EXHIBIT 10.5
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XXXXXXX RIVER LABORATORIES, INC.
and
XXXXXXX RIVER LABORATORIES HOLDINGS, INC.
as Issuers
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$150,000,000
150,000 Units Consisting of
13 1/2% Senior Subordinated Notes due 2009 and
Warrants to purchase 591,366 shares of Common Stock
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PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 23, 1999
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XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
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$150,000,000
150,000 Units Consisting of
13 1/2% Senior Subordinated Notes due 2009 and
Warrants to purchase 591,366 shares of Common Stock
PURCHASE AGREEMENT
September 23, 1999
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxxx River Laboratories, Inc., a Delaware corporation (the
"Company"), and Xxxxxxx River Laboratories Holdings, Inc., a Delaware
corporation ("Holdings" and, together with the Company, the "Issuers"),
propose to issue and sell to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation (the "Initial Purchaser") 150,000 units (the "Units"), each
consisting of $1,000 in aggregate principal amount of the Company's 13 1/2%
Series A Senior Subordinated Notes due 2009 (the "Series A Notes"), together
with the Subsidiary Guarantees described below and one warrant (the
"Warrants") to purchase 591,366 shares of common stock of Holdings, par value
$0.01 per share (the "Common Stock"), subject to the terms and conditions set
forth herein. The Series A Notes are to be issued pursuant to the provisions
of an indenture (the "Indenture"), to be dated as of the Closing Date (as
defined below), among the Company, the Guarantors (as defined below) and State
Street Bank and Trust Company, as trustee (the "Trustee"). The Series A Notes
and the Series B Notes (as defined below) issuable in exchange therefor are
collectively referred to herein as the "Notes." As of the Consummation (as
defined), the Notes will be guaranteed (the "Subsidiary Guarantees") by each
of the Guarantors (as defined below). The Warrants will be issued pursuant to
a warrant agreement (the "Warrant Agreement"), to be dated as of the Closing
Date, between Holdings and State Street Bank and Trust Company, as warrant
agent (the "Warrant Agent"). Shares of Common Stock of Holdings issuable upon
exercise of the Warrants are collectively referred to herein as the "Warrant
Shares." The Units, the Notes, the Warrants and the Warrant Shares are
collectively referred to herein as the "Securities." Capitalized terms used
but not defined herein shall have the meanings given to such terms in the
Indenture. This Agreement, the Securities, the Warrant Agreement, the Warrant
Registration Rights Agreement (as defined), the Indenture, the Subsidiary
Guarantees, the Registration Rights Agreement (as defined) and the Credit
Agreement (as defined) are collectively referred to herein as the "Operative
Documents."
The Series A Notes are being issued and sold in connection with the
recapitalization (the "Recapitalization") of the Company, pursuant to a
Recapitalization Agreement dated as of July 25, 1999 among the Company,
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Holdings, certain subsidiaries of Bausch & Lomb Incorporated (the "Rollover
Shareholders"), CRL Acquisition LLC and DLJ Merchant Banking Partners II, L.P.
("DLJMB"). In connection with the Recapitalization, (i) the Company will enter
into a syndicated senior secured loan facility pursuant to a credit agreement
to be dated as of the Closing Date with a group of lenders, including DLJ
Capital Funding, Inc., as syndication agent (the "Credit Agreement") and (ii)
DLJMB and certain of its affiliated funds and entities, the Rollover
Shareholders and certain management of the Company will retain or purchase
capital stock of Holdings, in each case as described in the Offering
Memorandum (as defined below). The Company has also entered into a stock
purchase agreement to acquire SBI Holdings, Inc., and its wholly-owned
subsidiaries, Sierra Biomedical, Inc. and Sierra Biomedical San Diego, Inc.
(collectively, the "Sierra Entities"), which will be consummated on the
Closing Date (the "Sierra Acquisition"). Upon the consummation of the Sierra
Acquisition (the "Consummation"), the Sierra Entities will execute the
Indenture and become guarantors of the Notes issued thereunder (each, a
"Guarantor" and collectively, the "Guarantors").
1. Offering Memorandum. The Units will be offered and sold to the
Initial Purchaser pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "Securities
Act"). The Issuers have prepared a preliminary offering memorandum, dated
September 7, 1999 (the "Preliminary Offering Memorandum"), and a final
offering memorandum, dated September 23, 1999 (the "Offering Memorandum"),
relating to the Units.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture and the Warrant Agreement, the
Securities (and all securities issued in exchange therefor, in substitution
thereof or upon conversion thereof) shall bear the following legend:
"THIS [NOTE] [SECURITY] (OR ITS PREDECESSOR) [AND THE WARRANT SHARES
TO BE ISSUED UPON ITS EXERCISE HAVE] [HAS] NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS, EXCEPT AS SET FORTH IN
THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (As
defined in Rule 144A under the Securities Act) (A "QIB"), (B) IT HAS
ACQUIRED THIS [NOTE] [SECURITY] IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (As defined in Rule 501(A) (1),
(2), (3) or (7) of Regulation D under the Securities Act (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS [NOTE]
[SECURITY] EXCEPT (A) TO the COMPANY OR ANY OF ITS SUBSIDIARIES, (B)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE [TRUSTEE] [WARRANT AGENT] A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS
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[NOTE] [SECURITY] (the form of which can be obtained from the
[Trustee] [warrant agent]) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF [NOTES] [SECURITIES] LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, [AND]
[(3) AGREES NOT TO ENGAGE IN HEDGING TRANSACTIONS UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT AND]
(3) [4] AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
[NOTE] [SECURITY] OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE [INDENTURE] [WARRANT AGREEMENT] CONTAINS A
PROVISION REQUIRING THE [TRUSTEE] [WARRANT AGENT] TO REFUSE TO
REGISTER ANY TRANSFER OF THIS [NOTE] [SECURITY] IN VIOLATION OF THE
FOREGOING."
