<PAGE>
EXHIBIT 4.7
EXECUTION COPY
ATRIUM COMPANIES, INC.
$50,000,000 10 1/2% SENIOR SUBORDINATED NOTES DUE 2009
PURCHASE AGREEMENT
December 3, 2003
New York, New York
UBS Securities LLC
299 Park Avenue
New York, New York 10171
CIBC World Markets Corp.
425 Lexington Avenue
New York, New York 10017
Ladies and Gentlemen:
KAT Holdings, Inc., a Delaware corporation ("KAT") and, as of
the Effective Time (as defined below), the
Issuers (as defined below), jointly
and severally hereby agree with you as
follows:
1. Issuance of Notes. KAT proposes to cause Atrium Companies,
Inc. (the "ISSUER") to issue and sell to
UBS Securities LLC and CIBC World
Markets Corp. (each an "INITIAL PURCHASER"
and together the "INITIAL
PURCHASERS") $50,000,000 aggregate
principal amount of the Issuer's 10 1/2%
Senior Subordinated Notes due 2009 (the
"ORIGINAL NOTES"). KAT shall cause the
Issuer's obligations under the Original
Notes and the Indenture (as defined
below) to be unconditionally guaranteed
(the "GUARANTEES") on an unsecured
senior subordinated basis by each of the
entities denotated as guarantors listed
on Schedule II hereto (the "GUARANTORS,"
and, together with the Issuer, the
"ISSUERS"). All references herein to the
Original Notes include the related
Guarantees unless the context otherwise
requires. The Original Notes and the
Guarantees will be issued pursuant to an
indenture dated May 17, 1999, as
amended as of October 25, 2000 and January
24, 2003 and pursuant to the Third
Supplemental Indenture dated as of November
18, 2003 (the "INDENTURE"), among
the Issuer, the Guarantors named therein
and U.S. Bank National Association (as
successor in interest to State Street Bank
and Trust Company), as trustee (the
"Trustee"). Capitalized terms used but not
otherwise defined herein shall have
the meanings given to such terms in the
Indenture.
The Original Notes are being sold in connection with the
merger (the "MERGER") of KAT with and into
Atrium Corporation, a Delaware
corporation ("HOLDINGS"), pursuant to an
Agreement and Plan of Merger (as
amended in accordance therewith, the
"MERGER AGREEMENT"), dated as of October
27, 2003, by and among KAT, Holdings and
the Holdings' securityholders named
therein. Subject to the conditions set
forth in the Merger Agreement, KAT will
merge with and into Holdings with Holdings
surviving the Merger. The time of the
consummation of the Merger is referred to
herein as the "EFFECTIVE TIME."
<PAGE>
In connection with the Merger and on the Effective Time,
certain of Holdings' and the Issuer's debt
will be renewed, repaid or refinanced
(the "REFINANCING") (including, without
limitation, the renewal, repayment or
refinancing of (a) Holdings' existing 15%
Senior Pay-In-Kind Notes due 2010 (the
"PIK NOTES"), (b) the Issuer's accounts
receivable securitization facility (the
"AR FACILITY") and (c) the Issuer's
existing senior credit facility (the
"EXISTING BANK FACILITY")).
The Merger, the Refinancing and related fees and expenses (and
ongoing working capital) will be financed
with (i) approximately $265.0 million
of equity contributed to Holdings by Kenner
& Company, Inc., its affiliates and
certain other equity investors (the
"SPONSOR EQUITY"), (ii) the issuance of the
Original Notes, (iii) the renewal of the AR
Facility and (iv) borrowings
consisting of (x) a senior secured term
loan facility of up to $180.0 million
and (y) a senior secured revolving credit
facility of up to $50.0 million
pursuant to a credit agreement (the "CREDIT
AGREEMENT") dated as of the
Effective Time, by and among the Issuer,
the Guarantors, Canadian Imperial Bank
of Commerce as Administrative Agent and
Collateral Agent and UBS Securities LLC
as Syndication Agent. In order to secure
the Issuers' obligations under the
Credit Agreement, Holdings and the Issuers
will enter into the security
documents (the "BANK SECURITY DOCUMENTS")
pursuant to which they will pledge
substantially all of their assets.
As used herein, the term "TRANSACTIONS" means the issuance of
the Original Notes, the consummation of the
Merger, the Refinancing, the
contribution of the Sponsor Equity, the
initial borrowings under the Credit
Agreement and the payment of related fees
and expenses. The Note Documents (as
defined herein) and all of the documents
entered into in connection with the
Transactions are hereinafter collectively
referred to as the "TRANSACTION
DOCUMENTS."
Concurrently with the Effective Time, Holdings and the Issuers
will execute an assumption agreement (the
"ASSUMPTION AGREEMENT") substantially
in the form attached hereto as Exhibit B.
Pursuant to applicable law and the
Assumption Agreement (i) Holdings, as
survivor of the Merger, will assume all of
the obligations of KAT under this Agreement
and will cause the Issuer to issue
the Original Notes and be bound by the
obligations of the Issuer pursuant to
this Agreement.
