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EXHIBIT 99.1
CONFIDENTIAL
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MMI PRODUCTS, INC.
$30,000,000
11 1/4% Series C Senior Subordinated Notes due 2007
Purchase Agreement
February 9, 1999
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
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MMI PRODUCTS, INC.
$30,000,000
11 1/4% Series C Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
February 9, 1999
New York, New York
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
MMI Products, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to Bear, ▇▇▇▇▇▇▇ & Co. Inc. (the "Initial Purchaser") $30,000,000
aggregate principal amount of its 11 1/4% Series C Senior Subordinated Notes due
2007 (the "Series C Notes"), subject to the terms and conditions set forth in
this Purchase Agreement (this "Agreement"). The Notes (as defined below) will be
issued pursuant to an indenture (the "Indenture"), dated April 16, 1997, between
the Company and U.S. Trust Company of Texas, N.A., as trustee (the "Trustee").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Indenture.
The Company intends to use the proceeds of the sale of the Series C
Notes to repay certain indebtedness as described under "Use of Proceeds" in the
Offering Memorandum (as defined below).
1. Issuance of Securities. The Company proposes, upon the terms and
subject to the conditions set forth herein, to issue and sell to the Initial
Purchaser an aggregate of $30,000,000 principal amount of Series C Notes. The
Series C Notes and the Series B Notes (as defined below) issuable in exchange
therefor are collectively referred to herein as the "Notes."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Act"), the Series C Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
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"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OF AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A
NON-UNITED STATES PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
2. Offering. The Series C Notes will be offered and sold to the
Initial Purchaser pursuant to an exemption from the registration requirements
under the Act. The Company has prepared a preliminary offering memorandum, dated
February 8, 1999 (the "Preliminary Offering Memorandum"), and a final offering
memorandum, dated February 9, 1999, including those documents filed with the
Securities and Exchange Commission ("the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
exhibits thereto incorporated by reference therein (collectively, the
"Incorporated Documents") and attached as Annexes thereto (the "Offering
Memorandum"), relating to the Company and the Series C Notes.
The Initial Purchaser has advised the Company that the Initial
Purchaser will make offers (the "Exempt Resales") of the Series C Notes on the
terms set forth in the Offering
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Memorandum, as amended or supplemented, solely to persons whom the Initial
Purchaser reasonably believes to be "qualified institutional buyers", as defined
in Rule 144A under the Act ("QIBs" or "Eligible Purchasers"). The Initial
Purchaser will offer the Series C Notes to such Eligible Purchasers initially at
a price equal to 107.125% of the principal amount thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Series C Notes will
have the registration rights set forth in the registration rights agreement
relating thereto (the "Registration Rights Agreement"), to be dated the Closing
Date (as defined below), for so long as such Series C Notes constitute "Transfer
Restricted Notes" (as defined in the Registration Rights Agreement). Pursuant to
the Registration Rights Agreement, the Company will agree to file with the
Commission, under the circumstances set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration Statement") relating
to newly issued 11 1/4% Series B Senior Subordinated Notes due 2007 or such
other series of notes as the Company may issue in the event it is unable to
issue additional 11 1/4% Series B Senior Subordinated Notes due 2007 (in either
case, the "Series B Notes") to be offered in exchange for the Series C Notes
(the "Exchange Offer") and (ii), if required, a shelf registration statement
pursuant to Rule 415 under the Act (the "Shelf Registration Statement" and,
together with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the Series C Notes,
and to use its best efforts to cause the Registration Statements to be declared
effective and to consummate the Exchange Offer. This Agreement, the Notes, the
Indenture and the Registration Rights Agreement are hereinafter sometimes
referred to collectively as the "Operative Documents".
3. Purchase, Sale and Delivery. (a) On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to the
Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Company, $30,000,000 aggregate principal amount of Series C Notes. The purchase
price for the Series C Notes will be $1,044.47 per $1,000 principal amount Note.
(b) Delivery of the Series C Notes shall be made, against payment
of the purchase price therefor, at the offices of Weil, Gotshal & ▇▇▇▇▇▇ LLP at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or such other location as
may be mutually acceptable. Such delivery and payment shall be made at 10:00
a.m., Dallas time, on February 12, 1999 or at such other time as shall be agreed
upon by the Initial Purchaser and the Company. The time and date of such
delivery and payment are herein called the "Closing Date".
(c) One or more Series C Notes in definitive form, registered in
the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"),
having an aggregate amount corresponding to the aggregate amount of the Series C
Notes sold pursuant to Exempt Resales to QIBs (the "Global Note"), shall be
delivered by the Company to the Initial Purchaser (or as the Initial Purchaser
directs), against payment by the Initial Purchaser of the purchase price
therefor, by wire transfer, in same-day funds, to
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an account designated by the Company, provided that the Company shall give at
least two business days' prior written notice to the Initial Purchaser of the
information required to effect such wire transfer. The Global Note shall be made
available to the Initial Purchaser or its agents for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.
4. Agreements of the Company. The Company covenants and agrees with
the Initial Purchaser as follows:
(a) To advise the Initial Purchaser promptly and, if requested by
the Initial Purchaser, confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the qualification
or exemption from qualification of any Notes for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by any state
securities commission or other regulatory authority or (ii) of the happening of
any event that makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Offering Memorandum untrue or that requires the
making of any additions to or changes in the Preliminary Offering Memorandum or
the Offering Memorandum in order to make the statements of material fact
therein, in the light of the circumstances under which they are made, not
misleading. The Company shall make every reasonable effort to prevent the
issuance of any stop order or order suspending the qualification or exemption of
any Notes under any state securities or Blue Sky laws and, if at any time any
state securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption of any Notes under any state
securities or Blue Sky laws, the Company shall make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchaser and those persons identified
by the Initial Purchaser to the Company, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchaser may reasonably request. The
Company consents to the use of the Preliminary Offering Memorandum and the
Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchaser in connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless the
Initial Purchaser shall previously have been advised thereof and shall not have
objected thereto within a reasonable time after being furnished a copy of such
amendment or supplement. The Company shall promptly prepare, upon the Initial
Purchaser's reasonable request, any amendment or supplement to the Preliminary
Offering Memorandum or the Offering Memorandum that may be necessary or
advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resale, any event shall occur as a result of which, in the judgment of
the Company or in the reasonable opinion of counsel for the Company or the
Initial Purchaser, it becomes
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necessary or advisable to amend or supplement the Preliminary Offering
Memorandum or Offering Memorandum in order to make the statements of material
fact therein, in the light of the circumstances when such Offering Memorandum is
delivered to an Eligible Purchaser which is a prospective purchaser, not
misleading, or if it is necessary or advisable to amend or supplement the
Preliminary Offering Memorandum or Offering Memorandum to comply with applicable
law, (i) to promptly notify the Initial Purchaser and (ii) to promptly prepare
an appropriate amendment or supplement to such Preliminary Offering Memorandum
or Offering Memorandum so that the statements of material fact therein as so
amended or supplemented will not, in the light of the circumstances when it is
so delivered, be misleading, or so that such Preliminary Offering Memorandum or
Offering Memorandum will comply with applicable law.
