SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 8)
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BERTUCCI'S, INC.
(Name of Subject Company [Issuer])
NERC ACQUISITION CORP.
A WHOLLY-OWNED SUBSIDIARY OF
NE RESTAURANT COMPANY, INC.
(Bidder)
COMMON STOCK, PAR VALUE $0.005 PER SHARE
(Title of Class of Securities)
086063 10 4
(CUSIP Number of Class of Securities)
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DENNIS PEDRA
PRESIDENT
NE RESTAURANT COMPANY, INC.
80A TURNPIKE ROAD
WESTBOROUGH, MASSACHUSETTS 01581
(508) 870-9200
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Bidder)
WITH A COPY TO:
DAVID L. FINKELMAN, ESQ.
STROOCK & STROOCK & LAVAN LLP
180 MAIDEN LANE
NEW YORK, NEW YORK 10038-4982
(212) 806-5400
<PAGE>
NERC Acquisition Corp., a Massachusetts corporation ("Purchaser"), and NE
Restaurant Company, Inc., a Delaware corporation ("Parent"), hereby further
amend and supplement their Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1"), filed with the Securities and Exchange Commission on May 20,
1998, with respect to Purchaser's offer to purchase all of the outstanding
shares of Common Stock, par value $0.005 per share (the "Shares"), of
Bertucci's, Inc., a Massachusetts corporation (the "Company"), not presently
owned by Parent, at a purchase price of $10.50 per Share, net to the seller in
cash, without interest thereon. All capitalized terms used herein shall have the
meaning set forth in the Schedule 14D-1 or the Offer to Purchase dated May 20,
1998, except as may otherwise be provided herein.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a)-(b) The information set forth in Paragraphs (a)-(b) of Item 4 is hereby
amended and supplemented by the following:
A copy of the Purchase Agreement relating to the sale of the Senior Notes
has been filed as Exhibit (b)(1) to the Schedule 14D-1 and is incorporated
herein by reference. Reference is made to the Purchase Agreement for the actual
terms and conditions thereof.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 is hereby amended by adding thereto the following exhibit:
(b)(1) Purchase Agreement dated July 13, 1998 among Parent,
Chase Securities Inc. and BancBoston Securities Inc.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
Dated: July 14, 1998
NE RESTAURANT COMPANY, INC.
By: /s/ Paul V. Hoagland
---------------------------
Paul V. Hoagland
Executive Vice President
NERC ACQUISITION CORP.
By: /s/ Paul V. Hoagland
---------------------------
Paul V. Hoagland
Executive Vice President
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(b)(1) Purchase Agreement dated July 13, 1998 among Parent, Chase
Securities Inc. and BancBoston Securities Inc.
Exhibit (b)(1)
EXECUTION COPY
NE RESTAURANT COMPANY, INC.
$100,000,000
10 3/4% Senior Notes due 2008
PURCHASE AGREEMENT
July 13, 1998
CHASE SECURITIES INC.
BANCBOSTON SECURITIES INC.
c/o Chase Securities Inc.
270 Park Avenue, 4th Floor
New York, New York 10017
Ladies and Gentlemen:
NE Restaurant Company, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell $100,000,000 aggregate principal amount of its 10
3/4% Senior Notes due 2008 (the "SECURITIES"), which Securities will be
unconditionally guaranteed (the "GUARANTEES"), on a senior unsecured basis, by
each Guarantor (as defined below), including, without limitation, Bertucci's
Inc. ("BERTUCCI'S" and, together with its subsidiaries, the "BERTUCCI'S
GUARANTORS"). The Securities will be issued pursuant to an Indenture to be dated
as of July 20, 1998 (the "INDENTURE") among the Company and United States Trust
Company of New York, as trustee (the "TRUSTEE"). The Company hereby confirms its
agreement with Chase Securities Inc. ("CSI") and BancBoston Securities Inc.
(together with CSI, the "INITIAL PURCHASERS") concerning the purchase of the
Securities from the Company by the Initial Purchasers. "GUARANTOR" means each
subsidiary of the Company (other than (i) a foreign subsidiary, (ii) NERC
Limited Partnership or NERC SPE Inc., (iii) NERC SPE II Inc. or (iv) NERC
Limited Partnership II) in existence on the date of issuance of the securities
and any Restricted Subsidiary (other than (i) a Foreign Subsidiary or (ii) a
special purpose entity and/or limited partnership created solely to incur
certain indebtedness) created or acquired by the Company after the date of
issuance of the Securities.
