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Exhibit 10.1
SPARKLING SPRING WATER GROUP LIMITED
$100,000,000
11 1/2% SENIOR SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
November 14, 1997
BT Alex. Xxxxx Incorporated
NatWest Capital Markets Limited
c/o BT Alex. Xxxxx Incorporated
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Sparkling Spring Water Group Limited, a corporation organized under
the laws of the Province of Nova Scotia, Canada (the "Issuer" or the "Company"),
and each of the Guarantors (as defined) hereby confirm their agreement with you
(the "Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Issuer proposes to issue and sell to the Initial Purchasers
$100,000,000 aggregate principal amount of the Issuer's 11 1/2% Senior
Subordinated Notes due 2007 (the "Notes"). The Notes will be guaranteed
(collectively, the "Guarantees") on a senior subordinated basis by each of the
Issuer's subsidiaries listed on the signature pages hereof (collectively, and
together with any subsidiary that in the future executes a supplemental
indenture pursuant to which such subsidiary agrees to guarantee the Notes, the
"Guarantors"). The Notes and the Guarantees are collectively referred to herein
as the "Securities." The Securities are to be issued under an indenture (the
"Indenture") dated the Closing Date (as defined below) by and among the Issuer,
the Guarantors and Bankers Trust Company, as trustee (the "Trustee").
The Securities will be offered and sold to you without being
registered under the Securities Act of 1933, as amended (the "Act"), in reliance
on exemptions therefrom and pursuant to exemptions from the prospectus and
registration requirements of the Securities Act (Nova Scotia).
In connection with the sale of the Securities, the Issuer has
prepared a preliminary offering memorandum dated October 30, 1997 (the
"Preliminary Memorandum") and a final offering memorandum dated November 14,
1997 (the "Final
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Memorandum," the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "Memorandum") setting forth or including a description of
the terms of the Securities, the terms of the offering of the Securities, a
description of the Issuer and the Guarantors and any material developments
relating to the Issuer and the Guarantors occurring after the date of the most
recent historical financial statements included therein.
The Issuer understands that the Initial Purchasers propose to make
an offering of the Securities on the terms and in the manner set forth in the
Final Memorandum and Section 8 hereof as soon as the Initial Purchasers deem
advisable after this Purchase Agreement (this "Agreement") has been executed and
delivered, to certain persons in the United States whom the Initial Purchasers
reasonably believe to be qualified institutional buyers ("Qualified
Institutional Buyers" or "QIBs") as defined in Rule 144A under the Act, as such
rule may be amended from time to time ("Rule 144A"), in transactions under Rule
144A, to a limited number of other institutional "accredited investors"
("Accredited Investors") as defined in Rule 501(a)(1), (2), (3) and (7) under
Regulation D under the Act ("Regulation D") in private sales exempt from
registration under the Act, and outside the United States to certain persons in
reliance on Regulation S under the Act ("Regulation S").
The Initial Purchasers and their direct and indirect transferees of
the Securities will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement"), pursuant to which the Issuer and the
Guarantors have agreed, among other things, to file a registration statement
(the "Registration Statement") with the Securities and Exchange Commission (the
"Commission") registering the Exchange Notes (as defined in the Registration
Rights Agreement) under the Act. This Agreement, the Notes, the Exchange Notes,
the Private Exchange Notes (as defined in the Registration Rights Agreement),
the Guarantees, the Indenture and the Registration Rights Agreement are
hereinafter referred to collectively as the "Operative Documents."
2. Representations and Warranties of the Issuer and the Guarantors.
The Issuer and each of the Guarantors, jointly and severally, represents and
warrants to and agrees with each of the Initial Purchasers that:
(a) Neither the Preliminary Memorandum as of the date thereof nor
the Final Memorandum nor any amendment or supplement thereto as of the
date thereof and at all times subsequent thereto up to the Closing Date
(as defined in Section 3 below) contained or will contain any untrue
statement of a material fact or omitted or will omit to state a material
fact necessary to make the statements
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therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this Section 2(a) do not apply to statements or omissions made in reliance
upon and in conformity with information relating to any of the Initial
Purchasers furnished to the Issuer in writing by the Initial Purchasers
expressly for use in the Preliminary Memorandum, the Final Memorandum or
any amendment or supplement thereto. The Preliminary Memorandum, the Final
Memorandum and each amendment or supplement thereto complies or will
comply in all material respects with the Act.
(b) As of the Closing Date, the Issuer will have the authorized,
issued and outstanding capitalization set forth in the Final Memorandum;
all of the outstanding shares of capital stock of the Issuer and each of
the Guarantors have been, and as of the Closing Date will be, duly
authorized and validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights; except as set
forth in the Final Memorandum, all of the outstanding shares of capital
stock of the Guarantors will be owned, directly or indirectly, by the
Issuer, free and clear of all liens, encumbrances, equities and claims or
restrictions on transferability (other than those imposed by the Act and
the securities or "Blue Sky" laws of certain jurisdictions) or voting;
except as set forth in the Final Memorandum, there are no (i) options,
warrants or other rights to purchase, (ii) agreements or other obligations
to issue or (iii) other rights to convert any obligation into, or exchange
any securities for, shares of capital stock of or ownership interests in
the Issuer or any of the Guarantors outstanding. Except for the Issuer's
direct and indirect interests in the Guarantors, the Issuer does not own,
directly or indirectly, any shares of capital stock or any other equity or
long-term debt securities or have any equity interest in any firm,
partnership, joint venture or other entity other than as described in the
Final Memorandum.
(c) Each of the Issuer and the Guarantors is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization and has all requisite corporate or other power and authority
to own its properties and conduct its business as now conducted and as
described in the Final Memorandum; each of the Issuer and the Guarantors
is duly qualified to do business as a foreign or extra-provincial
corporation and is in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse
effect on the general affairs, management, business,
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condition (financial or otherwise), prospects or results of operations of
the Issuer and each of its subsidiaries (each, a "Subsidiary" and
collectively, the "Subsidiaries"), taken as a whole (any such event, a
"Material Adverse Effect").
(d) Each of the Issuer and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Operative Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby, including,
without limitation, the power and authority to issue, sell and deliver the
Securities as contemplated by this Agreement. The Notes, when issued, will
be in the form contemplated by the Indenture. The Notes, the Exchange
Notes and the Private Exchange Notes have each been duly and validly
authorized by the Issuer and, when executed by the Issuer and
authenticated by the Trustee in accordance with the provisions of the
Indenture and, in the case of the Notes, when delivered to and paid for by
the Initial Purchasers in accordance with the terms of this Agreement,
will have been duly executed, issued and delivered and will constitute
valid and legally binding obligations of the Issuer (assuming the due
authorization, execution and delivery of the Indenture by the Trustee and
the due authorization and delivery of the Notes by the Trustee in
accordance with the Indenture), entitled to the benefits of the Indenture,
and enforceable against the Issuer in accordance with their terms, except
that the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and
(ii) general principles of equity and the discretion of the court before
which any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(e) The Guarantees have been duly and validly authorized by each
Guarantor, and when executed and delivered by such Guarantors, will
constitute the valid and legally binding obligations of such Guarantors,
entitled to the benefits of the Indenture, enforceable against each of
them in accordance with their terms, except that the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(f) Each of the Issuer and the Guarantors has all
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requisite corporate power and authority to execute, deliver and perform
its obligations under the Indenture. The Indenture meets the requirements
for qualification under the Trust Indenture Act of 1939, as amended (the
"TIA"). The Indenture has been duly and validly authorized by each of the
Issuer and the Guarantors and, when executed and delivered in accordance
with its terms (assuming the due authorization, execution and delivery by
the Trustee), will have been duly executed and delivered and will
constitute a valid and legally binding agreement of each of the Issuer and
the Guarantors, enforceable against each of them in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity and the discretion
of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in
equity or at law).
(g) Each of the Issuer and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Registration Rights Agreement. The Registration
Rights Agreement has been duly and validly authorized by each of the
Issuer and the Guarantors and, when executed and delivered by each of the
Issuer and the Guarantors (assuming due authorization, execution and
delivery by the Initial Purchasers), will have been duly executed and
delivered and will constitute a valid and legally binding agreement of
each of the Issuer and the Guarantors, enforceable against each of them in
accordance with its terms, except that (A) the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and (B) any rights to
indemnity or contribution thereunder may be limited by U.S. or Canadian
federal, state or provincial securities laws.
(h) Each of the Issuer and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. This Agreement and the consummation by the Issuer and
the Guarantors of the transactions contemplated hereby have been duly and
validly authorized by each of the Issuer and the Guarantors. This
Agreement has been duly executed and
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delivered by each of the Issuer and the Guarantors and constitutes a valid
and legally binding agreement of each of the Issuer and the Guarantors,
enforceable against each of them in accordance with its terms, except that
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such enforcement
is considered in a proceeding in equity or at law).
