Purchase Agreement (2006)Full Document 

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NOVAR USA INC. To Be Merged With and Into CA INVESTMENT CORP. and Renamed CLARKE AMERICAN CORP. AND THE GUARANTORS LISTED ON SCHEDULE I HERETO $175,000,000 11 3/4% Senior Notes due 2013 Purchase Agreement December 8, 2005 BEAR, STEARNS & CO. INC. J.P. MORGAN SECURITIES INC. ================================================================================ NOVAR USA INC. To Be Merged With and Into CA INVESTMENT CORP. and Renamed CLARKE AMERICAN CORP. AND THE GUARANTORS LISTED ON SCHEDULE I HERETO $175,000,000 11 3/4% Senior Notes due 2013 PURCHASE AGREEMENT December 8, 2005 New York, New York BEAR, STEARNS & CO. INC. J.P. MORGAN SECURITIES INC. c/o Bear, Stearns & Co. Inc. 383 Madison Avenue New York, New York 10179 Ladies & Gentlemen: Novar USA Inc., a Delaware corporation (the "TARGET"), to be merged with and into CA Investment Corp., a Delaware corporation ("CAIC") in which CAIC will be the surviving entity (the "MERGER") and will be renamed Clarke American Corp., a Delaware corporation (the "COMPANY"), proposes to issue and sell to Bear, Stearns & Co. Inc. and J.P. Morgan Securities Inc. (each, an "INITIAL PURCHASER" and together, the "INITIAL PURCHASERS"), $175,000,000 in aggregate principal amount of 11 3/4% Senior Notes due 2013 (the "INITIAL NOTES"), subject to the terms and conditions set forth herein. The Notes (as defined) will be issued pursuant to an indenture (the "INDENTURE"), to be dated the Closing Date (as defined), among the Company, the Guarantors (as defined) listed on Schedule I hereto, and The Bank of New York, as trustee (the "TRUSTEE"). The Notes will be fully and unconditionally guaranteed (the "GUARANTEES") as to payment of principal, interest, premium and liquidated damages, if any, on a senior unsecured basis, jointly and severally by each entity listed on Schedule I hereto (the "GUARANTORS"). The Notes are being issued and sold in connection with the acquisition (the "ACQUISITION") by M&F Worldwide Corp., a Delaware corporation, ("M&F") of all of the outstanding stock of the Target, pursuant to the Stock Purchase Agreement, dated as of October 31, 2005 (the "ACQUISITION AGREEMENT"). Upon the consummation of the Acquisition, all of the Target's outstanding capital stock will be owned directly or indirectly by M&F. In order to pay for the Acquisition and pay related fees and expenses, (i) the Company and the Guarantors expect to enter into a new senior secured credit facility in the amount of $480.0 million (the "NEW SENIOR CREDIT FACILITY") pursuant to a credit agreement among the Company, the Guarantors party thereto and the lenders party thereto (the "CREDIT AGREEMENT"), (ii) the Company expects to issue and to become obligated under the Notes and (iii) M&F will make a cash contribution of $203.0 million to the common equity capital of CAIC (the "EQUITY CONTRIBUTION"). As used herein, the term "the TRANSACTIONS" means collectively (w) offering the Initial Notes, (x) entering into the New Senior Credit Facility, (y) the Acquisition and (z) the Merger. In addition, on the Closing Date, the Company and the Guarantors will agree to become bound by this Agreement pursuant to the First Amendment to the Purchase Agreement, dated as of the date hereof, among the Company, the Guarantors and the Initial Purchasers, substantially in the form attached hereto as Exhibit A (the "FIRST AMENDMENT"). The representations, warranties and agreements of the Company and the Guarantors under this Agreement shall not become effective until the Company and the Guarantors execute the First Amendment, at which time such representations, warranties and agreements shall become effective and each of the Company and the Guarantors shall become party to this Agreement. 1. Issuance of Securities. Target, to be merged with and into CAIC in the Merger and renamed Clarke American Corp., proposes, upon the terms and subject to the conditions set forth herein, to issue and sell to the Initial Purchasers an aggregate of $175,000,000 in principal amount of Initial Notes. The Initial Notes and the Exchange Notes (as defined) issuable in exchange therefor are collectively referred to herein as the "NOTES." Upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Securities Act of 1933, as amended (the "ACT"), the Initial Notes (and all securities issued in exchange therefor or in substitution thereof other than the Exchange Notes) shall bear the following legend: "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (a) (1), (2), (3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR")) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN 2 OPINION OF COUNSEL ACCEPTABLE TO CLARKE AMERICAN CORP. THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND BASED UPON AN OPINION OF COUNSEL IF CLARKE AMERICAN CORP. SO REQUESTS, (2) TO CLARKE AMERICAN CORP. OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE." 2. Offering. The Initial Notes will be offered and sold to the Initial Purchasers pursuant to an exemption from the registration requirements under the Act. CAIC and the Target have prepared a preliminary offering memorandum, dated November 25, 2005 (the "PRELIMINARY OFFERING MEMORANDUM"), and a final offering memorandum, dated December 8, 2005 (the "OFFERING MEMORANDUM"), relating to the Company, its subsidiaries and the Notes. The Initial Purchasers have advised CAIC and the Target that the Initial Purchasers will make offers (the "EXEMPT RESALES") of the Initial Notes 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" ("QIBS"), as defined in Rule 144A under the Act and (ii) non-U.S. persons outside the United States in reliance upon Regulation S ("REGULATION S") under the Act (each, a "REG S INVESTOR"). The QIBs and the Reg S Investors are collectively referred to herein as the "ELIGIBLE PURCHASERS." The Initial Purchasers will offer the Initial Notes to such Eligible Purchasers initially at a price equal to 100.0% of the principal amount thereof. Such price may be changed at any time without notice. Holders (including subsequent transferees) of the Initial Notes will have the registration rights set forth