1
EXHIBIT 4(b)
EXECUTION COPY
EV INTERNATIONAL, INC.
$100,000,000
11% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
March 19, 1997
CHASE SECURITIES INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
c/o Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
EV International, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell $100,000,000 aggregate principal amount
of its 11% Senior Subordinated Notes due 2007 (the "Securities"). The Securities
will be issued pursuant to an Indenture to be dated as of March 24, 1997 (the
"Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee"). The Company hereby confirms its agreement with Chase Securities Inc.
("CSI") and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (together with CSI, the "Initial Purchasers")
concerning the purchase of the Securities from the Company by the Initial
Purchasers.
The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon an exemption therefrom. The Company has
prepared a preliminary offering memorandum dated March 7, 1997 (the "Preliminary
Offering Memorandum") and will prepare an offering memorandum dated the date
hereof (the "Offering Memorandum") setting forth information concerning the
Company and the Securities. Copies of the Preliminary Offering Memorandum have
been, and copies of the Offering Memorandum will be, delivered by the Company to
the Initial Purchasers pursuant to the terms of this Agreement. Any references
herein to the Preliminary Offering Memorandum and the Offering Memorandum shall
be deemed to include all amendments and supplements thereto, unless otherwise
noted. The Company hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering and resale of the Securities by the Initial Purchasers in
accordance with Section 2.
2
2
Holders of the Securities (including the Initial Purchasers
and their direct and indirect transferees) will be entitled to the benefits of
an Exchange and Registration Rights Agreement, substantially in the form
attached hereto as Annex A (the "Registration Rights Agreement"), pursuant to
which the Company will agree to file with the Securities and Exchange Commission
(the "Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of senior
subordinated notes of the Company (the "Exchange Securities") which are
identical in all material respects to the Securities (except that the Exchange
Securities will not contain terms with respect to transfer restrictions) and
(ii) under certain circumstances, a shelf registration statement pursuant to
Rule 415 under the Securities Act (the "Shelf Registration Statement").
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company.
The Company represents and warrants to, and agrees with, the Initial Purchasers
on and as of the date hereof and the Closing Date (as defined in Section 3)
that:
(a) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, did not, and on the
Closing Date the Offering Memorandum will not, contain any untrue
statement of a material fact or omit to state a 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; provided that the Company makes no representation or
warranty as to information contained in or omitted from the Preliminary
Offering Memorandum or the Offering Memorandum in reliance upon and in
conformity with written information relating to the Initial Purchasers
furnished to the Company by or on behalf of any Initial Purchaser
specifically for use therein (the "Initial Purchasers' Information").
(b) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, contains all of the
information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective
purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 2 and their
compliance with the agreements set forth therein, it is not necessary,
in connection with the issuance and sale of the Securities to the
Initial Purchasers and the offer, resale and delivery of the Securities
by the Initial Purchasers in the manner contemplated by this Agreement
and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act").
3
3
(d) The Company and each of its subsidiaries (i) have been
duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation, (ii) are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and (iii) have all
power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged,
except, in the case of clauses (ii) and (iii), where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole (a "Material Adverse
Effect").
(e) The Company has an authorized capitalization as set forth
in the Offering Memorandum under the heading "Description of Capital
Stock"; all of the outstanding shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and the capital stock of the Company conforms in all
material respects to the description thereof contained in the Offering
Memorandum. All of the outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company (or are owned by nominees of the Company or
directors of its subsidiaries), free and clear of any lien, charge,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party, except for the pledge of stock by
EVI Audio International Holding Corporation, Inc. pursuant to the
Credit Agreement among the Company and the several lenders from time to
time parties thereto and The Chase Manhattan Bank, as Administrative
Agent, dated as of February 10, 1997.
(f) The Company has full right, power and authority to execute
and deliver this Agreement, the Indenture, the Registration Rights
Agreement, and the Securities (collectively, the "Transaction
Documents") and to perform its obligations hereunder and thereunder;
and all corporate action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction
Documents and the consummation of the transactions contemplated thereby
have been duly and validly taken.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
agreement of the Company.
(h) The Registration Rights Agreement has been duly authorized
by the Company and, when duly executed and delivered in accordance with
its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company enforceable against the
Company in accordance with its terms, except (i) to the extent that
such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws affecting
4
4
creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) or (ii)
insofar as rights to indemnification and contribution contained therein
may be limited by Federal or state securities laws or public policy.
(i) The Indenture has been duly authorized by the Company and,
when duly executed and delivered in accordance with its terms by each
of the parties thereto, will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law). On the Closing Date,
the Indenture will conform in all material respects to the requirements
of the Trust Indenture Act and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder.
(j) The Securities have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered as
provided in the Indenture and paid for as provided herein, will be duly
and validly issued and outstanding and will constitute valid and
legally binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in accordance with
their terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
(k) Each Transaction Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum.
(l) The execution, delivery and performance by the Company of
each of the Transaction Documents, the issuance, authentication, sale
and delivery of the Securities and compliance by the Company with the
terms thereof and the consummation of the transactions contemplated by
the Transaction Documents (i) will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, any material indenture, mortgage, deed
of trust, loan agreement or other material agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor (ii) will such actions result in (a) any violation of the
provisions of the charter or by-laws of the Company or any of its
subsidiaries or (b) any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of their properties or
5
5
assets except, in the case of clauses (i) and (ii) (b), for such
actions as would not, individually or in the aggregate, have a Material
Adverse Effect and would not have a material adverse effect on the
Company's ability to perform its obligations under the Transaction
Documents; and no consent, approval, authorization or order of, or
filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by the Company of each of the Transaction Documents, the
issuance, authentication, sale and delivery of the Securities and
compliance by the Company with the terms thereof and the consummation
of the transactions contemplated by the Transaction Documents, except
for such consents, approvals, authorizations, filings, registrations or
qualifications (i) which shall have been obtained or made prior to the
Closing Date and (ii) as may be required to be obtained or made under
the Securities Act and applicable state securities laws as provided in
the Registration Rights Agreement.