On May 13, 1998, the Company, NERC Acquisition Corp. ("ACQUISITION
SUB"), a wholly-owned subsidiary of the Company, and Bertucci's entered into an
Agreement and Plan of Merger (the "MERGER AGREEMENT") in order to acquire
substantially all of the outstanding capital stock of Bertucci's. Pursuant to
the Merger Agreement, Acquisition Sub has offered to purchase (the "TENDER
OFFER") all outstanding shares of common stock of Bertucci's (determined on a
fully diluted basis and excluding the 430,000 shares currently owned by the
Company). Under the Merger Agreement, the Company's purchase of the tendered
shares (the "ACQUISITION") is conditioned upon the tender of 90% of Bertucci's
common stock (determined on a fully diluted basis and including the Company's
430,000 shares) (the "MINIMUM Condition"). In anticipation of the Acquisition,
the Company will establish an escrow account (the "ESCROW Account") to hold the
proceeds of the sale of the Securities to the Initial Purchasers, with the
release of the proceeds from the Escrow Account to the Company conditioned upon
satisfaction of the Minimum Condition. In the event that the Acquisition is not
consummated by July 31, 1998, or if the Merger Agreement is terminated prior to
such date, the Company will redeem the Securities with the escrowed proceeds
plus additional funds.
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 June 24, 1998 (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.
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 and
the Guarantors 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 notes of
the Company which are unconditionally guaranteed on a senior unsecured basis by
the Guarantors (the "EXCHANGE SECURITIES") and 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").
(d) Each of the Company and each of its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the conduct of
its businesses requires such qualification, and has all power and authority
necessary to own or hold its respective 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 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 "Capitalization"; 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.
(f) The Company has full right, power and authority to execute and
deliver this Agreement, the Indenture, the Registration Rights Agreement,
and the Merger Agreement (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 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, by rights of
acceleration, if applicable, and by general equitable principles (whether
considered in a proceeding in equity or at law) and except to the extent
that the indemnification and contribution provisions thereof may be limited
by federal or state securities laws or the public policy underlying such
laws or otherwise unenforceable.
(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 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, by
rights of acceleration, if applicable, and by general equitable principles
(whether considered in a proceeding in equity or at law) and except to the
extent that the indemnification and contribution provisions thereof may be
limited by federal or state securities laws or the public policy underlying
such laws or otherwise unenforceable.
(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, by rights of
acceleration, if applicable, and by general equitable principles (whether
considered in a proceeding in equity or at law) and except to the extent
that the indemnification and contribution provisions thereof may be limited
by federal or state securities laws or the public policy underlying such
laws or otherwise unenforceable. 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, by rights of
acceleration, if applicable, and by general equitable principles (whether
considered in a proceeding in equity or at law).
(k) The Merger Agreement has been duly authorized, executed and
delivered by the Company and Acquisition Sub and constitutes a valid and
legally binding agreement of the Company and Acquisition Sub enforceable
against the Company and Acquisition Sub 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, by rights of
acceleration, if applicable, and by general equitable principles (whether
considered in a proceeding in equity or at law) and except to the extent
that the indemnification and contribution provisions thereof may be limited
by federal or state securities laws or the public policy underlying such
laws or otherwise unenforceable.
(l) Each Transaction Document conforms in all material respects to the
description thereof contained in the Offering Memorandum.
(m) 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 by the Company of the transactions contemplated by the
Transaction Documents 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 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 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 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
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 (A) 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 or (B) where the failure to
obtain or make any such consent, approval, authorization, order, filing or
registration would not be reasonably expected to result in a Material
Adverse Effect or any material adverse effect on the ability of the Company
to perform its obligations under the Transaction Documents.
(n) Arthur Andersen LLP 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) of the Company 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--Summary Financial Data of the Company",
"Capitalization", "Selected Financial Data of the Company", "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--of the Company" and "Management of the Company--Executive
Compensation" 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 of the Company included in the Offering Memo- randum
are, in all material respects, fairly presented.
(o) Except as described in the Offering Memorandum 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, would 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.
(p) 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 Securi- ties 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 would
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.
(q) None of the Company or any of its subsidiaries is (i) in violation
of its charter or by-laws, (ii) in default, 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 of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject, other than in the case of clauses (ii) and (iii), any default or
violation that would not reasonably be expected to have a Material Adverse
Effect.
(r) The Company and each of its subsidiaries will possess as of the
Closing Date all material licenses, certificates, authorizations and
permits issued by, and have made all 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 none of
the Company or any of its subsidiaries has received notification of any
revocation or 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.
(s) 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, would reasonably be expected to
have) a Material Adverse Effect.
(t) None of the Company or 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.
(u) 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 princi- ples 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 re- spect to any differences.
(v) The Company and each of its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are
customary in the businesses in which the Company and its subsidiaries are
engaged. None of the Company or any of its subsidiaries has received notice
from any insurer or agent of such insurer that capital improvements or
other expenditures are required or necessary to be made in order to
continue such insurance.
(w) 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 mark
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; 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.
(x) The Company and each of its subsidiaries have good and 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) would not
reasonably be expected to have a Material Adverse Effect.
