FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported) DECEMBER 17, 1993.
COLOR TILE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-8777 75-1606185
(state or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation or Number)
organization)
515 HOUSTON STREET, FORT WORTH, TEXAS 76102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (817) 870-9400.
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Item 5. - Other Events
On December 17, 1993, the Registrant completed its public
offering of $200,000,000 aggregate principal amount of 10-3/4% Senior
Notes due 2001. In connection with the offering, the Registrant entered
into an underwriting agreement dated December 10, 1993 with Bear,
Stearns & Co. Inc., Lehman Brothers Inc. and Chemical Securities Inc.
The form of underwriting agreement executed by each of the parties
thereto is filed herewith as Exhibit 1.
Upon the consummation of the public offering of the 10-3/4%
Senior Notes and the receipt of net proceeds therefrom, American Blind
and Wallpaper Factory, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Registrant, acquired substantially all the assets of
ABF Acquisition Corp., a Delaware corporation, for a purchase price of
$80,000,000 and the assumption of certain liabilities. The terms and
conditions of this acquisition were previously reported in the
Registrant's Registration Statement or Form S-1 (Reg. No. 33-50599)
filed in respect of the 10-3/4% Senior Notes (the "Registration
Statement"). The assets purchased consisted of the operating assets of
the direct-response sale of window treatments and wall covering business
formerly operated by ABF Acquisition Corp. The remaining net proceeds
of the offering were used to repay certain outstanding indebtedness, as
described in the Registration Statement.
Item 7. - Exhibits
1. Underwriting Agreement, dated December 10, 1993, among
the Registrant, Bear, Stearns & Co. Inc., Lehman Brothers Inc. and
Chemical Securities Inc.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
COLOR TILE, INC.
(Registrant)
Date: January 4, 1994 By:____________________________
Name:
Title:
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$200,000,000
COLOR TILE, INC.
10-3/4% Senior Notes due 2001
UNDERWRITING AGREEMENT
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December 10, 1993
Bear, Stearns & Co. Inc.
Lehman Brothers Inc.
Chemical Securities Inc.
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Dear Sirs:
Color Tile, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you, upon the terms hereinafter set
forth, $200,000,000 aggregate principal amount of its 10-3/4% Senior
Notes due 2001 (the "Securities"). The Securities will be issued
pursuant to an indenture between the Company and U.S. Trust Company of
Texas, N.A., as Trustee (the "Trustee"), substantially in the form
filed as an exhibit to the Registration Statement (the "Indenture")
referred to below and are more fully described in the Registration
Statement.
1. Registration Statement and Prospectus. The Company has
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prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act
of 1933, as amended (the "Act"), and the rules and regulations of the
Commission promulgated thereunder (the "Regulations"), a registration
statement on Form S-1 (File No. 33-50599) relating to the Securities
and two amendments thereto, including in each case a preliminary
prospectus. The Company proposes to prepare and file with the
Commission a further amendment to that registration statement,
including therein a final prospectus, necessary to permit the
registration statement to become effective or, if no amendment is
required for that purpose, then promptly following the effectiveness
of the registration statement, the Company proposes to prepare and
file with the Commission, pursuant to Rule 424(b) of the Regulations,
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a final prospectus containing all Rule 430A Information (as
hereinafter defined) omitted from the registration statement at the
time that it is declared effective by the Commission. The Company
will not file any such further amendment or final prospectus to which
you shall reasonably object in writing after being furnished a copy
thereof prior to filing. As used in this Agreement, (i) the term
"Effective Date" means the date that the registration statement
hereinabove referred to is declared effective by the Commission,
(ii) the term "Registration Statement" means such registration
statement as last amended prior to the time it was declared effective
by the Commission, including all exhibits and schedules thereto and
all Rule 430A Information deemed to be included therein at the
Effective Date pursuant to Rule 430A of the Regulations, (iii) the
term "Rule 430A Information" means information with respect to the
Securities and the public offering thereof permitted, pursuant to the
provisions of paragraph (a) of Rule 430A of the Regulations, to be
omitted from the form of prospectus included in the Registration
Statement at the time it is declared effective by the Commission,
(iv) the term "Prospectus" means the form of final prospectus relating
to the Securities first filed with the Commission pursuant to Rule
424(b) of the Regulations or, if no filing pursuant to Rule 424(b) is
required, the form of final prospectus included in the Registration
Statement at the time it is declared effective by the Commission, and
(v) the term "preliminary prospectus" means each preliminary
prospectus (as described in Rule 430 of the Regulations) with respect
to the Securities that omit Rule 430A Information.
2. Representations and Warranties of the Company. The
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Company represents and warrants to you as follows:
(a) On the Effective Date, the date the Prospectus is first
filed with the Commission pursuant to Rule 424(b) (if required),
at all times subsequent thereto to and including the Closing Date
(as hereinafter defined) and when any post-effective amendment to
the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, the
Registration Statement and, if filed at such time, the Prospectus
(as amended or as supplemented if the Company shall have filed
with the Commission any amendment or supplement thereto) complied
and will comply in all material respects with the applicable
provisions of the Act and the Regulations, and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and the rules and regulations thereunder, and did not and will
not contain an untrue statement of a material fact or omit to
state any material fact required to be stated
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therein or necessary in order to make the statements therein (in
the case of the Prospectus, in light of the circumstances under
which they were made) not misleading. When the preliminary
prospectus dated November 16, 1993 was first filed with the
Commission (whether filed as part of the Registration Statement
or an amendment thereof or pursuant to Rule 424(a) of the
Regulations) and when any amendment thereof or supplement thereto
was first filed with the Commission, such preliminary prospectus
and any amendments thereof and supplements thereto complied in
all material respects with the applicable provisions of the Act
and the Regulations and did not contain an untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. No representation or warranty is made in this
subsection (a), however, with respect to information relating to
any of you or the public offering of the Securities by you
contained in or omitted from the Registration Statement or the
Prospectus or any related preliminary prospectus or any amendment
thereof or supplement thereto in reliance upon and in conformity
with information furnished in writing to the Company by Bear,
Stearns & Co. Inc. on its or your behalf expressly for use
therein. If the Registration Statement has become effective, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission and the Company
shall file with the Commission in accordance with Rule 424(b) of
the Regulations a final Prospectus containing all Rule 430A
Information omitted at the time such Registration Statement was
declared effective by the Commission. The Company will not file
any such final Prospectus or further amendment to such
Registration Statement to which you shall reasonably object in
writing after being furnished a copy thereof prior to filing.