(i) No consent, waiver, approval, authorization or order of, or
filing, registration, qualification, license or permit of or with, any
court or governmental agency or body, or third party is required for the
performance of this Agreement or any other Operative Document by the
Issuer and the Guarantors or the consummation by them of the other
transactions contemplated hereby or thereby, except such (i) as have been
obtained or made, (ii) as may be required under state securities or "Blue
Sky" laws in connection with the purchase and resale of the Securities by
the Initial Purchasers, and (iii) as may be required in connection with
the registration of the Securities, Exchange Notes and Private Exchange
Notes, as the case may be, pursuant to the Registration Rights Agreement
and the qualification of the Indenture under the TIA and (iv) the failure
of which to obtain could not have, individually or in the aggregate, a
Material Adverse Effect. Neither the Issuer nor any of the Guarantors is
(i) in violation of its constating documents, certificate of incorporation
or bylaws (or similar organization documents), (ii) in breach or violation
of any statute, judgment, decree, order, rule or regulation applicable to
any of them or any of their respective properties or assets, or (iii) in
breach of or in default under (nor has any event occurred which, with
notice or passage of time or both, would constitute a default under) or in
violation of any of the terms or provisions of any indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate, contract or other agreement or instrument to which
any of them is a party or to which their respective properties or assets
are subject (collectively, "Contracts"), except in the case of clauses
(ii) and (iii) above for any such breaches, defaults, violations or events
which would not, individually or in the aggregate, have a Material Adverse
Effect. Neither the Issuer nor any Guarantor has received any notice or
claim of any default or event, condition or omission which with notice or
lapse of time or both would result in a default under any of their
respective Contracts, including those referred to in the Final Memorandum,
or any
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Operative Document to which it is a party or has knowledge of any breach
of any of such Contracts by the other party or parties thereto, except
such defaults or breaches which would not, individually or in the
aggregate, have a Material Adverse Effect.
(j) The execution, delivery and performance by the Issuer and the
Guarantors of each of the Operative Documents (to the extent a party
thereto) and the consummation of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and sale of the
Securities to the Initial Purchasers), and the fulfillment of the terms
hereof and thereof, will not conflict with or constitute or result in a
breach of or a default under (or an event which with notice or passage of
time or both would constitute a default under) or violation of or cause an
acceleration of any obligation under, or result in the imposition or
creation of (or the obligation to create or impose) a lien on any property
or assets of the Issuer or any Guarantor with respect to (i) the terms or
provisions of any Contract; (ii) the constating documents, certificate of
incorporation or bylaws (or similar organizational documents) of the
Issuer or any of the Guarantors; or (iii) (assuming compliance with all
applicable state securities or "Blue Sky" laws and assuming the accuracy
of the representations and warranties of the Initial Purchasers in Section
8 hereof) any statute, judgment, decree, order, rule or regulation of any
court or governmental agency or body applicable to the Issuer, the
Guarantors or any of their respective properties or assets.
(k) Each of the Operative Documents conforms in all material
respects to the description thereof in the Final Memorandum.
(l) The consolidated financial statements of the Issuer and the
related notes thereto included in the Final Memorandum present fairly the
consolidated financial position, results of operations and cash flows of
the Issuer at the dates and for the periods to which they relate and have
been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis, except as otherwise
stated therein, and comply in all material respects with the applicable
accounting requirements of the Act and the rules and regulations
thereunder. The financial statements of Canadian Springs Water Company
Ltd. ("CS"), Cullyspring Water Co., Inc. ("Cullyspring"), D&D and Company,
Inc. ("D&D") and Marlborough Employment Limited and Subsidiaries
("Marlborough"), including, in each case, the related notes thereto,
included in the Final Memorandum (i) presently fairly the financial
position, results of operations and
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cash flows of CS, Cullyspring, D&D and Marlborough, respectively, at the
dates and for the periods to which they relate, (ii)(except Marlborough)
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis, except as otherwise
stated therein, and (iii) comply in all material respects with the
applicable requirements of the Act and the rules and regulations
thereunder. The Final Memorandum contains all financial statements and
other financial information required under the Act, including, without
limitation, under Rules 3-01, 3-05, 3-10 and 11-02 of Regulation S-X. The
summary and selected financial and statistical data included in the Final
Memorandum present fairly the information shown therein and have been
prepared and compiled on a basis consistent with the audited financial
statements included therein, except as otherwise stated therein, and
comply in all material respects with the applicable accounting
requirements of the Act and the rules and regulations thereunder. Each of
Ernst & Young and Kidsons Impey is an independent public accounting firm
as required by the Act and the rules and regulations thereunder.
(m) (i) The pro forma financial statements (including the notes
thereto) and the other pro forma financial information included in the
Final Memorandum (A) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (B) have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and (C) have been properly
computed on the bases described therein, and (ii) the assumptions used in
the preparation of the pro forma financial statements and other pro forma
financial information included in the Final Memorandum are reasonable and
the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(n) There is not pending or, to the best knowledge of the Issuer and
each of the Guarantors, threatened any action, suit, proceeding, inquiry
or investigation to which the Issuer or any of the Guarantors is a party,
or to which any of their respective properties or assets are subject,
before or brought by any court, arbitrator or governmental agency or body,
which, if determined adversely to the Issuer or any such Guarantor, would,
individually or in the aggregate, have a Material Adverse Effect, or which
seeks to restrain, enjoin, prevent the consummation of or otherwise
challenge the issuance or sale of the Securities to be sold hereunder or
the anticipated application of the proceeds therefrom or the consummation
of the other transactions
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contemplated by the Operative Documents.
(o) Each of the Issuer and the Guarantors owns or possesses adequate
licenses or other rights to use all patents, trademarks, service marks,
trade names, copyrights and know-how necessary to conduct the businesses
now or proposed to be operated by it as described in the Final Memorandum,
and neither the Issuer nor any of the Guarantors has received any notice
of infringement of or conflict with (or knows of any such infringement of
or conflict with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how which, if
such assertion of infringement or conflict were sustained, would,
individually or in the aggregate, have a Material Adverse Effect.
(p) Each of the Issuer and the Guarantors possesses all licenses,
permits, certificates, consents, orders, approvals, exemptions and other
authorizations from, and has made all declarations and filings with, all
federal, provincial, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals presently
required or necessary to own or lease, as the case may be, and to operate
its properties and to carry on its business as set forth in the Final
Memorandum ("Permits"), except where the failure to obtain such Permits
would not, individually or in the aggregate, have a Material Adverse
Effect; each of the Issuer and the Guarantors has fulfilled and performed
all of its material obligations with respect to such Permits and no event
has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or which could result in any other
material impairment of the rights of the holder of any such Permit, except
where such revocation, termination or impairment would not, individually
or in the aggregate, have a Material Adverse Effect; and neither the
Issuer nor any Guarantor has received any notice of any proceeding
relating to revocation or modification of any such Permit, except where
such revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect.
(q) Since the respective dates as of which information is given in
the Final Memorandum, except as described therein, there has been no
material adverse change or any fact or event known to the Issuer or any of
the Guarantors which could reasonably be expected to result in a material
adverse change, in the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the Issuer
and the Subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, or any loss of, or
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damage to, properties (whether or not insured) which could reasonably be
expected to affect materially and adversely the general affairs,
management, business, condition (financial or otherwise), prospects or
results of operations of the Issuer and the Subsidiaries taken as a whole.
Since the date of the latest balance sheet of the Issuer presented in the
Final Memorandum, except as expressly disclosed in the Final Memorandum,
neither the Issuer nor any of the Guarantors has (i) incurred or
undertaken any liabilities or obligations, direct or contingent, that are
material to the Issuer and the Subsidiaries taken as a whole other than in
the ordinary course of business consistent with past practice, (ii)
entered into any transaction or contract not in the ordinary course of
business and consistent with past practice, (iii) declared or paid any
dividend or made any distribution on any shares of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
otherwise acquire any shares of its capital stock or (iv) effected any
change in the capital stock or long-term indebtedness of the Issuer or any
of the Guarantors.
(r) Each of the Issuer and the Guarantors has filed all necessary
federal, provincial, state and foreign income, franchise and other tax
returns, except where the failure to so file such returns would not,
individually or in the aggregate, have a Material Adverse Effect, and has
paid all taxes shown as due thereon; and other than tax deficiencies which
the Issuer or any of the Guarantors is contesting in good faith and for
which the Issuer or such Guarantor has provided adequate reserves in
accordance with United States generally accepted accounting principles,
there is no tax deficiency that has been asserted against the Issuer or
any Guarantor that would, individually or in the aggregate, have a
Material Adverse Effect.
(s) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Issuer believes
to be reliable and accurate.
(t) Neither the Issuer nor any of the Guarantors nor any agent
acting on their behalf has taken or will take any action that might cause
this Agreement or the sale of the Securities to violate Regulation G, T, U
or X of the Board of Governors of the Federal Reserve System, in each case
as in effect, or as the same may hereafter be in effect, on the Closing
Date.
(u) Each of the Issuer and the Guarantors has good title to all
personal property described in the Final Memorandum as being owned by it,
good and marketable title to all real property described in the Final
Memorandum as
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being owned by it and good and valid title to a leasehold estate in the
real and personal property described in the Final Memorandum as being
leased by it, in each case, free and clear of all liens, charges,
encumbrances or restrictions except as described in the Final Memorandum
or to the extent the failure to have such title or the existence of such
liens, charges, encumbrances or restrictions would not, individually or in
the aggregate, have a Material Adverse Effect. All leases, contracts and
agreements to which the Issuer or any Guarantor is a party or by which the
Issuer or such Guarantor is bound are valid and enforceable against the
Issuer or such Guarantor (as the case may be), to the knowledge of the
Issuer are valid and enforceable against the other party or parties
thereto and are in full force and effect with only such exceptions as
would not, individually or in the aggregate, have a Material Adverse
Effect.
(v) There are no legal or governmental proceedings involving or
affecting the Issuer, any of the Guarantors or any of their respective
properties or assets which would be required to be described in a
prospectus contained in a registration statement on Form S-1 pursuant to
the Act that are not described in the Final Memorandum, nor are there any
material contracts or other documents which would be required to be
described in a prospectus contained in a registration statement on Form
S-1 pursuant to the Act that are not described in the Final Memorandum.