(m) To the best knowledge of the Company, each of Coopers &
▇▇▇▇▇▇▇ L.L.P. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company are independent certified
public accountants with respect to the Company and its subsidiaries
within the meaning of Rule 101 of the Code of Professional Conduct of
the American Institute of Certified Public Accountants ("AICPA") and
its interpretations and rulings thereunder. The historical financial
statements (including the related notes) contained in the Offering
Memorandum comply in all material respects with the requirements
applicable to a registration statement on Form S-1 under the Securities
Act (except that certain supporting schedules are omitted); such
financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods covered thereby and fairly present the financial position of
the entities purported to be covered thereby at the respective dates
indicated and the results of their operations and their cash flows for
the respective periods indicated; and the financial information
contained in the Offering Memorandum under the headings "Summary
Historical and Pro Forma Financial Information", "Capitalization",
"Selected Historical and Pro Forma Financial Information",
"Management's Discussion and Analysis of Financial Condition and
Results of Operations", "Management--Summary Compensation Table" and
"Management--Aggregated Option Exercises" are derived from the
accounting records of the Company and its subsidiaries and fairly
present the information purported to be shown thereby. The pro forma
financial information contained in the Offering Memorandum has been
prepared on a basis consistent with the historical financial statements
contained in the Offering Memorandum (except for the pro forma
adjustments specified therein), includes all material adjustments to
the historical financial information required by Rule 11-02 of
Regulation S-X under the Securities Act and the Exchange Act to reflect
the transactions described in the Offering Memorandum, gives effect to
assumptions made on a reasonable basis and fairly presents the
historical and proposed transactions contemplated by the Offering
Memorandum and the Transaction Documents. The other historical
financial and statistical information and data included in the Offering
Memorandum are, in all material respects, fairly presented.
6
6
(n) Except as described in the Offering Memorandum under
"Business--Legal Proceedings", there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, singularly or in the aggregate, if
determined adversely to the Company or any of its subsidiaries, could
reasonably be expected to have a Material Adverse Effect; and to the
best knowledge of the Company, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(o) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental agency
or body which prevents the issuance of the Securities or suspends the
sale of the Securities in any jurisdiction; no injunction, restraining
order or order of any nature by any federal or state court of competent
jurisdiction has been issued with respect to the Company or any of its
subsidiaries which would prevent or suspend the issuance or sale of the
Securities or the use of the Preliminary Offering Memorandum or the
Offering Memorandum in any jurisdiction; no action, suit or proceeding
is pending against or, to the best knowledge of the Company, threatened
against or affecting the Company or any of its subsidiaries before any
court or arbitrator or any governmental agency, body or official,
domestic or foreign, which could reasonably be expected to interfere
with or adversely affect the issuance of the Securities or in any
manner draw into question the validity or enforceability of any of the
Transaction Documents or any action taken or to be taken pursuant
thereto; and the Company has complied with any and all requests by any
securities authority in any jurisdiction for additional information to
be included in the Preliminary Offering Memorandum and the Offering
Memorandum.
(p) Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws, (ii) in default in any material
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or (iii) in
violation in any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets
may be subject.
(q) The Company and each of its subsidiaries possess all
material licenses, certificates, authorizations and permits issued by,
and have made all material declarations and filings with, the
appropriate federal, state or foreign regulatory agencies or bodies
which are necessary or desirable for the ownership of their respective
properties or the conduct of their respective businesses as described
in the Offering Memorandum, except where the failure to possess or make
the same would not, singularly or in the aggregate, have a Material
Adverse Effect, and neither the Company nor any of its subsidiaries has
received notification of any revocation or
7
7
modification of any such license, certificate, authorization or permit
or has any reason to believe that any such license, certificate,
authorization or permit will not be renewed in the ordinary course.
(r) The Company and each of its subsidiaries have filed all
federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes
due thereon, and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has had (nor does the Company
or any of its subsidiaries have any knowledge of any tax deficiency
which, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have) a Material Adverse
Effect.
(s) Neither the Company nor any of its subsidiaries is (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"), and the rules and regulations of the
Commission thereunder or (ii) a "holding company" or a "subsidiary
company" of a holding company or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(t) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(u) The Company and each of its subsidiaries have insurance
covering their respective properties, operations, personnel and
businesses, adequate and suitable for its business and comparable to
insurance customarily carried by comparable companies similarly
situated and carrying on the same or similar business. Neither the
Company nor any of its subsidiaries has received notice from any
insurer or agent of such insurer that material capital improvements or
other material expenditures are required or necessary to be made in
order to continue such insurance.
(v) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses; except where
the failure to own or possess such rights or use such intellectual
properties would not individually or in the aggregate, have a Material
8
8
Adverse Effect; and the conduct of their respective businesses will not
conflict in any material respect with, and the Company and its
subsidiaries have not received any notice of any claim of conflict
with, any such rights of others where such claim would not
individually, or together with other claims, have a Material Adverse
Effect.
(w) The Company and each of its subsidiaries have good and (in
the case of real property) marketable title in fee simple to, or have
valid rights to lease or otherwise use, all items of real and personal
property which are material to the business of the Company and its
subsidiaries, in each case free and clear of all liens, encumbrances,
claims and defects and imperfections of title except such as (i) do not
materially interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries or (ii) could not
reasonably be expected to have a Material Adverse Effect.
(x) No material labor disturbance by or dispute with the
employees of the Company or any of its subsidiaries exists or, to the
best knowledge of the Company, is contemplated or threatened.
(y) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan of
the Company or any of its subsidiaries which could reasonably be
expected to have a Material Adverse Effect; each such employee benefit
plan is in compliance in all material respects with applicable law,
including ERISA and the Code; the Company and each of its subsidiaries
have not incurred and do not expect to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from, any
pension plan for which the Company or any of its subsidiaries would
have any liability; and for each such pension plan that is intended to
be qualified under Section 401(a) of the Code there is an application
pending with the Internal Revenue Service for such qualification and
the Company will use its best efforts to take all actions to so qualify
such plans.
(aa) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release of
any kind of toxic or other wastes or other hazardous substances by, due
to or caused by the Company or any of its subsidiaries (or, to the best
knowledge of the Company, any other entity (including any predecessor)
for whose acts or omissions the Company or any of its subsidiaries is
or could reasonably be expected to be liable) upon any of the property
now or previously owned or leased by the Company or any of its
subsidiaries, or upon any other property, in violation of any statute
or any ordinance, rule, regulation, order, judgment, decree
9
9
or permit or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or
liability that could not reasonably be expected to have, singularly or
in the aggregate with all such violations and liabilities, a Material
Adverse Effect; and there has been no disposal, discharge, emission or
other release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other
hazardous substances with respect to which the Company has knowledge,
except for any such disposal, discharge, emission or other release of
any kind which could not reasonably be expected to have, singularly or
in the aggregate with all such discharges and other releases, a
Material Adverse Effect.
(bb) Neither the Company nor, to the best knowledge of the
Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company has (i) used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or
is in violation of any provision of the Foreign Corrupt Practices Act
of 1977; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment, except for any such use, payment or
violation that, individually or in the aggregate, would not have a
Material Adverse Effect.