2. Agreements to Sell and Purchase. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Issuers agree to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Issuers, all of the Units initially at a purchase price
equal to $970.00 per Unit.
3. Terms of Offering. The Initial Purchaser has advised the Issuer
that the Initial Purchaser will make offers (the "Exempt Resales") of the
Units purchased hereunder on the terms set forth in the Offering Memorandum,
as amended or supplemented, solely to (i) persons whom the Initial Purchaser
reasonably believes to be "qualified institutional buyers" as defined in Rule
144A under the Securities Act ("QIBs"), and (ii) persons permitted to purchase
the Series A Notes in offshore transactions in reliance upon Regulation S
under the Securities Act (each, a "Regulation S Purchaser") (such persons
specified in clauses (i) and (ii) being referred to herein as the "Eligible
Purchasers"). The Initial Purchaser will offer the Units to Eligible
Purchasers initially at a price equal to $970.00 per Unit. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement
(the "Registration Rights Agreement"), to be dated the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such Series A Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
and the Guarantors will agree to file with the Securities and Exchange
Commission (the "Commission") under the circumstances set forth therein, (i) a
registration statement under the Securities Act (the "Exchange Offer
Registration Statement") relating to the Company's 13 1/2% Series B Senior
Subordinated Notes due 2009 (the "Series B Notes"), to be offered in exchange
for the Series A Notes (such offer to exchange being referred to as the
"Exchange Offer") and the Subsidiary Guarantees
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thereof (the "Series B Guarantees") and (ii) a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement" and, together with the Exchange Offer Registration Statement, the
"Registration Statements") relating to the resale by certain holders of the
Series A Notes and to use their reasonable best efforts to cause such
Registration Statements to be declared and remain effective and usable for the
periods specified in the Registration Rights Agreement and to consummate the
Exchange Offer.
Holders (including subsequent transferees) of the Warrants and the
Warrant Shares will have the rights set forth in the Warrant Agreement and the
warrant registration rights agreement (the "Warrant Registration Rights
Agreement"), to be dated the Closing Date. Pursuant to the Warrant
Registration Rights Agreement, Holdings will agree to grant to the holders of
the Warrant Shares the right to require Holdings to file a shelf registration
statement (the "Warrant Registration Statement") covering resales of the
Warrants and Warrant Shares and the exercise of the Warrants purchased
pursuant to such Warrant Registration Statement and to use its reasonable best
efforts to make such Warrant Registration Statement effective.
4. Delivery and Payment.
(a) Delivery of, and payment of the Purchase Price for, the Units
shall be made at the offices of Xxxxx Xxxx & Xxxxxxxx or such other location
as may be mutually acceptable. Such delivery and payment shall be made at 9:00
a.m. New York City time, on September 29, 1999, or at such other time on the
same date or such other date as shall be agreed upon by the Initial Purchaser
and the Issuers in writing. The time and date of such delivery and the payment
for the Units are herein called the "Closing Date."
(b) One or more of the Units in definitive global form, registered in
the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"),
having an aggregate principal amount corresponding to the aggregate principal
amount of the Units sold pursuant to Exempt Resales (collectively, the "Global
Unit"), shall be delivered by the Issuers to the Initial Purchaser (or as the
Initial Purchaser directs) in each case with any transfer taxes thereon duly
paid by the Issuers against payment by the Initial Purchaser of the Purchase
Price thereof by wire transfer in immediately available funds to the order of
the Issuers. The Global Units shall be made available to the Initial Purchaser
for inspection not later than 9:30 a.m., New York City time, on the business
day immediately preceding the Closing Date.