The
Original Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from
the registration requirements under the
Securities Act of 1933, as amended (the
"ACT"). The Issuer has prepared a
preliminary offering memorandum dated
December 2, 2003 (including the documents
incorporated by reference therein, the
"PRELIMINARY OFFERING MEMORANDUM"), and a
final offering memorandum dated and
available for distribution on the date
hereof (including the documents
incorporated by reference therein, the "OFFERING
MEMORANDUM") relating to the Issuer and the
Original Notes has been prepared by
KAT and the Issuer.
The Initial Purchasers have advised KAT and the Issuer that
the Initial Purchasers intend, as soon as
they deem practicable after this
Purchase Agreement (this "AGREEMENT") has
been executed and delivered, to resell
(the "EXEMPT RESALES") the Original Notes
purchased by the Initial Purchasers
under this Agreement in private sales
exempt from registration under the Act on
the terms set forth in the Offering
Memorandum, as amended or supplemented,
solely to (i) persons whom the Initial
Purchasers reasonably believe to be
"qualified institutional buyers,"
-2-
<PAGE>
as defined in Rule 144A under the Act
("QIBS"), and (ii) other eligible
purchasers pursuant to offers and sales
that occur outside the United States
within the meaning of Regulation S under
the Act; the Persons specified in
clauses (i) and (ii) are sometimes
collectively referred to herein as the
"ELIGIBLE PURCHASERS."
Upon issuance of the Original Notes and until such time as the
same is no longer required under the
applicable requirements of the Act, the
Original Notes shall bear the legend
relating thereto set forth under the
caption "Notice to Investors" in the
Offering Memorandum.
Holders (including subsequent transferees) of the Original
Notes will have the registration rights set
forth in the registration rights
agreement (the "REGISTRATION RIGHTS
AGREEMENT") to be dated the Closing Date in
the form attached hereto as Exhibit C.
Pursuant to the Registration Rights
Agreement, the Issuers will agree to (i)
file with the Securities and Exchange
Commission (the "COMMISSION") under the
circumstances set forth in the
Registration Rights Agreement, (a) a
registration statement under the Act (the
"EXCHANGE OFFER REGISTRATION STATEMENT")
relating to a new issue of debt
securities (collectively with the Private
Exchange Notes (as defined in the
Registration Rights Agreement), the
"EXCHANGE NOTES" and, together with the
Original Notes, the "NOTES," which term
includes the guarantee thereof by the
Guarantors) to be offered in exchange for
the Original Notes (the "EXCHANGE
OFFER") and issued under the Indenture
and/or (b) under certain circumstances
set forth in the Registration Rights
Agreement, a shelf registration statement
pursuant to Rule 415 under the Act (the
"SHELF REGISTRATION STATEMENT" and,
together with the Exchange Offer
Registration Statement, the "REGISTRATION
STATEMENTS") relating to the resale by
certain holders of the Original Notes,
and (ii) to use its commercially reasonable
best efforts to cause such
Registration Statements to be declared
effective. This Agreement, the Notes, the
Guarantees, the Indenture, the Registration
Rights Agreement, and the Assumption
Agreement are hereinafter sometimes
referred to collectively as the "NOTE
DOCUMENTS."
2. Agreements to Sell and Purchase. On the basis of the
representations, warranties and covenants
contained in this Agreement, KAT
agrees to cause the Issuer as of the
Effective Time to issue and sell to the
Initial Purchasers $50,000,000 in aggregate
principal amount of the Original
Notes. The Initial Purchasers agree, on the
basis of the representations,
warranties and covenants contained in this
Agreement, and subject to the terms
and conditions contained in this Agreement,
severally and not jointly to
purchase from the Issuer, the aggregate
principal amount of the Original Notes
set forth opposite its name on Schedule I
attached hereto. The purchase price
for the Original Notes shall be
104.4703125% of their principal amount.
3. Delivery and Payment. Delivery of, and payment of the
purchase price for, the Original Notes
shall be made at 10:00 a.m., New York
time, on December 10, 2003 (such date and
time, the "CLOSING DATE") at the
offices of Mayer, Brown, Rowe & Maw LLP
at 1675 Broadway, New York, New York
10019. The Closing Date and the location of
delivery of and the form of payment
for the Original Notes may be varied by
mutual agreement between the Initial
Purchasers and the Issuer.
KAT, and on and as of the Effective Time, Holdings shall cause
the Issuer and on and as of the Effective
Time, the Issuer agrees to deliver all
of the Original Notes to the Initial
Purchasers (or as the Initial Purchasers
direct) through the facilities of The
Depository Trust
-3-
<PAGE>
Company against payment by the Initial
Purchasers of the purchase price therefor
by means of wire transfer of immediately
available funds to such account or
accounts specified by the Issuer in
accordance with its obligations under
Sections 4(g) and 8(n) hereof on or prior
to the Closing Date, or by such means
as the parties hereto shall agree prior to
the Closing Date. The Original Notes
shall be evidenced by one or more
certificates in global form registered in such
names as the Initial Purchasers may request
upon at least one business day's
notice prior to the Closing Date and having
an aggregate principal amount
corresponding to the aggregate principal
amount of the Original Notes.
4. Agreements of KAT, Holdings and the Issuer. KAT and, on and
as of the Effective Time, Holdings, agrees
to cause the Issuers and on and as of
the Effective Time the Issuers jointly and
severally covenant and agree with the
Initial Purchasers as follows:
(a) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers, without charge, with as
many
copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendments or supplements thereto, as the
Initial
Purchasers may reasonably request. KAT and, on and as of the
Effective
Time Holdings agree to cause the Issuers and on and after the
Effective
Time the Issuers consent to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and
supplements thereto required pursuant to this Agreement, by the
Initial
Purchasers in connection with Exempt Resales.