(w) Except as described in the Final Memorandum or as would not,
individually or in the aggregate, have a Material Adverse Effect, (A) each
of the Issuer and the Guarantors is in compliance with and not subject to
liability under applicable Environmental Laws, (B) each of the Issuer and
the Guarantors has made all filings and provided all notices required
under applicable Environmental Laws and possesses and is in compliance
with all Permits required under applicable Environmental Laws, and each
such filing, notice and Permit is in full force and effect, (C) there is
no civil, criminal or administrative action, suit, demand, claim, hearing,
notice of violation, investigation, proceeding, notice or demand letter or
request for information pending or, to the knowledge of the Issuer or any
of the Guarantors, threatened against the Issuer or any Guarantor under
any Environmental Law, (D) no lien, charge, encumbrance or restriction has
been recorded under any Environmental Law with respect to any assets,
facility or property owned, operated, leased or controlled by the Issuer
or any Guarantor, (E) neither the Issuer nor any Guarantor has received
notice that it has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), or any comparable state or
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foreign law and (F) no property or facility of the Issuer or any Guarantor
is (i) listed or proposed for listing on the National Priorities List
under CERCLA or (ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated pursuant to
CERCLA, or on any comparable list maintained by any state or local
governmental authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, provincial, state, local and
foreign laws or regulations, codes, orders, decrees, judgments or
injunctions issued, promulgated, approved or entered thereunder, relating
to pollution or protection of public or employee health and safety or the
environment, including, without limitation, laws relating to (i)
emissions, discharges, releases or threatened releases of Hazardous
Materials into the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata), (ii)
the manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport or handling of Hazardous Materials, and (iii)
underground and aboveground storage tanks, and related piping, and
emissions, discharges, releases or threatened releases therefrom.
For purposes of this Agreement, "Hazardous Materials" means any
substance, chemical, compound, product, solid, gas, liquid, waste,
byproduct, pollutant, contaminant or material which is defined, classified
or regulated as "hazardous" or "toxic" pursuant to Environmental Laws and
includes, without limitation, asbestos, polychlorinated biphenyls and
petroleum (including crude oil or any fraction thereof).
(x) There is no strike, labor dispute, slowdown or work stoppage
with the employees of the Issuer or the Guarantors which is pending or, to
the knowledge of the Issuer or any of the Guarantors, threatened.
(y) Each of the Issuer and the Guarantors carries insurance in such
amounts and covering such risks as is adequate for the conduct its
business and the value of its properties.
(z) Neither the Issuer nor any Guarantor has any liability for any
prohibited transaction within the meaning of Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or funding
deficiency within the meaning of Section 302 of ERISA or any complete or
partial withdrawal liability under Title IV of ERISA with respect to any
pension, profit sharing or other plan which is subject to ERISA to which
the Issuer or any Xxxxxxxxx
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makes or ever has made a contribution and in which any employee of the
Issuer or any Guarantor is or has ever been a participant. With respect to
such plans, each of the Issuer and the Guarantors is in compliance in all
material respects with all applicable provisions of ERISA.
(aa) Each of the Issuer and the Guarantors (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(bb) None of the Issuer or any Guarantor is or will be an
"investment company" or "promoter" or "principal underwriter" for an
"investment company," as such terms are defined in the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder.
(cc) No holder of securities of the Issuer or any Guarantor (other
than the Registrable Notes (as defined in the Registration Rights
Agreement)) will be entitled to have such securities registered under the
registration statements required to be filed by the Issuer pursuant to the
Registration Rights Agreement.
(dd) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable
value of the assets of each of the Issuer and the Guarantors will exceed
the sum of its stated liabilities and identified contingent liabilities
(after giving effect, in the case of each of the Guarantors, to the
limitations contained in each Guarantee); neither the Issuer nor any of
the Guarantors is, or will be after giving effect to the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, (a) left with unreasonably small capital
with which to carry on its business as it is proposed to be conducted, (b)
unable to pay its debts (contingent or otherwise) as they mature or (c)
otherwise insolvent.
(ee) Neither the Issuer nor any of the Guarantors nor any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D) has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of any "security" (as
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defined in the Act) which is or could be integrated with the sale of the
Securities in a manner that would require the registration under the Act
of the Securities,(ii) engaged in any form of general solicitation or
general advertising (as those terms are used in Regulation D) in
connection with the offering of the Securities or in any manner involving
a public offering within the meaning of Section 4(2) of the Act or (iii)
sold pursuant to a transaction or series of transactions involving a
purchase and sale or a repurchase and resale of Securities in the course
of or incidental to a "distribution" (as defined in the Securities Act
(Nova Scotia)).
(ff) Assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 8 hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Initial Purchasers in the manner contemplated by this Agreement to
register any of the Securities under the Act or to qualify the Indenture
under the TIA.
(gg) No securities of the Issuer are of the same class (within the
meaning of Rule 144A under the Act) as the Securities and 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.
(hh) Neither the Issuer nor any Guarantor has taken, nor will take,
directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation
of the price of the Securities.
(ii) Neither the Issuer nor any Guarantor, nor any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D) or any
person acting on any of their behalf (other than the Initial Purchasers as
to which the Issuer and the Guarantors make no representation) has engaged
in any directed selling efforts (as that term is defined in Regulation S)
with respect to the Securities; the Issuer and its Affiliates and any
person acting on any of their behalf (other than the Initial Purchasers as
to which the Issuer and the Guarantors make no representation) have
complied with the offering restrictions requirement of Regulation S.
(jj) Neither the Issuer nor any Guarantor or any of their respective
affiliates 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 1985, as amended, and all regulations promulgated thereunder.
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3. Purchase, Sale and Delivery of the Securities. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuer and the
Guarantors agree to issue and sell to the Initial Purchasers, and each of the
Initial Purchasers agrees, acting severally and not jointly, to purchase the
Notes (including the related Guarantees), at 97.225% of their principal amount,
in the respective principal amounts set forth opposite their names on Schedule I
hereto.
One or more certificates in definitive form for the Securities that
the Initial Purchasers have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Initial Purchasers request upon notice to the Issuer at least 36 hours prior to
the Closing Date, shall be delivered by or on behalf of the Issuer to the
Initial Purchasers, against payment by or on behalf of the Initial Purchasers of
the purchase price therefor by wire transfer of immediately available funds
payable to such account or accounts as the Issuer shall specify prior to the
Closing Date, or by such means as the parties hereto shall agree prior to the
Closing Date. Such delivery of and payment for the Securities shall be made at
the offices of Winston & Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00
A.M., New York time, on November 19, 1997, or at such other place, time or date
as the Initial Purchasers and the Issuer may agree upon, such time and date of
delivery against payment being herein referred to as the "Closing Date." The
Issuer will make such certificate or certificates for the Securities available
for checking and packaging by the Initial Purchasers at the offices of BT Alex.
Xxxxx Incorporated in New York, New York or such other place as BT Alex. Xxxxx
Incorporated may designate, at least 24 hours prior to the Closing Date. The
Issuer agrees to pay any transfer taxes payable in connection with the initial
delivery to the Initial Purchasers of the Securities.
4. Offering by the Initial Purchasers. The Initial Purchasers,
directly or through affiliates, propose to make an offering of the Securities at
the price and upon the terms set forth in the Final Memorandum as soon as
practicable after this Agreement is entered into and as in the sole judgment of
the Initial Purchasers is advisable.
5. Covenants of the Issuer and the Guarantors. The Issuer and each
of the Guarantors covenant and agree with each of the Initial Purchasers that:
(a) The Issuer will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchasers and
counsel to the Initial Purchasers shall not previously have been advised
and furnished a copy for a reasonable period of time prior to the proposed
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amendment or supplement and as to which the Initial Purchasers shall not
have given their consent, which consent shall not be unreasonably
withheld. The Issuer will promptly, upon the reasonable request of the
Initial Purchasers or counsel for the Initial Purchasers, make any
amendments or supplements to the Preliminary Memorandum or the Final
Memorandum that may be necessary or advisable in connection with the
resale of the Securities by the Initial Purchasers.
(b) The Issuer and the Guarantors will cooperate with the Initial
Purchasers in arranging for the qualification of the Securities for
offering and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Initial Purchasers may designate and will continue
such qualification in effect for as long as may be necessary to complete
the resale of the Securities by the Initial Purchasers; provided, however,
that in connection therewith, the Issuer and the Guarantors shall not be
required to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction or subject the Issuer or
any Guarantor to any tax in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchasers of the Notes or the Private Exchange Notes, any
event occurs or information becomes known as a result of which the Final
Memorandum as then amended or supplemented would include an untrue
statement of a material fact, or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if for any other reason it is
necessary at any time to amend or supplement the Final Memorandum in order
to comply with applicable law, the Issuer will promptly notify the Initial
Purchasers thereof and will prepare, at the Issuer's expense, an amendment
or supplement to the Final Memorandum that corrects such statement or
omission or effects such compliance.
(d) The Issuer will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) The Issuer will apply the net proceeds from the sale of the
Securities substantially as set forth under "Use of Proceeds" in the Final
Memorandum.
(f) For so long as any Securities remain outstanding,
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the Issuer will furnish to the Initial Purchasers copies of all reports
and other communications (financial or otherwise) furnished by the Issuer
to the Trustee or the holders of the Securities and, as soon as available,
copies of any reports or financial statements furnished to or filed by the
Issuer with the Commission or any national securities exchange on which
any class of securities of the Issuer may be listed.
(g) Prior to the Closing Date, the Issuer will furnish to the
Initial Purchasers, as soon as they have been prepared by or are available
to the Issuer, a copy of any unaudited interim consolidated financial
statements of the Issuer for any period subsequent to the period covered
by its most recent financial statements appearing in the Final Memorandum.