5. Agreements of the Issuers and the Guarantors. As of the date
hereof, the Issuers, and as of the Consummation, the Guarantors, hereby agree
with the Initial Purchaser as follows:
(a) To advise the Initial Purchaser promptly and, if requested by the Initial
Purchaser, confirm such advice in writing, (i) of the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of any Securities for offering or sale in any
jurisdiction designated by the Initial Purchaser pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose, and (ii)
of the happening of any event during the period referred to in Section 5(c)
below that makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Offering Memorandum untrue or that requires any
additions to or changes in the Preliminary Offering Memorandum or the Offering
Memorandum in order to make the statements therein not misleading. The Issuers
and the Guarantors shall use their reasonable best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption
of any of the Securities under any state securities or Blue Sky laws, and, if
at any time any state securities commission or other federal or state
regulatory authority shall issue an order suspending the qualification or
exemption of any Securities under any state securities or Blue Sky laws, the
Issuers and the Guarantors shall use their reasonable best efforts to obtain
the withdrawal or lifting of such
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order at the earliest possible time; provided, however, that the Issuers and
the Guarantors shall not be required in connection therewith to qualify as a
foreign entity in any jurisdiction in which it is not now so qualified or to
take any action that would subject it to general consent to service of process
or taxation, other than as to matters and transactions relating to the
Preliminary Offering Memorandum, the Offering Memorandum or Exempt Resales, in
any jurisdiction in which it is not now so subject.
(b) To furnish the Initial Purchaser and those persons identified by
the Initial Purchaser to the Issuers as many copies of the Preliminary
Offering Memorandum and the Offering Memorandum, and any amendments or
supplements thereto, as the Initial Purchaser may reasonably request for the
time period specified in Section 5(c). Subject to the Initial Purchaser's
compliance with its representations and warranties and agreements set forth in
Section 7 hereof, the Issuers and the Guarantors consent to the use of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments and supplements thereto required pursuant hereto, by the Initial
Purchaser in connection with Exempt Resales.
(c) During such period as, in the opinion of counsel for the Initial
Purchaser, an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchaser and in connection with
market-making activities of the Initial Purchaser for so long as any Units are
outstanding, (i) not to make any amendment or supplement to the Offering
Memorandum of which the Initial Purchaser shall not previously have been
advised or to which the Initial Purchaser shall reasonably object after being
so advised and (ii) to prepare promptly, upon the Initial Purchaser's
reasonable request, any amendment or supplement to the Offering Memorandum
which may be necessary or advisable in connection with such Exempt Resales or
such market-making activities.
(d) If, during the period referred to in Section 5(c) above, any
event shall occur or condition shall exist as a result of which, in the
opinion of counsel to the Initial Purchaser, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when such Offering Memorandum is delivered to
an Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchaser, it is necessary to amend or supplement the Offering
Memorandum to comply with any applicable law, forthwith to prepare an
appropriate amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the light of
the circumstances when it is so delivered, be misleading, or so that such
Offering Memorandum will comply with applicable law, and to furnish to the
Initial Purchaser and such other persons as the Initial Purchaser may
designate such number of copies thereof as the Initial Purchaser may
reasonably request.
(e) Prior to the sale of all Units pursuant to Exempt Resales as
contemplated hereby, to cooperate with the Initial Purchaser and counsel to
the Initial Purchaser in connection with the registration or qualification of
the Units for offer and sale to the Initial Purchaser and pursuant to Exempt
Resales under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchaser may request and to continue such registration or
qualification in effect so long as required for Exempt Resales and to file
such consents to service of process or other documents as may be necessary in
order to effect such registration or qualification; provided, however, that
neither of the Issuers nor any Guarantor shall be required in connection
therewith to qualify as a foreign entity in any jurisdiction in which it is
not now so qualified or to take any action that would subject it to general
consent to service of process or taxation, other than as to matters and
transactions relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction in which it is not now so
subject.
(f) So long as the Securities are outstanding and the Indenture so
requires, (i) to mail and make generally available as soon as practicable
after the end of each fiscal year to the record holders of the Series
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A Notes a financial report of the Issuers and their subsidiaries on a
consolidated basis all such financial reports to include a consolidated
balance sheet, a consolidated statement of operations, a consolidated
statement of cash flows and a consolidated statement of shareholders' equity
as of the end of and for such fiscal year, together with comparable
information as of the end of and for the preceding year, certified by the
Issuers' independent public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period
(except for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(g) So long as the Securities are outstanding, to furnish to the
Initial Purchaser as soon as available copies of all reports or other
communications furnished by the Issuers and the Guarantors to their security
holders or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Issuers and the
Guarantors is listed and such other publicly available information concerning
the Issuers and/or their subsidiaries as the Initial Purchaser may reasonably
request.
(h) So long as any of the Securities remain outstanding and during
any period in which the Issuers and the Guarantors are not subject to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to make available to any holder of Securities in connection with any
sale thereof and any prospective purchaser of such Securities from such
holder, the information ("Rule 144A Information") required by Rule 144A(d)(4)
under the Securities Act.