(b) Not to make any changes to the information contained in
the Offering Memorandum from the corresponding information
contained in
the Preliminary Offering Memorandum other than (i) changes to
reflect
pricing information with respect to the Notes and (ii) such
other
changes as to which the Representative shall have consented,
such
consent not to be unreasonably withheld. Not to amend or supplement
the
Offering Memorandum prior to the Closing Date unless the
Initial
Purchasers shall previously have been advised of such proposed
amendment or supplement prior to the proposed use, and shall not
have
reasonably objected to such amendment or supplement.
(c) If, prior to the time that the Initial Purchasers have
completed their distribution of the Original Notes, any event
shall
occur that, in the judgment of KAT and, on and after the
Effective
Time, Holdings and the Issuer or in the judgment of counsel to
the
Initial Purchasers, makes any statement of a material fact in
the
Offering Memorandum, as then amended or supplemented, untrue or
that
requires the making of any additions to or changes in the
Offering
Memorandum in order to make the statements in the Offering
Memorandum,
as then amended or supplemented, in the light of the
circumstances
under which they are made, not misleading, or if it is necessary
to
amend or supplement the Offering Memorandum to comply with all
applicable laws, KAT and, on and after the Effective Time, Holdings
and
the Issuer shall promptly notify the Initial Purchasers of such
event
and (subject to Section 4(b)) prepare an appropriate amendment
or
supplement to the Offering Memorandum so that (i) the statements in
the
Offering Memorandum, as amended or supplemented, will, in the light
of
the circumstances at the time that the Offering Memorandum is
delivered
to prospective Eligible Purchasers, not be misleading and (ii)
the
Offering Memorandum will comply in all material respects with
applicable law.
-4-
<PAGE>
(d) To qualify or register the Original Notes under the
securities laws of such jurisdictions as the Initial Purchasers
may
reasonably request and to continue such qualification in effect so
long
as required for the Exempt Resales. Notwithstanding the foregoing,
no
Issuer shall be required to qualify as a foreign corporation in
any
jurisdiction in which it is not so qualified or to execute a
general
consent to service of process in any such jurisdiction or
subject
itself to taxation in excess of a nominal dollar amount in any
such
jurisdiction where it is not then so subject.
(e) To advise the Initial Purchasers promptly, and if
requested by the Initial Purchasers, to confirm such advice in
writing,
of the issuance by any securities commission of any stop order
suspending the qualification or exemption from qualification of any
of
the Original Notes for offering or sale in any jurisdiction, or
the
initiation of any proceeding for such purpose by any securities
commission or other regulatory authority. KAT and, on and after
the
Effective Time, Holdings shall cause the Issuers, and on and after
the
Effective Time the Issuers shall use their commercially reasonable
best
efforts to prevent the issuance of any stop order or order
suspending
the qualification or exemption of any of the Original Notes under
any
securities laws, and if at any time any securities commission or
other
regulatory authority shall issue an order suspending the
qualification
or exemption of any of the Original Notes under any securities
laws,
KAT and, on and after the Effective Time, Holdings shall cause
the
Issuers, and on and after the Effective Time the Issuers shall
use
their commercially reasonable best efforts to obtain the withdrawal
or
lifting of such order at the earliest possible time.
(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or
is
terminated, to pay all costs, expenses, fees and disbursements
(including fees, expenses and disbursements of counsel to the
Issuers)
reasonably incurred and stamp, documentary or similar taxes
incident to
and in connection with: (i) the preparation, printing and
distribution
of the Preliminary Offering Memorandum and the Offering
Memorandum
(including, without limitation, financial statements) and all
amendments and supplements thereto, (ii) all reasonable and
documented
expenses (including travel expenses) of KAT, Holdings, the Issuers
and
the Initial Purchasers in connection with any meetings with
prospective
investors in the Original Notes, (iii) the preparation,
notarization
(if necessary) and delivery of the Note Documents and all other
agreements, memoranda, correspondence and documents prepared
and
delivered in connection with this Agreement and with the Exempt
Resales, (iv) the issuance, transfer and delivery of the Original
Notes
by the Issuers to the Initial Purchasers, (v) the qualification
or
registration of the Notes for offer and sale under the securities
laws
of the several states of the United States or provinces of
Canada
(including, without limitation, the cost of printing and
mailing
preliminary and final Blue Sky or legal investment memoranda and
fees
and
disbursements of counsel (including local counsel) to the
Initial
Purchasers relating thereto), (vi) the furnishing of such copies of
the
Preliminary Offering Memorandum and the Offering Memorandum, and
all
amendments and supplements thereto, as may be reasonably requested
for
use in connection with Exempt Resales, (vii) the preparation of
certificates for the Notes, (viii) the application for quotation of
the
Notes in The Portal Market ("PORTAL") of the National Association
of
Securities Dealers, Inc. ("NASD"), including, but not limited to,
all
listing fees and expenses, (ix) the approval of the Notes by
The
Depository Trust Company ("DTC")
-5-
<PAGE>
for "book-entry" transfer, (x) the rating of the Notes by
rating
agencies, (xi) the fees and expenses of the Trustee and its counsel
and
(xii) the performance by KAT and, on and as of the Effective
Time,
Holdings and the Issuer of its other obligations under the Note
Documents.