(cc) On and immediately after the Closing Date, the Company
(after giving effect to the issuance of the Securities and to the other
transactions related thereto as described in the Offering Memorandum)
will be Solvent. As used in this paragraph, the term "Solvent" means,
with respect to a particular date, that on such date (i) the present
fair market value (or present fair saleable value) of the assets of the
Company is not less than the total amount required to pay the probable
liabilities of the Company on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured,
(ii) the Company is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and commitments as they
mature and become due in the normal course of business, (iii) assuming
the sale of the Securities as contemplated by this Agreement and the
Offering Memorandum, the Company is not incurring debts or liabilities
beyond its ability to pay as such debts and liabilities mature and (iv)
the Company is not engaged in any business or transaction, and is not
about to engage in any business or transaction, for which its property
would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the
Company is engaged. In computing the amount of such contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
10
10
(dd) Except as described in the Offering Memorandum, there are
no outstanding subscriptions, rights, warrants, calls or options to
acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of,
any shares of capital stock of or other equity or other ownership
interest in the Company or any of its subsidiaries.
(ee) Neither the Company nor any of its subsidiaries owns any
"margin securities" as that term is defined in Regulations G and U of
the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), and none of the proceeds of the sale of the Securities
will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation G, T, U or X of the Federal Reserve Board.
(ff) Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person that
would give rise to a valid claim against the Company or the Initial
Purchasers for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Securities, other than the
fees payable to the Initial Purchasers in connection with the Offering
and sale of the Securities.
(gg) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(hh) Neither the Company nor any of its affiliates has,
directly or through any agent, sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as such
term is defined in the Securities Act), which is or will be integrated
with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(ii) None of the Company or any of its affiliates or any other
person acting on its or their behalf has engaged, in connection with
the offering of the Securities, in any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the
Securities Act.
(jj) There are no securities of the Company registered under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or listed on a national securities exchange or quoted in a U.S.
automated inter-dealer quotation system.
(kk) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange
Act in connection with the offering of the Securities.
11
11
(ll) None of the Company or any of its subsidiaries does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Florida Statutes Section 517.075.
(mm) Since the date as of which information is given in the
Offering Memorandum, except as otherwise stated therein, (i) there has
been no material adverse change or any development involving a
prospective material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, management or business
prospects of the Company, whether or not arising in the ordinary course
of business, (ii) the Company has not incurred any material liability
or obligation, direct or contingent, other than in the ordinary course
of business, (iii) the Company has not entered into any material
transaction other than in the ordinary course of business and (iv)
there has not been any change in the capital stock or long-term debt of
the Company, or any dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
2. Purchase and Resale of the Securities. (a) On the basis of
the representations, warranties and agreements contained herein, and subject to
the terms and conditions set forth herein, the Company agrees to issue and sell
to each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on Schedule 1 hereto at a purchase price equal to 97% of the
principal amount thereof. The Company shall not be obligated to deliver any of
the Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Initial Purchasers have advised the Company that they
propose to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents and warrants to, and agrees
with, the Company that (i) it is purchasing the Securities pursuant to a private
sale exempt from registration under the Securities Act, (ii) it has not
solicited offers for, or offered or sold, and will not solicit offers for, or
offer or sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D under the
Securities Act ("Regulation D") or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act and (iii) it has
solicited and will solicit offers for the Securities only from, and has offered
or sold and will offer, sell or deliver the Securities, as part of its initial
offering, only to (A) persons whom it reasonably believes to be qualified
institutional buyers ("Qualified Institutional Buyers") as defined in Rule 144A
under the Securities Act, or if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to it that each such account is a
Qualified Institutional Buyer to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A and in each case, in
transactions in accordance with Rule 144A and (B) a limited number of other
accredited investors ("Accredited Investors") as defined in Rule 501(a)(1), (2),
(3) or (7) under Regulation D that are institutional investors in private sales
exempt from registration under the
12
12
Securities Act. Each Initial Purchaser, severally and not jointly, agrees that,
prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Company pursuant hereto, such Initial Purchaser shall furnish
to that purchaser a copy of the Offering Memorandum (and any amendment or
supplement thereto that the Company shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale). In addition to the
foregoing, each Initial Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 5(d), (e) and (f) counsel for the Company and for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers and their compliance with their agreements
contained in this Section 2, and each Initial Purchaser hereby consents to such
reliance.
(c) The Company acknowledges and agrees that CSI may sell
Securities to any affiliate of CSI and that any such affiliate may sell
Securities purchased by it to CSI.
3. Delivery of and Payment for the Securities. (a) Delivery of
and payment for the Securities shall be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ or at such other place
as shall be agreed upon by the Initial Purchasers and the Company, at 10:00
A.M., New York City time, on March 24, 1997, or at such other time or date, not
later than seven full business days thereafter, as shall be agreed upon by the
Initial Purchasers and the Company (such date and time of payment and delivery
being referred to herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchasers of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the Initial Purchasers hereunder. Upon delivery,
the Securities shall be in global form, registered in such names and in such
denominations as CSI on behalf of the Initial Purchasers shall have requested in
writing not less than two full business days prior to the Closing Date. The
Company agrees to make one or more global certificates evidencing the Securities
available for inspection by CSI on behalf of the Initial Purchasers in New York,
New York at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company. The Company agrees with
each of the Initial Purchasers:
(a) to advise the Initial Purchasers promptly and, if
requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made in the Offering
Memorandum untrue or which requires the making of any additions to or
changes in the Offering Memorandum (as amended or
13
13
supplemented from time to time) in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; to advise the Initial Purchasers promptly of any order
preventing or suspending the use of the Preliminary Offering Memorandum
or the Offering Memorandum, of any suspension of the qualification of
the Securities for offering or sale in any jurisdiction and of the
initiation or threatening of any proceeding for any such purpose; and
to use its best efforts to prevent the issuance of any such order
preventing or suspending the use of the Preliminary Offering Memorandum
or the Offering Memorandum or suspending any such qualification and, if
any such suspension is issued, to obtain the lifting thereof at the
earliest possible time;
(b) to furnish promptly to each of the Initial Purchasers and
counsel for the Initial Purchasers, without charge, as many copies of
the Preliminary Offering Memorandum and the Offering Memorandum (and
any amendments or supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to each of the Initial
Purchasers and counsel for the Initial Purchasers and not to effect any
such amendment or supplement to which the Initial Purchasers shall
reasonably object by notice to the Company after a reasonable period to
review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary, in the opinion of
counsel for the Initial Purchasers or counsel for the Company, to amend
or supplement the Offering Memorandum in order that the Offering
Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Offering Memorandum to comply with applicable
law, to promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the
Offering Memorandum, as so amended or supplemented, will comply with
applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request
of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act (the foregoing agreement
being for the benefit of the holders from time to time of the
Securities and prospective purchasers of the Securities designated by
such holders);
14
14
(f) for so long as the Securities are outstanding, to furnish
to the Initial Purchasers copies of any annual reports, quarterly
reports and current reports filed by the Company with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be
designated by the Commission, and such other documents, reports and
information as shall be furnished by the Company to the Trustee or to
the holders of the Securities pursuant to the Indenture or the Exchange
Act or any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the
Initial Purchasers may reasonably request to qualify the Securities for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may designate and to continue
such qualifications in effect for so long as required for the resale of
the Securities; and to arrange for the determination of the eligibility
for investment of the Securities under the laws of such jurisdictions
as the Initial Purchasers may reasonably request; provided that the
Company and its subsidiaries shall not be obligated to qualify as
foreign corporations in any jurisdiction in which they are not so
qualified or to subject itself to taxation in respect to doing business
in any jurisdiction in which it is not otherwise so subject or to file
a general consent to service of process in any jurisdiction;
(h) to assist the Initial Purchasers in arranging for the
Securities to be designated Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") Market securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL
Market and for the Securities to be eligible for clearance and
settlement through the Depository Trust Company ("DTC");
(i) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as such term is defined in the Securities Act) which
could be integrated with the sale of the Securities in a manner which
would require registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates not to, and not to
authorize or knowingly permit any person acting on their behalf to,
solicit any offer to buy or offer to sell the Securities by means of
any form of general solicitation or general advertising within the
meaning of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; and not to
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section
4(2) of the Securities Act to cease to be applicable to the offering
and sale of the Securities as contemplated by this Agreement and the
Offering Memorandum;
15
15
(k) for a period of 90 days from the date of the Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise
dispose of, directly or indirectly, or file a registration statement
for, or announce any offer, sale, contract for sale of or other
disposition of any debt securities issued or guaranteed by the Company
or any of its subsidiaries (other than the Securities) without the
prior written consent of the Initial Purchasers;
(l) during the period from the Closing Date until three years
after the Closing Date, without the prior written consent of the
Initial Purchasers, not to, and not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities that have been reacquired by them, except for Securities (i)
purchased by the Company or any of its affiliates (other than ▇▇▇▇▇
▇▇▇▇▇▇ Inc.) and resold in a transaction registered under the
Securities Act or (ii) purchased by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and resold in a
transaction registered under or exempt from the Securities Act;
(m) not to, for so long as the Securities are outstanding, be
or become, or be or become owned by, an open-end investment company,
unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act, and to not be or become, or be or become owned by, a closed-end
investment company required to be registered, but not registered
thereunder;
(n) in connection with the offering of the Securities, until
CSI on behalf of the Initial Purchasers shall have notified the Company
of the completion of the resale of the Securities, not to, and to cause
its affiliated purchasers (as defined in Regulation M under the
Exchange Act) (other than ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.) not to, either alone or
with one or more other persons, bid for or purchase, for any account in
which such purchasers has a beneficial interest, any Securities, or
attempt to induce any person to purchase any Securities; and not to,
and to cause its affiliated purchasers including ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. not
to, make bids or purchase for the purpose of creating actual, or
apparent, active trading in or of raising the price of the Securities;
(o) in connection with the offering of the Securities, to make
its officers, employees, independent accountants and legal counsel
reasonably available upon request by the Initial Purchasers;
(p) to furnish to each of the Initial Purchasers on the date
hereof a copy of the independent accountants' report included in the
Offering Memorandum signed by the accountants rendering such report;
(q) to do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use its best efforts to satisfy
all conditions precedent contained herein on its part to the delivery
of the Securities;
16
16
(r) to not take any action prior to the execution and delivery
of the Indenture which, if taken after such execution and delivery,
would have violated any of the covenants contained in the Indenture;
(s) to use its best efforts to not take any action prior to
the Closing Date which would require the Offering Memorandum to be
amended or supplemented pursuant to Section 4(d);
(t) prior to the Closing Date, not to issue any press release
or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except
for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and of
which the Initial Purchasers are notified), without the prior written
consent of the Initial Purchasers, unless in the judgment of the
Company and its counsel, and after notification to the Initial
Purchasers, such press release or communication is required by law; and
(u) to apply the net proceeds from the sale of the Securities
as set forth in the Offering Memorandum under the heading "Use of
Proceeds".
5. Conditions of Initial Purchasers' Obligations. The
respective obligations of the several Initial Purchasers hereunder are subject
to the accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Company contained herein, to the accuracy
of the statements of the Company and its officers made in any certificates
delivered pursuant hereto, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial
Purchasers may agree; and no stop order suspending the sale of the
Securities in any jurisdiction shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Company on or prior to the Closing Date that the
Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of counsel for the
Initial Purchasers, is material or omits to state any fact which, in
the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of the Transaction
Documents and the Offering Memorandum, and all other legal matters
relating to the Transaction Documents and
17
17
the transactions contemplated thereby, shall be satisfactory in all
material respects to the Initial Purchasers, and the Company shall have
furnished to the Initial Purchasers all documents and information that
they or their counsel may reasonably request to enable them to pass
upon such matters.
(d) Debevoise & ▇▇▇▇▇▇▇▇ shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Company, addressed
to the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers,
substantially to the effect set forth in Annex B hereto.
(e) (i) Ashurst ▇▇▇▇▇▇ ▇▇▇▇▇, British counsel to the Company,
shall have furnished to the Initial Purchasers their written opinion
addressed to the Initial Purchasers and dated the Closing Date, in form
and substance reasonably satisfactory to the Initial Purchasers,
substantially to the effect set forth in Annex C-1 hereto;
(ii) Oppenhoff & ▇▇▇▇▇▇, German counsel to the
Company, shall have furnished to the Initial Purchasers their written
opinion addressed to the Initial Purchasers and dated the Closing Date,
in form and substance reasonably satisfactory to the Initial
Purchasers, substantially to the effect set forth in Annex C-2 hereto;
(iii) Nishimura & Partners, Japanese counsel to the
Company, shall have furnished to the Initial Purchasers their written
opinion addressed to the Initial Purchasers and dated the Closing Date,
in form and substance reasonably satisfactory to the Initial
Purchasers, substantially to the effect set forth in Annex C-3 hereto;
and
(iv) ▇▇▇▇ ▇▇▇ & Co., Hong Kong counsel to the
Company, shall have furnished to the Initial Purchasers their written
opinion addressed to the Initial Purchasers and dated the Closing Date,
in form and substance reasonably satisfactory to the Initial
Purchasers, substantially to the effect set forth in Annex C-4 hereto.
(f) The Initial Purchasers shall have received from ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Initial Purchasers may reasonably require, and the Company shall have
furnished to such counsel such documents and information as they
request for the purpose of enabling them to pass upon such matters.
(g) The Company shall have furnished to the Initial Purchasers
a letter of Coopers & ▇▇▇▇▇▇▇ L.L.P., addressed to the Initial
Purchasers and dated the date hereof, in form and substance
satisfactory to the Initial Purchasers, substantially to the effect set
forth in Annex D hereto and a letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company,
addressed to the Initial Purchasers and dated the date hereof in form
and substance satisfactory to the Initial Purchasers (the "Initial
Letters").