(i) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of the obligations of the Issuers and
the Guarantors under this Agreement, including: (i) the fees, disbursements
and expenses of counsel to the Issuers and the Guarantors and accountants of
the Issuers and the Guarantors in connection with the sale and delivery of the
Units to the Initial Purchaser and pursuant to Exempt Resales, and all other
fees and expenses in connection with the preparation, printing, filing and
distribution of the Preliminary Offering Memorandum, the Offering Memorandum
and all amendments and supplements to any of the foregoing (including
financial statements), including the mailing and delivering of copies thereof
to the Initial Purchaser and persons designated by them in the quantities
specified herein, (ii) all costs and expenses related to the transfer and
delivery of the Units to the Initial Purchaser and pursuant to Exempt Resales,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement, the other Operative Documents and any
other agreements or documents in connection with the offering, purchase, sale
or delivery of the Units, (iv) all expenses in connection with the
registration or qualification of the Units and the Subsidiary Guarantees for
offer and sale under the securities or Blue Sky laws of the several states and
all costs of printing or producing any preliminary and supplemental Blue Sky
memoranda in connection therewith (including the filing fees and fees and
disbursements of counsel for the Initial Purchaser in connection with such
registration or qualification and memoranda relating thereto), (v) the cost of
printing certificates representing the Units and the Subsidiary Guarantees,
(vi) all expenses and listing fees in connection with the application for
quotation of the Units in the National Association of Securities Dealers, Inc.
("NASD") Automated Quotation System - PORTAL ("PORTAL"), (vii) the fees and
expenses of the Trustee and the Trustee's counsel in connection with the
Indenture, the Notes and the Subsidiary Guarantees, (viii) the fees and
expenses of the Warrant Agent and the Warrant Agent's counsel in connection
with the Warrant Agreement, (ix) the costs and charges of any transfer agent,
registrar and/or depositary (including the DTC), (x) any fees charged by
rating agencies for the rating of the Notes, (xi) all costs and expenses of
the Exchange Offer and any Registration Statement, as set forth in the
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Registration Rights Agreement, (xii) all costs and expenses of the Warrant
Registration Statement, as set forth in the Warrant Registration Rights
Agreement, and (xiii) all other costs and expenses incident to the performance
of the obligations of the Issuers and the Guarantors hereunder for which
provision is not otherwise made in this Section.
The Sierra Entities shall not be responsible for any fees and
expenses described in this paragraph unless and until the Sierra Acquisition
is Consummated.
(j) To use its reasonable best efforts to effect the inclusion of the
Securities in PORTAL and to maintain the listing of the Securities on PORTAL
for so long as the Securities are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of the
Securities, and to comply with all agreements set forth in the representation
letters of the Issuers and the Guarantors to DTC relating to the approval of
the Securities by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Issuers or any
Guarantor or any warrants, rights or options to purchase or otherwise acquire
debt securities of the Issuers or any Guarantor substantially similar to the
Securities and the Subsidiary Guarantees (other than (i) the Securities and
the Subsidiary Guarantees or (ii) commercial paper issued in the ordinary
course of business), without the prior written consent of the Initial
Purchaser.
(m) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act) that
would be integrated with the sale of the Units to the Initial Purchaser or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Units under the Securities Act.
(n) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Securities.
(o) To cause the Exchange Offer to be made in the appropriate form to
permit Series B Notes and guarantees thereof by the Guarantors registered
pursuant to the Securities Act to be offered in exchange for the Series A
Notes, subject to the limitations contemplated by the Registration Rights
Agreement, and to comply with all applicable federal and state securities laws
in connection with the Exchange Offer.
(p) To cause the Warrant Registration Statement to be made on the
appropriate form and to comply with all applicable federal and state
securities laws in connection therewith.
(q) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(r) To comply with all of its agreements set forth in the Warrant
Agreement.
(s) To use its reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Units and the Subsidiary Guarantees.
(t) For so long as any of the Securities and the Subsidiary
Guarantees are outstanding and if, in the reasonable judgment of the Initial
Purchaser or its counsel, the Initial Purchaser or any of its affiliates (as
defined in the rules and regulations under the Securities Act) is required to
deliver a prospectus (any such prospectus, a "Market Making Prospectus") in
connection with sales of the Units, to (i) provide the Initial Purchaser and
its affiliates, without charge, as many copies of the Market Making Prospectus
as they may
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reasonably request, (ii) periodically amend the Registration
Statement or the Warrant Registration Statement so that the information
contained therein complies with the requirements of Section 10(a) of the
Securities Act, (iii) amend the Registration Statement, the Warrant
Registration Statement or amend or supplement the Market Making Prospectus
when necessary to reflect any material changes in the information provided
therein and promptly file such amendment or supplement with the Commission,
(iv) provide the Initial Purchaser and its affiliates with copies of each
amendment or supplement so filed and such other documents, including opinions
of counsel and "comfort" letters, as they may reasonably request and (v)
indemnify the Initial Purchaser and its affiliates with respect to the Market
Making Prospectus and, if applicable, contribute to any amount paid or payable
by the Initial Purchaser and its affiliates in a manner substantially
identical to that specified in Section 8 hereof (with appropriate
modifications). The Issuers consent to the use, subject to the provisions of
the Securities Act and the state securities or Blue Sky laws of the
jurisdictions in which the Units are offered by the Initial Purchaser, of each
Market Making Prospectus.
6. Representations, Warranties and Agreements of the Issuers. As of
the date hereof, the Issuers, and as of the Consummation, the Guarantors,
represent and warrant to, and agree with, the Initial Purchaser that:
(a) The Preliminary Offering Memorandum and the Offering Memorandum
do not, and any supplement or amendment to them will not, contain any untrue
statement of a material fact or omit to state any 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, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchaser furnished to the Issuers in
writing by the Initial Purchaser expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting
that any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act, has been issued.