(e) To cooperate with the Initial Purchaser and counsel for the
Initial Purchaser in connection with the qualification or registration of the
Series C Notes under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchaser may reasonably request and to continue such qualification
in effect so long as required for the Exempt Resales; provided, however, that
the Company shall not be required in connection therewith to register or qualify
as a foreign corporation where it is not now so qualified or to take any action
that would subject it to service of process in suits or taxation, in each case,
in any jurisdiction where it is not now so subject.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
to pay all costs, expenses, fees and taxes incident to the performance of the
obligations of the Company hereunder, including in connection with: (i) the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation, financial
statements) and all amendments and supplements thereto required pursuant hereto
(other than legal fees and expenses of counsel to the Initial Purchaser in
connection with any of the foregoing), (ii) the preparation (including, without
limitation, duplication costs) and delivery of all preliminary and final Blue
Sky Memoranda and all other agreements, memoranda, correspondence and all other
documents prepared and delivered in connection herewith and with the Exempt
Resales (including Blue Sky filing fees, but excluding legal fees and expenses
of counsel to the Initial Purchaser in connection with any of the foregoing),
(iii) the issuance, transfer and delivery by the Company of the Notes to the
Initial Purchaser, (iv) the qualification or registration of the Notes for offer
and sale under the securities or Blue Sky laws of the several states (including,
without limitation, the cost of printing and mailing a Blue Sky Memorandum and
the reasonable fees and disbursements of counsel for the Initial Purchaser
relating thereto), (v) furnishing such copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and all amendments and supplements
thereto, as may be requested for use in connection with Exempt Resales, (vi) the
preparation of certificates for the Notes (including, without limitation,
printing and engraving thereof), (vii) the fees, disbursements and expenses of
the Company's accountants, (viii) all expenses and listing fees in connection
with the application for quotation of the Notes in the National Association of
Securities Dealers, Inc. ("NASD") Private Offering, Resales and Trading through
Automated Linkages ("PORTAL") market (but excluding legal fees and expenses
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of counsel to the Initial Purchaser in connection with the foregoing), (ix) all
fees and expenses (including fees and expenses of counsel) of the Company in
connection with the approval of the Notes by DTC for "book-entry" transfer, (x)
rating the Notes by rating agencies, (xi) the reasonable fees and expenses of
the Trustee and its counsel, (xii) the performance by the Company of its other
obligations under this Agreement and the other Operative Documents, (xiii)
"roadshow" travel and other expenses incurred in connection with the marketing
and sale of the Notes, and (xiv) the fees, disbursements and expenses of the
Company's counsel; provided, however, that, except as provided in this Section
4(f) or Section 11(d), the Initial Purchaser shall pay its own costs and the
costs and expenses of its counsel.
(g) To use the proceeds from the sale of the Series C Notes in
the manner described in the Offering Memorandum under the caption "Use of
Proceeds".
(h) Not to voluntarily claim, and to resist actively any attempts
to claim, the benefit of any usury laws against the holders of any Notes.
(i) To do and perform all things required to be done and
performed under this Agreement by it prior to or after the Closing Date and to
make every reasonable effort to satisfy all conditions precedent on its part to
the delivery of the Series C Notes pursuant to the directions of the Initial
Purchaser.
(j) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Series C Notes in a manner that would
require the registration under the Act of the sale to the Initial Purchaser, the
QIBs of the Series C Notes or to take any other action that would result in the
Exempt Resales not being exempt from registration under the Act.
(k) For so long as any of the Notes remain outstanding and during
any period in which the Company is not subject to Section 13 or 15(d) of the
Exchange Act, to make available to any holder or beneficial owner of Series C
Notes in connection with any sale thereof and any prospective purchaser of such
Series C Notes from such holder or beneficial owner, in each case upon request,
the information required by Rule 144A(d)(4) under the Act.
(l) To use its best efforts to cause the Exchange Offer to be
made in the appropriate form to permit the Series B Notes to be offered in
exchange for the Series C Notes and to comply with all applicable federal and
state securities laws in connection with the Exchange Offer.
(m) To make every reasonable effort to effect the inclusion of
the Notes in the PORTAL market in accordance with the rules and regulations of
the NASD, relating to trading in the PORTAL market, and to make every reasonable
effort to obtain approval of the Series C Notes by DTC for "book-entry"
transfer.
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(n) For so long as any of the Notes remain outstanding, to
deliver without charge to the Initial Purchaser, as it may reasonably request,
promptly upon their becoming available, copies of (i) all publicly available
reports or other publicly available information that the Company shall mail or
otherwise make available to its security holders and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange and such other publicly available
information concerning the Company including, without limitation, press
releases.
(o) Prior to the Closing Date, to furnish to the Initial
Purchaser, as soon as they have been prepared in the ordinary course by the
Company or its accountants, as the case may be, copies of any unaudited interim
financial statements for any period subsequent to the periods covered by the
financial statements appearing in the Offering Memorandum.
(p) Not to take, directly or indirectly, any action designed to,
or that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Notes. Except as permitted by the Act, the Company will not
distribute any (i) preliminary offering memorandum, including, without
limitation, the Preliminary Offering Memorandum, (ii) offering memorandum,
including, without limitation, the Offering Memorandum or (iii) other offering
material in connection with the offering and sale of the Notes.
(q) To comply with all of its agreements set forth in this
Agreement, the Indenture, the Registration Rights Agreement and the other
Operative Documents to which it is a party and all agreements set forth in the
representation letters of the Company to DTC relating to the approval of the
Notes by DTC for "book-entry" transfer.
5. Representations and Warranties. (a) The Company represents and
warrants to the Initial Purchaser that:
(i) The Preliminary Offering Memorandum and the Offering
Memorandum have been prepared in connection with the Exempt Resales.
The Preliminary Offering Memorandum as of its date did not and the
Offering Memorandum as of its date does not and as of the Closing Date
will not, and any supplement or amendment to either of them as of the
date of such supplement or amendment will not, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties contained in this paragraph shall not apply to statements
in or omissions from the Preliminary Offering Memorandum and the
Offering Memorandum (or any supplement or amendment thereto) 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 therein, as such information is enumerated
in Article 9 herein. No stop order preventing the use of the
Preliminary Offering
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Memorandum or the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued.
(ii) Each of the Incorporated Documents, at the time they
were filed with the Commission, complied in all material respects with
the requirements of the Exchange Act and the rules and regulations of
the Commission under the Exchange Act, no such document when it was
filed, and, when read together with the other information in the
Offering Memorandum, as of its date and 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
therein, in the light of the circumstances under which they were made,
not misleading. There are no contracts, indentures, mortgages, loan
agreements, leases or other instruments or documents of the Company or
the Subsidiary (as defined) that are required to be described or
referred to in the Incorporated Documents or to be filed as exhibits
thereto by the Exchange Act or by the rules and regulations
thereunder, other than those described or referred to therein or filed
as exhibits thereto.
(iii) Each of the Company and Security Fence Supply Co.,
Inc., a Maryland corporation (the "Subsidiary"), (A) has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, (B) has all
requisite corporate power and authority to carry on its business as it
is currently being conducted and as described in the Offering
Memorandum and to own, lease and operate its properties and (C) is
duly qualified and in good standing as a foreign corporation and
authorized to do business in each jurisdiction in which the nature of
its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified could not
reasonably be expected to (x) result, individually or in the
aggregate, in a material adverse effect on the properties, business,
results of operations, condition (financial or otherwise), or affairs
of the Company and the Subsidiary, taken as a whole, (y) interfere
with or adversely affect the issuance of the Notes pursuant hereto or
(z) in any manner draw into question the validity of this Agreement or
any other Operative Document or the transactions described in the
Offering Memorandum under the caption "Use of Proceeds" (any of the
events set forth in clauses (x), (y) or (z), a "Material Adverse
Effect"). Other than the Subsidiary, the Company has no other
subsidiaries and does not control, directly or indirectly, any other
person, including any corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust or
unincorporated organization.