18
18
(h) The Company shall have furnished to the Initial Purchasers
letters (the "Bring-Down Letters") of each of Coopers & ▇▇▇▇▇▇▇ L.L.P.,
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company, addressed to the Initial Purchasers and
dated the Closing Date (i) confirming that they are independent public
accountants with respect to the Company and its subsidiaries within the
meaning of Rule 101 of the Code of Professional Conduct of the AICPA
and its interpretations and rulings thereunder, (ii) stating, as of the
date of such respective Bring-Down Letter (or, with respect to matters
involving changes or developments since the respective dates as of
which specified financial information is given in the Offering
Memorandum, as of a date not more than three business days prior to the
date of such Bring-Down Letters), that the conclusions and findings of
such accountants with respect to the financial information and other
matters covered by the Initial Letters are accurate and (iii)
confirming in all material respects the conclusions and findings set
forth in the Initial Letters. In addition, the Company shall have
received letters from Coopers & ▇▇▇▇▇▇▇ L.L.P. consenting to the use,
in connection with the offering of the Securities, of the audited
financial statements of the Company prepared by such accountants and
included in the Offering Memorandum.
(i) The Company shall have furnished to the Initial Purchasers
a certificate, dated the Closing Date, of its chief executive officer
and its chief financial officer stating that (A) such officers have
carefully examined the Offering Memorandum, (B) in their opinion, the
Offering Memorandum, as of its date, did not include any untrue
statement of a material fact and did not omit to state a 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, and since the date of the Offering
Memorandum, no event has occurred which should have been set forth in a
supplement or amendment to the Offering Memorandum so that the Offering
Memorandum (as so amended or supplemented) would not include any untrue
statement of a material fact and would not omit to state a 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 and (C) as of the Closing Date, the
representations and warranties of the Company in this Agreement are
true and correct in all material respects, the Company has complied
with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder on or prior to the Closing Date, and
subsequent to the date of the most recent financial statements
contained in the Offering Memorandum, there has been no material
adverse change in the financial position or results of operation of the
Company or any of its subsidiaries, or any change, or any development
including a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business or prospects
of the Company and its subsidiaries taken as a whole, except as set
forth in the Offering Memorandum.
(j) The Initial Purchasers shall have received a counterpart
of the Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of the Company.
19
19
(k) The Indenture shall have been duly executed and delivered
by the Company and the Trustee, and the Securities shall have been duly
executed and delivered by the Company and duly authenticated by the
Trustee.
(l) The Securities shall have been approved by the NASD for
trading in the PORTAL Market.
(m) If any event shall have occurred that requires the Company
under Section 4(d) to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchasers shall have been given a reasonable
opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchasers reasonably in advance of the
Closing Date.
(n) There shall not have occurred any invalidation of Rule
144A under the Securities Act by any court or any withdrawal or
proposed withdrawal of any rule or regulation under the Securities Act
or the Exchange Act by the Commission or any amendment or proposed
amendment thereof by the Commission which in the judgment of the
Initial Purchasers would materially impair the ability of the Initial
Purchasers to purchase, hold or effect resales of the Securities as
contemplated hereby.
(o) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the
Offering Memorandum (exclusive of any amendment or supplement thereto),
there shall not have been any change in the capital stock or long-term
debt or any change, or any development involving a prospective change,
in or affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole, the effect of which, in any such case described
above, is, in the judgment of the Initial Purchasers, so material and
adverse as to make it impracticable or inadvisable to proceed with the
sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement and the Offering Memorandum (exclusive
of any amendment or supplement thereto).
(p) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the
Securities.
(q) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Securities or any of the Company's other debt securities or preferred
stock by any "nationally recognized statistical rating organization",
as such term is defined by the Commission for purposes of Rule
436(g)(2) of the rules and regulations of the Commission under the
Securities
20
20
Act and (ii) no such organization shall have publicly announced that it
has under surveillance or review (other than an announcement with
positive implications of a possible upgrading), its rating of the
Securities or any of the Company's other debt securities or preferred
stock.
(r) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or
limited, or minimum prices shall have been established on any such
exchange or market by the Commission, by any such exchange or by any
other regulatory body or governmental authority having jurisdiction, or
trading in any securities of the Company on any exchange or in the
over-the-counter market shall have been suspended or (ii) any
moratorium on commercial banking activities shall have been declared by
federal or New York state authorities or (iii) an outbreak or
escalation of hostilities or a declaration by the United States of a
national emergency or war or (iv) a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) the effect of which, in the case of this clause (iv),
is, in the judgment of the Initial Purchasers, so material and adverse
as to make it impracticable or inadvisable to proceed with the sale or
the delivery of the Securities on the terms and in the manner
contemplated by this Agreement and in the Offering Memorandum
(exclusive of any amendment or supplement thereto).
(s) The Company shall have furnished to the Initial Purchasers
such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers, in their absolute
discretion, by notice given to and received by the Company prior to delivery of
and payment for the Securities if, prior to that time, any of the events
described in Section 5(m), (n), (o), (p) or (q) shall have occurred and be
continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing Date,
any Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchasers may make arrangements for the
purchase of the Securities which such defaulting Purchaser agreed but failed to
purchase by other persons satisfactory to the Company and the non-defaulting
Initial Purchasers, but if no such arrangements are made
21
21
within 36 hours after such default, this Agreement shall terminate without
liability on the part of the non-defaulting Initial Purchasers or the Company,
except that the Company will continue to be liable for the payment of expenses
to the extent set forth in Sections 8 and 12 and except that the provisions of
Sections 9 and 10 shall not terminate and shall remain in effect. As used in
this Agreement, the term "Initial Purchasers" includes, for all purposes of this
Agreement unless the context otherwise requires, any party not listed in
Schedule 1 hereto that, pursuant to this Section 7, purchases Securities which a
defaulting Initial Purchaser agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting
Initial Purchaser of any liability it may have to the Company or any
non-defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to purchase the Securities of a defaulting
Initial Purchaser, either the non-defaulting Initial Purchasers or the Company
may postpone the Closing Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Initial Purchasers may be necessary in the Offering Memorandum or in any
other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Offering Memorandum that effects any such
changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 7, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason permitted under this Agreement or (c) the Initial Purchasers shall
decline to purchase the Securities for any reason permitted under this
Agreement, the Company shall reimburse the Initial Purchasers for such
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
as shall have been reasonably incurred by the Initial Purchasers in connection
with this Agreement and the proposed purchase and resale of the Securities. If
this Agreement is terminated pursuant to Section 7 by reason of the default of
one or more of the Initial Purchasers, the Company shall not be obligated to
reimburse any defaulting Initial Purchaser on account of such expenses.