(b) Each of the Issuers and their subsidiaries has been duly
organized, is validly existing and in good standing under the laws of its
jurisdiction of organization and has the requisite power and authority to
carry on its business as described in the Preliminary Offering Memorandum and
the Offering Memorandum and to own, lease and operate its properties, and each
is duly qualified and is in good standing as a foreign entity authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not (i) have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Issuers and their subsidiaries, taken as a whole or (ii) in any manner draw
into question the validity of any of the Operative Documents (the events
referred to in clauses (i) and (ii), each a "Material Adverse Effect").
(c) All equity interests of the Issuers have been duly authorized and
validly issued and are fully paid, non-assessable and not subject to any
preemptive or similar rights.
(d) The entities listed on Schedule B hereto are the only
subsidiaries, direct or indirect, of the Issuers. Except as otherwise set
forth in the Offering Memorandum, all of the outstanding equity interests of
each of the Issuers' subsidiaries have been duly authorized and validly issued
and are fully paid and non-assessable, as applicable, and are owned by the
Issuers, directly or indirectly through one or more subsidiaries, free and
clear of any security interest, claim, lien, encumbrance or adverse interest
of any nature (each, a "Lien")
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(e) This Agreement has been duly authorized, executed and delivered
by the Issuers and each of the Guarantors.
(f) The Indenture has been duly authorized by the Company and each of
the Guarantors, and on the Closing Date, will have been validly executed and
delivered by the Company and each of the Guarantors. When the Indenture has
been duly executed and delivered by the Company and each of the Guarantors,
the Indenture will be a valid and binding agreement of the Company and each of
the Guarantors, enforceable against the Company and each of the Guarantors in
accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability. On
the Closing Date, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the "TIA" or
"Trust Indenture Act"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(g) Each of the Issuers has duly and validly authorized the issuance
of the Notes and the Warrants as a Unit. On the Closing Date, the Units will
conform as to legal matters to the description thereof contained in the
Offering Memorandum.
(h) The Series A Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Series A Notes have been issued, executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, the Series A Notes
will be entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability. On
the Closing Date, the Series A Notes will conform as to legal matters to the
description thereof contained in the Offering Memorandum.
(i) On the Closing Date, the Series B Notes will have been duly
authorized by the Company. When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the
Indenture and will be the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles
of general applicability.
(j) The Warrants have been duly authorized by Holdings and, on the
Closing Date, will have been validly delivered by Holdings. When the Warrants
are issued, the Warrants will be valid and binding obligations of Holdings,
enforceable against Holdings in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) the rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability. On the Closing Date, the Warrants will
conform as to legal matters to the description thereof in the Offering
Memorandum.
(k) The Warrant Shares have been duly and validly authorized for
issuance by Holdings, and when issued pursuant to the terms of the Warrants
and the Warrant Agreement will be fully paid and
10
nonassessable and will not be subject to any preemptive or similar rights. On
the Closing Date, the Warrant Shares will conform as to legal matters to the
description thereof contained in the Offering Memorandum.
(l) The Subsidiary Guarantee to be endorsed on the Series A Notes by
each Guarantor has been duly authorized by such Guarantor and, on the Closing
Date, will have been duly executed and delivered by each such Guarantor. When
the Series A Notes have been issued, executed and authenticated in accordance
with the Indenture and delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement, the Subsidiary Guarantee of each
Guarantor endorsed thereon will be entitled to the benefits of the Indenture
and will be the valid and binding obligation of such Guarantor, enforceable
against such Guarantor in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles
of general applicability. On the Closing Date, the Subsidiary Guarantees to be
endorsed on the Series A Notes will conform as to legal matters to the
description thereof contained in the Offering Memorandum.
(m) The Subsidiary Guarantee to be endorsed on the Series B Notes by
each Guarantor has been duly authorized by such Guarantor and, when issued,
will have been duly executed and delivered by each such Guarantor. When the
Series B Notes have been issued, executed and authenticated in accordance with
the terms of the Exchange Offer and the Indenture, the Subsidiary Guarantee of
each Guarantor endorsed thereon will be entitled to the benefits of the
Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditor's rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles
of general applicability. When the Series B Notes are issued, authenticated,
and delivered, the Subsidiary Guarantees to be endorsed on the Series B Notes
will conform as to legal matters to the description thereof in the Offering
Memorandum.
(n) The Registration Rights Agreement has been duly authorized by the
Company and each of the Guarantors and, on the Closing Date, will have been
duly executed and delivered by the Company and each of the Guarantors. When
the Registration Rights Agreement has been duly executed and delivered by the
Company and each of the Guarantors, the Registration Rights Agreement will be
a valid and binding agreement of the Company and each of the Guarantors,
enforceable against the Company and each of the Guarantors in accordance with
its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability and (iii) rights to
indemnity and contribution thereunder may be limited by applicable law. On the
Closing Date, the Registration Rights Agreement will conform as to legal
matters to the description thereof in the Offering Memorandum.
