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Exhibit 1.1
FRIENDLY ICE CREAM CORPORATION
$175,000,000 SENIOR NOTES DUE 2012
PURCHASE AGREEMENT
March 3, 2004
Goldman, Sachs & Co.
Banc of America Securities LLC
SG Cowen Securities Corporation
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
Friendly Ice
Cream Corporation, a Massachusetts corporation (the
"COMPANY"), proposes, subject to the terms
and conditions stated herein, to
issue and sell to the Purchasers named in
Schedule I hereto (the "PURCHASERS")
an aggregate of $175,000,000 in principal
amount of its 8 3/8% Senior Notes due
2012 (the "NOTES"). The Notes will be
unconditionally guaranteed (the
"GUARANTEE") by Friendly's Restaurants
Franchise, Inc., a Delaware corporation
(the "GUARANTOR" and together with the
Company, the "ISSUERS"). The Notes and
the Guarantee are hereinafter collectively
referred to as the "SECURITIES."
1. The Issuers,
jointly and severally, represent and warrant to, and
agree with, each of the Purchasers
that:
(a) A
preliminary offering circular, dated February 23, 2004
(the
"PRELIMINARY OFFERING CIRCULAR") and an offering circular, dated
March
3, 2004 (the
"OFFERING CIRCULAR") have been prepared in connection with the
offering of the
Securities. Any reference to the Offering Circular, as
amended or
supplemented, as of any specified date, shall be deemed to
refer
to and include
(i) any documents filed with the United States Securities
and Exchange
Commission (the "COMMISSION") pursuant to Section 13(a), 13(c)
or 15(d) of the
United States Securities Exchange Act of 1934, as amended
(the "EXCHANGE
ACT"), after the date of the Offering Circular and prior to
such specified
date and (ii) any Additional Issuer Information (as defined
in Section 5(f))
furnished by any Issuer prior to the completion of the
distribution of
the Securities; and all documents filed under the Exchange
Act and so
deemed to be included in the Offering Circular, or any
amendment
or supplement
thereto are hereinafter called the "EXCHANGE ACT REPORTS".
The Exchange Act
Reports, when they are filed with the Commission, will
conform in all
material respects to the applicable requirements of the
Exchange Act and
the applicable rules and regulations of the Commission
thereunder. The
Preliminary Offering Circular and the Offering Circular and
any amendments
or supplements thereto and the Exchange Act Reports did not
and will not, as
of their respective dates or, in the case of the Offering
Circular, as of
the Time of Delivery, contain 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 under which they
were made, not
misleading; PROVIDED, HOWEVER, that this representation and
warranty shall
not apply to any statements or
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omissions made
in reliance upon and in conformity with information
furnished in
writing to the Company by a Purchaser through Goldman, Sachs
&
Co. expressly
for use therein;
(b)
Neither the Company nor any of its subsidiaries has sustained
since the date
of the latest audited financial statements included in the
Offering
Circular any loss or interference with its business from fire,
explosion, flood
or other calamity, whether or not covered by insurance, or
from any labor
dispute or court or governmental action, order or decree,
which loss or
interference is material to the Company and its subsidiaries,
taken as a
whole, otherwise than as set forth or contemplated in the
Offering
Circular; and, since the respective dates as of which
information
is given in the
Offering Circular, there has not been any change in the
capital stock
(other than as a result of exercises of stock options) or
increase in
long-term debt (other than working capital borrowings in the
ordinary course
of business consistent with past practices) of the Company
or any of its
subsidiaries or any material adverse change, or any
development
involving a prospective material adverse change, in or
affecting the
general affairs, management, financial position,
stockholders'
equity or results of operations of the Company and its
subsidiaries,
taken as a whole, otherwise than as set forth or contemplated
in the Offering
Circular;
(c) The
Company and its subsidiaries have good and marketable
title in fee
simple to all real property and good and marketable title to
all personal
property owned by them, in each case free and clear of all
liens,
encumbrances and defects except such as are described in the
Offering
Circular or such as do not materially affect the value of such
property and do
materially not interfere with the use made and proposed to
be made of such
property by the Company and its subsidiaries; and any real
property and
buildings held under lease by the Company and its subsidiaries
are held by them
under valid, subsisting and enforceable leases with such
exceptions as
are not material and do not materially interfere with the use
made and
proposed to be made of such property and buildings by the
Company
and its
subsidiaries;
(d)
The
Company has been duly incorporated and is validly