9. Indemnification. (a) The Company shall indemnify and hold
harmless each Initial Purchaser, its affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls any Initial Purchaser within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 9(a) and
Section 10 as an Initial Purchaser), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of the Securities), to which that Initial Purchaser may
become subject under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
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 or supplement thereto or in any information provided by the Company
pursuant to Section 4(e) or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in
22
22
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and shall reimburse each Initial Purchaser
promptly upon demand for any legal or other expenses reasonably incurred by that
Initial Purchaser in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with any Initial Purchasers' Information; and
provided, further, that with respect to any such untrue statement in or omission
from the Preliminary Offering Memorandum, the indemnity agreement contained in
this Section 9(a) shall not inure to the benefit of any such Initial Purchaser
to the extent that the sale to the person asserting any such loss, claim,
damage, liability or action was an initial resale by such Initial Purchaser and
any such loss, claim, damage, liability or action of or with respect to such
Initial Purchaser results from the fact that both (A) to the extent required by
applicable law, a copy of the Offering Memorandum was not sent or given to such
person at or prior to the written confirmation of the sale of such Securities to
such person and (B) the untrue statement in or omission from the Preliminary
Offering Memorandum was corrected in the Offering Memorandum unless, in either
case, such failure to deliver the Offering Memorandum was a result of
non-compliance by the Company with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 9(b) and
Section 10 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) 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 or supplement thereto or (ii) the omission or alleged
omission to state therein a 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, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with any Initial
Purchasers' Information, and shall reimburse the Company promptly upon demand
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or
23
23
9(b), notify the indemnifying party in writing of the claim or the commencement
of that action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 9 except to the extent that it has been materially prejudiced (through
the forfeiture of substantive rights or defenses) by such failure; and,
provided, further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 9. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 9 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (3) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 9(a) and 9(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending proceeding in respect of which any indemnified party is a party and
indemnity has been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
24
24
The obligations of the Company and the Initial Purchasers in
this Section 9 and in Section 10 are in addition to any other liability that the
Company or the Initial Purchasers, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
10. Contribution. If the indemnification provided for in Section
9 is unavailable or insufficient to hold harmless an indemnified party under
Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and by the
Initial Purchasers on the other hand from the offering of the Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Initial Purchasers on the other hand with
respect to the statements or omissions that resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Initial Purchasers on the other hand with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Securities purchased under this Agreement (before
deducting expenses) received by or on behalf of the Company, on the one hand,
and the total discounts and commissions received by the Initial Purchasers with
respect to the Securities purchased under this Agreement, on the other hand,
bear to the total gross proceeds from the sale of the Securities under this
Agreement, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to the
Company or information supplied by the Company on the one hand or to any Initial
Purchasers' Information on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Initial Purchasers agree
that it would not be just and equitable if contributions pursuant to this
Section 10 were to be determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 10 shall be deemed to include, for purposes of
this Section 10, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or preparing to
defend any such action or claim. Notwithstanding the provisions of this Section
10, no Initial Purchaser shall be required to contribute any amount in excess of
the amount by which the total discounts and commissions received by such Initial
Purchaser with respect to the Securities purchased by it under this Agreement
exceeds the amount of any damages which such Initial Purchaser has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
25
25
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers' obligations
to contribute as provided in this Section 10 are several in proportion to their
respective purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Company and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 9 and 10 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Company and
the Initial Purchasers and in Section 4(e) with respect to holders and
prospective purchasers of the Securities. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons referred to in
this Section 11, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
12. Expenses. The Company agrees with the Initial Purchasers to
pay (a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that connection; (b) the
costs incident to the preparation, printing and distribution of the Preliminary
Offering Memorandum, the Offering Memorandum and any amendments or supplements
thereto; (c) the costs of reproducing and distributing each of the Transaction
Documents; (d) the costs incident to the preparation, printing and delivery of
the certificates evidencing the Securities, including stamp duties and transfer
taxes, if any, payable upon issuance of the Securities; (e) the fees and
expenses of the Company's counsel and independent accountants; (f) the fees and
expenses of qualifying the Securities under the securities laws of the several
jurisdictions as provided in Section 4(h) and of preparing, printing and
distributing Blue Sky Memoranda (including related fees and expenses of counsel
for the Initial Purchasers); (g) any fees charged by rating agencies for rating
the Securities; (h) the fees and expenses of the Trustee and any paying agent
(including related fees and expenses of any counsel to such parties); (i) all
expenses and application fees incurred in connection with the application for
the inclusion of the Securities on the PORTAL Market and the approval of the
Securities for book-entry transfer by DTC; and (j) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement which are not otherwise specifically provided for in this Section 12;
provided, however, that except as provided in this Section 12 and Section 8, the
Initial Purchasers shall pay their own costs and expenses, including counsel's
fees and expenses.
13. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company and the
Initial Purchasers contained in this Agreement or made by or on behalf of the
Company or the Initial Purchasers pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
26
26
14. Notices, etc.. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail or telecopy transmission to Chase Securities Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇ (telecopier
no.: (▇▇▇) ▇▇▇-▇▇▇▇); or
(b) if to the Company, shall be delivered or sent by mail or
telecopy transmission to the address of the Company set forth in the
Offering Memorandum, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (telecopier no.: (616)
695-2207) with a copy to: Debevoise & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ (telecopier no.: (212)
909-6836); and Greenwich Street Capital Partners, L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ (telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇);
provided that any notice to an Initial Purchaser pursuant to Section 9(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by CSI.
15. Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
16. Initial Purchasers' Information. The parties hereto
acknowledge and agree that the Initial Purchasers' Information consists solely
of the following information in the Preliminary Offering Memorandum and the
Offering Memorandum: (i) the last paragraph on the front cover page concerning
the terms of the offering by the Initial Purchasers; (ii) the legend on the
inside front cover page concerning over-allotment and trading activities by the
Initial Purchasers; and (iii) the statements concerning the Initial Purchasers
contained in the last two paragraphs under the heading "Plan of Distribution"
and the last paragraph under the heading "Related Transactions".
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
27
27
19. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
28
28
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and the several
Initial Purchasers in accordance with its terms.