(b) Subsequent to the respective dates as of which
information is given in the Registration Statement, except as set
forth in the Registration Statement, there has not been any
material adverse change, or any development involving a
prospective material adverse change, in the business, properties,
operations, condition (financial or other) or results of
operations of the Company and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course
of business, and since the date of the latest consolidated
balance sheet of the Company and its subsidiaries included in the
Registration
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Statement, neither the Company nor any of its subsidiaries has
incurred or undertaken any liabilities or obligations, direct or
contingent, that are material to the Company and its subsidiaries
taken as a whole, except for liabilities or obligations that were
incurred or undertaken in the ordinary course of business or that
are fully disclosed in the Registration Statement.
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, (i) subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally,
(ii) subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and (iii) except to the extent
that rights to indemnification thereunder may be limited by
federal or state securities laws or public policy relating
thereto.
(d) The execution, delivery, and performance of this
Agreement, the Indenture and the Securities and the consummation
of the transactions contemplated hereby and thereby, including
the issuance, sale and delivery of the Securities and application
of the proceeds therefrom as set forth in the Registration
Statement, will not, except as set forth in the Registration
Statement, (i) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default (or an event
that with notice or lapse of time, or both, would constitute a
default) or require consent 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
the terms of any agreement, instrument, franchise, license or
permit to or by which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or their
respective properties or assets may be bound (other than those as
to which requisite waivers or consents have been obtained by the
Company) or (ii) violate or conflict with any provision of the
certificate of incorporation, by-laws, or equivalent instruments,
of the Company or any of its subsidiaries or any judgment,
decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any
of their respective properties or assets. No consent,
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approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any
public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any
of their respective properties or assets is required for the
execution, delivery and performance of this Agreement, the
Indenture or the Securities and the consummation by the Company
of the transactions contemplated hereby and thereby, except for
the registration under the Act of the Securities, the
qualification of the Indenture under the Trust Indenture Act and
such consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits as may be required
under the state securities or Blue Sky laws in connection with
your purchase and distribution of the Securities.
(e) The Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority required to carry on its
business as described in the Registration Statement and to own,
lease and operate its properties, and each is duly qualified and
is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business
or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(f) All of the outstanding shares of capital stock of each
subsidiary of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable, and are owned
by the Company, free and clear of any security interest, adverse
claim, lien, encumbrance, restriction on transfer, shareholders'
agreement, voting trust or encumbrance whatsoever (except as
expressly disclosed in the Registration Statement and as will be
expressly disclosed in the Prospectus). There are no rights
granted to or in favor of any person to acquire any such capital
stock except as otherwise expressly disclosed in the Registration
Statement and the Prospectus.
(g) The Company had, at October 3, 1993, an authorized and
outstanding capitalization as set forth in the Registration
Statement and will have the adjusted capitalization described
therein at the Closing (as
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hereinafter defined) (based on the assumptions set forth in the
Registration Statement). All of the currently outstanding shares
of common stock of the Company have been duly authorized and
validly issued, are fully paid and non-assessable and were not
issued in violation of or subject to any preemptive rights and
are owned as set forth in the Registration Statement.
(h) The Indenture conforms in all material respects to the
description thereof set forth in the Registration Statement and
as shall be set forth in the Prospectus, has been duly and
validly authorized by all necessary corporate action on the part
of the Company and, when executed and delivered by the Company
and the Trustee and qualified under the Trust Indenture Act, will
constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
(i) subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws relating
to creditors' rights and remedies generally, (ii) subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in
equity) and (iii) except insofar as the usury waiver therein may
be deemed to be unenforceable.
(i) The Securities have been duly and validly authorized by
all necessary corporate action and, when authenticated by the
Trustee and issued, sold and delivered by the Company pursuant to
this Agreement against payment therefor, will have been duly and
validly executed, authenticated, issued and delivered and will
constitute valid and binding obligations of the Company entitled
to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, (i) subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws relating to creditors' rights and
remedies generally, (ii) subject, as to enforceability, to
general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity) and (iii) except
insofar as the usury waiver therein may be deemed to be
unenforceable. The Securities, when issued, will conform in all
material respects to the description thereof set forth in the
Registration Statement and as shall be set forth in the
Prospectus.
(j) There are no rights of third parties to require
registration of any securities of the Company in connection
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with the filing of the Registration Statement or to otherwise
require the Company to register any securities under the Act
except such as have been waived or otherwise disclosed in the
Registration Statement.
(k) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or in default in the
performance of any obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument
to which it is a party or by which it or any of its property is
bound, except for those defaults that, individually or in the
aggregate, would not have a material adverse effect on the
business, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
(l) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened to which the
Company or any of its subsidiaries is a party or of which any of
their respective properties or assets is the subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described. There is no statute,
regulation, contract or other document of a character required to
be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that is
not so described or filed as required.
(m) The Company and each of its subsidiaries have all
necessary licenses, consents, authorizations, approvals, orders,
certificates and permits, including without limitation those
relating to the environment or environmental matters
(collectively, "Licenses") of and from, and have made all
declarations and filings with and satisfied all eligibility and
other similar requirements imposed by all federal, state, local
and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, in each case as
required for the conduct of the business in which it is engaged,
and each such License is in full force and effect, except to the
extent that, individually or in the aggregate, the failure to
obtain any such License or to keep such License in effect or to
make any such declaration or filing or satisfy any such
requirement would not have a material adverse effect on the
business, prospects, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole.
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(n) The Company and its subsidiaries are in compliance with
all applicable federal, state and local laws and regulations
relating to (i) zoning, land use, and human health and safety and
(ii) employee or occupational safety, discrimination in hiring,
promotion or pay of employees, employee hours and wages or
employee benefits, except in each case where such noncompliance
would not, individually or in the aggregate, have a material
adverse effect upon the Company and its subsidiaries taken as a
whole.
(o) Coopers & Lybrand and Grant Thornton, whose reports are
included in the Registration Statement, are independent public
accountants with respect to the Company, and, in the case of
Grant Thornton, with respect to American Blind Factory, Inc.
("ABF"), as required by the Act and the Regulations.