existing as a
corporation in good standing under the laws of Massachusetts,
with power and
authority (corporate and other) to own its properties and
conduct its
business as described in the Offering Circular, and has been
duly qualified
as a foreign corporation for the transaction of business and
is in good
standing under the laws of each other jurisdiction in which it
owns or leases
properties or conducts any business so as to require such
qualification,
or is subject to no material liability or disability by
reason of the
failure to be so qualified in any such jurisdiction; and each
subsidiary of
the Company has been duly incorporated or organized and is
validly existing
as a corporation or limited liability company in good
standing under
the laws of its jurisdiction of organization; the entities
set forth on
Schedule II are the only direct or indirect subsidiaries of
the Company;
(e) The
Company has an authorized capitalization as set forth in
the Offering
Circular, and all of the issued shares of capital stock of the
Company have
been duly and validly authorized and issued and are fully paid
and
non-assessable; and all of the issued shares of capital stock of
each
subsidiary of
the Company have been duly and validly authorized and issued,
are fully paid
and non-assessable and (except for directors' qualifying
shares) are
owned directly or indirectly by the Company, free and clear of
all liens,
encumbrances, equities or claims (other than liens arising
under
the credit
facility dated as of December 17, 2001, as amended through the
date hereof,
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among the
Company, Fleet National Bank and the lenders from time to time
party thereto
(the "Revolving Credit Facility"));
(f) The
Securities have been duly authorized and, when the Notes
are issued and
delivered to and paid for by the Purchasers pursuant to this
Agreement and
authenticated by the Trustee, the Notes will have been duly
authenticated,
and the Securities will have been duly executed, issued and
delivered and
will constitute valid and legally binding obligations of the
Issuers entitled
to the benefits provided by the indenture to be dated as
of the date of
the Time of Delivery (the "INDENTURE") among the Issuers and
The Bank of New
York, as Trustee (the "TRUSTEE"), under which they are to
be issued, which
will be substantially in the form previously delivered to
you; the
Indenture has been duly authorized and, when executed and
delivered by the
Issuers and the Trustee, the Indenture will constitute a
valid and
legally binding instrument, enforceable in accordance with its
terms, subject,
as to enforcement, to bankruptcy, insolvency,
reorganization
and other laws of general applicability relating to or
affecting
creditors' rights and to general equity principles; and the
Securities and
the Indenture will conform in all material respects to the
descriptions
thereof in the Offering Circular and will be in substantially
the form
previously delivered to you;
(g) None
of the transactions contemplated by this Agreement
(including,
without limitation, the use of the proceeds from the sale of
the Securities)
will violate or result in a violation of Section 7 of the
Exchange Act, or
any regulation promulgated thereunder, including, without
limitation,
Regulations T, U, and X of the Board of Governors of the
Federal Reserve
System;
(h) Prior
to the date hereof, no Issuer nor any affiliate of any
Issuer has taken
any action which is designed to or which has constituted
or which might
have been expected to cause or result in stabilization or
manipulation of
the price of the Securities;
(i) The
Registration Rights Agreement to be entered into among
the Issuers and
the Purchasers, substantially in the form of EXHIBIT A
hereto (the
"REGISTRATION RIGHTS AGREEMENT"), has been duly authorized by
each of the
Issuers and, when executed and delivered by each of the Issuers
(assuming the
due authorization, execution and delivery of the Registration
Rights Agreement
by the Purchasers), will constitute a valid and legally
binding
agreement of each of the Issuers, enforceable in accordance
with
its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization
and other laws of general applicability relating to or
affecting
creditors' rights and to general equity principles and except
that any rights
to indemnity or contribution thereunder may be limited by
federal and
state securities laws and public policy considerations; and the
Registration
Rights Agreement will conform to the description thereof in
the Offering
Circular;
(j) The
Exchange Securities (as defined in the Registration
Rights
Agreement) have been duly authorized by each of the Issuers
and,
when the
Exchange Notes (as defined in the Registration Rights
Agreement)
are
authenticated and the Exchange Securities executed, issued and
delivered in
accordance with the Indenture and the Registration Rights
Agreement
(assuming the due authorization, execution and delivery of the
Indenture by the