Very truly yours,
EV INTERNATIONAL, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name:
Title:
Accepted:
CHASE SECURITIES INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
29
SCHEDULE 1
Principal
Amount
Initial Purchasers of Securities
------------------ -------------
Chase Securities Inc. $ 75,000,000
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. $ 25,000,000
------------
Total $100,000,000
============
30
ANNEX A
[Form of Exchange and Registration Rights Agreement]
31
ANNEX B
Form of Opinion of Debevoise & ▇▇▇▇▇▇▇▇, Counsel for the Company
Debevoise & ▇▇▇▇▇▇▇▇ shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
below:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
is duly qualified to do business and is in good standing as a foreign
corporation in Delaware, California, Tennessee, Indiana, Michigan,
Oklahoma, Texas and Washington, which jurisdictions are all of the
domestic jurisdictions identified by management of the Company to such
counsel in which the Company or its domestic subsidiaries own property
or have significant operations and has all requisite corporate power
and authority necessary to own or hold its properties and to conduct
the businesses in which it is engaged (except where the failure to so
qualify or have such power or authority would not, singularly or in the
aggregate, have a Material Adverse Effect),
(ii) the Company has an authorized capitalization as set forth
in the Offering Memorandum, and all of the outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; and the capital stock of
the Company conforms in all material respects to the description
thereof contained in the Offering Memorandum;
(iii) the statements in the Offering Memorandum under the
heading "Certain Federal Income Tax Considerations", insofar as such
statements purport to summarize the Federal laws of United States,
fairly summarize such provisions described therein in all material
respects; and such counsel does not have actual knowledge of any
current or pending legal or governmental actions, suits or proceedings
which would be required to be described in the Offering Memorandum if
the Offering Memorandum were a prospectus included in a registration
statement on Form S-1 which are not described as so required;
(iv) the Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations
of the Commission applicable to an indenture which is qualified
thereunder;
(v) the Company has full right, power and authority to execute
and deliver each of the Transaction Documents and to perform its
obligations thereunder; and all corporate action required to be taken
for the due and proper authorization, execution and delivery of each of
the Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken;
32
2
(vi) each of the Purchase Agreement and the Registration
Rights Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding agreement of
the Company enforceable against the Company in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws
of general applicability relating to or affecting creditors' rights
generally and to general equity principles (whether considered in a
proceeding in equity or at law), an implied covenant of good faith and
fair dealing, the possible judicial application of foreign laws or
foreign governmental or judicial action affecting creditors' rights
and, in the case of indemnification and contribution provisions
therein, considerations of public policy;
(vii) the Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws of general applicability relating to or
affecting creditors' rights generally and to general equity principles
(whether considered in a proceeding in equity or at law), an implied
covenant of good faith and fair dealing, the possible judicial
application of foreign laws or foreign governmental or judicial action
affecting creditors' rights and, in the case of indemnification and
contribution provisions therein, considerations of public policy;
(viii) the Securities have been duly authorized and issued by
the Company and, assuming due authentication thereof by the Trustee in
accordance with the terms of the Indenture and upon payment and
delivery in accordance with the Purchase Agreement and the Indenture,
will constitute valid and legally binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except as may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws of general applicability relating to
or affecting creditors' rights generally and to general equity
principles (whether considered in a proceeding in equity or at law), an
implied covenant of good faith and fair dealing, the possible judicial
application of foreign laws or foreign governmental or judicial action
affecting creditors' rights and, in the case of indemnification and
contribution provisions therein, considerations of public policy;
(ix) each Transaction Document, to the extent described in the
Offering Memorandum, conforms in all material respects to the
description thereof contained in the Offering Memorandum;
(x) the execution, delivery and performance by the Company of
each of the Purchase Agreement, the Indenture and the Registration
Rights Agreement, the compliance by the Company with the terms thereof,
the consummation of the transactions contemplated by such documents and
the issuance, authentication, sale and
33
3
delivery of the Securities will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any of the agreements and instruments listed on Exhibit
A hereto (which agreements and instruments have been certified by the
Company to such counsel to constitute all the material agreements or
instruments to which the Issuer or any of its domestic subsidiaries is
a party or by which the Issuer or any of its domestic subsidiaries is
bound or to which any of the property or assets of the Issuer or any of
its domestic subsidiaries is subject and which relate to the
transactions contemplated by the Transaction Documents (other than the
Transaction Documents)), nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any existing Federal or New York State, statute,
rule or regulation or, to the knowledge of counsel, any judgment,
order, decree of any Federal or New York State court or arbitrator or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties or assets; and no
consent, approval, authorization or order of, or filing or registration
with, any such court or arbitrator or governmental agency or body under
any such statute, judgment, order, decree, rule or regulation is
required for the execution, delivery and performance by the Company of
each of the Purchase Agreement, the Indenture or the Registration
Rights Agreement, the issuance, authentication, sale and delivery of
the Securities and compliance by the Company with the terms thereof and
the consummation of the transactions contemplated by the Transaction
Documents, except for such consents, approvals, authorizations,
filings, registrations or qualifications (i) which have been obtained
or made prior to the Closing Date, (ii) as may be required under state
securities or Blue Sky laws in connection with the purchase and resale
of the Securities by the Initial Purchasers, and (iii) as may be
required under the Securities Act of 1933, as amended (the "Act"), the
Trust Indenture Act of 1939, as amended, or state securities or Blue
Sky laws in connection with the Exchange Offer contemplated in the
Offering Memorandum.
(xi) to the best knowledge of such counsel, and other than as
set forth or contemplated in the Offering Memorandum there are no
pending actions or suits or judicial, arbitral, rule-making,
administrative or other proceedings to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which question the
validity or enforceability of any of the Transaction Documents or any
action taken or to be taken pursuant thereto; and to the best knowledge
of such counsel, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(xii) neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws;
(xiii) neither the Company nor any of its subsidiaries is (A)
an "investment company" or a company "controlled by" an investment
company within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder,
without taking account of any exemption under the Investment
34
4
Company Act arising out of the number of holders of the Company's
securities or (B) a "holding company" or a "subsidiary company" of a
holding company or an "affiliate" thereof within the meaning of the
Public Utility Holding Company Act of 1935, as amended;
(xiv) neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance, execution or
delivery of the Securities will violate Regulation G, T, U or X of the
Federal Reserve Board; and
(xv) assuming the accuracy of the representations, warranties
and agreements of the Company and of the Initial Purchasers contained
in the Purchase Agreement, the issuance, offer and sale of the
Securities to the Initial Purchasers and the initial resale and
delivery of the Securities in the manner contemplated by the Purchase
Agreement and the Offering Memorandum are exempt from the registration
requirements of the Securities Act, and it is not necessary to qualify
the Indenture under the Trust Indenture Act.
Such counsel shall also state that they themselves have not checked the
accuracy or completeness of, or otherwise verified, and are not passing upon and
assume no responsibility for the accuracy or completeness of, the information
contained or incorporated by reference in the Offering Memorandum, except to the
limited extent stated in paragraphs (ii), (iii) and (ix) above. In the course of
such counsel's review, such counsel has participated in conferences with certain
officers and other representatives of the Company, representatives of its
independent public accountants and representatives of the Initial Purchasers, at
which the contents of the Offering Memorandum were discussed, and in the course
of that review and discussion, but without independent check or verification, no
facts have come to such counsel's attention that have caused such counsel to
believe that any part of the Offering Memorandum contains an untrue statement of
a material fact or omits 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; it being understood that such
counsel shall express no opinion as to the financial statements or other
financial, accounting or statistical data included in an of the documents
mentioned in this paragraph
In rendering such opinion, such counsel may rely as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Company and public officials which are furnished to the Initial
Purchasers.