(g) To use the proceeds from the sale of the Original Notes in
the manner described in the Offering Memorandum under the caption
"Use
of Proceeds."
(h) To do and perform all things required to be done and
performed under this Agreement by them prior to or after the
Closing
Date and to satisfy all conditions precedent on their part to
the
delivery of the
Original Notes.
(i) Not to, and not to permit any of their respective
subsidiaries to sell, offer for sale or solicit offers to buy
any
security (as defined in the Act) that would be integrated with the
sale
of the Original Notes in a manner that would require the
registration
under the Act of the sale of the Original Notes to the Initial
Purchasers or any Eligible Purchasers.
(j) Not to, and to cause their respective affiliates (as
defined in Rule 144 under the Act) not to, resell any of the
Original
Notes that have been reacquired by any of them.
(k) Not to engage, not to allow any of their respective
subsidiaries to engage, and to cause their respective affiliates
and
any person acting on their behalf (other than, in any case, the
Initial
Purchasers and any of their affiliates, as to whom the Issuers make
no
covenant) not to engage, in any form of general solicitation or
general
advertising (within the meaning of Regulation D under the Act)
in
connection with any offer or sale of the Original Notes in the
United
States prior to the effectiveness of a registration statement
with
respect to the Notes.
(l) Not to engage, not to allow any of their respective
subsidiaries to engage, and to cause their respective affiliates
and
any person acting on their behalf (other than, in any case, the
Initial
Purchasers and any of their affiliates, as to whom the Issuers make
no
covenant) not to engage, in any directed selling effort with
respect to
the Original Notes, and to comply with the offering
restrictions
requirement of Regulation S under the Act. Terms used in this
paragraph
have the meanings given to them by Regulation S.
(m) From and after the Closing Date, for so long as any of the
Notes remain outstanding and are "restricted securities" within
the
meaning of Rule 144(a)(3) under the Act and during any period in
which
the Issuer is not subject to Section 13 or 15(d) of the
Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to make
available upon request the information required by Rule
144A(d)(4)
under the Act to (i) any holder or beneficial owner of Notes in
connection with any sale of such Notes and (ii) any prospective
purchaser of such Notes from any such holder or beneficial
owner
designated by the holder or beneficial owner. From and after
the
Effective Time, the Issuer will pay the expenses of preparing,
printing
and distributing such documents.
-6-
<PAGE>
(n) To comply in all material respects with any of their
respective agreements set forth in the Registration Rights
Agreement.
(o) To comply in all material respects with all of their
respective obligations set forth in the representations letter of
the
Issuer to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer and the Issuer shall use its commercially
reasonable best efforts to obtain approval of the Notes by DTC
for
"book-entry" transfer.
(p) Prior to the Closing Date, to furnish without charge to
the Initial Purchasers, (i) as soon as they have been prepared by
the
Issuer, a copy of any regularly prepared internal financial
statements
of the Issuer and its subsidiaries for any period subsequent to
the
period covered by the financial statements appearing in the
Offering
Memorandum, (ii) all other reports and other communications
(financial
or otherwise) that the Issuer mails or otherwise makes available to
its
security holders and (iii) such other information as the
Initial
Purchasers shall reasonably request.
(q) Not to, and not to permit any of their respective
affiliates or anyone acting on their or their respective
affiliates'
behalf to (other than the Initial Purchasers and their
affiliates),
distribute prior to the Closing Date any offering material in
connection with the offer and sale of the Original Notes other than
the
Preliminary Offering Memorandum and the Offering Memorandum.
(r) During the period of two years after the Closing Date or,
if earlier, until such time as the Original Notes are no longer
restricted securities (as defined in Rule 144 under the Act), not
to be
or become a closed-end investment company required to be
registered,
but not registered, under the Investment Company Act of 1940.
(s) In connection with the offering, until the Initial
Purchasers shall have notified the Issuer of the completion of
the
resale of the Notes, not to, and not to permit any of their
respective
affiliates (as such term is defined in Rule 501(b) of Regulation
D
under the Act) to, either alone or with one or more other Persons,
bid
for or purchase for any account in which it or any of its
affiliates
has a beneficial interest, and neither the Issuers nor any of
their
respective affiliates will make bids or purchases for the purpose
of
creating actual or apparent active trading in, or of raising the
price
of, the Notes.
(t) To use its commercially reasonable best efforts to effect
the inclusion of the Notes in Portal.