(h) None of the Issuer, the Guarantors or any of their respective
Affiliates will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any "security" (as defined in the Act) that could
be integrated with the sale of the Securities in a manner that would
require the registration under the Act of the Securities.
(i) None of the Issuer or any Guarantor will engage in any form of
general solicitation or general advertising (as those terms are used in
Regulation D) in connection with the offering of the Securities or in any
manner involving a public offering within the meaning of Section 4(2) of
the Act.
(j) For so long as any of the Securities remain outstanding, the
Issuer will make available at its expense, upon request, to any holder of
such Securities and any prospective purchasers thereof the information
specified in Rule 144A(d)(4) under the Act, unless the Issuer is then
subject to Section 13 or 15(d) of the Exchange Act and is in compliance
therewith.
(k) Each of the Issuer and the Guarantors will use its best efforts
to (i) permit the Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. (the "NASD") relating to trading
in the Private Offerings, Resales and Trading through Automated Linkages
market (the "PORTAL Market") and (ii) permit the Securities to be eligible
for clearance and settlement through The Depository Trust Company.
(l) In connection with any Securities offered and sold in an
offshore transaction (as defined in Regulation S), the Issuer will not
register any transfer of such Securities not
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made in accordance with the provisions of Regulation S and, except in
accordance with the provisions of Regulation S, if applicable, the Issuer
and the Guarantors will not issue any such Securities in the form of
definitive securities.
6. Expenses. The Issuer agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to: (i) the printing, word processing or other production of documents
with respect to such transactions, including any costs of printing the
Preliminary Memorandum and the Final Memorandum and any amendments or
supplements thereto, and any "Blue Sky" memoranda, (ii) all arrangements
relating to the delivery to the Initial Purchasers of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Issuer, (iv) the preparation
(including printing), issuance and delivery to the Initial Purchasers of any
certificates evidencing the Securities, (v) the qualification of the Securities
under state securities and "Blue Sky" laws, including filing fees and reasonable
fees and disbursements of counsel for the Initial Purchasers relating thereto,
and other filing or similar fees payable to government agencies in connection
with the issuance and sale of the Notes, (vi) expenses incurred in connection
with any meetings with prospective investors in the Securities, (vii) the fees
and expenses of the Trustee, including fees and expenses of its counsel, and
(viii) all expenses and listing fees incurred in connection with the application
for quotation of the Securities on the PORTAL Market and (ix) any fees charged
by investment rating agencies for the rating of the Securities. If the issuance
and sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Initial Purchasers set forth in Section 7
hereof is not satisfied, because this Agreement is terminated pursuant to
Section 11 hereof or because of any failure, refusal or inability on the part of
the Issuer or any Guarantor to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder (other than solely
by reason of a default by the Initial Purchasers of their obligations hereunder
after all conditions hereunder have been satisfied in accordance herewith), the
Issuer will promptly reimburse the Initial Purchasers upon demand for all
out-of-pocket expenses (including fees, disbursements and charges of Winston &
Xxxxxx and Stikeman, Elliott, counsel for the Initial Purchasers) that shall
have been incurred by the Initial Purchasers in connection with the proposed
purchase and sale of the Securities.
7. Conditions of the Initial Purchasers' Obligations. The obligation
of the Initial Purchasers to purchase and pay for the Securities shall, in their
sole discretion, be subject to the
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satisfaction or waiver of the following conditions on or prior to the Closing
Date:
(a) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxxxxxx & Xxxx LLP, United States counsel for the Issuer
and the Guarantors, in form and substance satisfactory to the Initial
Purchasers and counsel for the Initial Purchasers, substantially to the
following effect (with customary qualifications and assumptions
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers):
(i) Each of the Issuer and the Guarantors is duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Final Memorandum.
(ii) Based solely on a review of the stock ledger and the
records of proceedings of the Board of Directors and shareholders of
the Issuer, the Issuer has the authorized capitalization as set
forth in the Final Memorandum; all of the outstanding shares of
capital stock of the Issuer and each of the Guarantors have been
duly authorized and validly issued, are fully paid and nonassessable
and were not issued in violation of any preemptive or similar
rights; all of the outstanding shares of capital stock of each of
the Guarantors are owned of record, directly or indirectly, by the
Issuer, and, to the knowledge of such counsel, are free and clear of
all liens, encumbrances, equities and claims or restrictions on
transferability (other than those imposed by the Act and the
securities or "Blue Sky" laws of certain jurisdictions) or voting.
(iii) To the knowledge of such counsel, except as set forth in
the Final Memorandum, (A) no options, warrants or other rights to
purchase from the Issuer or any Guarantor shares of capital stock or
ownership interests in the Issuer or any Guarantor are outstanding,
(B) no agreements or other obligations of the Issuer or any
Guarantor to issue, or other rights to cause the Issuer or any
Guarantor to convert any obligation into, or exchange any securities
for, shares of capital stock or ownership interests in the Issuer or
any Guarantor are outstanding and, (C) no holder of securities of
the Issuer or any Guarantor (other than the Registrable Notes) is
entitled to have such securities registered under a registration
statement filed by the Issuer and the Guarantors pursuant to the
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Registration Rights Agreement.
(iv) The Issuer has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture; each of the Guarantors has all requisite corporate power
and authority to execute, deliver and perform its obligations under
the Indenture and such Guarantor's Guarantee; the Indenture is in
sufficient form for qualification under the TIA; the Indenture has
been duly and validly authorized, executed and delivered by each of
the Issuer and the Guarantors, and (assuming the due authorization,
execution and delivery thereof by the Trustee) constitutes the valid
and legally binding agreement of each of the Issuer and the
Guarantors, enforceable against each of them in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) general principles of equity
and the discretion of the court before which any proceeding therefor
may be brought (regardless of whether such enforcement is considered
in a proceeding in equity or at law).
(v) The Notes are in the form contemplated by the Indenture.
The Notes have each been duly and validly authorized, executed and
delivered by the Issuer and, when paid for by the Initial Purchasers
in accordance with the terms of this Agreement (assuming the due
authorization, execution and delivery of the Indenture by the
Trustee and due authentication and delivery of the Notes by the
Trustee in accordance with the Indenture), will constitute the valid
and legally binding obligations of the Issuer, entitled to the
benefits of the Indenture, and enforceable against the Issuer in
accordance with their terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which
any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(vi) The Guarantees are in the form contemplated by the
Indenture. The Guarantees have been duly and validly authorized,
executed and delivered by each Guarantor and (assuming the due
authorization, execution and delivery of the Indenture by the
Trustee
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and due authentication and delivery of the Notes by the Trustee in
accordance with the Indenture) constitute the valid and legally
binding obligations of each Guarantor, entitled to the benefits of
the Indenture, enforceable against each of them in accordance with
their terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) general principles of equity
and the discretion of the court before which any proceeding therefor
may be brought (regardless of whether such enforcement is considered
in a proceeding in equity or at law).
(vii) The Exchange Notes and the Private Exchange Notes and
the Guarantees to be endorsed on them have been duly and validly
authorized by the Issuer and each of the Guarantors, as the case may
be, and when the Exchange Notes and the Private Exchange Notes have
been duly executed and delivered by the Issuer and the Guarantees to
be endorsed on them have been duly executed and delivered by the
Guarantors, each in accordance with the terms of the Registration
Rights Agreement and the Indenture (assuming the due authorization,
execution and delivery of the Indenture by the Trustee and due
authentication and delivery of the Exchange Notes and the Private
Exchange Notes by the Trustee in accordance with the Indenture),
will constitute the valid and legally binding obligations of the
Issuer and the Guarantors, respectively, entitled to the benefits of
the Indenture, and enforceable against the Issuer and the
Guarantors, respectively, in accordance with their terms, except
that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(viii) Each of the Issuer and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Registration Rights Agreement; the
Registration Rights Agreement has been duly and validly authorized,
executed and delivered by the Issuer and the Guarantors, and
(assuming due authorization, execution and delivery thereof by the
Initial Purchasers) constitutes the valid and legally binding
agreement of
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the Issuer and the Guarantors, enforceable against each of them in
accordance with its terms, except that (A) the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought (regardless of whether
such enforcement is considered in a proceeding in equity or at law)
and (B) any rights to indemnity or contribution thereunder may be
limited by U.S. or Canadian federal, state or provincial securities
laws.
(ix) Each of the Issuer and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby; this Agreement and the consummation by the
Issuer and the Guarantors of the transactions contemplated hereby
have been duly and validly authorized by the Issuer and the
Guarantors, respectively. This Agreement has been duly executed and
delivered by each of the Issuer and the Guarantors and constitutes a
valid and legally binding agreement of each of the Issuer and the
Guarantors, enforceable against each of them in accordance with its
terms, except that enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(x) The statements made in the Final Memorandum under the
captions "Description of the Notes" and "Exchange Offer;
Registration Rights," insofar as they purport to constitute
summaries of certain terms of documents referred to therein,
constitute accurate summaries of the terms of such documents in all
material respects.
(xi) The statements made in the Final Memorandum under the
caption "Certain Income Tax Considerations," to the extent that they
constitute summaries of matters of United States law or regulation
or legal conclusions, have been reviewed by such counsel and fairly
summarize the matters described therein in all material respects.
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(xii) Each of the Operative Documents conforms in all material
respects to the descriptions thereof contained in the Final
Memorandum.
(xiii) To the knowledge of such counsel, no legal or
governmental proceedings are pending or threatened to which the
Issuer or any of the Guarantors is a party, or to which any of their
respective properties or assets are subject, which would be required
under the Act to be described in a registration statement on Form
S-1 or in a prospectus contained therein and are not described in
the Final Memorandum, or which seek to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the
Securities to be sold hereunder or the consummation of the other
transactions contemplated by the Operative Documents.