(o) The Warrant Agreement has been duly and validly authorized by
Holdings and, when duly executed and delivered by Holdings, will be a valid
and binding agreement of Holdings, enforceable against it in accordance with
its terms, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability and (iii) rights to
indemnity and contribution thereunder may be limited by applicable law. On the
Closing Date, the Warrant Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(p) The Warrant Registration Rights Agreement has been duly and
validly authorized by Holdings and, when duly executed and delivered by
Holdings, will be a valid and binding agreement of
11
Holdings, enforceable in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally, (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles
of general applicability and (iii) rights to indemnity and contribution
thereunder may be limited by applicable law. On the Closing Date, the Warrant
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(q) The indebtedness represented by the Units is being incurred for
proper purposes and in good faith. On the Closing Date (after giving effect to
the application of the proceeds from the issuance of the Units), (a) the fair
value and present fair saleable value of the Issuers' assets exceeds and would
exceed its stated liabilities and identified contingent liabilities, (b) the
Issuers should be able to pay its debts as they become absolute and matured
and (c) the capital the Issuers is not and would not be unreasonably small for
the business in which it is engaged.
(r) Neither of the Issuers nor any of their subsidiaries is in
violation of its respective organizational documents or in default in the
performance of any obligation, agreement, covenant or condition contained in
any indenture, loan agreement, mortgage, lease or other agreement or
instrument to which the Issuers or any of their subsidiaries is a party or by
which the Issuers or any of their subsidiaries or their respective property is
bound, except for such defaults which, singly or in the aggregate, would not
have a Material Adverse Effect.
(s) The execution, delivery and performance of this Agreement and the
other Operative Documents by the Issuers and each of the Guarantors (as
applicable), compliance by the Issuers and each of the Guarantors (as
applicable) with all provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) require any consent,
approval, authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under federal
securities or Blue Sky laws of the various states or have been or will be
obtained prior to the Closing Date), (ii) conflict with or constitute a breach
of any of the terms or provisions of, or a default under, (A) the charter or
by-laws of the Issuers or any of their subsidiaries or (B) any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material
to the Issuers and their subsidiaries, taken as a whole, to which the Issuers
or any of their subsidiaries is a party or by which the Issuers or any of
their subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction
over the Issuers, any of their subsidiaries or their respective property, (iv)
result in the imposition or creation of (or the obligation to create or
impose) a Lien under, any agreement or instrument to which the Issuers or any
of their subsidiaries is a party or by which the Issuers or any of their
subsidiaries or their respective property is bound (other than the Liens to be
created under the Credit Agreement as set forth in the Offering Memorandum),
or (v) result in the termination, suspension or revocation of any
Authorization (as defined below) of the Issuers or any of their subsidiaries
or result in any other impairment of the rights of the holder of any such
Authorization, except (1) insofar as there is required any consent, approval,
authorization, filing, notification or other action that both (x) is described
in Section 3.4 of the Recapitalization Agreement or listed in Schedule 3.4 of
the Disclosure Schedule (as defined in the Recapitalization Agreement) and (y)
either has been or prior to the Closing Date will be obtained or made or (2)
in the case of clauses (i), (ii)(B), (iv) and (v), as would not, singly or in
the aggregate, have a Material Adverse Effect.
(t) No action has been taken and no law, statute, rule or regulation
or order has been enacted, adopted or issued by any governmental agency or
body which prevents the execution, delivery and performance of any of this
Agreement, the Indenture, the Units, the Subsidiary Guarantees or any of the
12
other Operative Documents or the issuance of the Units, or suspends the sale
of the Units in any jurisdiction referred to in Section 5(e) and no
injunction, restraining order or other order or relief of any nature by a
federal or state court or other tribunal of competent jurisdiction has been
issued with respect to the Issuers which would prevent or suspend the issuance
or sale of the Units in any jurisdiction referred to in Section 5(e).
(u) Except as disclosed in the Offering Memorandum, there are no
legal or governmental proceedings pending or threatened to which the Issuers
or any of their subsidiaries is or could be a party or to which any of their
respective property is or could be subject, which would reasonably be expected
to result, singly or in the aggregate, in a Material Adverse Effect.
(v) Except as disclosed in the Offering Memorandum, neither of the
Issuers nor any of their subsidiaries has violated any foreign, federal, state
or local law or regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), any provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or any
provisions of the Foreign Corrupt Practices Act or the rules and regulations
promulgated thereunder, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect.
(w) Except as otherwise set forth in the Offering Memorandum, there
are no costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws or any
Authorization, any related constraints on operating activities and any
potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
(x) Each of the Issuers and their subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "Authorization") of, and has made all filings with and notices to,
all governmental or regulatory authorities and self-regulatory organizations
and all courts and other tribunals, including without limitation, under any
applicable Environmental Laws, as are necessary to own, lease, license and
operate its respective properties and to conduct its business, except where
the failure to have any such Authorization or to make any such filing or
notice would not, singly or in the aggregate, have a Material Adverse Effect.