5. Representations and Warranties. (a) KAT and, on and as of
the Effective Time, Holdings shall cause
the Issuers to, and on and as of the
Effective Time (upon execution and delivery
of the Assumption Agreement), the
Issuers represent and warrant to the
Initial Purchasers that:
(i) Each of the Preliminary Offering Memorandum and the
Offering Memorandum has been prepared for use in connection with
the
Exempt Resales. None of the Preliminary Offering Memorandum,
the
Offering Memorandum or any supplement or amendment thereto contains
any
untrue statement of a material fact or omits to state any material
fact
necessary in order to make the statements therein, in the light of
the
circumstances
-7-
<PAGE>
under which they were made, not misleading; provided, however,
that
none of KAT or the Issuers makes any representation or warranty
with
respect to information relating to the Initial Purchasers contained
in
or omitted from the Preliminary Offering Memorandum or the
Offering
Memorandum or any supplement or amendment thereto in reliance upon
and
in conformity with information furnished or failed to be furnished
to
KAT and the Issuers in writing by or on behalf of an Initial
Purchaser
relating to such Initial Purchaser expressly for inclusion in
the
Preliminary Offering Memorandum, the Offering Memorandum or any
supplement or amendment thereto. To the best knowledge of KAT,
after
due inquiry, the
Issuer's Annual Report on Form 10-K most recently
filed with the Commission and all subsequent reports which have
been
filed by the Issuer with the Commission pursuant to the Exchange
Act do
not include any untrue statement of a material fact or omit to
state
any material fact necessary to make the statements therein, in
the
light of the circumstances under which they were made, not
misleading.
No order preventing the use of the Preliminary Offering Memorandum
or
the Offering Memorandum, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued or, to
the
knowledge
of KAT and the Issuers, has been threatened.
(ii) There are no securities of the Issuers that are listed on
a national securities exchange registered under Section 6 of
the
Exchange Act or that are quoted in a United States automated
interdealer quotation system of the same class within the meaning
of
Rule 144A under the Act as the Notes.
(iii) To the best knowledge of KAT, after due inquiry, as of
the Closing Date, the Issuer shall have an authorized
capitalization as
set forth under the heading "Capitalization" in the Offering
Memorandum, including the notes thereto, included in the
Offering
Memorandum. To the best knowledge of KAT, after due inquiry, all of
the
issued and outstanding shares of capital stock of the Issuer have
been
duly authorized and validly issued, are fully paid and
nonassessable
and were not issued in violation of any preemptive or similar right
of
any securityholder of the Issuer. Attached as Schedule II is to
the
best knowledge of KAT, after due inquiry, a true and complete list
of
each entity in which the Issuer has a direct or indirect
majority
equity or voting interest (each a "SUBSIDIARY" and, together,
the
"SUBSIDIARIES"), their jurisdictions of incorporation or
formation,
type of entity and percentage equity ownership by the Issuer. To
the
best knowledge of KAT, after due inquiry, all of the issued and
outstanding shares of capital stock or other equity interests of
each
of the Subsidiaries have been duly and validly authorized and
issued,
are fully paid and nonassessable, were not issued in violation of
any
preemptive or similar right of any securityholder of the
Subsidiary
and, except as set forth in the Offering Memorandum, are owned by
the
Issuer free and clear of any security interest, mortgage, pledge,
lien,
encumbrance, claim or equity (other than transfer restrictions
imposed
by the Act, the securities or Blue Sky laws of certain
jurisdictions
and security interests granted pursuant to the Bank Security
Documents.
Except as set forth in the Offering Memorandum, to the best
knowledge
of KAT, after due inquiry, there are no outstanding options,
warrants
or other rights to acquire or purchase, or instruments convertible
into
or exchangeable for, any shares of capital stock of the Issuer or
any
of the Subsidiaries. To the best knowledge of KAT, after due
inquiry,
no holder of any securities of the Issuer or any of the
Subsidiaries is
entitled to have such securities (other than the
-8-
<PAGE>
Notes) registered under any registration statement contemplated by
the
Registration Rights Agreement.
(iv) KAT and, to the best knowledge of KAT, after due inquiry,
the Issuer and each of the Subsidiaries (A) is a corporation
duly
organized and validly existing under the laws of the jurisdiction
of
its organization; (B) has all requisite corporate power and
authority,
and has all governmental licenses, authorizations, consents and
approvals, necessary to own its property and carry on its business
as
now being conducted, except if the failure to obtain any such
license,
authorization, consent and approval could not reasonably be
expected to
have, individually or in the aggregate, a Material Adverse Effect;
and
(C) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it
makes
such qualification necessary, except where the failure to be so
qualified and in good standing, individually or in the aggregate,
could
not reasonably be expected to have, individually or in the
aggregate, a
Material Adverse
Effect. A "MATERIAL ADVERSE EFFECT" means any material
adverse effect on the business, condition (financial or other),
results
of operations, performance, properties or prospects of KAT, the
Issuer
and the Subsidiaries, taken as a whole.
(v) KAT and, to the best knowledge of KAT, after due inquiry,
each of the Issuers has all requisite corporate power and authority
to
execute, deliver and perform all of its obligations under the
Note
Documents to which it is a party and to consummate the
transactions
contemplated hereby and by the Note Documents to be consummated on
its
part and, without limitation, the Issuers have all requisite
corporate
power and authority to issue, sell and deliver and perform
their
obligations under the Notes.
(vi) This Agreement has been duly and validly authorized,
executed and delivered by KAT, and on and after the Effective
Time,
Holdings and each of the Issuers.
(vii) To the best knowledge of KAT, after due inquiry, the
Indenture is a legally binding and valid obligation of each of
the
Issuers, enforceable against each of them in accordance with its
terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium
or
similar laws affecting the enforcement of creditors' rights
generally
and by general
principles of equity and the discretion of the court
before which any proceeding therefor may be brought. The
Indenture
conforms in all material respects to the description thereof in
the
Offering Memorandum.