(xiv) To the knowledge of such counsel, neither the Issuer nor
any of the Guarantors is in violation of its certificate of
incorporation or bylaws (or similar organizational documents).
(xv) The execution, delivery and performance by the Issuer and
each of the Guarantors of the Operative Documents (to the extent a
party thereto), the consummation of the transactions contemplated
hereby and thereby (including, without limitation, the issuance and
sale of the Securities to the Initial Purchasers) and the
fulfillment of the terms hereof and thereof will not conflict with
or constitute or result in a breach or a default under (or an event
which with notice or passage of time or both would constitute a
default under) or violation of or cause an acceleration of any
obligation under, or result in the imposition or creation of (or the
obligation to create or impose) a lien on any property or assets of
the Issuer or any Guarantor with respect to (i) any of the terms or
provisions of any Contract identified to such counsel as material to
the Issuer and the Subsidiaries taken as a whole,(ii) the
certificate of incorporation or bylaws (or similar organizational
documents) of the Issuer or any Guarantor, or (iii) (assuming
compliance with all applicable state securities or "Blue Sky" laws
and assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 8 hereof) any statute, rule or
regulation or, to such counsel's knowledge, any judgment, decree or
order, applicable to the Issuer or any of the Guarantors or any of
their respective properties or assets.
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(xvi) To the knowledge of such counsel, each of the Issuer and
the Guarantors has obtained all Permits necessary to conduct the
businesses now or proposed to be conducted by it as described in the
Final Memorandum, the lack of which would, individually or in the
aggregate, have a Material Adverse Effect; each of the Issuer and
the Guarantors has fulfilled and performed all of its obligations
with respect to such Permits and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of
the rights of the Issuer or any such Guarantor as holder of any such
Permit, except for any such revocation or termination which would
not have a Material Adverse Effect.
(xvii) No consent, approval, authorization or order of any
governmental authority is required for the issuance and sale by the
Issuer and the Guarantors of the Securities to the Initial
Purchasers or the other transactions contemplated in this Agreement,
except (i) as may be required in connection with the registration of
the Securities and the Exchange Notes and Private Exchange Notes and
the Guarantees to be endorsed on them, pursuant to the Registration
Rights Agreement and the qualification of the Indenture under the
TIA, or (ii) such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits (y) as
have been obtained and made or (z) as may be required under state
securities or "Blue Sky" laws, as to which such counsel need express
no opinion.
(xviii) None of the Issuer or the Guarantors is, and
immediately after the sale of the Securities to be sold hereunder
and the application of the proceeds from such sale (as described in
the Final Memorandum under the caption "Use of Proceeds") will be,
an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(xix) No registration under the Act of the Securities is
required in connection with the sale of the Securities to the
Initial Purchasers as contemplated by this Agreement and the Final
Memorandum or in connection with the initial resale of the
Securities by the Initial Purchasers in accordance with Section 8 of
this Agreement, and prior to the commencement of the Exchange Offer
(as defined in the Registration Rights Agreement) or the
effectiveness of the Shelf Registration Statement (as defined in the
Registration Rights Agreement), the Indenture is not
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required to be qualified under the TIA, in each case assuming (i)
that the purchasers who buy such Securities in the initial resale
thereof are QIBs or Accredited Investors or purchase such Securities
in compliance with Regulation S under the Act, (ii) the accuracy of
the Initial Purchasers' representations in Section 8 and those of
the Issuer contained in this Agreement regarding the absence of a
general solicitation in connection with the sale of such Securities
to the Initial Purchasers and the initial resale thereof, (iii) the
due performance by the Initial Purchasers of the agreements set
forth in Section 8 hereof and the offering and transfer procedures
set forth in the Final Memorandum, and (iv) the accuracy of the
representations made by each Accredited Investor who purchases
Securities in the initial resale as set forth in the Final
Memorandum.
(xx) Neither the execution, delivery or performance by the
Issuer and the Guarantors of this Agreement nor the issuance or sale
of the Securities under the circumstances contemplated by this
Agreement nor the use of proceeds in the manner contemplated by the
Final Memorandum under the caption "Use of Proceeds" will violate
Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
(xxi) Neither the Issuer or any Guarantor nor any holder of
the Notes, the Exchange Notes or the Private Exchange Notes will
incur or be subject to any tax liability imposed by any governmental
authority as a result of the transactions contemplated by the
Reorganization (as defined in the Final Memorandum).
At the time the foregoing opinion is delivered, such counsel shall
additionally state that it has participated in conferences with officers
and other representatives of the Issuer and the Guarantors,
representatives of the independent public accountants for the Issuer and
the Guarantors, representatives of Canadian counsel for the Issuer and the
Guarantors and representatives of the Initial Purchasers and counsel for
the Initial Purchasers, at which conferences the contents of the Final
Memorandum and related matters were discussed, and, although it has not
independently verified and is not passing upon and assumes no
responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum (except to the extent
specified in subsections 7(a)(ii), 7(a)(x), 7(a)(xi) and 7(a)(xii)), no
facts have come to its attention which lead it to believe that the Final
Memorandum, on the date thereof or at the Closing Date, contained an
untrue statement of a material fact or omitted to state a material
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fact required to be stated therein or necessary to make the statements
contained therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express
no opinion with respect to the financial statements and related notes
thereto and the other financial and accounting data included in the Final
Memorandum). The opinion of such counsel described in this Section shall
be rendered to the Initial Purchasers at the request of the Issuer and the
Guarantors and shall so state therein.
References to the Final Memorandum in this subsection (a) shall
include any amendment or supplement thereto prepared in accordance with
the provisions of this Agreement at the Closing Date.
In rendering such opinion, such counsel may state that they express
no opinion as to the laws of any jurisdiction other than the federal laws
of the United States and the laws of the States of New York and Delaware.
Such counsel may also state that with respect to opinions as to the laws
of jurisdictions other than Delaware and New York, such counsel has relied
on the opinion of local counsel of the Issuer and the Guarantors who are
reasonably satisfactory to counsel for the Initial Purchasers; provided,
however, that Xxxxxxxx & Xxxx LLP shall state that it believes that it,
the Initial Purchasers and counsel for the Initial Purchasers are
justified in relying on such opinion. Such counsel may also state that,
insofar as such opinion involves factual matters, such counsel have
relied, to the extent they deem proper, upon certificates of officers of
the Issuer and certificates of public officials; provided that such
certificates have been provided to the Initial Purchasers.
(b) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Xxxxxxx XxXxxxxx Stirling Scales, Canadian counsel for the
Issuer and each Guarantor organized under the federal laws of Canada or a
province thereof (each a "Canadian Guarantor" and collectively, the
"Canadian Guarantors"), in form and substance satisfactory to the Initial
Purchasers and counsel for the Initial Purchasers substantially to the
following effect (with customary qualifications and assumptions
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers):
(i) Each of the Issuer and the Canadian Guarantors is duly
organized, validly existing and in good standing under the laws of
its jurisdiction of organization and has all requisite corporate
power and
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authority to own, lease and operate its properties and to conduct
its business as described in the Final Memorandum. Each of the
Issuer and the Canadian Guarantors is duly qualified to do business
as a foreign or extra-provincial corporation and is in good standing
in all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would
not, individually or in the aggregate, have a Material Adverse
Effect.
(ii) The Issuer has the authorized capitalization as set forth
in the Final Memorandum; all of the outstanding shares of capital
stock of the Issuer and each of the Canadian Guarantors have been
duly authorized and validly issued, are fully paid and nonassessable
and were not issued in violation of any preemptive or similar
rights; all of the outstanding shares of capital stock of each of
the Canadian Guarantors are owned, directly or indirectly, by the
Issuer, free and clear of all liens, encumbrances, equities and
claims or restrictions on transferability (other than those imposed
by the Securities Act (Nova Scotia) and the securities or "Blue Sky"
laws of certain jurisdictions) or voting.
(iii) To the knowledge of such counsel, except as set forth in
the Final Memorandum, (A) no options, warrants or other rights to
purchase from the Issuer or any Canadian Guarantor shares of capital
stock or ownership interests in the Issuer or any Canadian Guarantor
are outstanding, (B) no agreements or other obligations of the
Issuer or any Canadian Guarantor to issue, or other rights to cause
the Issuer or any Canadian Guarantor to convert, any obligation
into, or exchange any securities for, shares of capital stock or
ownership interests in the Issuer or any Canadian Guarantor are
outstanding and, (C) no holder of securities of the Issuer or any
Canadian Guarantor (other than the Registrable Notes) is entitled to
have such securities registered under a registration statement filed
by the Issuer and the Guarantors pursuant to the Registration Rights
Agreement.
(iv) The Issuer has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture; each of the Canadian Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under the Indenture and the Guarantees to be entered
into by such Canadian Guarantors (the "Canadian Guarantees"); the
Indenture has been duly and
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validly authorized, executed and delivered by each of the Issuer and
the Canadian Guarantors. The appointment of the Trustee, at its
principal office in the City of New York, as registrar, paying agent
and transfer agent for the Notes and as trustee for the holders of
the Notes has been duly authorized by the Issuer.
(v) The Notes have each been duly and validly authorized,
executed and delivered by the Issuer. The issuance of the Notes is
not subject to pre-emptive or other similar rights arising by
operation of law or under the constating documents of the Issuer.
(vi) The Canadian Guarantees have been duly and validly
authorized, executed and delivered by the Canadian Guarantors.
