the benefit of any person or persons who control the Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchaser contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Company and officers and any person or persons who control the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Notes from the Initial Purchaser will be deemed a successor
because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
30
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 between the Company and the
Initial Purchaser.
Very truly yours,
ANACOMP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
NATWEST CAPITAL MARKETS LIMITED
By:/s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Chief Executive
SCHEDULE 2(b)
SUBSIDIARIES
Percentage
Domestic Subsidiaries Ownership Jurisdiction of Organization
None
Foreign Subsidiaries
Xidex GmbH Germany
Anacomp GmbH Germany
Anacomp Information Management Germany
Services GmbH
Anacomp Holdings Ltd. U.K.
Anacomp Ltd. U.K.
Xidex U.K. Ltd. U.K.
Anacomp B.V. Holland
Anacomp A.B. Sweden
Anacomp A/S Denmark
Anacomp O.Y. Finland
Anacomp A/S Norway
Anacomp S.A. France
Anacomp GesmbH Austria
N.V. Anacomp Belgium S.A. Belgium
Anacomp Italia S.r.l. Italy
COM S.r.l. Italy
Xidex Magnetics S.A. Switzerland
Xidex Corp. S.A.* Switzerland
Anacomp Canada, Inc. Canada
Anacomp do Brazil Ltda. Brazil
Anacomp Japan Ltd. Japan
Anacomp Pty Ltd.* Australia
Xidex New Zealand Ltd.* New Zealand
Data-▇▇▇▇ Development Int'l, Ltd.* Barbados
Anacomp Information Management France
Services S.A.
The Fiche Center Limited* U.K.
Anacomp International N.V.* The Netherlands
Com-Informatic AG Switzerland
------------------
* Has substantially no assets and/or in process of being dissolved.
** Has approximately $46,400 in assets