(viii) To the best knowledge of KAT, after due inquiry, the
Original Notes have been duly and validly authorized for issuance
and
sale to the Initial Purchasers by each of the Issuers, and when
issued,
authenticated and delivered by the Issuers against payment therefor
by
the Initial Purchasers in accordance with the terms of this
Agreement
and the Indenture, the Original Notes will be legally binding and
valid
obligations of each of the Issuers, entitled to the benefits of
the
Indenture (assuming the due authorization, execution and delivery
of
the Indenture by the Trustee) and enforceable against each of
the
Issuers in accordance with their terms, except as the
enforcement
thereof may be limited by bankruptcy, insolvency (including,
without
limitation, all laws relating to fraudulent transfers),
reorganization,
moratorium or similar laws affecting the enforcement of
creditors'
-9-
<PAGE>
rights generally and by general principles of equity (regardless
of
whether enforcement is considered in a proceeding in equity or at
law)
and the discretion of the court before which any proceeding
therefor
may be brought. To the best knowledge of KAT, after due inquiry,
the
Original Notes, when issued, authenticated and delivered, will
conform
in all material respects to the description thereof in the
Offering
Memorandum.
(ix) To the best knowledge of KAT, after due inquiry, the
Exchange Notes have been, or on or before the Closing Date will
be,
duly and validly authorized for issuance by each of the Issuers,
and
when issued, authenticated and delivered by the Issuers in
accordance
with the terms of the Registration Rights Agreement, the Exchange
Offer
and the Indenture, the Exchange Notes will be legally binding and
valid
obligations of each of the Issuers, entitled to the benefits of
the
Indenture (assuming the due authorization, execution and delivery
of
the Indenture by the Trustee) and enforceable against each of
the
Issuers in accordance with their terms, except as the
enforcement
thereof may be limited by bankruptcy, insolvency (including,
without
limitation, all laws relating to fraudulent transfers),
reorganization,
moratorium or similar laws affecting the enforcement of
creditors'
rights generally and by general principles of equity (regardless
of
whether enforcement is considered in a proceeding in equity or at
law)
and the discretion of the court before which any proceeding
therefor
may be
brought.
(x) To the best knowledge of KAT, after due inquiry, the
Guarantees, when the Original Notes are issued, authenticated by
the
Trustee and delivered by the Issuer against payment by the
Initial
Purchasers in
accordance with the terms of this Agreement and the
Indenture (assuming the due authorization, execution and delivery
of
the Indenture by the Trustee), will be legally binding and
valid
obligations of the Guarantors, enforceable against each of them
in
accordance with their terms, except that enforceability thereof may
be
limited by bankruptcy, insolvency (including, without limitation,
all
laws relating to fraudulent transfers), reorganization, moratorium
or
similar laws affecting the enforcement of creditors' rights
generally
and by general principles of equity (regardless of whether
enforcement
is considered in a proceeding in equity or at law) and the
discretion
of the court before which any proceedings therefor may be
brought.
(xi) To the best knowledge of KAT, after due inquiry, the
guarantees to be endorsed on the Exchange Notes, when the
Exchange
Notes are issued, authenticated by the Trustee and delivered in
accordance with the terms of the Registration Rights Agreement,
the
Exchange Offer and the Indenture, will be legally binding and
valid
obligations of the Guarantors, enforceable against each of them
in
accordance with their terms, except that enforceability thereof may
be
limited by bankruptcy, insolvency (including, without limitation,
all
laws relating to fraudulent transfers), reorganization, moratorium
or
similar laws affecting the enforcement of creditors' rights
generally
and by general principles of equity (regardless of whether
enforcement
is considered in a proceeding in equity or at law) and the
discretion
of the court before which any proceedings therefor may be
brought.
(xii) At the Closing Date, the Registration Rights Agreement
will have been duly and validly authorized by the Issuers and,
when
duly executed and delivered by the Issuers (assuming the due
authorization, execution and delivery thereof by the Initial
Purchasers),
-10-
<PAGE>
will constitute a valid and legally binding obligation of the
Issuers,
enforceable against them in accordance with its terms, except that
(A)
the enforcement thereof may be limited by bankruptcy,
insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
the
enforcement of creditors' rights generally and by general
principles of
equity and the discretion of the court before which any
proceeding
therefor may be brought and (B) any rights to indemnity or
contribution
thereunder may be limited by federal and state securities laws
and
public policy considerations. The Registration Rights Agreement,
when
executed and delivered, will conform in all material respects to
the
description thereof in the Offering Memorandum.
(xiii) To the best knowledge of KAT, after due inquiry, each
Subsidiary which is or will be a guarantor or otherwise obligated
under
the Credit Agreement will be a Guarantor of the Notes and is
denotated
as a Guarantor on Schedule II hereto. KAT and, to the best
knowledge of
KAT, after due inquiry, each of the Issuers has all requisite
corporate
power and authority to enter into and perform its respective
obligations under the Transaction Documents to which it is a
party.
(xiv) All taxes, fees and other governmental charges that are
due and payable on or prior to the Closing Date in connection with
the
execution, delivery and performance of the Note Documents and
the
execution, delivery and sale of the Original Notes shall have been
paid
by or on behalf of the Issuer at or prior to the Closing Date.