(p) The consolidated financial statements of the Company
and its subsidiaries, together with the related schedules and
notes, forming part of the Registration Statement (and any
amendment thereto) present fairly in all material respects the
consolidated financial position, results of operations, cash flow
and stockholder's equity of the Company and its subsidiaries in
conformity with generally accepted accounting principles on the
basis stated in the Registration Statement at the respective
dates and for the respective periods to which they apply; such
financial statements and related schedules and notes have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved,
except as disclosed therein; and the other financial and
statistical information and data with respect to the Company and
its subsidiaries set forth in the Registration Statement (and any
amendment thereto) present fairly the information purported to be
shown thereby at the respective dates or for the respective
periods to which they apply and have been prepared on a basis
consistent with such financial statements and the books and
records of the Company.
(q) The financial statement of ABF, together with the
related schedules and notes, forming part of the Registration
Statement (and any amendment thereto) present fairly in all
material respects the financial position, results and operations
and cash flow of ABF in conformity with generally accepted
accounting practices on the basis stated in the Registration
Statement at the respective dates and for the respective periods
to which they apply; such
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financial statements and related schedules and notes have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved,
except as disclosed therein; and the other financial and
statistical information and data with respect to ABF set forth in
the Registration Statement (and any amendment thereto) present
fairly the information purported to be shown thereby at the
respective dates for the respective periods to which they apply
and have been prepared on a basis consistent with such financial
statements and the books and records of ABF.
(r) The unaudited pro forma condensed combined financial
statements, together with the notes thereto, as set forth in the
Registration Statement and as they will be set forth in the
Prospectus, comply as to form in all material respects with the
applicable accounting requirements of the Act and the Regulations
(including, without limitation, Regulation S-X promulgated by the
Commission). Such pro forma financial statements have been
prepared on a basis consistent with the historical financial
statements of the Company and ABF, except for the pro forma
adjustments specified therein, which adjustments have been
properly applied to the historical amounts in the compilation of
such pro forma financial statements and give effect to the
assumptions therein, which assumptions were made on a reasonable
basis.
(s) The Company has not received written notice and is not
aware of any oral notice of any violations, proceedings, claims,
or lawsuits arising out of environmental matters with respect to
the operation of its business or the property owned or leased by
the Company, any adverse determination relating to which could
individually or together with other adverse determinatins in
respect of such other violations, proceedings, claims or lawsuits
have a material adverse effect on the Company and its
subsidiaries taken as a whole; there is no treatment, storage,
disposal or release of any hazardous or toxic substances,
materials, or wastes or any pollutants, contaminants, or
petroleum products at, onto or from sites presently or formerly
(through the date the Company or such subsidiary last owned,
leased or used such property) owned, leased or used by the
Company, liability for which is reasonably likely to have a
material adverse effect on the business, financial condition or
results of operations of the Company and its subsidiaries taken
as a whole.
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(t) The Company and each of its subsidiaries, and to the
Company's knowledge, ABF is the sole and exclusive owner or
licensee of the trade names "Color Tile," "Color Carpet," "Floors
A Plenty." There are no other trade names, trademarks, service
marks or brand names that individually or in the aggregate are
material to the Company and its subsidiaries taken as a whole.
None of the Company, any of its subsidiaries or ABF has been
charged with any infringement of any intangible property of the
character described above or been notified or advised of any
claim of any other person relating to any of the intangible
property which infringements or claims (individually or in the
aggregate) would have a material adverse effect on the condition
(financial or otherwise), properties, operations, results of
operations, earnings or business affairs of the Company and its
subsidiaries taken as a whole.
(u) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
3. Purchase, Sale and Delivery of the Securities. (a) On
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the basis of the representations, warranties, covenants and agreements
herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each of you, and each of you,
severally and not jointly, agrees to purchase from the Company, the
principal amount of the Securities set forth opposite your name below,
at a purchase price equal to 97% of the principal amount thereof,
together with accrued interest, if any, on the Securities from
December 17, 1993 to the Closing Date:
Bear, Stearns & Co. Inc. . . . . . $ 110,000,000
Lehman Brothers Inc. . . . . . . . 70,000,000
Chemical Securities Inc. . . . . . 20,000,000
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$ 200,000,000
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(b) Delivery of the Securities and payment of the purchase
price therefor shall be made at the offices of Bear, Stearns & Co.
Inc. located at 245 Park Avenue, New York, New York 10167, or at such
other location as may be mutually acceptable to the Company and you.
Such delivery and payment shall be made at 10:00 A.M., New York City
time, on the fifth full business day following the later of the date
of this Agreement or the Effective Date (unless such time and date are
postponed in accordance with the provisions of Section 8(c) hereof),
or at such other time as shall be mutually agreed upon by the Company
and you. The time and date of such delivery and payment are
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herein called the "Closing Date." Delivery of the Securities shall be
made to you against payment of the purchase price therefor in
immediately available funds to the account of the Company (wire
transfer instructions: Color Tile, Inc., 144-098596, Chemical Bank,
New York, ABA # 021-000-128)
(the Company being obligated to pay you three days' interest in
respect of such payment at an annual rate based on a 360 day year
equal to the federal funds rate in effect at 9:30 a.m. on the Closing
Date plus 1.375%).
(c) The Securities shall be registered in such name or
names and in such authorized denominations as you may request in
writing at least two full business days prior to the Closing Date,
provided that, if you so specify, the Securities may be represented by
a global instrument registered in the name of Cede & Co., as nominee
of the Depositary Trust Company. The Company will permit you to
examine and package the Securities for delivery at least one full
business day prior to the Closing Date, unless the Securities are to
be represented by a global instrument.
4. Offering. It is understood that, if the Registration
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Statement is not already effective at the time of execution of this
Agreement, then as soon after the Registration Statement becomes
effective as you deem it advisable to do so, you will offer the
Securities for sale to the public as set forth in the Prospectus.
5. Agreements of the Company. The Company covenants and
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agrees with you as follows:
(a) If the Registration Statement is not already effective,
then the Company will use its best efforts to cause the
Registration Statement to become effective. If the Registration
Statement has become or becomes effective pursuant to Rule 430A
of the Regulations, or filing of the Prospectus is otherwise
required by Rule 424(b) of the Regulations, the Company will file
the Prospectus, properly completed, pursuant to Rule 424(b) of
the Regulations within the time period therein prescribed and
will provide evidence satisfactory to you of such timely filing.