Except as disclosed in the Offering Memorandum, each such Authorization is
valid and in full force and effect and each of the Issuers and their
subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including,
without limitation, the receipt of any notice from any authority or governing
body) which allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or results or,
after notice or lapse of time or both, would result in any other impairment of
the rights of the holder of any such Authorization; and such Authorizations
contain no restrictions that are burdensome to the Issuers or any of their
subsidiaries; except, in each case, where such failure to be valid and in full
force and effect or to be in compliance, the occurrence of any such event or
the presence of any such restriction would not, singly or in the aggregate,
have a Material Adverse Effect.
(y) The accountants, PricewaterhouseCoopers LLP, that have certified
the financial statements included in the Preliminary Offering Memorandum and
the Offering Memorandum are independent public accountants with respect to the
Issuers as required by the Securities Act and the Exchange Act.
(z) The historical financial statements, together with related notes
forming part of the Offering Memorandum (and any amendment or supplement
thereto), present fairly the consolidated financial
13
position, results of operations and changes in financial position of the
Issuers and their subsidiaries on the basis stated in the Offering Memorandum
at the respective dates or for the respective periods to which they apply;
such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the Offering
Memorandum (and any amendment or supplement thereto) are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Issuers.
(aa) Each of the Issuers has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(bb) The pro forma financial statements included in the Preliminary
Offering Memorandum and the Offering Memorandum have been prepared on a basis
consistent with the historical financial statements of the Issuers and their
subsidiaries and give effect to assumptions used in the preparation thereof on
a reasonable basis and in good faith and present fairly the historical and
proposed transactions contemplated by the Preliminary Offering Memorandum and
the Offering Memorandum; and such pro forma financial statements comply as to
form in all material respects with the requirements applicable to pro forma
financial statements included in registration statements on Form S-1 under the
Securities Act. The other pro forma financial and statistical information and
data included in the Offering Memorandum are, in all material respects,
accurately presented and prepared on a basis consistent with the pro forma
financial statements.
(cc) The Issuers are not, and after giving effect to the offering and
sale of the Units and the application of the net proceeds thereof as described
in the Offering Memorandum, will not be, an "investment company," as such term
is defined in the Investment Company Act of 1940, as amended.
(dd) Except as otherwise disclosed in the Offering Memorandum, there
are no contracts, agreements or understandings that will remain in effect
after the issuance of the Securities between the Issuers and any person
granting such person the right to require the Issuers to file a registration
statement under the Securities Act with respect to any securities of the
Issuers or to require the Issuers to include such securities with the
Securities registered pursuant to any Registration Statement or the Warrant
Registration Statement.
(ee) Neither of the Issuers nor any of their subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of
the Units to violate Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System.
(ff) No "nationally recognized statistical rating organization" (as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act)
(i) has imposed (or has informed the Issuers that it is considering imposing)
any condition (financial or otherwise) on any Issuer's retaining any rating
assigned to the Issuers or any securities of any Issuer or (ii) has indicated
to any Issuer that it is considering (A) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (B) any change
in the outlook for any rating of any Issuer or any securities of any Issuer.
(gg) Since the respective dates as of which information is given in
the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the condition,
financial or otherwise, or the
14
earnings, business, management or operations of the Issuers and their
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in
the capital stock or in the long-term debt of the Issuers or any of their
subsidiaries and (iii) neither of the Issuers nor any of their subsidiaries
has incurred any material liability or obligation, direct or contingent.
(hh) Except as set forth in the Offering Memorandum under "SEC
Review," and except with respect to any financial statements of the Guarantors
and Holdings, each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Securities Act.
(ii) When the Securities and the Subsidiary Guarantees are issued and
delivered pursuant to this Agreement, neither the Securities nor the
Subsidiary Guarantees will be of the same class (within the meaning of Rule
144A under the Securities Act) as any security of any Issuer or the Guarantors
that is listed on a national securities exchange registered under Section 6 of
the Exchange Act or that is quoted in a United States automated inter-dealer
quotation system.
(jj) No form of general solicitation or general advertising (as
defined in Regulation D under the Securities Act) was used by any Issuer or
Guarantor or any of their respective representatives (other than the Initial
Purchaser, as to whom the Issuers and the Guarantors make no representation)
in connection with the offer and sale of the Units contemplated hereby,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising. No securities of
the same class as the Units have been issued and sold by any Issuer within the
six-month period immediately prior to the date hereof.
(kk) Prior to the effectiveness of any Registration Statement, the
Indenture is not required to be qualified under the TIA.
(ll) Neither of the Issuers, the Guarantors, nor any of their
respective affiliates or any person acting on their behalf (other than the
Initial Purchaser, as to whom the Issuers and the Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Securities Act ("Regulation S")
with respect to the Units.
(mm) The Units offered and sold in reliance on Regulation S have been
and will be offered and sold only in offshore transactions assuming the
accuracy of the Initial Purchaser's representations and warranties and
agreements set forth in Section 7 hereof.