(vii) The Exchange Notes and the Private Exchange Notes and
the Canadian Guarantees to be endorsed on them have been duly and
validly authorized by the Issuer and the Canadian Guarantors. The
form of definitive certificate representing the Notes, the Exchange
Notes and the Private Exchange Notes has been duly approved and
adopted by the Issuer, and there are no provisions of the Companies
Act (Nova Scotia) applicable thereto.
(viii) Each of the Issuer and the Canadian Guarantors has all
requisite corporate power and authority to execute, deliver and
perform its obligations under the Registration Rights Agreement; the
Registration Rights Agreement has been duly and validly authorized,
executed and delivered by the Issuer and the Canadian Guarantors.
(ix) Each of the Issuer and the Canadian Guarantors has all
requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby; this Agreement and the
consummation by the Issuer and the Canadian Guarantors of the
transactions contemplated hereby have been duly and validly
authorized by the Issuer and the Canadian Guarantors. This Agreement
has been duly executed and delivered by the each of the Issuer and
the Canadian Guarantors.
(x) To the knowledge of such counsel, neither the Issuer nor
any of the Canadian Guarantors is in violation of its memorandum or
articles of association (or similar organizational documents).
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(xi) The execution, delivery and performance by the Issuer and
each of the Canadian Guarantors of the Operative Documents (to the
extent a party thereto), the consummation of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance and sale of the Securities to the Initial Purchasers) and
the fulfillment of the terms hereof and thereof will not conflict
with or constitute or result in a breach or a default under (or an
event which with notice or passage of time or both would constitute
a default under) or violation of or cause an acceleration of any
obligation under, or result in the imposition or creation of (or the
obligation to create or impose) a lien on any property or assets of
the Issuer or any Canadian Guarantor with respect to (i) any of the
terms or provisions of any Contract identified to such counsel as
material to the Issuer and the Subsidiaries taken as a whole,(ii)
the memorandum or articles of association or similar organizational
documents of the Issuer or any Canadian Guarantor, or (iii)
(assuming compliance with all applicable state securities or "Blue
Sky" laws and assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 8 hereof) any
statute, judgment, decree, order, rule or regulation applicable to
the Issuer or any Canadian Guarantor or any of their respective
properties or assets.
(xii) To the knowledge of such counsel, each of the Issuer and
the Canadian Guarantors has obtained all Permits necessary to
conduct the businesses now or proposed to be conducted by it as
described in the Final Memorandum, the lack of which would,
individually or in the aggregate, have a Material Adverse Effect;
each of the Issuer and the Canadian Guarantors has fulfilled and
performed all of its obligations with respect to such Permits and no
event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any
other material impairment of the rights of the Issuer or any such
Canadian Guarantor as holder of any such Permit, except for any such
revocation or termination which would not have a Material Adverse
Effect.
(xiii) No legal or governmental proceedings are pending or, to
the knowledge of such counsel, threatened to which the Issuer or any
of the Guarantors is a party, or to which any of their respective
properties or assets are subject which seek to restrain, enjoin,
prevent the consummation of or otherwise challenge the issuance or
sale of the
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Securities to be sold hereunder or the consummation of the other
transactions contemplated by the Operative Documents.
(xiv) No consent, approval, authorization or order of any
governmental authority in the Province of Nova Scotia is required
for the issuance and sale by the Issuer of the Notes to the Initial
Purchasers or the other transactions contemplated in this Agreement,
subject to the filing in Nova Scotia within 10 days from the date of
issuance and sale of the Notes of a copy of the Final Memorandum and
a report on Form 20, duly executed, together with the payment of
appropriate fees.
(xv) The statements made in the Final Memorandum under the
caption "Certain Income Tax Considerations," to the extent that they
constitute summaries of matters of Canadian law or regulations or
legal conclusions, have been reviewed by such counsel and fairly
summarize the matters described therein in all material respects.
(xvi) A court of competent jurisdiction in the Province of
Nova Scotia, Canada (a "Canadian Court") would uphold the choice of
law of the State of New York ("New York law") as the proper law
governing the Operative Documents, provided that such choice of law
is bona fide (in the sense that it was not made with a view to
avoiding the consequences of the laws of any other jurisdiction, and
provided further that such choice of law is not contrary to public
policy, as that term is applied by a Canadian Court ("Public
Policy"), and such choice of law is legal under the laws of the
State of New York. To our knowledge, no Public Policy would be
offended by recognition of the choice of New York law and the choice
is bona fide.
(xvii) The laws of the Province of Nova Scotia, Canada permit
an action to be brought in a court of competent jurisdiction on any
final and conclusive judgment in personam for a sum certain in money
of a New York Court (as defined below) which is not impeachable as
void or voidable under the internal laws of New York, without
reexamination or relitigation of the matters adjudicated upon if:
(A) the court rendering such judgment had jurisdiction,
in accordance with Canadian conflict of law rules, over the
judgment debtor (and submission by the Issuer and each of the
Canadian Guarantors to the jurisdiction of such court of
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the State of New York pursuant to the Operative Documents will
suffice for this purpose) and if the New York Court was not a
seriously inconvenient forum for the trial of the action;
(B) the judgment does not conflict with another final
and conclusive judgment in or relating to the same cause of
action in a different jurisdiction;
(C) the procedural rules for commencement and
maintenance of the enforcement proceedings in the New York
Court have been observed;
(D) there is a real and substantial connection between
the subject matter of the action upon which the judgment is
based and the State of New York;
(E) in the case of a judgment obtained by default there
has been no manifest error in the granting of such judgment;
(F) the judgment has neither been satisfied nor is it
for any other reason not a subsisting judgment;
(G) the proceedings in the New York Court were not
contrary to an agreement between the parties under which the
dispute in question was to be settled otherwise than by
proceedings in that court;
(H) the judgment debtors were duly served with the
process of the court proceedings to enable them to defend the
action;
(I) such judgment was not obtained by fraud or in a
manner contrary to natural justice and the enforcement thereof
would not be contrary to Public Policy, as such term is
understood under the laws of the Province of Nova Scotia and
the federal laws of Canada applicable therein;
(J) the enforcement of such judgment would not
constitute, directly or indirectly, the enforcement of a
foreign revenue, expropriation, confiscatory, penal, criminal
or public law;
(K) no new admissible evidence relevant to the action is
discovered prior to the rendering of judgment by the Canadian
Court; and
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(L) there has been compliance with the Limitation of
Actions Act (Nova Scotia) which has the effect that the action
to enforce such judgment must be commenced within 6 years
after the date of such judgment.
(xviii) In the event that any of the Operative Documents are
sought to be enforced in any action or proceeding in the Province of
Nova Scotia, Canada, the courts of the Province of Nova Scotia,
Canada would recognize the choice of laws made in the Operative
Documents and would apply the laws of the State of New York in any
such action or proceeding, upon appropriate evidence as to such laws
being adduced, provided that none of the provisions of the Operative
Documents, as the case may be, or of the laws of the State of New
York, are contrary to Public Policy, and a Canadian Court will not
apply those laws of New York which it characterizes as being of a
revenue, expropriatory, confiscatory, penal, criminal or public law
nature, and in matters of procedure or administration, the laws of
the Province of Nova Scotia, Canada will be applied. There are no
reasons under the laws of the Province of Nova Scotia, Canada or the
federal laws of Canada applicable therein and no reasons, to such
counsel's knowledge with respect to the application of New York law
by a Canadian Court, for avoiding enforcement of the Operative
Documents (except as to the indemnity and contribution provisions of
the Operative Documents, about which such counsel need not comment)
based on Public Policy.
(xix) In an action on a final and conclusive judgment in
personam of any federal or state court sitting in the Borough of
Manhattan in The City of New York (a "New York Court") that is not
impeachable as void or voidable under New York law, a Canadian Court
would recognize service of process on a duly appointed agent of the
Issuer or any of the Canadian Guarantors such as CT Corporation
System as service of process on the Issuer or any of the Canadian
Guarantors in the United States of America under the Operative
Documents and the provisions of the Operative Documents whereby the
Issuer and each of the Canadian Guarantors submit to the
non-exclusive jurisdiction of a New York Court would be recognized
by a Canadian Court as conferring jurisdiction on the New York
Court.
The opinion of such counsel described in this Section shall be
rendered to the Initial Purchasers at the request of the Issuer and the
Canadian Guarantors and shall so state
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therein. References to the Final Memorandum in this subsection (b) shall
include any amendment or supplement thereto prepared in accordance with
the provisions of this Agreement at the Closing Date. In rendering such
opinion, such counsel may state that they express no opinion as to the
laws of any jurisdiction other than the federal laws of Canada and the
laws of the Province of Nova Scotia, Canada and the laws of Canada
applicable therein. If applicable, such counsel may also state that with
respect to opinions as to the laws of jurisdictions other than the federal
laws of Canada and the laws of the Province of Nova Scotia, Canada and the
laws of Canada applicable therein, such counsel has relied on the opinion
of other counsel of the Issuer and the Canadian Guarantors who are
reasonably satisfactory to counsel for the Initial Purchasers; provided,
however, that Xxxxxxx XxXxxxxx Stirling Scales shall state that it
believes that it, the Initial Purchasers, and counsel for the Initial
Purchasers are justified in relying on such opinion. Such counsel may also
state that, insofar as such opinion involves factual matters, such counsel
have relied, to the extent they deem proper, upon certificates of officers
of the Issuer and the Canadian Guarantors and certificates of public
officials; provided that such certificates have been provided to the
Initial Purchasers.