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(b) The Company will advise you promptly and, if so
requested by you, will confirm such advice in writing, (i) when
the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (ii) of any
request by the Commission for amendments to the Registration
Statement or amendments or supplements to the Prospectus or for
additional information, (iii) of the issuance by the Commission
of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of
the Securities for offering or sale in any jurisdiction, or the
initiation or threat of initiation of any proceeding for such
purposes, and (iv) of the happening, during the period referred
to in paragraph (e) below, of any event of which the Company has
knowledge that makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or which requires
the making of any additions to or changes in the Registration
Statement or the Prospectus in order to comply with the Act or
the Regulations or to make the statements therein not misleading.
The Company will use every reasonable effort to prevent the
issuance of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or
any suspension of qualification of the Securities in any
jurisdiction and if at any time the Commission shall issue any
such stop order, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order or suspension at
the earliest possible time.
(c) The Company will furnish (i) to your counsel, for
delivery to you, two manually signed copies of the Registration
Statement (including all exhibits thereto filed therewith) and
each amendment thereto (including all exhibits filed therewith),
and (ii) to you and to those persons who you identify to the
Company such number of copies of each preliminary prospectus, the
Prospectus, the Registration Statement, the Indenture and all
amendments of and supplements to such documents, if any, without
exhibits, as you reasonably may request. The Company consents to
the respective use of each preliminary prospectus, the Prospectus
and any amendment or supplement thereto by you and by all dealers
to whom the Securities may be sold, in connection with the
offering or sale of the Securities and, as to the Prospectus or
any amendment or supplement thereto, during such period of time
thereafter as the Prospectus is required by law to be delivered
in connection therewith.
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(d) The Company will not file any amendment to the
Registration Statement, whether before or after the Effective
Date, or issue any supplement to the Prospectus, of which you
shall not previously have been advised or to which you shall
reasonably object; and the Company will prepare and file with the
Commission, promptly upon your reasonable request, any amendment
to the Registration Statement or supplement to the Prospectus
that may be necessary or advisable in connection with the
distribution of the Securities by you, and will use its best
efforts to cause the same to become effective promptly.
(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in
the opinion of your counsel a prospectus is required by law to be
delivered in connection with sales of Securities by you or any
dealer, the Company will furnish to you and each dealer as many
copies of the Prospectus (and of any amendment or supplement to
the Prospectus) as you or such dealer reasonably may request.
(f) If during the period specified in paragraph (e) above
any event shall occur as a result of which it becomes necessary
to amend or supplement the Prospectus in order to make the
statements therein, in light of the circumstances existing when
the Prospectus is delivered to a purchaser, not misleading, or if
it becomes necessary to amend or supplement the Prospectus to
comply with any law, the Company will forthwith prepare and file
with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not, in light of the circumstances
existing when it is so delivered, be misleading, or so that the
Prospectus will comply with law, and the Company will furnish to
you and to those dealers as you shall specify, such number of
copies thereof as you or those dealers reasonably may request.
(g) Prior to any public offering of the Securities, the
Company will cooperate with you and your counsel in connection
with the registration or qualification of the Securities under
the securities or Blue Sky laws of such jurisdictions as you may
request, will continue such qualification in effect so long as
required for such purpose and will file such consents to service
of process or other documents as may be necessary in order to
effect such registration or qualification; provided, however,
-------- -------
that in connection therewith the Company shall not be required to
13
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qualify as a foreign corporation or to file any general consent
to service of process in any jurisdiction in which it is not
already so qualified or subject.
(h) The Company will mail and make generally available to
its securityholders as soon as reasonably practicable an earnings
statement covering a period of at least twelve consecutive months
commencing after the Effective Date (but in no event commencing
later than 90 days after such date) that shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 thereunder.
(i) So long as any of the Securities remains outstanding,
the Company will (i) mail as soon as reasonably practicable after
the end of each fiscal year to the record holders of the
Securities, a financial report of the Company and its
subsidiaries on a consolidated basis, including in each such
financial report a consolidated balance sheet, a consolidated
statement of operations, a consolidated statement of cash flows
and a consolidated statement of stockholder's equity as of the
end of and for such fiscal year, together with comparable
information as of the end of and for the preceding year,
certified by independent public accountants, and (ii) mail and
make generally available to such holders as soon as practicable
after the end of each quarterly period (except for the last
quarterly period of each fiscal year), a consolidated balance
sheet, a consolidated statement of operations and a consolidated
statement of cash flows as of the end of and for such period, and
for the period from the beginning of such year to the close of
such quarterly period, together with comparable information for
the corresponding periods of the preceding year, none of which
statements need be audited.
(j) During the period referred to in paragraph (i) above,
the Company will furnish you as soon as available a copy of each
report mailed by the Company to holders of its securities or
filed by the Company with the Commission and such other publicly
available information concerning the Company and its subsidiaries
as you reasonably may request.
(k) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the
Company will pay all costs, expenses and fees incident to (i) the
preparation, printing, filing under the Act and distribution of
the Registration Statement (including financial statements and
exhibits), each preliminary prospectus and all amendments and
supplements to
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any of them, (ii) the printing, filing under the Act (if
required), distribution and delivery of the Prospectus and all
amendments thereof or supplements thereto, (iii) the reproduction
and delivery of this Agreement, the Blue Sky Memorandum and any
supplement thereto and all other agreements, memoranda,
correspondence and other documents printed and delivered in
connection with the offering of the Securities (including in each
case any reasonable disbursements of your counsel relating to
such reproduction and delivery), (iv) the registration or
qualification of the Securities under the securities or Blue Sky
laws of the several states (including in each case the reasonable
fees and disbursements of your counsel relating to such
registration or qualification and the preparation of a Blue Sky
Memorandum relating thereto), (v) filings with the National
Association of Securities Dealers, Inc. in connection with its
review of the fairness of the underwriting terms and arrangements
for the public offering of the Securities by you (including the
reasonable fees and disbursements of your counsel in connection
therewith), (vi) furnishing such copies of the Registration
Statement, the Prospectus and all amendments and supplements
thereto as may be requested for use in connection with the
offering or sale of the Securities by you or by dealers to whom
Securities may be sold, (vii) the fees and expenses of the
Trustee and any agent of such Trustee and the fees and
disbursements of counsel for such Trustee in connection with the
Indenture, (viii) the fees of the national rating agencies in
connection with the rating of the Securities, and (ix) the
performance by the Company of its other obligations under this
Agreement. Notwithstanding the foregoing, the Underwriters shall
reimburse the Company for $500,000 of its legal and other
expenses in the same proportion among the Underwriters as that of
the principal amount of Securities agreed to be purchased by each
Underwriter pursuant to Section 3 hereof.