(xv) KAT,
and to the best knowledge of KAT, after due inquiry,
neither the Issuer nor any Subsidiary, is (A) in violation of
its
charter, bylaws or other constitutive documents, or (B) in default
(or,
with notice or lapse of time or both, would be in default) in
the
performance or observance of any obligation, agreement, covenant
or
condition contained in any bond, debenture, note, indenture,
mortgage,
deed of trust, loan or credit agreement, lease, license,
franchise
agreement, authorization, permit, certificate or other agreement
or
instrument to which KAT, the Issuer or any Subsidiary is a party or
by
which any of them is bound or to which any of their assets or
properties is subject
(collectively, "AGREEMENTS AND INSTRUMENTS"),
except, for such defaults or violations as could not reasonably
be
expected to have, individually or in the aggregate, a Material
Adverse
Effect.
(xvi) The
execution, delivery and performance of the
Transaction Documents and consummation of the other Transactions
does
not and will not violate, conflict with or constitute a breach of
any
of the terms or provisions of or a default under (or an event that
with
notice or the lapse of time, or both, would constitute a default),
or
require consent under, or result in the creation or imposition of
a
lien, charge or encumbrance on any property or assets of KAT, or to
the
best knowledge of KAT, after due inquiry, the Issuer or any
Subsidiary
(other than as created pursuant to the Credit Agreement and the
Bank
Security Documents) or an acceleration of any indebtedness of
the
Issuer or any Subsidiary pursuant to, (i) the charter, bylaws or
other
constitutive documents of Holdings, the Issuer or any Subsidiary,
(ii)
any of the Agreements and Instruments, (iii) any law, statute, rule
or
regulation applicable to KAT, the Issuer or any Subsidiary or
their
respective assets or properties or (iv) any judgment, order or
decree
of any domestic or foreign court
-11-
<PAGE>
or governmental agency or authority having jurisdiction over KAT,
the
Issuer or any Subsidiary or their respective assets or
properties.
Assuming the accuracy of the representations and warranties of
the
Initial Purchasers in Section 5(b) of this Agreement, no
consent,
approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, any court or
governmental
agency, body or administrative agency, domestic or foreign, is
required
to be obtained or made by the Issuer or any Subsidiary for the
execution, delivery and performance by the Issuer or any Subsidiary
of
the Transaction Documents and the consummation of the
Transactions,
except (w) such as have been or will be obtained or made on or
prior to
the Closing Date, (x) registration of the Exchange Offer or resale
of
the Notes under the Act pursuant to the Registration Rights
Agreement,
and (y) such filings and recordings with governmental authorities
as
may be required to perfect liens under the Bank Security
Documents.
With respect to KAT and with respect to the Issuers to the best
knowledge of KAT, after due inquiry, no consents or waivers from
any
other person or entity are required for the execution, delivery
and
performance of this Agreement or any of the other Transaction
Documents
and the consummation of the Transactions, other than such consents
and
waivers as have been obtained or will be obtained prior to the
Closing
Date and will be in full force and effect.
(xvii) Except as set forth in the Offering Memorandum, there
is (A) (1) no action, suit, proceeding, inquiry or investigation
before
or by any court, arbitrator or governmental agency, body or
official,
domestic or foreign, now pending or (2) to the best knowledge of
KAT,
threatened or contemplated, to which KAT, or to the best knowledge
of
KAT, after due inquiry, the Issuer or any Subsidiary is or may be
a
party or to which the business, assets or property of KAT, the
Issuer
or any Subsidiary is or may be subject, and (B) no statute,
rule,
regulation or order that has been enacted, adopted or issued or, to
the
knowledge of the Issuer, that has been proposed by any
governmental
body or agency, domestic or foreign, and no injunction,
restraining
order or order of any nature by a federal or state court or
foreign
court of competent jurisdiction to which KAT, the Issuer or any
Subsidiary is or may be subject that could reasonably be
expected,
individually or in the aggregate, in the case of both clauses (A)
and
(B), (1) to interfere with or adversely affect the consummation of
any
of the Transactions, assuming, in the case of clause (A), such
action,
suit or proceeding is determined adversely to KAT, the Issuer or
any
Subsidiary or (2) to have a Material Adverse Effect. Every request
of
any securities authority or agency of any jurisdiction for
additional
information with respect to the Transactions that has been received
by
KAT, or to the best knowledge of KAT, after due inquiry, the Issuer
or
any Subsidiary or their counsel prior to the date hereof has been,
or
will prior to the Closing Date be, complied with in all
material
respects.
(xviii) (A) To the best knowledge of KAT, after due inquiry,
except as could not reasonably be expected to have a Material
Adverse
Effect, no labor disturbance by the employees of the Issuer or
any
Subsidiary exists or (B) to the best knowledge of KAT, is imminent,
and
none of the Issuers are aware of any existing or imminent labor
disturbance by the employees of any of its or any of the
Subsidiaries'
principal suppliers, manufacturers, customers or contractors,
which, in
either case, may reasonably be expected to result in a Material
Adverse
Effect.