Trustee), the Exchange Securities will constitute valid
and legally
binding obligations of each of the Issuers, entitled to the
benefits
provided by the Indenture, under which they are to be issued,
and
enforceable in
accordance with their terms, subject, as to enforcement, to
bankruptcy,
insolvency, reorganization and
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other laws of
general applicability relating to or affecting creditors'
rights and to
general equity principles;
(k) The
issue and sale of the Securities and the compliance by
the Issuers with
all of the provisions of the Securities, the Indenture and
this Agreement
and the consummation of the transactions herein and therein
contemplated
will not conflict with or result in a breach or violation of
any of the terms
or provisions of, or constitute a default under, any
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, assuming the effectiveness of Amendment No. 4 to
the Credit
Agreement and except as, individually or in the aggregate,
would
not have a
material adverse effect on the current or future financial
position,
stockholders' equity or results of operations of the Company
and
its
subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"), nor
will
such action
result in any violation of the provisions of the certificate of
incorporation,
by-laws or other organizational document of any Issuer or
any statute or
any order, rule or regulation of any court or governmental
agency or body
having jurisdiction over the Company or any of its
subsidiaries or
any of their properties; and no consent, approval,
authorization,
order, registration or qualification of or with any such
court or
governmental agency or body is required for the issue and sale
of
the Securities
or the consummation by the Issuers of the transactions
contemplated by this
Agreement or the Indenture, except for the filing of a
registration
statement by the Issuers with the Commission pursuant to the
United States
Securities Act of 1933, as amended (the "ACT") pursuant to
Section 5(l)
hereof and such consents, approvals, authorizations,
registrations or
qualifications as may be required under state securities
or Blue Sky laws
in connection with the purchase and distribution of the
Securities by
the Purchasers;
(l)
Neither the Company nor any of its subsidiaries is (i) in
violation of its
certificate of incorporation, by-laws or other
organizational
documents or (ii) in default in the performance or
observance of
any material obligation, covenant or condition contained in
any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or
instrument to which it is a party or by which it or any of its
properties may
be bound, other than, in the case of this clause (ii),
defaults which
would not, individually or in the aggregate, have a Material
Adverse
Effect;
(m) The
statements set forth in the Offering Circular under the
caption
"Description of Notes", insofar as they purport to constitute a
summary of the
terms of the Securities, under the captions "Certain U.S.
Federal Income
Tax Consequences," "Description of the Revolving Credit
Facility" and
"Underwriting" (other than the sixth, seventh, eighth and
twelfth
paragraphs of such "Underwriting" section), insofar as they
purport
to describe the
provisions of the laws and documents referred to therein,
are accurate in
all material respects;
(n) Other
than as set forth in the Offering Circular, 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 of the Company or any
of its
subsidiaries is the subject in which (A) there is a reasonable
possibility that
such proceedings might be determined adversely to the
Company or any
of its subsidiaries and (B) if so determined adversely to
the Company or
any of its subsidiaries, such proceeding would, individually
or in the
aggregate, have a Material Adverse Effect; and, to the best of
the
Company's
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knowledge, no
such proceedings are threatened or contemplated by
governmental
authorities or threatened by others;
(o) When
the Securities are issued and delivered pursuant to this
Agreement, the
Securities will not be of the same class (within the meaning
of Rule 144A
under the Securities Act as securities which are listed on a
national
securities exchange registered under Section 6 of the Exchange
Act) or quoted
in a U.S. automated inter-dealer quotation system;
(p) The
Company is subject to Section 13 or 15(d) of the Exchange
Act;
(q) No
Issuer is, or after giving effect to the offering and sale
of the
Securities, will be, an "investment company", as such term is
defined in the
United States Investment Company Act of 1940, as amended
(the "INVESTMENT
COMPANY ACT");
(r) None
of the Issuers, or any person acting on behalf of any
Issuer (other
than the Purchasers as to whom no representation is made) has
offered or sold
the Securities by means of any general solicitation or
general
advertising within the meaning of Rule 502(c) under the Act or,
with respect to
Securities sold outside the United States to non-U.S.