(c) The Initial Purchasers shall have received opinions, dated the
Closing Date, of Winston & Xxxxxx and Stikeman, Elliott, counsel for the
Initial Purchasers, with respect to certain legal matters relating to this
Agreement, and such other related matters as the Initial Purchasers may
reasonably require. In rendering such opinions, Winston & Xxxxxx and
Stikeman, Xxxxxxx shall have received and may rely upon such certificates
and other documents and information as they may reasonably request to pass
upon such matters.
(d) On the date of the Final Memorandum prior to the execution of
this Agreement and also on the Closing Date, the Initial Purchasers shall
have received from Ernst & Young, independent public accountants for the
Issuer, and Kidsons Impey, chartered accountants for Marlborough, comfort
letters, dated the date hereof and the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers and counsel for the
Initial Purchasers.
(e) The representations and warranties of the Issuer and the
Guarantors contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date as if made on and as of
the Closing Date; each of the Issuer and the Guarantors shall have
performed in all material respects all covenants and agreements and
satisfied all conditions on its part to be performed or satisfied
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hereunder at or prior to the Closing Date; and, except as set forth in the
Final Memorandum (exclusive of any amendment or supplement thereto after
the date hereof), subsequent to the date of the most recent financial
statements in such Final Memorandum, there shall have been no events or
developments (including, without limitation, any loss or interference with
respect to the business, operations or properties of the Issuer or any of
the Guarantors) that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect.
(f) The issuance and sale of the Securities pursuant to this
Agreement shall not be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued or any
action, suit or proceeding shall have been commenced with respect to this
Agreement or any other Operative Document before any court or governmental
authority.
(g) The Initial Purchasers shall have received certificates, dated
the Closing Date, signed on behalf of each of the Issuer and the
Guarantors by its Chief Financial Officer and its President or any Vice
President to the effect that:
(i) The representations and warranties of the Issuer and the
Guarantors in this Agreement are true and correct in all material
respects as if made on and as of the Closing Date, and each of the
Issuer and the Guarantors has performed in all material respects all
covenants and agreements and satisfied all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof and since the
date of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no events or developments have occurred, no information has
become known nor does any condition exist that, individually or in
the aggregate, has or would be reasonably likely to have a Material
Adverse Effect; and
(iii) The sale of the Securities hereunder has not been
enjoined (temporarily or permanently) and no restraining order or
other injunctive order has been issued and no action, suit or
proceeding has been commenced with respect to this Agreement or any
other Operative Document before any court or governmental authority.
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(h) On the Closing Date, the Initial Purchasers shall have received
the Registration Rights Agreement executed by the Issuer and the
Guarantors and such agreement shall be in full force and effect at all
times from and after the Closing Date.
(i) The Indenture shall have been duly executed and delivered by the
Issuer, the Guarantors and the Trustee, the Notes and the Guarantees shall
have been duly executed by the Issuer and the Guarantors, respectively,
and the Notes shall have been duly authenticated by the Trustee.
(j) On or before the Closing Date, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such further
documents, certificates and schedules or instruments relating to the
business, corporate, legal and financial affairs of the Issuer as they
shall have reasonably requested from the Issuer and the Guarantors.
All such documents, opinions, certificates and schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory to the Initial Purchasers and
counsel for the Initial Purchasers. The Issuer shall furnish to the Initial
Purchasers such conformed copies of such documents, opinions, certificates and
schedules or instruments in such quantities as the Initial Purchasers shall
reasonably request.
8. Offering of Securities; Restrictions on Transfer. Each of the
Initial Purchasers represents and warrants (as to itself only) that it is a QIB.
Each of the Initial Purchasers agrees with the Issuer (as to itself only) that
(i) it has not and will not solicit offers for, or offer or sell, the Securities
by any form of general solicitation or general advertising (as those terms are
used in Regulation D) or in any manner involving a public offering within the
meaning of Section 4(2) of the Act; and (ii) it has and will solicit offers for
the Securities only from, and will offer the Securities only to (A) in the case
of offers inside the United States, (x) persons whom the Initial Purchasers
reasonably believe to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchasers that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A or (y) a limited number of other institutional investors reasonably
believed by the Initial Purchasers to be Accredited Investors that, prior to
their purchase of the Securities, deliver to the Initial Purchasers a letter
containing the representations and agreements set forth in Annex A to the Final
Memorandum and (B) in the case of offers
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outside the United States, to persons other than U.S. persons ("foreign
purchasers," which term shall include dealers or other professional fiduciaries
in the United States acting on a discretionary basis for foreign beneficial
owners (other than an estate or trust)) to whom it reasonably believes offers
and sales of Securities may be made in reliance on Regulation S; provided,
however, that in the case of this clause (B), in purchasing such Securities such
persons are deemed to have represented and agreed as provided under the caption
"Transfer Restrictions" contained in the Final Memorandum.
9. Indemnification and Contribution. (a) The Issuer and the
Guarantors agree, jointly and severally, to indemnify and hold harmless
the Initial Purchasers and the affiliates, directors, officers, agents,
representatives and employees of the Initial Purchasers, and each other
person, if any, who controls any Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities, joint or several, to which any
Initial Purchaser or any such affiliate, director, officer, agent,
representative, employee or controlling person may become subject under
the Act, the Exchange Act, the securities laws of Canada or any other
jurisdiction or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Memorandum or any amendment or
supplement thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by the Issuer or any
Guarantor or based upon information furnished by or on behalf of the
Issuer or any Guarantor filed in any jurisdiction in order to
qualify the Securities under the securities or "Blue Sky" laws
thereof or filed with any securities association or securities
exchange (each, an "Application"); or
(ii) the omission or alleged omission to state, in any
Memorandum or any amendment or supplement thereto, or in any
Application, a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
affiliate, director, officer, agent, representative and employee and each
such controlling person for any legal or other expenses reasonably
incurred by the Initial Purchasers, such affiliate, director, officer,
agent, representative or employee or such controlling person
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in connection with investigating, defending against or appearing as a
third-party witness in connection with any such loss, claim, damage,
liability or action; provided, however, that the Issuer and the Guarantors
will not be liable (i) in any such case to the extent that any such loss,
claim, damage, or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
in any Memorandum or any amendment or supplement thereto, or in any
Application, in reliance upon and in conformity with the written
information described in the first sentence of Section 12 hereof furnished
to the Issuer by the Initial Purchasers specifically for use therein or
(ii) with respect to the Preliminary Memorandum, to the extent that any
such loss, claim, damage or liability arises solely from the fact that the
Initial Purchasers sold Securities to a person to whom there was not sent
or given a copy of the Final Memorandum (as amended or supplemented) at or
prior to the written confirmation of such sale if the Issuer shall have
previously furnished copies thereof to the Initial Purchasers in
accordance with Section 5(d) hereof and the Final Memorandum (as amended
or supplemented) would have corrected any such untrue statement or
omission. This indemnity agreement will be in addition to any liability
that the Issuer and the Guarantors may otherwise have to the indemnified
parties. The Issuer and the Guarantors shall not be liable under this
subsection (a) for any settlement of any claim or action effected without
its consent, which consent shall not be unreasonably withheld or delayed.
The Initial Purchasers shall not, without the prior written consent
of the Issuer and the Guarantors, effect any settlement or compromise of
any pending or threatened proceeding in respect of which the Issuer and
the Guarantors are or could have been a party, or indemnity could have
been sought hereunder by the Issuer and the Guarantors, unless such
settlement (A) includes an unconditional written release of the Issuer and
the Guarantors, in form and substance reasonably satisfactory to the
Issuer and the Guarantors, from all liability on claims that are the
subject matter of such proceeding and (B) does not include any statement
as to an admission of fault, culpability or failure to act by or on behalf
of the Issuer and the Guarantors.
(b) The Initial Purchasers agree, severally and not jointly, to
indemnify and hold harmless the Issuer and the Guarantors, their
respective affiliates, directors, officers, agents, representatives and
employees and each other person, if any, who controls the Issuer or any
Guarantor within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims,
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damages or liabilities to which the Issuer or any Guarantor or any such
affiliate, director, officer, agent, representative, employee or
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in
any Memorandum or any amendments or supplement thereto, or in any
Application or (ii) the omission or the alleged omission to state therein
a material fact required to be stated in any Memorandum or any amendment
or supplement thereto, or in any Application, or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information concerning such Initial Purchaser described in
the first sentence of Section 12 hereof furnished to the Issuer by such
Initial Purchaser specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Issuer or
any Guarantor or any such affiliate, director, officer, agent,
representative, employee or controlling person in connection with
investigating or defending against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any
liability that the Initial Purchasers may otherwise have to the
indemnified parties. The Initial Purchasers shall not be liable under this
Section 9 for any settlement of any claim or action effected without their
consent, which consent shall not be unreasonably withheld or delayed.