(iv) All of the outstanding capital stock of the Company
has been duly authorized, validly issued, and is fully paid and
nonassessable and was not issued in violation of any preemptive or
similar rights. On October 3, 1998, after giving pro forma effect to
the issuance and sale of the Series C Notes pursuant hereto and the
application of the net proceeds therefrom, the Company
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would have had an authorized and outstanding capitalization as set
forth in the Offering Memorandum under the caption "Capitalization",
subject to the Notes and assumptions included therein.
(v) There are not currently any outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any capital stock or
other equity interest of the Company.
(vi) All of the outstanding capital stock of the
Subsidiary is owned, directly or indirectly, by the Company, free and
clear of any security interest, claim, lien, limitation on voting
rights or encumbrance, except for any such security interest, claim,
lien, limitation on voting rights or encumbrance pursuant to the
Amended and Restated Loan and Security Agreement, dated as of December
13, 1996, as amended, and all such securities have been duly
authorized, validly issued, and are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights.
(vii) When the Series C Notes are issued and delivered
pursuant to this Agreement, neither the Series C Notes will be of the
same class (within the meaning of Rule 144A under the Act) as
securities of the Company that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are
quoted in a United States automated inter-dealer quotation system.
(viii) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and each of the other Operative Documents to which it is a
party and to consummate the transactions contemplated hereby and
thereby, including, without limitation, the corporate power and
authority to issue, sell and deliver the Notes as provided herein and
therein.
(ix) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity.
(x) The Indenture has been duly and validly authorized,
executed and delivered by the Company and the Trustee, is the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject
to general principles of equity. The Indenture conforms, in all
material respects, to the description thereof in the Offering
Memorandum.
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(xi) The Registration Rights Agreement has been duly and
validly authorized by the Company and, when duly executed and
delivered by the Company and the Initial Purchaser, will be the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject
to general principles of equity. The Registration Rights Agreement
will conform, in all material respects, to the description thereof in
the Offering Memorandum.
(xii) The Series C Notes have been duly and validly
authorized by the Company for issuance and sale to the Initial
Purchaser pursuant to this Agreement and, when issued and
authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms hereof
and thereof, will be the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The Series C
Notes will conform, in all material respects, to the description
thereof in the Offering Memorandum.
(xiii) The Series B Notes have been duly and validly
authorized for issuance by the Company and, when issued and
authenticated in accordance with the terms of the Exchange Offer and
the Indenture, will be the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The Series B
Notes will conform, in all material respects to the description
thereof in the Offering Memorandum.
(xiv) The Company is not and, after giving effect to the
Offering, will not be (A) in violation of its charter or bylaws, (B)
in default in the performance of any bond, debenture, note, indenture,
mortgage, deed of trust or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties
is subject that could reasonably be expected to have a Material
Adverse Effect or (C) in violation of any local, state, federal or
foreign law, statute, ordinance, rule, regulation, requirement,
judgment or court decree (including, without limitation, environmental
laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to it or any of its assets or properties (whether
owned or leased) that could reasonably be expected to have a Material
Adverse Effect. To the best knowledge of the Company, there exists no
condition that, with notice, the passage of time or otherwise, would
constitute a default under any such document or instrument that could
reasonably be expected to have a Material Adverse Effect.
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(xv) None of (A) the execution, delivery or performance by
the Company of this Agreement or any of the other Operative Documents
to which it is a party, and (B) the issuance and sale of the Notes,
violates, conflicts with or constitutes a breach of any of the terms
or provisions of, or, after giving effect to the Offering, will
violate, conflict with or constitute a breach of any of the terms or
provisions of, or a default under (or an event that with notice or the
lapse of time, or both, would constitute a default), or requires
consent under, or results in the imposition of a lien or encumbrance
on any properties of the Company or the Subsidiary, or an acceleration
of any indebtedness of the Company pursuant to, (1) the charter or
bylaws of the Company or the Subsidiary, (2) any bond, debenture,
note, indenture, mortgage, deed of trust or other material agreement
or material instrument to which the Company or the Subsidiary is a
party or by which either of them or their respective property is or
may be bound, all of which material agreements are set forth in
Exhibit A, (3) any statute, rule or regulation applicable to the
Company, the Subsidiary or any of their respective assets or
properties or (4) any judgment, order or decree of any court or
governmental agency or authority having jurisdiction over the Company,
the Subsidiary or any of their respective assets or properties, except
in the case of clauses (2), (3) and (4) above, as would not reasonably
be expected to have a Material Adverse Effect. No consent, approval,
authorization or order of, or filing, registration, qualification,
license or permit of or with (A) any court or governmental agency,
body or administrative agency or (B) any other person is required for
(1) the execution, delivery and performance by the Company of this
Agreement or any of the other Operative Documents to which it is a
party, or (2) the issuance and sale of the Notes and the transactions
contemplated hereby and thereby, except such as have been obtained and
made (or, in the case of the Series B Notes and Registration Rights
Agreement, must be obtained and made) under the Act, the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
state securities or Blue Sky laws and regulations or such as may be
required by the NASD, and except those which the failure to obtain
would not reasonably be expected to have a Material Adverse Effect.
(xvi) There is (A) no action, suit, investigation or
proceeding before or by any court, arbitrator or governmental agency,
body or official, domestic or foreign, now pending or, to the
knowledge of the Company, threatened to which the Company or the
Subsidiary is or may be a party or to which the business or property
of the Company or the Subsidiary is subject, (B) no statute, rule,
regulation or order that has been enacted, adopted or issued by any
governmental agency or that has been proposed by any governmental body
and (C) no injunction, restraining order or order of any nature by a
federal or state court or foreign court of competent jurisdiction to
which the Company or the Subsidiary is or may be subject or to which
the business, assets, or property of the Company or the Subsidiary is
or may be subject that, in the case of clauses (A), (B) and (C) above,
(1) is required to be disclosed in the Preliminary Offering Memorandum
and the Offering Memorandum and that is not so disclosed or (2) could
reasonably be expected to have a Material Adverse Effect.
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(xvii) No action has been taken and no statute, rule,
regulation or order has been enacted, adopted or issued by any
governmental agency that prevents the issuance of the Series C Notes
or prevents or suspends the use of the Offering Memorandum; no
injunction, restraining order or order of any nature by a federal or
state court of competent jurisdiction has been issued that prevents
the issuance of the Notes or prevents or suspends the sale of the
Notes in any jurisdiction referred to in Section 4(e) hereof; and
every request of any securities authority or agency of any
jurisdiction for additional information has been complied with in all
material respects.
(xviii) Except as could not reasonably be expected to have
a Material Adverse Effect, there is (A) no unfair labor practice
complaint pending against the Company or the Subsidiary nor, to the
best knowledge of the Company, threatened against it or the
Subsidiary, before the National Labor Relations Board, any state or
local labor relations board or any foreign labor relations board, and
no significant grievance or significant arbitration proceeding arising
out of or under any collective bargaining agreement is so pending
against the Company or the Subsidiary or, to the knowledge of the
Company, threatened against it or the Subsidiary, (B) no significant
strike, labor dispute, slowdown or stoppage pending against the
Company or the Subsidiary nor, to the best knowledge of the Company,
threatened against the Company or the Subsidiary and (C) to the
knowledge of the Company, no union representation question existing
with respect to the employees of the Company or the Subsidiary. Except
as could not reasonably be expected to have a Material Adverse Effect,
to the knowledge of the Company, no collective bargaining organizing
activities are taking place with respect to the Company or the
Subsidiary. Except as could not reasonably be expected to have a
Material Adverse Effect, neither the Company nor the Subsidiary has
not violated (A) any federal, state or local law or foreign law
relating to discrimination in hiring, promotion or pay of employees,
(B) any applicable wage or hour laws or (C) any provision of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or the rules and regulations thereunder.