(l) The Company will apply the proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the
Prospectus.
(m) The Company will use its best efforts to do and perform
all things required or necessary to be done and performed under
this Agreement by the Company prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the
Securities.
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(n) During the period of one hundred eighty (180) days
following the date of the Prospectus, the Company will not,
without your prior written consent, directly or indirectly issue,
sell, offer or agree to sell, or otherwise dispose of any debt or
redeemable equity (other than for other non-redeemable equity
securities) Securities (or any securities convertible into,
exercisable for or exchangeable for any such securities) other
than the Securities to be issued and sold pursuant hereto.
6. Indemnification. (a) The Company agrees to indemnify
---------------
and hold harmless each of you and each person, if any, who controls
each of you within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments arising out of or relating to any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages,
liabilities or judgments arise out of or relate to any such untrue
statement or omission or alleged untrue statement or omission based
upon information relating to you furnished by Bear, Stearns & Co. Inc.
in writing to the Company expressly for use therein; provided,
--------
however, that the foregoing indemnity agreement with respect to any
-------
preliminary prospectus shall not inure to your benefit or that of any
such controlling person if the person asserting any such losses,
claims or damages purchased Securities from you and if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given
by you or on your behalf to such person, if required by law to have
been so delivered, at or prior to the written confirmation of the sale
of Securities to such person, if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages, liabilities or judgments and if the Company shall
have fully complied in all material respects with Sections 5(c) (other
than Section 5(c)(i)) through 5(f) hereof.
(b) In case any action shall be brought against you or any
person controlling you, based upon the Registration Statement, any
preliminary prospectus or the Prospectus or any amendment or
supplement thereto and with respect to which indemnity may be sought
against the Company, you shall promptly notify the Company in writing
(but failure to so notify an
16
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indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent that it has been
prejudiced in any material respect by such failure or from any
liability which it may otherwise have) and the Company shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to you and payment of all fees and expenses. You or any
such controlling person shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at your expense or at
the expense of such controlling person unless (i) the employment of
such counsel has been specifically authorized in writing by the
Company, or (ii) the Company has failed to assume the defense and
employ counsel reasonably satisfactory to you or (iii) the named
parties to any such action (including any impleaded parties) include
both you or such controlling person and the Company, and you or such
controlling person shall have been advised by such counsel that there
may be one or more legal defenses available to you or such controlling
person that are different from or additional to those available to the
Company (in which case the Company shall not have the right to assume
the defense of such action on behalf of you or such controlling
person, it being understood, however, that the Company shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for you and all such
controlling persons, which firm shall be designated in writing by you
and that all such fees and expenses shall be reimbursed as they are
incurred). The Company shall not be liable for any settlement of any
such action effected without its written consent but if settled with
its written consent, the Company agrees to indemnify and hold harmless
you and each such controlling person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable
fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than
60 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified
party is or has been threatened to be made
17
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a party and indemnity could have been sought hereunder by that
indemnified party; provided, however, that an indemnifying party may
-------- -------
effect such a settlement without the consent of the indemnified party
if such settlement includes an unconditional release of the
indemnified party from all liability on claims that are the subject
matter of the proceeding or the indemnifying party indemnifies the
indemnified party in writing and posts a bond for an amount equal to
the maximum liability on all such claims.
(c) You agree severally to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration
Statement, and each person, if any, controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to
the same extent as the foregoing indemnity from the Company to you but
only with reference to information relating to you furnished in
writing by Bear, Stearns & Co. Inc. on its or your behalf expressly
for use in the Registration Statement, the Prospectus, any preliminary
prospectus or any amendment or supplement thereto. In case any action
shall be brought against the Company, any of its directors, any such
officer or any such controlling person based on the Registration
Statement, the Prospectus or any preliminary prospectus or any
amendment or supplement thereto and in respect of which indemnity may
be sought against you, you shall have the same rights and duties as
are given to the Company by Section 6(b) hereof (except that if the
Company shall have assumed the defense thereof, you shall not be
required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such
separate counsel shall be at your expense), and the Company, its
directors, each such officer and each such controlling person shall
have the same rights and duties as are given to you by Section 6(b)
hereof.
(d) If the indemnification provided for in this Section 6
is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand
and you 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 and you in connection with the
statements or
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<PAGE>
omissions that resulted in such losses, claims, damages, liabilities
or judgments, as well as any other relevant equitable considerations.
The relative benefits received by the Company and you shall be deemed
to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company, and the
total underwriting discounts and commissions received by you, bear to
the total price to the public of the Securities, in each case as set
forth in the table on the cover page of the Prospectus. The relative
fault of the Company and you shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or you
and each party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and you agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were
determined by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or
judgments referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 6, you shall
not be required to contribute any amount in excess of the amount by
which the underwriting discount applicable to the Securities purchased
by you exceeds the amount of any damages which you were otherwise
required to pay by reason of such 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 Act)
shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. No party shall be liable for
contribution with respect to any action or claim settled without its
written consent; provided, however, that such written consent was not
-------- -------
unreasonably withheld.
7. Conditions of Underwriters' Obligations. Your
---------------------------------------
obligations to purchase and pay for the Securities shall be subject to
(i) the accuracy of the representations and warranties of the Company
herein contained, as of the date hereof and as of the Closing Date,
(ii) the absence from any certificates, opinions, written statements
or letters furnished pursuant to this Section 7 to you or to your
counsel, of any qualification or
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limitation not previously approved by you, (iii) the performance by
the Company of all its obligations hereunder required to be performed
on or before the Closing Date, and (iv) the following additional
conditions:
(a) Notice that the Registration Statement shall have
become effective shall be received by you not later than 5:00
P.M., New York City time, on the date of this Agreement or at
such later date and time as you may approve in writing, all
filings required by Rule 424 and Rule 430A under the Regulations
shall have been made on a timely basis and as of the Closing Date
no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or
threatened by the Commission.