The Issuer and the Guarantors shall not, without the prior written
consent of the Initial Purchasers, effect any settlement or compromise of
any pending or threatened proceeding in respect of which any Initial
Purchaser is or could have been a party, or indemnity could have been
sought hereunder by any Initial Purchaser, unless such settlement (A)
includes an unconditional written release of the Initial Purchasers, in
form and substance reasonably satisfactory to the Initial Purchasers, from
all liability on claims that are the subject matter of such proceeding and
(B) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such
indemnified party is entitled to
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indemnification under this Section 9, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party
(i) will not relieve it from any liability under subsection (a) or (b)
above unless and to the extent such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will
not, in any event, relieve the indemnifying party from any obligations to
any indemnified party other than the indemnification obligation provided
in subsections (a) and (b) above. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the defendants in any such
action include both the indemnified party and the indemnifying party and
the indemnified party shall have been advised by counsel that there may be
one or more legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, or (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after receipt by
the indemnifying party of notice of the institution of such action, then,
in each such case, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or
parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified
party under this Section 9 for any legal or other expenses, other than
reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with
the proviso to the immediately preceding sentence (it being understood,
however, that in connection with such action the indemnifying party shall
not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction
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arising out of the same general allegations or circumstances, designated
by BT Alex. Xxxxx Incorporated in the case subsection (a) of this Section
9 or the Issuer in the case of subsection (b) of this Section 9,
representing the indemnified parties under such subsection (a) or
subsection (b), as the case may be, who are parties to such action or
actions) or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified
party without the prior written consent of the indemnifying party (which
consent shall not be unreasonably withheld), unless such indemnified party
waived in writing its rights under this Section 9, in which case the
indemnified party may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for
in the preceding subsections of this Section 9 is unavailable to, or
insufficient to hold harmless, an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law,
not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits
received by the Issuer and the Guarantors on the one hand and any Initial
Purchaser on the other shall be deemed to be in the same proportion as the
total proceeds from the issuance and sale of the Notes under this
Agreement (before deducting expenses) received by the Issuer bear to the
total discounts and commissions received by such Initial Purchaser. The
relative fault of the parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Issuer and the Guarantors on the one hand,
or such Initial Purchaser on the
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other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate
in the circumstances. The Issuer, the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if the amount of
such contribution were determined by pro rata or per capita allocation or
by any other method of allocation that does not take into account the
equitable considerations referred to in the first sentence of this
subsection (d). Notwithstanding any other provision of this subsection
(d), no Initial Purchaser shall be obligated to make contributions
hereunder that in the aggregate exceed the total discounts, commissions
and other compensation received by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of the untrue or
alleged untrue statements or the omissions or alleged omissions to state a
material fact, and no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this subsection (d), each affiliate,
director, officer, agent, representative and employee of an Initial
Purchaser and each person, if any, who controls an Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Initial Purchasers,
and each affiliate, director, officer, agent, representative and employee
of the Issuer and the Guarantors and each person, if any, who controls the
Issuer or any Guarantor within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, shall have the same rights to contribution
as the Issuer and the Guarantors.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuer, the
Guarantors, their respective officers and directors and the Initial Purchasers
set forth in this Agreement or made by or on behalf of them pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Issuer, the Guarantors, any of their
respective officers or directors, the Initial Purchasers or any controlling
person referred to in Section 9 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6, 9, 15, 17 and 18 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination. (a) This Agreement may be terminated
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in the sole discretion of the Initial Purchasers by notice to the Issuer given
prior to the Closing Date in the event that the Issuer or any of the Guarantors
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior to
the date of such termination or, if at or prior to the Closing Date:
(i) either (x) the Issuer or any of the Guarantors shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor
dispute, slow down or work stoppage or any legal or governmental
proceeding, which loss or interference, in the sole judgment of the
Initial Purchasers, has had or could be reasonably likely to have a
Material Adverse Effect, or (y) there shall have been, in the sole
judgment of the Initial Purchasers, any event or development that,
individually or in the aggregate, has or could be reasonably likely
to have a Material Adverse Effect (including without limitation a
change in control of the Issuer), except in each case as described
in the Final Memorandum (exclusive of any amendment or supplement
thereto);
(ii) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange, the NASDAQ National Market or
the Toronto Stock Exchange shall have been suspended or maximum or
minimum prices shall have been established on any such exchange or
market;
(iii) a banking moratorium shall have been declared by New
York, United States or Canadian authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States or Canada and any foreign
power, or (B) an outbreak or escalation of any other insurrection or
armed conflict involving the United States or Canada or any other
national or international calamity or emergency or (C) any material
change in the financial markets of the United States or Canada that,
in the case of clauses (A), (B) or (C) above and in the sole
judgment of the Initial Purchasers, makes it impracticable or
inadvisable to proceed with the offering or the delivery of the
Securities as contemplated by the Final Memorandum; or
(v) any securities of the Issuer shall have been
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downgraded or placed on any "watch list" for possible downgrading by
any nationally recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchasers. The statements
set forth in the last paragraph of the cover page and the third, fifth, seventh
and ninth paragraphs of the section entitled "Private Placement" constitute the
only information furnished by the Initial Purchasers to the Issuer for the
purposes of Sections 2(a) and 9 hereof. In addition, NatWest Capital Markets
Limited has provided the information set forth in the eighth paragraph of the
section entitled "Private Placement."
13. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchasers, shall be mailed or delivered or telecopied
and confirmed in writing to BT Alex. Xxxxx Incorporated, One Bankers Trust
Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Finance Department, and if sent to the Issuer or the Guarantors, shall be
mailed, delivered or telecopied and confirmed in writing to the Issuer at: 00
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx Xxxxxx, Xxxxxx X0X-0X0, Attention: Xxxxxxx
Xxxxx, with copies to CF Capital Corporation, Xxx Xxxxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx and Xxxxxxxx & Xxxx,
Financial Center - 5th Floor, 000 X. Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxx.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Issuer, the Guarantors and their
respective successors, assigns and legal representatives, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of the Initial Purchasers, the Issuer, the Guarantors and
their respective successors, assigns and legal representatives and for the
benefit of no other person except that (i) the indemnities of the Issuer and the
Guarantors contained in Section 9 of this Agreement shall also be for the
benefit of the affiliates, directors, officers, agents, representatives and
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employees of the Initial Purchasers and any person or persons who control any of
the Initial Purchasers within the meaning of Section 15 of the Act or Section 20
of the Exchange Act and (ii) the indemnities of the Initial Purchasers contained
in Section 9 of this Agreement shall also be for the benefit of the affiliates,
directors, officers, agents, representatives and employees of the Issuer and the
Guarantors and any person or persons who control the Issuer or any Guarantor
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of any of the Securities from the Initial Purchasers will be deemed
a successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, each of the Issuer
and the Guarantors (i) acknowledges that it has, by separate written instrument,
designated and appointed CT Corporation System (the "Agent") (and any successor
entity) as its authorized agent upon which process may be served in any suit or
proceeding arising out of or relating to this Agreement that may be instituted
in any federal or state court in the Borough of Manhattan, The City of New York,
State of New York or brought under federal or state securities laws, and
acknowledges that the Agent has accepted such designation, (ii) submits to the
jurisdiction of any such court in any such suit or proceeding and (iii) agrees
that service of process upon the Agent and written notice of said service to the
Issuer and the Guarantors in accordance with this Section 17 shall be deemed in
every respect effective service of process upon the Issuer and the Guarantors in
any suit or proceeding. The Issuer and the Guarantors further agree to take any
and all action, including the execution and filing of any and all such documents
and instruments, as may be necessary to continue such designation and
appointment of the Agent in full force and effect so long as any of the
Securities, the Exchange Notes or the Private Exchange Notes shall be
outstanding; provided, however, that the Issuer and the Guarantors may (and, to
the extent the Agent ceases to be able to be served on the basis contemplated
herein, shall), by written notice to the holders of the Securities, the Exchange
Notes and the Private Exchange Notes, as applicable, designate such additional
or alternative agent for service of process under this Section 17 that (i)
maintains an office located in the Borough of Manhattan, The City of New York,
State of New York and (ii) is a corporate service company which acts as agent
for service of process for other persons in the ordinary course of its business.
Such written notice shall identify the name of such agent for service of process
and the address of the office of such agent for service of process in the
Borough of Manhattan, The City of New York, State of New York.
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To the extent that the Issuer or any Guarantor has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service of notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations under the above-referenced documents.
18. Judgment Currency. The Issuer and the Guarantors agree, jointly
and severally, to indemnify the Initial Purchasers against any loss incurred as
a result of any judgment or order being given or made for any amount due under
this Agreement and such judgment or order being expressed and paid in a currency
(the "Judgment Currency") other than United States dollars and as a result of
any variation as between (i) the rate of exchange at which the United States
dollar amount is converted into the Judgment Currency for the purpose of such
judgment or order and (ii) the spot rate of exchange in The City of New York at
which any such person on the date of payment of such judgment or order is able
to purchase United States dollars with the amount of the Judgment Currency
actually received by such person. The foregoing indemnity shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The
term "spot rate of exchange" shall include any premiums and costs of exchange
payable in connection with the purchase of, or conversion into, United States
dollars.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Issuer, the
Guarantors and the Initial Purchasers.
Very truly yours,
THE COMPANY:
SPARKLING SPRING WATER GROUP LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice Chairman
THE GUARANTORS:
SPARKLING SPRING WATER LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice Chairman
SPRING WATER, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
WATER JUG ENTERPRISES LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
XXXXXX'X WATER SOFTENING & PURIFICATION
LTD.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
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AQUA CARE WATER SOFTENING & PURIFICATION
LTD.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
HIGH VALLEY WATER LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
3003969 NOVA SCOTIA LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
CANADIAN SPRINGS WATER COMPANY LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
SPARKLING SPRING WATER (UK) LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
AQUAPORTE (UK) LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
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CRYSTAL SPRING ACQUISITION, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
MOUNTAIN FRESH ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
MARLBOROUGH EMPLOYMENT LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
WATER AT WORK LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
NATURAL WATER LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
CULLYSPRING WATER CO., INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
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The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
BT ALEX. XXXXX INCORPORATED
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Managing Director
NATWEST CAPITAL MARKETS LIMITED
By: /s/ N.S. Coulbeck
Name: N.S. Coulbeck
Title: Director
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EXHIBIT A
[Form of Registration Rights Agreement]
51
SCHEDULE I
Principal Amount of
Initial Purchaser Notes to be Purchased
----------------- ---------------------
BT Alex. Xxxxx Incorporated $80,000,000
NatWest Capital Markets Limited $20,000,000
------------
Total $100,000,000