-12-
<PAGE>
(xix) Except as described in the Offering Memorandum and
except such matters as would not, singly or in the aggregate,
result in
a Material Adverse Effect, KAT and, to the best knowledge of KAT,
after
due inquiry, the Issuer and its Subsidiaries (A) are not in
violation
of any federal, state, local or foreign statute, law, rule,
regulation,
ordinance, code, policy or rule of common law, including 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) or wildlife, including, without
limitation, laws and regulations relating to the release or
threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum
products
(collectively, "HAZARDOUS MATERIALS") or to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport
or handling of Hazardous Materials (collectively,
"ENVIRONMENTAL
LAWS"), (B) have all permits, authorizations and approvals
required
under any applicable Environmental Laws and are each in compliance
with
their requirements, (C) have no pending or threatened
administrative,
regulatory or judicial actions, suits, demands, demand letters,
claims,
liens, notices of noncompliance or violation, investigation, or
proceedings relating to any Environmental Law against it or them,
(D)
have experienced no events or circumstances that might reasonably
be
expected to form the basis of an order for clean-up or remediation,
or
an action, suit or proceeding by any private party or governmental
body
or agency, against or affecting it or them relating to
Hazardous
Materials or Environmental Laws and (E) has not assumed by contract
or
agreement any liabilities or obligations arising under any
Environmental Law including, without limitation, any such
liabilities
or obligations with respect to formerly owned, leased or operated
real
property or facilities, or former divisions or subsidiaries.
(xx) KAT and to the best knowledge of KAT, after due inquiry,
the Issuer and its Subsidiaries (A) possess such permits,
licenses,
approvals, consents and other authorizations (each an,
"AUTHORIZATION")
issued by the appropriate federal, state, local or foreign
regulatory
agencies or bodies necessary to conduct the business now operated
by
them, except where the failure to hold such Authorization would
not,
singly or in the aggregate, have a Material Adverse Effect, (B) are
in
compliance with the terms and conditions of any such
Authorization,
except where the failure so to comply would not, singly or in
the
aggregate, have a Material Adverse Effect, (C) possess all such
Authorizations are valid and in full force and effect, except where
the
invalidity of such Authorization or the failure of such
Authorization
to be in full force and effect would not have a Material Adverse
Effect
and (D) have not received any notice of proceedings relating to
the
revocation or modification of any such Authorization which, singly
or
in the aggregate, if the subject of an unfavorable decision, ruling
or
finding, would result in a Material Adverse Effect.
(xxi) To the best knowledge of KAT, after due inquiry, the
Issuer and each Subsidiary has good, valid and marketable title in
fee
simple to all items of owned real property and valid title to
all
personal property owned by each of them, in each case free and
clear of
any pledge, lien, encumbrance, security interest or other defect
or
claim of any third party, except (i) as created pursuant to the
Credit
Agreement and the Bank Security Documents, (ii) such as do not,
singly
or in the aggregate, materially and adversely affect the value of
such
property and do not interfere with the use made or proposed to be
made
-13-
<PAGE>
of such property by the Issuer or such Subsidiary to an extent
that
such interference could reasonably be expected to have a
Material
Adverse Effect, and (iii) liens described in the Offering
Memorandum.
To the best knowledge of KAT, after due inquiry, any real
property,
personal property and buildings held under lease or sublease
material
to the business of the Issuer and its Subsidiaries, considered as
one
enterprise, and under which the Issuer or any of its Subsidiaries
holds
properties described in the Offering Memorandum, are in full force
and
effect, and neither the Issuer nor any of its Subsidiaries has
any
notice of any material claim of any sort that has been asserted
by
anyone adverse to the rights of the Issuer or any of its
Subsidiaries
under any of the leases or subleases mentioned above, or affecting
or
questioning the rights of the Issuer or any of its Subsidiaries to
the
continued possession of the leased or subleased premises under any
such
lease or sublease. KAT owns no interest in any real property.
(xxii) To the best knowledge of KAT, after due inquiry, the
Issuer and each Subsidiary owns, possesses or can acquire on
reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other
unpatented
and/or unpatentable proprietary or confidential information,
systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, the "INTELLECTUAL
PROPERTY")
necessary to conduct the businesses operated by it as described in
the
Offering Memorandum, except where the failure to own, possess or
have
the right to employ such Intellectual Property, individually or in
the
aggregate, could not reasonably be expected to have a Material
Adverse
Effect. KAT owns no Intellectual Property. KAT and, to the best
knowledge of KAT, after due inquiry, neither the Issuer nor any
Subsidiary has received any notice of infringement of or conflict
with
(and neither knows of any such infringement or a conflict with)
asserted rights of others with respect to any of the foregoing
that
could reasonably be expected to have a Material Adverse Effect. To
the
best knowledge of KAT, after due inquiry, the use of the
Intellectual
Property in connection with the business and operations of the
Issuer
and the Subsidiaries does not infringe on the rights of any
person,
except for such infringement as could not reasonably be expected
to
have a Material Adverse Effect.
(xxiii) (A) KAT and to the best knowledge of KAT, after due
inquiry, the Issuer and its Subsidiaries have filed all federal,
state,
local and foreign tax returns that are required to be filed or
have
duly requested extensions thereof and have paid all taxes required
to
be paid by any of them and any related assessments, fines or
penalties,
except for any such tax, assessment, fine or penalty that is
being
contested in good faith and by appropriate proceedings and for
which
adequate reserves have been made in accordance with generally