(y) No 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, except for disputes with individual
employees, which in the aggregate would not reasonably be expected to have
a Material Adverse Effect.
(z) 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 each such pension plan that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would reasonably be expected to cause the loss of such qualification.
(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 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 which would 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) None of the Company or, 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.
(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" with respect to
any Person 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 such Person is not less than the total amount required to pay the
probable liabilities of such Person on its total existing debts and
liabilities (including contingent liabilities) as they become absolute and
matured, (ii) such Person 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, such Person is not incurring debts or liabilities beyond its
ability to pay as such debts and liabilities mature and (iv) such Person 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 such Person 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.
(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) None of the Company or any of its subsidiaries owns any "margin
securities" as that term is defined in Regulations 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, di- rectly
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 T, U or X of the Federal
Reserve Board.
(ff) Except as described in the Offering Memorandum, none of the
Company or 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.
(gg) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(hh) None of the Company, any of its affiliates or any person acting
on its or their behalf has engaged or will engage in any directed selling
efforts (as such term is defined in Regulation S under the Securities Act
("REGULATION S")), and all such persons have complied and will comply with
the offering restrictions requirement of Regulation S to the extent
applicable.
(ii) 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.
(jj) 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.
(kk) 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.
(ll) 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.
(mm) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Offering Memorandum or the Offering Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other than in
good faith.
(nn) 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.
(oo) 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 is not acquiring the
Securities with a view to any distribution thereof that would violate the
Securities Act or the securities laws of any state of the United States or any
other applicable jurisdiction, (iii) 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 (iv) 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 their initial offering, only (A) within the United
States to persons whom it reasonably believes to be qualified institutional
buyers ("QUALIFIED INSTITUTIONAL BUYERS"), as defined in Rule 144A under the
Securities Act ("RULE 144A"), 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) outside the United States to
persons other than U.S. persons in reliance on Regulation S.
(c) It is understood and acknowledged that upon original issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Act, (1) each of the Securities (and each
security issued in exchange therefor or in substitution thereof) issued pursuant
to Rule 144A shall bear the following private placement legend on the face
thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION
INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF SECURITIES, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) AND
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE."; and
(2) each of the Securities (and each security issued in exchange
therefor or in substitution thereof) issued pursuant to Regulation S shall bear
the following private placement legend on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S.
PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S, (E) TO AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT
OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM AND IN THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER
IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE TRUSTEE. THIS LEGEND
WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND INCLUDING THE
LATER OF (A) THE DAY ON WHICH THE SECURITIES ARE OFFERED TO PERSONS OTHER
THAN DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B) THE DATE OF THE
CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT."
(d) In connection with the offer and sale of Securities in reliance on
Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) the Securities have not been registered under the Securities
Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except pursuant to an exemption
from, or in transactions not subject to, the registration requirements of
the Securities Act;
(ii) such Initial Purchaser has offered and sold the Securities,
and will offer and sell the Securities, (A) as part of their distribution
at any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the Closing Date, only
in accordance with Regulation S or Rule 144A or any other available
exemption from registration under the Securities Act;
(iii) None of such Initial Purchaser or any of its affiliates or
any other person acting on its or their behalf has engaged or will engage
in any directed selling efforts as such term is defined in Regulation S
with respect to the Securities, and all such persons have complied and will
comply with the offering restrictions requirement of Regulation S;
(iv) at or prior to the confirmation of sale of any Securities
sold in reliance on Regulation S, it will have sent to each distributor,
dealer or other person receiving a selling concession, fee or other
remuneration that purchase Securities from it during the distribution
compliance period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the date of
original issuance of the Securities, except in accordance with
Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the
meanings given to them by Regulation S."; and
(v) it has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution of the
Securities, except with its affiliates or with the prior written consent of
the Company.
Terms used in this Section 2(d) have the meanings given to them by Regulation S.
(e) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that (i) it has not offered or sold and prior to the date
six months after the Closing Date will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 and the Public Offers
of Securities Regulations 1995 with respect to anything done by them in relation
to the Securities in, from or otherwise involving the United Kingdom; and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
(f) 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) and (e), 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 the Initial Purchasers hereby consent to such
reliance.
(g) The Company acknowledges and agrees that the Initial Purchasers
may sell, subject to the other requirements of this Section 2, Securities to any
affiliate of an Initial Purchaser and that any such affiliate may sell
Securities purchased by it to an Initial Purchaser.