persons (as
defined in Rule 902 under the Act), by means of any directed
selling efforts
within the meaning of Rule 902 under the Securities Act and
the Issuers,
each of their respective affiliates and any person acting on
their behalf has
complied with and will implement the "offering
restrictions"
within the meaning of such Rule 902;
(s) Within
the preceding six months, none of the Issuers or any
other person
acting on behalf of any Issuer has offered or sold to any
person any
Securities, or any securities of the same or a similar class as
the Securities,
other than Securities offered or sold to the Purchasers
hereunder. The
Issuers will take reasonable precautions designed to insure
that any offer
or sale, direct or indirect, in the United States or to any
U.S. person (as
defined in Rule 902 under the Act) of any Securities or any
substantially
similar security issued by any Issuer, within six months
subsequent to
the date on which the distribution of the Securities has been
completed (as
notified to the Company by Goldman, Sachs & Co.), is made
under
restrictions and other circumstances reasonably designed not to
affect the
status of the offer and sale of the Securities in the United
States and to
U.S. persons contemplated by this Agreement as transactions
exempt from the
registration provisions of the Securities Act;
(t) The
financial statements included in the Offering Circular
present fairly
the financial position of the Company and its consolidated
subsidiaries as
of the dates shown and their results of operations, changes
in stockholders'
equity and cash flows for the periods shown, and such
financial
statements have been prepared in conformity with the generally
accepted
accounting principles in the United States applied on a
consistent
basis. The
information, to the extent derived from the Company's audited
financial
statements, set forth under the captions "Offering Circular
Summary--Summary
Consolidated Financial and Other Information" and
"Selected
Consolidated Financial and Other Information" included in the
Offering
Circular fairly present the information set forth therein on a
basis consistent
with that of the audited financial statements of the
Company;
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(u) None
of the Issuers or any affiliate of any Issuer does
business with
the government of Cuba or with any person or affiliate
located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(v) Ernst
& Young LLP, who have certified certain financial
statements of
the Company and its subsidiaries, are independent public
accountants as
required by the Act and the rules and regulations of the
Commission
thereunder;
(w) Other
than as would not, individually or in the aggregate,
result in a
Material Adverse Effect, each of the Company and its
subsidiaries
possesses and is in compliance with such permits, licenses,
franchises,
approvals and authorizations of governmental or regulatory
authorities (the
"PERMITS") as are necessary to own its respective
properties and
to conduct its business in the manner described in the
Offering
Circular, and, to the best of the Company's knowledge, no event
has occurred
that allows, or after notice or lapse of time would allow, any
governmental or
regulatory authorities to revoke or terminate any such
Permits;
(x) Other
than as set forth in the Offering Circular or as would
not,
individually or in the aggregate, result in a Material Adverse
Effect,
(A) none of the
Company or any of its subsidiaries is in violation of or
has liability
(accrued, contingent, absolute, determinable or otherwise)
(collectively,
"LIABILITY") pursuant to any federal, state, local or
foreign statute,
law, rule, regulation, ordinance, code, policy or rule of
common law or
any judicial or administrative interpretation thereof
(including,
without limitation, any judicial or administrative order,
consent decree
or judgment) relating to pollution or protection of human
health, the
environment (including, without limitation, ambient air,
surface water,
groundwater, land surface or subsurface strata), wildlife,
natural
resources, mining or post-mining land reclamation, or
occupational
safety or
health, including, without limitation, those relating to the
release or
threatened release of chemicals, pollutants, contaminants,
solid
or hazardous
wastes, toxic substances, hazardous substances, hazardous
materials,
petroleum or petroleum products or wastes (including, without