(xix) Each of the Company and the Subsidiary has been and
is in compliance with all foreign, federal, state or local law,
including common law, statute, code, regulation, or similar legally
binding requirements relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws") except for
non-compliance that could not reasonably be expected to have a
Material Adverse Effect.
(xx) Except as could not reasonably be expected to have a
Material Adverse Effect, there is no alleged liability, or to the best
knowledge of the Company, potential liability (including, without
limitation, alleged or potential
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liability or investigatory costs, cleanup costs, governmental response
costs, natural resource damages, property damages, personal injuries
or penalties) of the Company or the Subsidiary arising out of, based
on or resulting from (a) the presence or release into the environment
of any Hazardous Material (as defined below) at any location, whether
or not owned by the Company or the Subsidiary, or (b) any violation or
alleged violation of any Environmental Law, which alleged or potential
liability is required to be disclosed in the Offering Memorandum,
other than as disclosed therein. The term "Hazardous Material" means
(i) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, (ii) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (iii) any petroleum or
petroleum product, (iv) any polychlorinated biphenyl and (v) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of
any other law relating to protection of human health or the
environment or imposing liability or standards of conduct concerning
any such chemical material, waste or substance.
(xxi) Except as could not reasonably be expected to have a
Material Adverse Effect, each of the Company and the Subsidiary has
such permits, licenses, franchises and authorizations of governmental
or regulatory authorities ("permits"), including, without limitation,
permits required under any applicable Environmental Laws, as are
necessary to own, lease and operate its properties and to conduct its
business. Except as could not reasonably be expected to have a
Material Adverse Effect, each of the Company and the Subsidiary has
fulfilled and performed all of its obligations with respect to such
permits and has not received any actual notice, nor is it aware, of
any proceeding seeking the revocation or termination of any such
permit, nor is it aware of the existence of any facts which would give
any governmental or regulatory authority a basis for revoking or
terminating any such permit.
(xxii) Each of the Company and the Subsidiary has (A) good
and marketable title to all of the material properties and material
assets described in the Offering Memorandum as owned by it, free and
clear of all liens and encumbrances, except for such as do not
materially affect the value of such property or materially interfere
with its use of such property, and (B) peaceful and undisturbed
possession under all material leases to which it is a party as lessee,
and each of such leases is valid and binding on the part of the
Company or the Subsidiary, respectively. To the knowledge of the
Company, no material default by the landlord is existing under any
such lease, except as could not reasonably be expected to have a
Material Adverse Effect.
(xxiii) Except as could not reasonably be expected to have
a Material Adverse Effect, each of the Company and the Subsidiary
owns, possesses or has the right to employ all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, software, systems or
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procedures), trademarks, service marks and trade names, computer
programs, technical data and information (collectively, the
"Intellectual Property") presently employed by it in connection with
the businesses now operated by it. The use of the Intellectual
Property in connection with the business and operations of the Company
and the Subsidiary does not infringe on the rights of any person,
except as could not reasonably be expected to have a Material Adverse
Effect.
(xxiv) All tax returns required to be filed by the Company
and the Subsidiary in all jurisdictions have been so filed. All taxes,
including withholding taxes, penalties and interest, assessments, fees
and other charges due or claimed to be due from the Company and the
Subsidiary or that are due and payable have been paid, other than
those being contested in good faith and for which adequate reserves
have been provided or those currently payable without penalty or
interest. To the knowledge of the Company, there are no material
proposed additional tax assessments against the Company or the
Subsidiary or its assets or property.
(xxv) The Company is not (i) an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(xxvi) There are no holders of securities of the Company
who, by reason of the execution by the Company of this Agreement or
any other Operative Document or the consummation by the Company of the
transactions contemplated hereby and thereby, have the right to
request or demand that the Company register under the Act or analogous
foreign laws and regulations securities held by them.
(xxvii) Each of the Company and the Subsidiary maintains a
system of internal accounting controls sufficient to provide
reasonable assurance that: (A) transactions are executed in accordance
with management's general or specific authorizations; (B) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles
and to maintain accountability for assets; (C) access to assets is
permitted only in accordance with management's general or specific
authorization; (D) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate
action is taken with respect thereto; and (E) the Company and the
Subsidiary, respectively, will be capable of complying with all of the
reporting requirements of the Exchange Act and the rules and
regulations promulgated thereunder.
(xxviii) Each of the Company and the Subsidiary maintains
insurance covering its properties, operations, personnel and business.
Such insurance insures against such losses and risks as are adequate
in accordance with customary industry practice to protect the Company
or the Subsidiary, as the case may be, and their respective business.
Neither the Company nor the Subsidiary has received notice from any
insurer or agent of such insurer that substantial capital improvements
or other expenditures that are material to the Company or the
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Subsidiary, as the case may be, will have to be made in order to
continue such insurance. All such insurance is outstanding and duly in
force on the date hereof and will remain outstanding and duly in force
on the terms in effect on the date hereof, subject only to changes
made in the ordinary course of business, consistent with past
practice, which do not, singly or in the aggregate, materially alter
the coverage thereunder or the risks covered thereby or which could
not reasonably be expected to have a Material Adverse Effect.
(xxix) None of the Company, the Subsidiary or, to the
knowledge of the Company, any of the officers or directors of the
Company or the Subsidiary or any other person acting on the Company's
behalf, has (A) taken, directly or indirectly, any action designed to,
or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Notes or (B) since the
date of the Preliminary Offering Memorandum (1) sold, bid for,
purchased or paid any person any compensation for soliciting purchases
of the Notes or (2) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities
of the Company.
(xxx) No registration under the Act of the Series C Notes
is required for the sale of the Series C Notes to the Initial
Purchaser as contemplated hereby or for the Exempt Resales assuming
(A) that the purchasers who buy the Series C Notes in the Exempt
Resales are either QIBs and (B) the accuracy of the Initial
Purchaser's representations regarding the absence of general
solicitation in connection with the sale of Series C Notes to the
Initial Purchaser and the Exempt Resales contained herein. No form of
general solicitation or general advertising was used by the Company or
any of its representatives (other than the Initial Purchaser, as to
which the Company makes no representation or warranty) in connection
with the offer and sale of any of the Notes in connection with Exempt
Resales, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. 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.
(xxxi) Each of the Company and the Subsidiary has
delivered all material employee pension or benefit plans with respect
to which it, or any corporation considered an affiliate of the Company
or the Subsidiary within the meaning of Section 407(d)(7) of ERISA (an
"ERISA Affiliate"), is a party in interest or disqualified person. The
execution and delivery of this Agreement, the other Operative
Documents and the sale of the Series C Notes to be purchased by the
QIBs will not involve any prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended. The representation made by the Company in the
preceding sentence is made in reliance upon and subject to the
accuracy of, and compliance with, the
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representations and covenants made or deemed made by the QIBs as set
forth in the Offering Memorandum under the caption "Notice to
Investors".
(xxxii) Each of the Preliminary Offering Memorandum and
the Offering Memorandum, as of its date, and each amendment or
supplement thereto, as of its date, contains the information specified
in, and meets the requirements of, Rule 144A(d)(4) under the Act.