(b) (i) Since the date of the latest balance sheet of the
Company and its subsidiaries included in the Registration
Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a
prospective material adverse change, in the condition, financial
or otherwise, or in the earnings, affairs, business or
operations, whether or not arising in the ordinary course of
business, of the Company and its subsidiaries, taken as a whole,
or any material change, or any development involving a
prospective material adverse change, in the sales, the capital
stock or in the long-term debt of the Company or any of its
subsidiaries from that set forth in or contemplated by the
Registration Statement and the Prospectus, (ii) neither the
Company nor any subsidiary shall have any liability or
obligation, direct or contingent, that is material to the Company
and its subsidiaries, taken as a whole, and that is not disclosed
in the Registration Statement and the Prospectus and (iii) on the
Closing Date you shall have received a certificate dated the
Closing Date, signed by the Chief Executive Officer and the Chief
Financial Officer of the Company, and such other certificates of
executive officers as you may specify, confirming the matters set
forth in the introduction to, and paragraphs (a) and (b) of, this
Section 7.
(c) On the Closing Date, you shall have received the
opinion of Gibson, Dunn & Crutcher, counsel to the Company, dated
the date of its delivery, addressed to you, and in form and scope
satisfactory to your counsel, to the effect that:
20
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(i) Each of the Company and its subsidiaries listed in
Exhibit 22 to the Registration Statement (the "Material
Subsidiaries") has been duly organized and is validly existing
and in good standing under the laws of its respective
jurisdiction of incorporation.
(ii) Each of the Company and the Material Subsidiaries is
duly qualified to do business as a foreign corporation and is in
good standing in all jurisdictions where the ownership or leasing
of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or in
good standing would not, in the aggregate, have a material
adverse effect on the business, operations, financial condition
or results of operations of the Company and the Material
Subsidiaries taken as a whole.
(iii) Each of the Company and the Material Subsidiaries has
the corporate power and authority to own or lease its respective
properties and to conduct its business as presently being
conducted and as described in the Registration Statement and the
Prospectus.
(iv) Except as set forth in the Registration Statement or
the Prospectus, all of the issued and outstanding shares of
capital stock of each Material Subsidiary of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable and free of preemptive rights provided in the
certificate of incorporation or other constituent documents of
such Material Subsidiary or by any Material Agreement and to such
counsel's knowledge based solely upon an examination of the stock
records of the Material Subsidiaries and the Material Agreements,
are owned of record, directly or indirectly, by the Company free
and clear of any lien, encumbrance or other Adverse Claim (as
such term is defined in Section 8-302(2) of the New York Uniform
Commercial Code), other than the pledge of 100% of the capital
stock of each of the Material Subsidiaries to secure the
Company's obligations under the Senior Credit Agreement (as
defined in the Prospectus).
(v) The authorized capital stock of the Company is as set
forth in the Registration Statement and the Prospectus. All of
the outstanding shares of the Company's capital stock have been
duly authorized and validly issued and are fully paid and non-
assessable and were not issued in violation of or subject to any
preemptive rights provided for in the Company's Certificate of
Incorporation, the Delaware General
21
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Corporation Law (the "DGCL") or any Material Agreement, except as
set forth in the Registration Statement or the Prospectus.
(vi) The Indenture has been duly and validly authorized,
executed and delivered by the Company, has been duly qualified
under the Trust Indenture Act of 1939, as amended, and assuming
due authorization, execution and delivery by the Trustee,
constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, (A)
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws now or
hereafter in effect relating to or affecting creditors' rights
and remedies generally, (B) subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or at
equity) and (C) except insofar as the usury waiver therein may be
deemed to be unenforceable.
(vii) The Securities have been duly and validly authorized
by the Company, and when executed, authenticated and delivered in
accordance with the terms of the Indenture and delivered to and
paid for by you pursuant to this Agreement, will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, (A) subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws now or hereafter in
effect relating to creditors' rights and remedies generally, (B)
subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a
proceeding at law or at equity) and (C) except insofar as the
usury waiver therein may be deemed to be unenforceable. The
holders of the Securities will be entitled to the benefits of the
Indenture.
(viii) Upon delivery of the Securities being sold by the
Company and payment thereof as contemplated by this Agreement,
you will receive the Securities free and clear of any liens,
encumbrances, adverse claims, security interests, restrictions on
transfer (other then such resale and other restrictions as may be
imposed under Federal or state securities laws) and other defects
of title (other than those resulting from actions taken by you),
assuming you
22
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<PAGE>
purchase such Securities without actual knowledge of any lien,
encumbrance, equity, claim or other "Adverse Claim" (as such term
is defined in Article 8-302 of the New York Uniform Commercial
Code).
(ix) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(x) To such counsel's knowledge, there is no action,
proceeding, inquiry or investigation, before or brought by any
court or governmental agency or body, to which the Company or any
of the Material Subsidiaries is a party or to which the property
of the Company or any of the Material Subsidiaries is subject,
which is required to be disclosed in the Registration Statement
or the Prospectus and that has not been so disclosed.
(xi) The execution, delivery and performance by the Company
of this Agreement, the Indenture and the Securities and the
consummation of the transactions contemplated hereby and thereby,
including without limitation the issuance, sale and delivery of
the Securities, do not (A) conflict with or result in a breach of
any of the terms or provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would
constitute a default) or require consent 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 Material
Subsidiaries pursuant to the terms of any Material Agreement, (B)
conflict with or violate any statute, rule, regulation or, to
such counsel's knowledge, any judgment, decree or order of any
governmental agency or body or any court having jurisdiction over
the Company or any of the Material Subsidiaries or any of their
respective properties (provided that we are expressing no opinion
in this clause (B) with respect to the Federal securities laws,
rules or regulations to the extent such laws are expressly
considered in other sections of this opinion, or with respect to
state securities or blue sky laws); or (C) conflict with or
violate the certificate of incorporation or bylaws or equivalent
charter documents of the Company or any of the Material
Subsidiaries.
(xii) No consent, approval, authorization, permit or order
of, or filing with, any governmental agency or body or, to such
counsel's knowledge, any court that has jurisdiction over the
Company or any of the Material Subsidiaries or any of their
respective assets or properties, is required to be obtained or
made by the
23
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Company or any of the Material Subsidiaries for the sale of the
Securities to the Underwriters as contemplated by this Agreement
and the Indenture, except for such as have been obtained and made
and such as may be required under state securities or blue sky
laws in connection with the purchase and distribution of the
Securities by the Underwriters, as to which we offer no opinion.
(xiii) The Registration Statement and the Prospectus, and
each amendment or supplement thereto, as of their respective
effective or issue dates, appear on their face to comply as to
form in all material respects with the requirements of the
Securities Act and the rules and regulations thereunder, except
that we express no opinion as to (i) the financial statements or
schedules or other financial or statistical data contained in the
Registration Statement or the Prospectus, (ii) the Statement of
Eligibility and Qualification of the Trustee under the Trust
Indenture Act or (iii) the exhibits to the Registration
Statement.