limitation,
crude oil or any fraction thereof) (collectively, "HAZARDOUS
MATERIALS") or
to the manufacture, processing, distribution, use,
treatment,
storage, disposal, release, transport or handling of Hazardous
Materials
(collectively, "ENVIRONMENTAL LAWS"), (B) there are no pending
or
threatened
administrative, regulatory or judicial actions, suits, demands,
demand letters,
claims, liens, notices of noncompliance or violation,
investigations
or proceedings relating to Environmental Laws against the
Company or any
of its subsidiaries, or against any person or entity whose
Liability under
Environmental Laws the Company or any of its subsidiaries
has or may have
retained or assumed by agreement or by operation of law and
(C) there are no
events or circumstances that might reasonably be expected
to form the
basis of an order for compliance, clean-up, investigation,
remediation or
reclamation, or an action, suit or proceeding by any private
party or entity
or governmental authority against or affecting, or
otherwise
expected to result in Liability to, the Company or any of its
subsidiaries
relating to Hazardous Materials or Environmental Laws;
(y) The Company and its subsidiaries
maintain systems of internal
accounting
controls sufficient to provide reasonable assurance that (i)
transactions are
executed in accordance with management's general or
specific
authorizations; (ii) transactions are recorded as necessary to
permit
preparation of financial statements in conformity with
generally
accepted
accounting principles and to maintain accountability with
regard
to its assets;
(iii) access to assets is permitted only in accordance with
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management's
general or specific authorization; and (iv) the recorded
accountability
for assets is compared with the existing assets at
reasonable
intervals and appropriate action is taken with respect to any
differences;
and
(z) The
Company has established and maintains disclosure controls
and procedures
(as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act);
the Company's auditors and the Audit Committee of the Board
of Directors
have been advised of: (1) any significant deficiencies in the
design or
operation of internal controls which could adversely affect the
Company's
ability to record, process, summarize and report financial
data;
and (2) any
fraud, whether or not material, that involves management or
other employees
who have a role in the Company's internal controls; any
material
weaknesses in internal controls have been identified for the
Company's
auditors; and since the date of the most recent evaluation of
such disclosure
controls and procedures, there have been no significant
changes in
internal control over financial reporting that have materially
affected, or are
reasonably likely to materially affect, the Company's
internal control
over financial reporting.
2. Subject to the
terms and conditions herein set forth, the Company
agrees to issue and sell to each of the
Purchasers, and each of the Purchasers
agrees, severally and not jointly, to
purchase from the Company, at a purchase
price of 97.25% of the principal amount
thereof, plus accrued interest thereon
from March 8, 2004 until the Time of
Delivery, the principal amount of Notes set
forth opposite the name of such Purchaser
in Schedule I hereto.
3. Upon the
authorization by you of the release of the Securities, the
several Purchasers propose to offer the
Securities for sale upon the terms and
conditions set forth in this Agreement and
the Offering Circular and each
Purchaser hereby represents and warrants
to, and agrees with the Issuers that:
(a) It
acknowledges that the Securities have not been registered
under the 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
the registration requirements of the Act; it will offer and
sell the
Securities only to: (i) persons who it reasonably believes are
"qualified
institutional buyers" ("QIBs") within the meaning of Rule 144A
under the Act in
transactions meeting the requirements of Rule 144A, or
(ii) upon the
terms and conditions set forth in Annex I to this Agreement;
(b) It is
an Institutional Accredited Investor within the meaning
of Rule 501
under the Act; and
(c)
Neither it nor any person acting on its behalf will offer or
sell the
Securities by any form of general solicitation or general
advertising,
including but not limited to the methods described in Rule
502(c) under the
Act.