(xxxiii) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the Closing
Date, except as set forth in the Offering Memorandum, (A) neither the
Company nor the Subsidiary has incurred any liabilities or
obligations, direct or contingent, which are material, individually or
in the aggregate, to the Company, nor entered into any material
transaction not in the ordinary course of business, in either case
that would require disclosure in the Offering Memorandum, (B) there
has not been, singly or in the aggregate, any change or development
which could reasonably be expected to result in a Material Adverse
Effect and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(xxxiv) None of the execution, delivery and performance of
this Agreement, the issuance and sale of the Notes, the application of
the proceeds from the issuance and sale of the Notes and the
consummation of the transactions contemplated thereby as set forth in
the Offering Memorandum, will violate Regulations G, T, U or X
promulgated by the Board of Governors of the Federal Reserve System or
analogous foreign laws and regulations.
(xxxv) The accountants who have certified or will certify
the financial statements included or to be included as part of the
Offering Memorandum are independent accountants. The historical
financial statements of the Company comply as to form in all material
respects with the requirements applicable to registration statements
on Form S-1 under the Act and present fairly in all material respects
the financial position and results of operations of the Company at the
dates and for the periods indicated. Such financial statements have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
presented. The pro forma financial data and as adjusted balance sheet
data included in the Offering Memorandum have been prepared on a basis
consistent with such historical statements, except for the pro forma
adjustments specified therein, and gives effect to assumptions made on
a reasonable basis and present fairly in all material respects the
historical and proposed transactions contemplated by this Agreement
and the other Operative Documents; and such pro forma financial data
and as adjusted balance sheet data financial statements comply as to
form in all material respects with the requirements applicable to pro
forma financial statements included in registration statements on Form
S-1 under the Act. The other historical financial information and data
included in the Offering Memorandum are prepared
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on a basis consistent with the financial statements included in the
Offering Memorandum and the books and records of the Company.
(xxxvi) Neither the Company nor the Subsidiary intends to,
nor does either believe that it will, incur debts beyond its ability
to pay such debts as they mature. The present fair saleable value of
the assets of the Company exceeds the amount that will be required to
be paid on or in respect of the existing debts and other liabilities
(including contingent liabilities) of the Company as they become
absolute and matured. The assets of the Company do not constitute
unreasonably small capital to carry out the business of the Company as
conducted or as proposed to be conducted. Upon the issuance of the
Notes, the present fair saleable value of the assets of the Company
will exceed the amount that will be required to be paid on or in
respect of the existing debts and other liabilities (including
contingent liabilities) of the Company as they become absolute and
matured. Upon the issuance of the Notes and the consummation of the
other Transactions, the assets of the Company will not constitute
unreasonably small capital to carry out its business as now conducted,
including the capital needs of the Company, taking into account the
projected capital requirements and capital availability.
(xxxvii) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company or the
Subsidiary and any other person that would give rise to a valid claim
against the Company, the Subsidiary or the Initial Purchaser for a
brokerage commission, finder's fee or like payment in connection with
the issuance, purchase and sale of the Notes.
(xxxviii) There exist no conditions that would constitute
a default (or an event which with notice or the lapse of time, or
both, would constitute a default) under any of the Operative
Documents.
(xxxix) Each certificate signed by any officer of the
Company and delivered to the Initial Purchaser or counsel for the
Initial Purchaser shall be deemed to be a representation and warranty
by the Company to the Initial Purchaser as to the matters covered
thereby.
The Company acknowledges that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 8 hereof, counsel for the Company and counsel for the Initial Purchaser,
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
(b) The Initial Purchaser represents, warrants and covenants
to the Company and agrees that:
(i) The Initial Purchaser 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 Series
C Notes.
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(ii) The Initial Purchaser (A) is not acquiring the Series
C Notes with a view to any distribution thereof that would violate the
Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling
the Series C Notes only to QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A.
(iii) No form of general solicitation or general
advertising has been or will be used by the Initial Purchaser or any
of its representatives in connection with the offer and sale of any of
the Series C Notes, including, but not limited to, articles, notices
or other communications published in any newspaper, magazine, or
similar medium or broadcast over television or radio, or any seminar
or meeting whose attendees have been invited by any general
solicitation or general advertising.
(iv) The Initial Purchaser agrees that, in connection with
the Exempt Resales, it will solicit offers to buy the Series C Notes
only from, and will offer to sell the Series C Notes only to, QIBs.
The Initial Purchaser further (A) agrees that it will offer to sell
the Series C Notes only to, and will solicit offers to buy the Series
C Notes only from, QIBs who in purchasing such Series C Notes will be
deemed to have represented and agreed that they are purchasing the
Series C Notes for their own accounts or accounts with respect to
which they exercise sole investment discretion and that they or such
accounts are QIBs, (B) agrees and acknowledges that such Series C
Notes will not have been registered under the Act and may be resold,
pledged or otherwise transferred only (x)(I) to a person who the
seller reasonably believes is a QIB in a transaction meeting the
requirements of Rule 144A, (II) in a transaction meeting the
requirements of Rule 144, (III) outside the United States to a foreign
person in a transaction meeting the requirements of Rule 904 under the
Act or (IV) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel if the
Company so requests), (y) to the Company or (z) pursuant to an
effective registration statement under the Act and, in each case, in
accordance with any applicable securities laws of any state of the
United States or any other applicable jurisdiction and (C) agrees that
it will, and acknowledges that each subsequent holder is required to,
notify any purchaser of the security evidenced thereby of the resale
restrictions set forth in (B) above.
The Initial Purchaser understands that the Company and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 8 hereof, counsel for the Company and counsel for the Initial Purchaser
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless (i) the
Initial Purchaser, (ii) each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
and (iii) the respective
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officers, directors, partners and employees of the Initial Purchaser or any
controlling person to the fullest extent lawful, from and against any and all
losses, liabilities, claims, damages and expenses whatsoever (including but not
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum, or in any supplement thereto or amendment
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company will not be liable in
any such case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Initial Purchaser expressly for
use therein. This indemnity agreement will be in addition to any liability which
the Company may otherwise have, including under this Agreement.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any losses, liabilities, claims, damages and reasonable expenses
whatsoever (including but not limited to reasonable attorneys' fees and any and
all reasonable expenses whatsoever incurred in investigating, preparing or
defending against any investigation or litigation, commenced or threatened, or
any claim whatsoever and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchaser expressly for use therein;
provided, however, that in no case shall the Initial Purchaser be liable or
responsible for any amount in excess of the discounts and commissions received
by the Initial Purchaser, less such sums reimbursed by the Initial Purchaser to
the Company. This indemnity will be in addition to any liability which the
Initial Purchaser may otherwise have, including under this Agreement.
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(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying parties
in connection with the defense of such action, (ii) the indemnifying parties
shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action or (iii)
such indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional to
those available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses of counsel shall be borne by the indemnifying
parties; provided, however, that the indemnifying party under subsection (a) or
(b) above shall only be liable for the legal expenses of one counsel (in
addition to any local counsel) for all indemnified parties in each jurisdiction
in which any claim or action is brought. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable for any
settlement of any claim or action effected without its prior written consent;
provided, however, that such consent was not unreasonably withheld.