(xiv) The Securities and the Indenture conform in all
material respects to the respective descriptions thereof in the
Registration Statement and the Prospectus.
(xv) The Registration Statement has become effective under
the Securities Act and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceedings
for that purpose have been instituted or are pending or, to such
counsel's knowledge, threatened under the Securities Act.
(xvi) The Company is not required to be registered as, and
is not controlled by, an investment company under the Investment
Company Act of 1940, as amended.
In addition, such counsel shall state the following:
We have participated in conferences with officers and other
representatives of the Company, representatives of the
independent auditors of the Company and your representatives at
which the contents of the Registration Statement, the Prospectus
and related matters were discussed. Because the purpose of our
professional engagement was not to establish or confirm factual
matters and because the scope of our examination of the affairs
of the Company did not permit us to verify the accuracy,
completeness or fairness of the
24
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statements set forth in the Registration Statement or Prospectus,
we are not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus. However,
on the basis of the foregoing and relying as to materiality to a
large extent upon the opinions of officers and other
representatives of the Company, it being understood that we make
no statement as to the financial statements or schedules or other
financial or statistical data contained in the Registration
Statement or the Prospectus, the Statement of Eligibility and
Qualification of the Trustee under the Trust Indenture Act or the
exhibits to the Registration Statement, (i) we do not know of any
pending or threatened legal or governmental proceedings required
to be described in the Registration Statement or the Prospectus
that are not described as required or of any contracts or
documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or
filed as required and (ii) no facts have come to our attention
that lead us to believe that the Registration Statement, or any
supplement or amendment thereto, as of their respective effective
dates, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein
or necessary to make the statements therein not misleading or
that the Prospectus, or any amendment or supplement thereto, as
of their respective issue dates and as of the date hereof,
included any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements
therein in the light of the circumstances under which they were
made, not misleading.
In rendering the foregoing opinion, such counsel may rely
(A) as to matters involving the application of laws other than
the laws of the United States, the State of New York and Delaware
corporate law, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion or
opinions (in form and scope reasonably satisfactory to your
counsel) of other counsel, reasonably acceptable to your counsel,
familiar with the applicable laws, which opinion shall be
addressed and delivered to you; and (B) as to matters of fact, to
the extent such counsel deems proper, on certificates of
responsible officers and other representatives of the Company,
certificates of public officials, and certificates or other
written statements of officers of departments of
25
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<PAGE>
various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and its
subsidiaries, provided that copies of any such statements or
certificates shall be delivered to your counsel.
(d) On the Closing Date you shall have received from your
counsel, Weil, Gotshal & Manges, an opinion, dated the date of
its delivery, addressed to you, with respect to the Company, the
Registration Statement, the Prospectus and other related matters
as you reasonably may require, and the Company shall have
furnished to your counsel such documents as they may reasonably
request for the purpose of enabling them to pass upon such
matters.
(e) Concurrently with the execution and delivery of this
Agreement you shall have received from each of Grant Thornton and
Coopers & Lybrand, and on the Closing Date you shall have
received from Coopers & Lybrand a letter addressed to you, dated
the date of its delivery, substantially in the form and to the
effect and with respect to such matters as shall have been
previously agreed upon by you.
(f) At the Closing Date, you shall have received an opinion
from counsel to the Trustee, dated the date of its delivery,
addressed to you and in form and substance satisfactory to your
counsel, to the effect that:
(i) the Trustee is a national banking association or
state chartered bank or trust company and is validly
existing in good standing under the laws of the jurisdiction
in which it is incorporated;
(ii) the Trustee has the power and authority to enter
into the Indenture and authenticate the Securities as
Trustee under the Indenture;
(iii) the Indenture has been duly authorized, executed
and delivered by the Trustee, as Trustee under the
Indenture, and the Indenture is valid and binding on the
Trustee in accordance with its terms, (i) subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws now or hereafter
in effect relating to creditors' rights and remedies
generally, (ii) subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good
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faith and fair dealing (regardless of whether enforcement is
sought in a proceeding at law or in equity) and (iii) except
insofar as the usury waiver therein may be deemed to be
unenforceable; and
(iv) the Securities have been duly authenticated and
delivered by the Trustee, as Trustee, under the Indenture.
(g) The Company shall have consummated the acquisition of
all of the assets and business of ABF.
(h) All proceedings taken in connection with the sale of
the Securities as herein contemplated shall be satisfactory in
form and substance to you and to your counsel, and you shall have
received from your counsel a favorable opinion, dated as of the
Closing Date with respect to the issuance and sale of the
Securities, as you may reasonably require, and the Company shall
have furnished to your counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(i) Prior to the Closing Date the Company shall have
furnished to you such further information, certificates and
documents as you reasonably may request.
If any of the conditions specified in this Section 7 shall
not have been fulfilled when and as required by this Agreement, or if
any of the certificates, opinions, written statements or letters
furnished to you or to your counsel pursuant to this Section 7 shall
not be reasonably satisfactory in form and scope in all material
respects to you and to your counsel, all of your obligations hereunder
may be canceled by you at, or at any time prior to, the Closing Date.
Notice of such cancellation shall be given to the Company in writing
or by telephone, telecopy, telex or telegraph, confirmed in writing.
8. Effective Date of Agreement and Termination. (a) This
-------------------------------------------
Agreement shall become effective upon the later of (i) its execution
or (ii) when notification of the effectiveness of the Registration
Statement has been released by the Commission and communicated by the
Company or its counsel to you. Until this Agreement becomes effective
as aforesaid, it may be terminated by the Company by notifying you or
by you by notifying the Company. Notwithstanding the foregoing, the
provisions of this Section 8 and of Sections 2, 5(k) and 6 hereof
shall at all times be in full force and effect.