in the registration rights agreement relating thereto (the "REGISTRATION RIGHTS AGREEMENT"), among the Initial Purchasers, the Guarantors and the Company, to be dated the Closing Date, for so long as such Initial Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Company and the Guarantors will agree to file with the Securities and Exchange Commission (the "COMMISSION"), under the circumstances set forth therein, (i) a registration statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to the Company's 11 3/4% Senior Notes due 2013 (the "EXCHANGE NOTES") and Guarantees thereof to be offered in exchange for the Initial Notes and Guarantees thereof (the "EXCHANGE OFFER") and (ii) under certain circumstances, 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 Initial Notes and the Guarantees thereof, and to use their commercially reasonable efforts to cause such Registration Statements to be declared effective and to consummate the Exchange Offer. This Agreement (including the First Amendment), the Initial Notes, the Guarantees of the Initial Notes, the Exchange Notes, the Guarantees of the Exchange Notes, the Indenture, the Registration Rights Agreement, the Credit Agreement and the Acquisition Agreement are hereinafter referred to collectively as the "OPERATIVE DOCUMENTS." 3 3. Purchase, Sale and Delivery. (a) On the basis of the representations, warranties and covenants contained in this Agreement, and subject to its terms and conditions, CAIC agrees to issue and sell to each Initial Purchaser, and each Initial Purchaser agrees, severally and not jointly, to purchase from CAIC, the principal amount of Initial Notes set forth opposite such Initial Purchaser's name on Schedule II hereto. The purchase price for the Initial Notes will be $975.00 per $1,000 principal amount of Initial Notes. (b) Delivery of the Initial Notes shall be made, against payment of the purchase price therefor, at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, New York or such other location as may be mutually acceptable. Such delivery and payment shall be made at 9:00 a.m., New York City time, on December 15, 2005 or at such other time as shall be agreed upon by the Initial Purchasers and the CAIC. The time and date of such delivery and payment are herein called the "CLOSING DATE." (c) On the Closing Date, one or more Initial Notes in definitive global form, registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), having an aggregate amount corresponding to the aggregate principal amount of the Initial Notes (the "GLOBAL NOTES") sold pursuant to Exempt Resales to Eligible Purchasers shall be delivered by the Company to the Initial Purchasers (or as the Initial Purchasers direct), against payment by the Initial Purchasers of the purchase price therefor, by wire transfer of same day funds, to an account designated by CAIC; provided that CAIC shall give at least one business day's prior written notice to the Initial Purchasers of the information required to effect such wire transfer. The Global Notes shall be made available to the Initial Purchasers for inspection not later than 5:00 p.m., New York City time, on the business day preceding the Closing Date. 4. Agreements of CAIC, the Company and the Guarantors. As of the date hereof, CAIC, and as of the Closing Date, the Company and each Guarantor, jointly and severally, covenants and agrees with the Initial Purchasers as follows: (a) To advise the Initial Purchasers promptly and, if requested by the Initial Purchasers, confirm such advice in writing (i) of the issuance by any state securities commission or other regulatory authority of any stop order or order suspending the qualification or exemption from qualification of any Notes or the Guarantees thereof for offering or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any state securities commission or other regulatory authority and (ii) of the happening of any event that makes any statement of a material fact made in the Preliminary Offering Memorandum or the Offering Memorandum untrue or that requires the making of any additions to or changes in the Preliminary Offering Memorandum or the Offering Memorandum in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. CAIC, the Company and the Guarantors shall use their respective commercially reasonable efforts to prevent the issuance of any stop order or order suspending the qualification or exemption from qualification of any Note or the Guarantees thereof under any state securities or Blue Sky laws and, if at any time any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of any Note or the Guarantees thereof under any state securities or Blue Sky laws, CAIC, the Company and the Guarantors shall use their respective commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest practicable time. 4 (b) To furnish the Initial Purchasers and those persons identified by the Initial Purchasers to CAIC or the Company, without charge, 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. CAIC, the Company and the Guarantors consent to the use of the Preliminary Offering Memorandum and the Offering Memorandum, and any amendments and supplements thereto required pursuant hereto, by the Initial Purchasers in connection with Exempt Resales. (c) Not to amend or supplement the Preliminary Offering Memorandum or the Offering Memorandum during such period that, in the opinion of counsel for the Initial Purchasers, the Preliminary Offering Memorandum or the Offering Memorandum is required by law to be delivered in connection with Exempt Resales and in connection with market-making activities of the Initial Purchasers for so long as any Initial Notes are outstanding unless the Initial Purchasers previously have been advised thereof and have not objected thereto within a reasonable time after being furnished a copy thereof. CAIC, the Company and the Guarantors shall promptly prepare, upon the Initial Purchasers' request, any amendment or supplement to the Preliminary Offering Memorandum or the Offering Memorandum that may be necessary or advisable in connection with such Exempt Resales or such market making activities.
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