7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 is for any
reason held to be unavailable from the Company or is insufficient to hold
harmless a party indemnified thereunder, the Company, on the one hand, and the
Initial Purchaser, on the other hand, shall contribute to the aggregate losses,
claims, damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claims asserted, but after deducting in
the case of losses, claims, damages, liabilities and expenses suffered by the
Company any contribution received by the Company from Persons, other than the
Initial Purchaser, who may also be liable for contribution, including Persons
who control the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act) to which the Company and the Initial Purchaser may be
subject, in such proportion as is appropriate to
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reflect the relative benefits received by the Company, on the one hand, and the
Initial Purchaser, on the other hand, from the offering of the Series C Notes
or, if such allocation is not permitted by applicable law or indemnification is
not available as a result of the indemnifying party not having received notice
as provided in Section 6, in such proportion as is appropriate to reflect not
only the relative benefits referred to above but also the relative fault of the
Company, on the one hand, and the Initial Purchaser, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on the
one hand, and the Initial Purchaser, on the other hand, shall be deemed to be in
the same proportion as (i) the total proceeds from the offering of Series C
Notes (net of discounts but before deducting expenses) received by the Company
and (ii) the discounts and commissions received by the Initial Purchaser, less
such sums reimbursed by the Initial Purchaser to the Company. The relative fault
of the Company, on the one hand, and of the Initial Purchaser, on the other
hand, 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 Initial Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7, (i) in no case shall the Initial Purchaser be required to
contribute any amount in excess of the amount by which the discounts and
commissions applicable to the Series C Notes purchased by the Initial Purchaser
pursuant to this Agreement exceeds the amount of any damages which the Initial
Purchaser has otherwise been required to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission and (ii) 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 Section 7, (A) each person,
if any, who controls the Initial Purchaser within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act and (B) the respective officers,
directors, partners, employees, representatives and agents of the Initial
Purchaser or any controlling person shall have the same rights to contribution
as the Initial Purchaser, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 7. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 7, notify such party
or parties from whom contribution may be sought, but the failure to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 7 or otherwise. No party shall be liable for contribution with respect
to any action or claim settled without its prior written consent; provided,
however, that such written consent was not unreasonably withheld.
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8. Conditions of Initial Purchaser's Obligations. The obligations
of the Initial Purchaser to purchase and pay for the Series C Notes, as provided
herein, shall be subject to the satisfaction of the following conditions:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof and on
the Closing Date with the same force and effect as if made on and as of the date
hereof and the Closing Date, respectively. The Company shall have performed or
complied in all material respects with all of the agreements herein contained
and required to be performed or complied with by it at or prior to the Closing
Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchaser not later than 10:00 a.m., New York City
time, on the day following the date of this Agreement or at such later date and
time as to which the Initial Purchaser may agree, and no stop order suspending
the qualification or exemption from qualification of the Series C Notes in any
jurisdiction referred to in Section 4(e) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the issuance of
the Series C Notes; no action, suit or proceeding shall have been commenced and
be pending against or affecting or, to the best knowledge of the Company,
threatened against the Company or the Subsidiary before any court or arbitrator
or any governmental body, agency or official that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect; and no stop
order shall have been issued preventing the use of the Offering Memorandum, or
any amendment or supplement thereto, or which could reasonably be expected to
have a Material Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum, (i) there shall not have been any material adverse change,
or any development that is reasonably likely to result in a material adverse
change, in the capital stock or the long-term debt, or material increase in the
short-term debt, of the Company or the Subsidiary from that set forth in the
Offering Memorandum, (ii) no dividend or distribution of any kind shall have
been declared, paid or made by the Company on any class of its capital stock and
(iii) neither the Company nor the Subsidiary shall have incurred any liabilities
or obligations, direct or contingent, that are material, individually or in the
aggregate, to the Company, and that are required to be disclosed on a
consolidated balance sheet or notes thereto in accordance with generally
accepted accounting principles and are not disclosed on the latest balance sheet
or notes thereto included in the Offering Memorandum. Since the date hereof and
since the dates as of which information is given in the Offering Memorandum,
there shall not have occurred any material adverse change in the business,
financial condition or results of operations of the Company or the Subsidiary,
taken as a whole.
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24
(e) The Initial Purchaser shall have received a certificate,
dated the Closing Date, signed on behalf of the Company, in form and substance
satisfactory to the Initial Purchaser, confirming, as of the Closing Date, the
matters set forth in paragraphs (a), (b), (c) and (d) of this Section 8.
(f) The Initial Purchaser shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance satisfactory to
the Initial Purchaser and counsel for the Initial Purchaser, of Weil, Gotshal &
▇▇▇▇▇▇ LLP, counsel for the Company, to the effect set forth in Exhibit B
hereto.
(g) At the time this Agreement is executed and at the Closing
Date, the Initial Purchaser shall have received from Ernst & Young LLP,
independent public accountants, dated as of the date of this Agreement and as of
the Closing Date, customary comfort letters addressed to the Initial Purchaser
and in form and substance satisfactory to the Initial Purchaser and counsel for
the Initial Purchaser with respect to the financial statements and certain
financial information of the Company contained in the Offering Memorandum.
(h) The Initial Purchaser shall have received an opinion dated
the Closing Date, in form and substance reasonably satisfactory to the Initial
Purchaser, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchaser, covering such
matters as are customarily covered in such opinions.
(i) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably require
for the purpose of enabling them to review or pass upon the matters referred to
in this Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations, warranties
or conditions herein contained as to matters or issues that arise between the
date of this Agreement and the Closing Date.
(j) Prior to the Closing Date, the Company shall have
furnished to the Initial Purchaser such further information, certificates and
documents as the Initial Purchaser may reasonably request.
(k) The Company shall have entered into the Registration
Rights Agreement and the Initial Purchaser shall have received counterparts,
conformed as executed, thereof.
(l) The Company shall have delivered to the Initial Purchaser
an executed waiver of Fleet Capital Corporation and Transamerica Business Credit
Corporation (collectively, the "Lenders") in connection with the Amended and
Restated Loan and Security Agreement, dated as of December 13, 1996, as further
amended, by and among the Company and the Lenders, in a form satisfactory to the
Initial Purchaser.
All opinions, certificates, letters and other documents
required by this Section 8 to be delivered by the Company will be in compliance
with the provisions hereof
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25
only if they are reasonably satisfactory in form and substance to the Initial
Purchaser. The Company will furnish the Initial Purchaser with such conformed
copies of such opinions, certificates, letters and other documents as it shall
reasonably request.
9. Initial Purchaser's Information. The Company acknowledges that
the statements with respect to the offering of the Series C Notes set forth in
the last paragraph of the cover page and the first sentence of the third
paragraph and the fourth sentence of the fifth paragraph under the caption "Plan
of Distribution" in such Offering Memorandum constitute the only information
furnished in writing by the Initial Purchaser expressly for use in the Offering
Memorandum.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Initial
Purchaser and the Company contained in this Agreement, including the agreements
contained in Sections 4(f) and 11(d), the indemnity agreements contained in
Section 6 and the contribution agreements contained in Section 7, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Initial Purchaser or any controlling person thereof or by or
on behalf of the Company or any controlling person thereof, and shall survive
delivery of and payment for the Series C Notes to and by the Initial Purchaser.