3. DELIVERY OF AND PAYMENT FOR THE SECURITIES. (a) Delivery of and
payment for the Securities shall be made at the offices of Simpson Thacher &
Bartlett, New York, New York, 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
July 20, 1998, 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 AND THE GUARANTORS. 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 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 after
the Company obtains knowledge 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 reasonable 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 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,
during any such period in which the Company is not subject to Section 13 or
15(d) of the Exchange 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
that would be required to be delivered if the Company were subject to
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);
(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 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;
(k) for a period of 180 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 two 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 purchased by the Company or any
of its affiliates and resold in a transaction registered under 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)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Securities, or attempt to induce any person
to purchase any Securities; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the
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 on its part to the delivery of the Securities;
(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 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 or any Guarantor, 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 the Guarantors
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 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 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) Stroock & Stroock & Lavan LLP, as special counsel to the Company
and its subsidiaries, and/or Brown Rudnick Freed & Gesmer, as counsel to
the Company and its subsidiaries, shall have furnished to the Initial
Purchasers their written opinion(s), as such 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) The Initial Purchasers shall have received from Simpson Thacher &
Bartlett, 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 and each Guarantor shall
have furnished to such counsel such documents and information as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(f) The Company shall have furnished to the Initial Purchasers a
letter (the "INITIAL LETTER") of Arthur Andersen LLP, 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 C hereto.
(g) The Company shall have furnished to the Initial Purchasers a
letter (the "BRING-DOWN LETTER") of Arthur Andersen LLP, 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 the 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 the
Bring-Down Letter), that the conclusions and findings of such accountants
with respect to the financial information and other matters covered by the
Initial Letter are accurate and (iii) confirming in all material respects
the conclusions and findings set forth in the Initial Letter.
(h) 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.
(i) 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.
(j) 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.
(k) On or prior to the Closing Date, the Company shall have
established the Escrow Account, which shall provide that the proceeds from
the sale of the Securities may only be released to the Company if the
Minimum Condition has been satisfied, and that in the event that the Merger
Agreement is terminated or the Acquisition is not consummated by July 31,
1998, the proceeds from the Escrow Account shall be released to the Trustee
for the purpose of redeeming the Securities.
(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) and except as
set forth in the Offering Memorandum, 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 reasonable 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 is- sued 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 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).
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.
<PAGE>
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 Initial 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 within
36 hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers, the Company or the
Guarantors, except that the Company and the Guarantors 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 8 and 9 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, the Guarantors 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 6 or 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 and each Guarantor, jointly and
severally, 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, whether commenced or threatened,
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 or any
Guarantor 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
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 or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are incurred;
PROVIDED, HOWEVER, that the Company and the Guarantors 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 (as then amended or
supplemented) 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 or any
Guarantor with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, its affiliates (including the Guarantors), 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 or a Guarantor may become subject, whether commenced or threatened,
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 and the Guarantors for any legal or other expenses
reasonably incurred by the Company or the Guarantors in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with 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 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 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) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
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 (4) 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 or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have 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.
The obligations of the Company, each Guarantor and the Initial
Purchasers in this Section 9 and in Section 10 are in addition to any other
liability that the Company, any Guarantor 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 and the Guarantors on the one hand and the
Initial Purchasers on the other 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
the Guarantors on the one hand and the Initial Purchasers on the other 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 and the
Guarantors on the one hand and the Initial Purchasers on the other 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 and the
Guarantors, 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, 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 a Guarantor or information supplied by the Company or
a Guarantor 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, the Guarantors 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 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. 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.
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 the Guarantors and their respective successors and permitted assigns. 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, the Guarantors 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 and the Guarantors agree 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(g) 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 and the Guarantors 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.
13. SURVIVAL. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Company, the Guarantors 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.
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., 270 Park Avenue, New
York, New York 10017, Attention: Jeffrey Blumin (telecopier no.: (212)
270-0994); 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: President (telecopier no.: (508) 870-9201);
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 and the
Guarantors 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, for all purposes of this Agreement, 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 second sentence of the ninth
paragraph, and in the last two paragraphs under the heading "Plan of
Distribution".
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.
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. As soon as practicable after the acquisition by the Company of at least
90% of the outstanding common stock of Bertucci's (determined on a fully diluted
basis and including the 430,000 shares currently owned by the Company), this
Agreement shall be amended to cause Bertucci's and its subsidiaries to become
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.
<PAGE>
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 among the Company and the Initial
Purchasers in accordance with its terms.
Very truly yours,
NE RESTAURANT COMPANY, INC.
By /s/ PAUL V. HOAGLAND
---------------------------
Name: Paul V. Hoagland
Title: Executive Vice President
Accepted:
CHASE SECURITIES INC.
By /s/ THOMAS WALKER
------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
270 Park Avenue, 40th Floor
New York, New York 10017
Attention: Legal Department
BANCBOSTON SECURITIES INC.
By /s/ STEVE DEMENNA
------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
100 Federal Street
Boston Massachusetts 02110
Attention: Leveraged Finance Department
<PAGE>
SCHEDULE 1
PRINCIPAL AMOUNT
INITIAL PURCHASERS OF SECURITIES
Chase Securities Inc. $ 90,000,000
BancBoston Securities Inc. $ 10,000,000
------------
Total $100,000,000