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(b) This Agreement may be terminated at any time prior to
the Closing Date by you by written notice to the Company if any of the
following has occurred: (i) on or prior to such date, the Company
shall have failed, refused or been unable to perform in any material
respect any agreement on its part to be performed hereunder, (ii) any
other condition of your obligations hereunder as provided in Section 5
is not fulfilled when and as required in any material respect,
(iii) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, any adverse change or
development involving a prospective adverse change in, or affecting
particularly the condition, financial or otherwise, of the Company,
any of its material subsidiaries, or the earnings, affairs, business
or operations of the Company or any of its material subsidiaries,
whether or not arising in the ordinary course of business, that would,
in your reasonable judgment, make it impracticable to market the
Securities on the terms and in the manner contemplated in the
Prospectus, (iv) any outbreak or escalation of hostilities or other
national or international calamity or crisis or material change in
economic conditions, if the effect of such outbreak, escalation,
calamity, crisis or change on the financial markets of the United
States or elsewhere would, in your reasonable judgment, make it
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus, (v) suspension of trading in
securities on the New York Stock Exchange, the American Stock Exchange
or NASDAQ or limitation on prices (other than limitations on hours or
numbers of days of trading) for securities on any such Exchange or
NASDAQ, (vi) the enactment, publication, decree or other promulgation
of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your reasonable opinion
materially and adversely affects, or will materially and adversely
affect, the business or operations of the Company and its subsi-
diaries, taken as a whole, (vii) declaration of a banking moratorium
by either federal or New York State authorities, (viii) the taking of
any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs that in your reasonable
opinion has a material adverse effect on the financial markets in the
United States, (ix) there shall have been any downgrading in the
rating accorded any of the Company's debt securities by Moody's
Investor Services, Inc. or Standard and Poor's Corporation or any such
organization shall have issued a notice that it has its rating under
surveillance or review for a possible change (other than one involving
no implication of a downgrading), or (x) there shall have been such a
material adverse change in general economic, political or financial
conditions or if the effect of international conditions on the
financial markets in the United
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States shall be such as, in your judgment, makes it inadvisable or
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be by telephone, telex, telephonic facsimile, or telegraph,
confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any
of the provisions hereof (otherwise than pursuant to (i) notification
by you as provided in Section 8(a) hereof or (ii) Section 8(b)
hereof), or if the sale of the Securities provided for herein is not
consummated because any condition to your obligations set forth herein
is not satisfied or because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or comply with
any provision hereof, the Company will, subject to demand by you,
reimburse you for all out-of-pocket expenses (including the reasonable
fees and expenses of your counsel), incurred by you in connection
herewith.
9. Survival of Representations and Agreements. All
------------------------------------------
representations and warranties, covenants and agreements of you and
the Company contained in this Agreement, including the agreements
contained in Sections 5(k) and 8(d) hereof, the indemnity agreements
contained in Section 6 hereof and the contribution agreements
contained in Section 6(d) hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf
of you or any controlling person or by or on behalf of the Company,
any of its officers and directors or any controlling person thereof,
and shall survive delivery of and payment for the Securities to and by
you. The representations contained in Section 2 hereof and the
agreements contained in Sections 5(k), 6 and 8(d) hereof shall survive
the termination of this Agreement, including pursuant to Section 8
hereof.
10. Default by an Underwriter
-------------------------
(a) If any of you shall default in your obligation to
purchase Securities hereunder, the nondefaulting underwriter or
underwriters may in its or their discretion arrange for itself or
themselves or for another party or parties to purchase such Securities
to which such default relates on the terms contained herein. In the
event that within five (5) calendar days after such default the
nondefaulting underwriter or underwriters does or do not arrange for
the purchase of Securities to which such default relates as provided
in this Section 10, this Agreement
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shall thereupon terminate, without liability on the part of the
Company with respect thereto (except in each case as provided in
Section 4, 6(a) and 7 hereof) or the nondefaulting underwriter or
underwriters, but nothing in this Agreement shall relieve any
defaulting underwriter or underwriters of its or their liability, if
any, to the nondefaulting underwriter or underwriters and the Company
for damages occasioned by its or their default hereunder.
(b) In the event that the Securities are to be purchased by
the nondefaulting underwriter or underwriters, or are to be purchased
by another party or parties as aforesaid, the nondefaulting
underwriter or underwriters or the Company shall have the right to
postpone the Closing Date for a period not exceeding five (5) business
days, in order to effect whatever may thereby be made necessary in the
Registration Statement or the Prospectus or any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in
the opinion of your counsel, may thereby be made necessary or
advisable. The term "underwriter" as used in this Agreement shall
include any party substituted under this Section 10 with like effect
as if it had originally been a party to this Agreement with respect to
such Securities.
11. Miscellaneous. (a) Notices given pursuant to any
-------------
provision of this Agreement shall be addressed as follows: (a) if to
the Company, to Color Tile, Inc., 515 Houston Street, Fort Worth,
Texas 76102, Attention: Eddie M. Lesok, Chairman, and (b) if to you,
to Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York
10167, Attention: Corporate Finance Department.
(b) The Company acknowledges that the statements with
respect to the public offering of the Securities set forth on the
cover page of the Prospectus and the information with respect thereto
and with respect to you under the caption "Underwriting" in the
Prospectus constitute the only information furnished in writing by
Bear, Stearns & Co. Inc. expressly for use in the Registration
Statement and the Prospectus.
(c) If this Agreement shall be terminated by you because of
any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the
Company shall reimburse you for all out-of-pocket expenses (including
the reasonable fees and disbursements of your counsel) reasonably
incurred by you.
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(d) Except as otherwise provided, this Agreement has been
and is made solely for the benefit of and shall be binding upon the
Company, each of you, the controlling persons, directors, officers,
employees and agents referred to in Section 6 hereof, and their
respective successors and assigns, all as and to the extent provided
in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement or any provision herein
contained. The term "successors and assigns" shall not include a
purchaser of any of the Securities from either of you merely because
of such purchase.
(e) The Company shall be entitled to rely and act upon any
request, notice, consent, waiver or agreement purportedly given by or
on behalf of you, in your capacity as underwriters hereunder, when the
same shall have been given in your names and on your behalf by Bear,
Stearns & Co. Inc.
(f) This Agreement shall be governed and construed in
accordance with the laws of the State of New York.
(g) This Agreement may be signed in various counterparts,
all of which together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement between the Company and each of you.
Very truly yours,
COLOR TILE, INC.
By: /s/ Eddie M. Lesok
----------------------
Eddie M. Lesok
Chairman of the Board
Accepted in New York, New York
December 10, 1993
BEAR, STEARNS & CO. INC.
By: /s/ Michael L. Offen
---------------------------
LEHMAN BROTHERS INC.
By: /s/ William A. Shutzer
----------------------------
CHEMICAL SECURITIES INC.
By: /s/ Stephen J. Eichenberger
----------------------------
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