The representations contained in Section 5 and the agreements contained in
Sections 4(f), 6, 7 and 11(d) shall survive the termination of this Agreement,
including any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchaser shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the Company
from the Initial Purchaser, without liability (other than with respect to
Sections 6 and 7) on the Initial Purchaser's part to the Company if, on or prior
to such date, (i) the Company shall have failed, refused or been unable to
perform in any material respect any agreement on its part to be performed
hereunder, (ii) any other condition to the obligations of the Initial Purchaser
hereunder as provided in Section 8 is not fulfilled when and as required in any
material respect, (iii) in the reasonable judgment of the Initial Purchaser, any
material adverse change shall have occurred since the respective dates as of
which information is given in the Offering Memorandum in the condition
(financial or otherwise), business, properties, assets, liabilities, prospects,
net worth, results of operations or cash flows of the Company, other than as set
forth in the Offering Memorandum, or (iv)(A) any domestic or international event
or act or occurrence has materially disrupted, or in the opinion of the Initial
Purchaser will in the immediate future materially disrupt, the market for the
Company's securities or for securities in general; or (B) trading in securities
generally on the New York Stock Exchange, the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange, the Chicago Board of Trade or the Nasdaq
National Market shall have been suspended or materially limited, or minimum or
maximum prices
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26
for trading shall have been established, or maximum ranges for prices for
securities shall have been required, on either such exchange, or by such
exchange or other regulatory body or governmental authority having jurisdiction;
or (C) a banking moratorium shall have been declared by federal or state
authorities, or a moratorium in foreign exchange trading by major international
banks or persons shall have been declared; or (D) there is an outbreak or
escalation of armed hostilities involving the United States on or after the date
hereof, or if there has been a declaration by the United States of a national
emergency or war, the effect of which shall be, in the Initial Purchaser's
judgment, to make it inadvisable or impracticable to proceed with the offering
or delivery of the Series C Notes on the terms and in the manner contemplated in
the Offering Memorandum; or (E) there shall have been such a material adverse
change in general economic, political or financial conditions or if the effect
of international conditions on the financial markets in the United States shall
be such as, in the Initial Purchaser's judgment, makes it inadvisable or
impracticable to proceed with the delivery of the Series C Notes as contemplated
hereby.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone, telex, telephonic facsimile or telegraph, confirmed in
writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to clause (iv) of Section 11(b),
in which case each party will be responsible for its own expenses), or if the
sale of the Series C Notes provided for herein is not consummated because any
condition to the obligations of the Initial Purchaser set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will reimburse the Initial Purchaser for all out-of-pocket expenses
(including the reasonable fees and expenses of Initial Purchaser's counsel)
incurred by the Initial Purchaser in connection herewith.
12. Notice. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to the
Initial Purchaser shall be mailed, delivered, or telexed, telegraphed or
telecopied and confirmed in writing to Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Finance Department,
telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
telecopy number (▇▇▇) ▇▇▇-▇▇▇▇; and if sent to the Company shall be mailed,
delivered or telexed, telegraphed or telecopied and confirmed in writing to MMI
Products, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to
Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇;
provided, however, that any notice pursuant to Section 7 shall be mailed,
delivered or telexed, telegraphed or telecopied and confirmed in writing.
13. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchaser, the Company and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other
25
27
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Notes from the Initial Purchaser.
14. Construction. This Agreement shall be construed in accordance
with the internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
(Signature page to follow)
28
If the foregoing correctly sets forth the understanding between the
Initial Purchaser and the Company please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
among us.
Very truly yours,
MMI PRODUCTS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Accepted and agreed to as of
the date first above written:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
S-1
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EXHIBIT A
Material Agreements
1. Option Agreement, dated as of July 6, 1989, between Ivy Holding
Corporation and Mannesmann Pipe & Steel Corporation ("Mannesmann").
2. Amendment No. 1 to Option Agreement, dated as of December 13, 1996,
between Merchant Metals Holding Company ("Holding") and Mannesmann.
3. Amendment No. 2 to Option Agreement, dated as of March 27, 1997, between
Holding and Mannesmann.
4. Termination Agreement to Option Agreement, dated as of April 16, 1997,
between Holding and Mannesmann.
5. Procurement Agreement, dated as of December 13, 1996, between the
Company and Mannesmann.
6. Amendment No. 1 to Procurement Agreement, dated as of March 27, 1997,
between the Company and Mannesmann.
7. Consignment Agreement, dated as of December 13, 1996, between the
Company and Mannesmann.
8. Stockholders' Agreement, dated as of December 13, 1996, among Holding,
Citicorp Venture Capital, Ltd. and the stockholders of Holding whose signatures
are found on the execution page thereof.
9. The Ivy Holding Corporation 1988 Stock Option Plan, dated as of December
12, 1988.
10. First Amendment to the Ivy Holding Corporation 1988 Stock Option Plan,
dated as of December 13, 1996.
11. MMI Products, Inc. Pension Plan, as amended.
12. MMI Products, Inc. 401(k) Savings Plan, as amended.
13. Merchants Metals Holding Company 1988 Stock Option Plan, dated as of
December 12, 1988, as amended.
14. Amended and Restated Loan and Security Agreement, dated as of December
13, 1996, among the Company, Fleet Capital Corporation ("Fleet") and
Transamerica Business Credit Corporation ("Transamerica"), as lenders, and
Fleet, as Collateral Agent.
▇-▇
▇▇
▇▇. First Amendment to Amended and Restated Loan and Security Agreement,
dated as of April 11, 1997, among the Company, Fleet and Transamerica, as
lenders, and Fleet, as Collateral Agent.
16. Employment Agreement, dated as of December 31, 1994, between the
Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as amended.
17. Amendment No. 1 to Employment Agreement, dated April 16, 1997, between
the Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
18. Non-Competition Agreement, dated as of December 31, 1994, between the
Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
19. Amended and Restated Put Agreement, dated as of June 11, 1997, between
Holding and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
20. Amended and Restated Senior Subordinated Secured Promissory Note, dated
December 13, 1996, in the principal sum of $10,000,000, executed by the Company
and payable to the order of Mannesmann or any successor holder.
21. Termination Agreements, each dated as of April 16, 1997, among Holding
and each holder of options for shares of Series A Junior Preferred Stock, par
value $.01, of Holding.
22. Indemnification Agreement, dated as of April 16, 1997, between the
Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
23. Indemnification Agreement, dated as of April 16, 1997, between the
Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇.
24. Indemnification Agreement, dated as of April 16, 1997, between the
Company and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
25. Indemnification Agreement, dated as of April 16, 1997, between the
Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
26. Indemnification Agreement, dated as of April 16, 1997, between the
Company and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
27. Indemnification Agreement, dated as of April 16, 1997, between the
Company and ▇▇▇▇ ▇. ▇▇▇▇▇▇.
28. Limited Liability Company Agreement of MMI Products, L.L.C.
29. Amended and Restated Repurchase Agreement, dated as of June 12, 1997,
between Holding and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
▇-▇
▇▇
▇▇. Amended and Restated Repurchase Agreement, dated as of June 12, 1997,
between Holding and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
31. Amended and Restated Repurchase Agreement, dated as of June 12, 1997,
between Holding and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
32. Amended and Restated Repurchase Agreement, dated as of June 12, 1997,
between Holding and ▇▇▇▇ ▇. ▇▇▇▇▇▇.
33. Amended and Restated Repurchase Agreement, dated as of June 12, 1997,
between Holding and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
34. Amended and Restated Repurchase Agreement, dated as of June 12, 1997,
between Holding and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
35. Amended and Restated Repurchase Agreement, dated as of June 12, 1997,
between Holding and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
36. Asset Purchase Agreement, dated as of June 10, 1996, between the
Company and Atlantic Steel Industries, Inc.
37. Asset Purchase Agreement, dated as of December 12, 1997, between the
Company and The ▇▇▇▇▇ Group, L.L.C.
38. Purchase Agreement, dated February 9, 1999, between the Company and the
Initial Purchaser.
39. Indenture, dated as of April 16, 1997, between the Company and the
Trustee.
40. The Series C Notes.
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32
EXHIBIT B
Form of Opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP
1. To the knowledge of such counsel, no stop order preventing the use of
the Preliminary Offering Memorandum or the Offering Memorandum, or any amendment
or supplement thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act, has been issued by the United States Securities and Exchange Commission
or any state securities commission.
2. Each of the Company and the Subsidiary (A) is duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, (B) has all requisite corporate power and
authority to carry on its business as described in the Offering Memorandum and
to own, lease and operate its properties and (C) is duly qualified and in good
standing as a foreign corporation and authorized to do business in each
jurisdiction in which it operates or owns facilities or properties reflected in
the Offering Memorandum.