4. (a) The
Securities to be purchased by each Purchaser hereunder will
be represented by one or more definitive
global Securities in book-entry form
which will be deposited by or on behalf of
the Company with The Depository Trust
Company ("DTC") or its designated
custodian. The Company will deliver the
Securities to Goldman, Sachs & Co., for
the account of each Purchaser, against
payment by or on behalf of such Purchaser
of the purchase price therefor by wire
transfer of Federal (same day) funds to the
account specified by the Company to
Goldman, Sachs & Co. at least
forty-eight hours in advance, by causing DTC to
credit the Securities to the account of
Goldman, Sachs & Co. at DTC. The Company
will cause
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the certificates representing the
Securities to be made available to
Goldman, Sachs & Co. for checking at
least twenty-four hours prior to the Time
of Delivery (as defined below) at the
office of DTC or its designated custodian
(the "DESIGNATED OFFICE"). The time and
date of such delivery and payment shall
be 9:30 a.m., New York City time, on March
8, 2004 or such other time and date
as Goldman, Sachs & Co. and the Company
may agree upon in writing. Such time and
date are herein called the "TIME OF
DELIVERY".
(b) The
documents to be delivered at the Time of Delivery by or
on behalf of the parties hereto pursuant to
Section 7 hereof, including the
cross-receipt for the Securities and any
additional documents requested by the
Purchasers pursuant to Section 7(k) hereof,
will be delivered at such time and
date at the offices of Cahill Gordon &
Reindel LLP, 80 Pine Street, New York,
New York 10005 (the "CLOSING LOCATION"),
and the Securities will be delivered at
the Designated Office, all at the Time of
Delivery. A meeting will be held at
the Closing Location at 4:00 p.m., New York
City time, on the New York Business
Day next preceding the Time of Delivery, at
which meeting the final drafts of
the documents to be delivered pursuant to
the preceding sentence will be
available for review by the parties hereto.
For the purposes of this Section 4,
"NEW YORK BUSINESS DAY" shall mean each
Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking
institutions in New York are
generally authorized or obligated by law or
executive order to close.
5. The Issuers,
jointly and severally, agree with each of the
Purchasers:
(a) To
prepare the Offering Circular in a form approved by you;
to make no
amendment or any supplement to the Offering Circular which
shall
be disapproved
by you promptly after reasonable notice thereof; and to
furnish you with
copies thereof;
(b)
Promptly from time to time to take such action as you may
reasonably request to
qualify the Securities for offering and sale under
the securities
laws of such jurisdictions as you may request and to comply
with such laws
so as to permit the continuance of sales and dealings
therein in such
jurisdictions for as long as may be necessary to complete
the distribution
of the Securities, provided that in connection therewith
no Issuer shall
be required to qualify as a foreign corporation or to file
a general
consent to service of process in any jurisdiction;
(c) To
furnish the Purchasers with copies of the Offering
Circular and
each amendment or supplement thereto in such quantities as you
may from time to
time reasonably request, and if, at any time prior to the
earlier of (i)
the completion of distribution of the Securities and (ii)
the expiration
of nine months after the date of the Offering Circular, any
event shall have
occurred as a result of which the Offering Circular as
then amended or
supplemented would include an untrue statement of a
material fact or
omit to state any material fact necessary in order to make
the statements
therein, in the light of the circumstances under which they
were made when
such Offering Circular is delivered, not misleading, or, if
for any other
reason it shall be necessary or advisable during such same
period to amend
or supplement the Offering Circular, to notify you and upon
your request to
prepare and furnish without charge to each Purchaser and to
any dealer in
securities as many written and electronic copies as you may
from time to
time reasonably request of an amended Offering Circular or a
supplement to
the Offering Circular which will correct such statement or
omission or
effect such necessary or advisable amendment or supplement;
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(d) During
the period beginning from the date hereof and
continuing until
the date 90 days after the Time of Delivery, not to offer,
sell, contract
to sell or otherwise dispose of, without the written consent
of Goldman,