35
ANNEX C-1
Form of Opinion of Ashurt ▇▇▇▇▇▇ ▇▇▇▇▇
1. [Local company/ies] has been duly incorporated and is validly
existing as a corporation under the laws of [your jurisdiction] and has the
power and authority necessary to own or hold its properties and to conduct
businesses in which it is engaged.
2. All of the issued shares of capital stock of [local company/ies]
have been duly and validly authorized and issued and are fully paid and
non-assessable, and all the issued and outstanding shares [of local company/ies]
are held by EV International Holding Corporation, Inc.
3. To your knowledge, there are no legal or governmental proceedings
pending or threatened to which EV International, Inc. (the "Company") and [local
company/ies] are a party or of which any property or assets of the Company or
[local company/ies] are subject which, if determined adversely to the Company or
[local company/ies], are reasonably likely to have a material adverse effect on
the financial condition, results of operations, business or prospects of the
Company and all of its subsidiaries, taken as a whole.
36
ANNEX C-2
Form of Opinion of Oppenhoff & ▇▇▇▇▇▇
1. [Local company/ies] has been duly incorporated and is validly
existing as a corporation under the laws of [your jurisdiction] and has the
power and authority necessary to own or hold its properties and to conduct
businesses in which it is engaged.
2. All of the issued shares of capital stock of [local company/ies]
have been duly and validly authorized and issued and are fully paid and
non-assessable, and all the issued and outstanding shares [of local company/ies]
are held by EV International Holding Corporation, Inc.
3. To your knowledge, there are no legal or governmental proceedings
pending or threatened to which EV International, Inc. (the "Company") and [local
company/ies] are a party or of which any property or assets of the Company or
[local company/ies] are subject which, if determined adversely to the Company or
[local company/ies], are reasonably likely to have a material adverse effect on
the financial condition, results of operations, business or prospects of the
Company and all of its subsidiaries, taken as a whole.
37
ANNEX C-3
Form of Opinion of Nishimura & Partners
1. [Local company/ies] has been duly incorporated and is validly
existing as a corporation under the laws of [your jurisdiction] and has the
power and authority necessary to own or hold its properties and to conduct
businesses in which it is engaged.
2. All of the issued shares of capital stock of [local company/ies]
have been duly and validly authorized and issued and are fully paid and
non-assessable, and all the issued and outstanding shares [of local company/ies]
are held by EV International Holding Corporation, Inc.
3. To your knowledge, there are no legal or governmental proceedings
pending or threatened to which EV International, Inc. (the "Company") and [local
company/ies] are a party or of which any property or assets of the Company or
[local company/ies] are subject which, if determined adversely to the Company or
[local company/ies], are reasonably likely to have a material adverse effect on
the financial condition, results of operations, business or prospects of the
Company and all of its subsidiaries, taken as a whole.
38
ANNEX C-4
Form of Opinion of ▇▇▇▇ ▇▇▇ & Co.
1. [Local company/ies] has been duly incorporated and is validly
existing as a corporation under the laws of [your jurisdiction] and has the
power and authority necessary to own or hold its properties and to conduct
businesses in which it is engaged.
2. All of the issued shares of capital stock of [local company/ies]
have been duly and validly authorized and issued and are fully paid and
non-assessable, and all the issued and outstanding shares [of local company/ies]
are held by EV International Holding Corporation, Inc.
3. To your knowledge, there are no legal or governmental proceedings
pending or threatened to which EV International, Inc. (the "Company") and [local
company/ies] are a party or of which any property or assets of the Company or
[local company/ies] are subject which, if determined adversely to the Company or
[local company/ies], are reasonably likely to have a material adverse effect on
the financial condition, results of operations, business or prospects of the
Company and all of its subsidiaries, taken as a whole.
39
ANNEX D
Form of Initial Comfort Letter
The Company shall have furnished to the Initial Purchasers a
letter of Coopers & ▇▇▇▇▇▇▇ L.L.P. addressed to the Initial Purchasers and dated
the date of the Purchase Agreement, in form and substance satisfactory to the
Initial Purchasers, substantially to the effect set forth below:
(i) they are independent certified public accountants with
respect to the Company within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings;
(ii) in their opinion, the audited financial statements
included in the Offering Memorandum and reported on by them comply in
form in all material respects with the accounting requirements of the
Exchange Act and the related published rules and regulations of the
Commission thereunder that would apply to the Offering Memorandum if
the Offering Memorandum were a prospectus included in a registration
statement on Form S-1 under the Securities Act (except that certain
supporting schedules are omitted);
(iii) based upon a reading of the latest unaudited financial
statements made available by the Company, the procedures of the AICPA
for a review of interim financial information as described in Statement
of Auditing Standards No. 71, reading of minutes and inquiries of
certain officials of the Company who have responsibility for financial
and accounting matters and certain other limited procedures requested
by the Initial Purchasers and described in detail in such letter,
nothing has come to their attention that causes them to believe that
(A) any unaudited financial statements included in the Offering
Memorandum do not comply as to form in all material respects with
applicable accounting requirements, (B) any material modifications
should be made to the unaudited financial statements included in the
Offering Memorandum for them to be in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in
the Offering Memorandum or (C) the information included under the
headings "Summary--Summary Financial Data", "Capitalization", "Selected
Financial Data", and "Management's Discussion and Analysis of Results
of Operations and Financial Condition" is not in conformity with the
disclosure requirements of Regulation S-K that would apply to the
Offering Memorandum if the Offering Memorandum were a prospectus
included in a registration statement on Form S-1 under the Securities
Act;
(iv) based upon the procedures detailed in such letter with
respect to the period subsequent to the date of the last available
balance sheet, including reading of minutes and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, nothing has come to their attention that causes
them to believe
40
2
that (A) at a specified date not more than three business days prior to
the date of such letter, there was any change in capital stock,
increase in long-term debt or decrease in net current assets as
compared with the amounts shown in the November 30, 1996 unaudited
balance sheet included in the Offering Memorandum or (B) for the period
from _________ __, 199__ to a specified date not more than three
business days prior to the date of such letter, there were any
decreases, as compared with the corresponding period in the preceding
year, in net sales, income from operations, EBITDA or net income,
except in all instances for changes, increases or decreases that the
Offering Memorandum discloses have occurred or which are set forth in
such letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless said
explanation is not deemed necessary by the Initial Purchasers; and
(v) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the Offering
Memorandum agrees with the accounting records of the Company, excluding
any questions of legal interpretation.