3. All of the outstanding capital stock of the Company has been duly
authorized, validly issued, and is fully paid and nonassessable and is owned of
record and, to such counsel's knowledge beneficially, solely by Holding.
4. To such counsel's knowledge, there are not currently any outstanding
subscriptions, rights, warrants, calls, commitments of sale or options to
acquire, or instruments convertible into or exchangeable for, any capital stock
or other equity interest of the Company.
5. To such counsel's knowledge, the Company has no material subsidiaries
other than the Subsidiary.
6. When the Series C Notes are issued and delivered pursuant to this
Agreement, no Series C Note will be of the same class (within the meaning of
Rule 144A under the Act) as securities of the Company that are listed on a
national securities exchange registered under Section 12 of the Exchange Act or
that are quoted in a United States automated inter-dealer quotation system.
7. The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement and each of the other
Operative Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the corporate
power and authority to issue, sell and deliver the Notes as provided herein and
therein.
B-1
33
8. This Agreement has been duly authorized, executed and delivered by the
Company and, assuming due authorization, execution and delivery thereof by the
Initial Purchaser, is the valid and binding agreement of the Company.
9. Each of the Indenture and the Registration Rights Agreement has been
duly authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery thereof by the Trustee and the Initial
Purchaser, respectively, is the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.
10. The Indenture, the Series C Notes, and the Registration Rights
Agreement conform, and the Series B Notes (when issued in accordance with the
terms of the Indenture and the Registration Rights Agreement) will conform, as
to legal matters in all material respects to the descriptions thereof contained
in the Offering Memorandum.
11. The Series C Notes have been duly authorized by the Company for
issuance and sale to the Initial Purchaser pursuant to this Agreement and, when
issued and authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms hereof and
thereof, will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the benefits
of the Indenture, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
12. The Series C Notes have been duly authorized for issuance by the
Company and, when issued and authenticated in accordance with the terms of the
Exchange Offer and the Indenture, will be the valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
13. None of (A) the execution, delivery or performance by the Company of
this Agreement or any of the other Operative Documents to which it is a party
and (B) the issuance and sale of the Notes violates, conflicts with or
constitutes a breach of any of the terms or provisions of, or a default under
(or an event that with notice or the lapse of time, or both, would constitute a
default), or requires consent under, or results in the imposition of a lien or
encumbrance on any properties of the Company or the Subsidiary, or an
acceleration of any indebtedness of the Company pursuant to, (1) the charter or
bylaws of the Company or the Subsidiary, (2) to such counsel's knowledge, any
bond, debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or the Subsidiary is a party or by which either
of them or their respective property is or may be bound and which has been
identified to such counsel by the Company as material as reflected on Exhibit A
to the Purchase Agreement, (3) any
B-2
34
existing statute, rule or regulation of the United States, the State of New
York, the State of Texas or (solely with respect to the General Corporation Law
of the State of Delaware) the State of Delaware that in such counsel's
experience is normally applicable to transactions such as the issuance and sale
of the Notes (provided, that such counsel need express no opinion with respect
to compliance with any federal or state securities or anti-fraud, rule or
regulation except as otherwise specifically stated in such opinion), except for
any such violation, conflict, breach or default referred to in clauses (2), (3)
or (4) as would not reasonably be expected to have a Material Adverse Effect, or
(4) to such counsel's knowledge, any judgment, order or decree of any court or
governmental agency or authority having jurisdiction over the Company or any of
its assets or properties. Assuming compliance with applicable state securities
and Blue Sky laws, as to which such counsel need express no opinion, and except
for the filing and effectiveness of a registration statement under the Act and
qualification of the Indenture under the Trust Indenture Act, or in connection
with the Registration Rights Agreement, no consent, approval, authorization or
order of, or filing, registration, qualification, license or permit of or with
any court or other governmental authority of the United States, the State of New
York, the State of Texas or the State of Delaware (solely with respect to the
General Corporation Law of the State of Delaware) is required for (1) the
execution, delivery and performance by the Company of this Agreement or any of
the other Operative Documents to which it is a party or (2) the issuance and
sale of the Notes and the transactions contemplated hereby and thereby, except
such as have been obtained and made or have been disclosed in the Offering
Memorandum, and except where the failure to obtain such consents or waivers
would not, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
14. To such counsel's knowledge there are no legal or governmental
proceedings pending or threatened against the Company or the Subsidiary, other
than legal or governmental proceedings referred to in the Offering Memorandum
and other than claims, lawsuits and other proceedings which in the opinion of
the Company should not have a Material Adverse Effect.
15. The Company is not an "investment company" within the meaning of the
Investment Company Act.
16. Except as set forth in the Registration Rights Agreement, to such
counsel's knowledge, there are no holders of securities of the Company who, by
reason of the execution by the Company of this Agreement or any other Operative
Document or the consummation by the Company of the transactions contemplated
hereby and thereby, have the right to request or demand that the Company
register under the Act or analogous foreign laws and regulations securities held
by them.
17. No registration under the Act of the Series C Notes is required for the
sale of the Series C Notes to the Initial Purchaser as contemplated hereby or
for the Exempt Resales assuming (A) that the Initial Purchaser is a QIB, (B)
that the purchasers who buy the Series C Notes in the Exempt Resales are QIBs
(C) the accuracy of the Initial Purchaser's representations regarding the
absence of general solicitation in connection
B-3
35
with the sale of Series C Notes to the Initial Purchaser and the Exempt Resales
contained herein, (D) the accuracy of the Company's representations in this
Agreement, (E) that the certificates representing the Series C Notes bear the
legends contemplated by the Indenture and (F) receipt by the purchasers to whom
the Initial Purchaser initially resells the Series C Notes of a copy of the
Offering Memorandum at or prior to the delivery of confirmation of sale.
18. The Offering Memorandum, as of its date, and each amendment or
supplement thereto made prior to the Closing Date, as of its date (except for
the financial statements, including the notes thereto, and supporting schedules
and other financial, statistical and accounting data included therein or omitted
therefrom, as to which no opinion need be expressed), contains the information
specified in Rule 144A(d)(4) under the Act.
19. Each of the Incorporated Documents, and in any amendment thereof or
supplement thereto (other than the financial statements and schedules and other
financial and statistical data included or incorporated by reference therein, as
to which no opinion need be rendered) when they were filed with the Commission
complied as to form in all material respects with the Exchange Act and the rules
and regulations thereunder.
20. Assuming the proceeds from the sale of the Notes are applied as
described in the Offering Memorandum, none of the execution, delivery and
performance of this Agreement, the issuance and sale of the Notes, the
application of the proceeds from the issuance and sale of the Notes and the
consummation of the transactions contemplated thereby as set forth in the
Offering Memorandum, will violate Regulations G, T, U or X promulgated by the
Board of Governors of the Federal Reserve System.
21. The Indenture has been qualified under the Trust Indenture Act.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company and
representatives of the independent certified public accountants of the Company
and the Initial Purchaser and its representatives at which the contents of the
Preliminary Offering Memorandum and the Offering Memorandum and related matters
were discussed and, although it has not undertaken to investigate or verify
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Preliminary Offering
Memorandum or the Offering Memorandum (except as indicated in paragraph 10 of
such opinion), on the basis of the foregoing, no facts have come to its
attention which led it to believe that the Preliminary Offering Memorandum or
the Offering Memorandum, including the Incorporated Documents, when read
together with the other information in the Offering Memorandum, as of its date
or the Closing Date contained an untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading (except as to financial statements and related notes, the
financial statement schedules and other financial and statistical data included
therein).
B-4