Sachs & Co., except as provided hereunder, any additional
Notes
or any security
that is substantially similar to the Notes;
(e) Not to
be or become, at any time prior to the expiration of
two years after
the Time of Delivery, an open-end investment company, unit
investment
trust, closed-end investment company or face-amount certificate
company that is
or is required to be registered under Section 8 of the
Investment
Company Act;
(f) At any
time, prior to the expiration of two years after the
Time of
Delivery, when the Company is not subject to Section 13 or 15(d)
of
the Exchange
Act, for the benefit of holders from time to time of
Securities, to
furnish at its expense, upon request, to holders of
Securities and
prospective purchasers of securities information (the
"ADDITIONAL
ISSUER INFORMATION") satisfying the requirements of subsection
(d)(4)(i) of
Rule 144A under the Act;
(g) If
requested by you, to use its reasonable best efforts to
cause the
Securities to be eligible for the PORTAL trading system of the
National
Association of Securities Dealers, Inc.;
(h)
During a
period of five years from the date of the Offering
Circular, to
furnish to you copies of all reports or other communications
(financial or
other) furnished to stockholders of the Company, and to
deliver to you
as soon as they are available, copies of any reports and
financial
statements furnished to or filed with the Commission or any
securities
exchange on which the Securities or any class of securities of
the Company is
listed;
(i) During
the period of two years after the Time of Delivery,
the Company will
not, and will not permit any of its "affiliates" (as
defined in Rule
144 under the Securities Act) over which it exercises
control to,
resell any of the Securities which constitute "restricted
securities"
under Rule 144 that have been reacquired by any of them;
(j) The
Issuers shall comply with all the terms and conditions of
the Registration
Rights Agreement; and
(k) To use
the net proceeds received by it from the sale of the
Securities
pursuant to this Agreement in the manner specified in the
Offering
Circular under the caption "Use of Proceeds".
6. The Issuers,
jointly and severally, covenant and agree with the
several Purchasers that the Issuers will
pay or cause to be paid the following:
(i) the fees, disbursements and expenses of
the Issuers' counsel and accountants
in connection with the issue of the
Securities and all other expenses in
connection with the preparation and
printing of the Preliminary Offering
Circular and the Offering Circular and any
amendments and supplements thereto
and the mailing and delivering of copies
thereof to the Purchasers and dealers;
(ii) the cost of producing any Agreement
among Purchasers, this Agreement, the
Indenture, the Blue Sky survey, closing
documents (including any compilations
thereof) and any other documents in
connection with the offering, purchase, sale
and delivery of the Securities; (iii) all
expenses in connection with the
qualification of the Securities for
offering and sale under
<Page>
state securities laws as provided in
Section 5(b) hereof, including the fees and
disbursements of counsel for the Purchasers
in connection with such
qualification and in connection with the
Blue Sky survey; (iv) any fees charged
by securities rating services for rating
the Securities; (v) the cost of
preparing the Securities; (vi) the fees and
expenses of the Trustee and any
agent of the Trustee and the fees and
disbursements of counsel for the Trustee
in connection with the Indenture and the
Securities; (vii) any cost incurred in
connection with the designation of the
Securities for trading in PORTAL; and
(viii) all other costs and expenses
incident to the performance of their
obligations hereunder which are not
otherwise specifically provided for in this
Section. It is understood, however, that,
except as provided in this Section,
and Sections 8 and 11 hereof, the
Purchasers will pay all of their own costs and
expenses, including the fees of their
counsel, transfer taxes on resale of any
of the Securities by them, and any
advertising expenses connected with any
offers they may make.
7. The obligations
of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all
representations and warranties and
other statements of the Issuers herein are,
at and as of the Time of Delivery,
true and correct, the condition that the
Issuers shall have performed all of
their obligations hereunder theretofore to
be performed, and the following
additional conditions:
(a) Cahill
Gordon & Reindel LLP, counsel for the Purchasers,
shall have
furnished to you such opinion or opinions, dated the Time of
Delivery, with
respect to such matters as you may reasonably request, and
such counsel
shall hav