(nn) The sale of the Units pursuant to Regulation S is not part of a
plan or scheme to evade the registration provisions of the Securities Act.
(oo) No registration under the Securities Act of the Units or the
Subsidiary Guarantees is required for the sale of the Units and the Subsidiary
Guarantees to the Initial Purchaser as contemplated hereby or for the Exempt
Resales assuming the accuracy of the Initial Purchaser's representations and
warranties and agreements set forth in Section 7 hereof.
(pp) There is no (i) material unfair labor practice complaint,
grievance or arbitration proceeding pending or threatened against the Issuers
before the National Labor Relations Board or any state or local labor
relations board or (ii) strike, labor dispute, slowdown or stoppage pending or
threatened against the
15
Issuers, except for such actions specified in clause (i) or (ii) above, which,
singly or in the aggregate, would not have a Material Adverse Effect. To the
best of the Issuers' knowledge, no collective bargaining organizing activities
are taking place with respect to the Issuers, which, singly or in the aggregate,
would have a Material Adverse Effect.
(qq) The Issuers maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(rr) Except as otherwise set forth in the Offering Memorandum, the
Issuers and their subsidiaries own or possess, or can acquire on reasonable
terms, all patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures), trademarks, service marks
and trade names ("intellectual property") currently employed by them in
connection with the business now operated by them, except where the failure to
own or possess or otherwise be able to acquire such intellectual property
would not, singly or in the aggregate, have a Material Adverse Effect; and, to
the best of the Issuers' knowledge, neither of the Issuers nor any of their
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of such intellectual property
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.
(ss) Each certificate signed by any officer of any Issuer and
delivered to the Initial Purchaser or counsel for the Initial Purchaser shall
be deemed to be a representation and warranty by such Issuer to the Initial
Purchaser as to the matters covered thereby.
(tt) The agreements listed on Exhibit C hereto are all the agreements
that are material to the conduct of the business of the Issuers and their
subsidiaries, taken as a whole.
The Issuers acknowledge that the Initial Purchaser and, for purposes
of the opinions to be delivered to the Initial Purchaser pursuant to Section 9
hereof, counsel to the Issuers and counsel to the Initial Purchaser will rely
upon the accuracy and truth of the foregoing representations and hereby
consent to such reliance.
7. Initial Purchaser's Representations and Warranties. The Initial
Purchaser represents and warrants to the Issuers, that:
(a) The Initial Purchaser is either a QIB or an institutional
"accredited investor" (as such term is defined in rule 501(a)(1), (2), (3) or
(7) under the Securities Act, an "Accredited Institution") in either case,
with such knowledge and experience in financial and business matters as is
necessary in order to evaluate the merits and risks of an investment in the
Units.
(b) The Initial Purchaser (A) is not acquiring the Units with a view
to any distribution thereof or with any present intention of offering or
selling any of the Units in a transaction that would violate the Securities
Act or the securities laws of any state of the United States or any other
applicable jurisdiction and (B) will be reoffering and reselling the Units
only (x) to QIBs in reliance on the exemption from the
16
registration requirements of the Securities Act provided by Rule 144A and (y)
in offshore transactions in reliance upon Regulation S under the Securities
Act.
(c) The Initial Purchaser agrees that no form of general solicitation
or general advertising (within the meaning of Regulation D under the
Securities Act) has been or will be used by the Initial Purchaser or any of
its representatives in connection with the offer and sale of the Securities
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) The Initial Purchaser agrees that, in connection with Exempt
Resales, the Initial Purchaser will solicit offers to buy the Units only from,
and will offer to sell the Units only to, Eligible Purchasers. The Initial
Purchaser further agrees that it will offer to sell the Units only to, and
will solicit offers to buy the Units only from (A) Eligible Purchasers that
the Initial Purchaser reasonably believes are QIBs and (B) Regulation S
Purchasers, in each case, that agree that (x) the Securities purchased by them
may be resold, pledged or otherwise transferred within the time period
referred to under Rule 144(k) (taking into account the provisions of Rule
144(d) under the Securities Act, if applicable) under the Securities Act, as
in effect on the date of the transfer of such Units, only (I) to the Issuers
or any of their subsidiaries, (II) to a person whom the seller reasonably
believes is a QIB purchasing for its own account or for the account of a QIB
in a transaction meeting the requirements of Rule 144A under the Securities
Act, (III) in an offshore transaction (as defined in Rule 902 under the
Securities Act) meeting the requirements of Rule 904 of the Securities Act,
(IV) in a transaction meeting the requirements of Rule 144 under the
Securities Act, (V) to an Accredited Institution that, prior to such transfer,
furnishes the Trustee a signed letter containing certain representations and
agreements relating to the registration of transfer of such Unit (the form of
which may be obtained from the Trustee) and, if such transfer is in respect of
an aggregate principal amount of Units less than $250,000, an opinion of
counsel acceptable to the Issuers that such transfer is in compliance with the
Securities Act, (VI) in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel acceptable to the Issuers) or (VII) pursuant to an effective
registration statement and, in each case, in accordance with the applicable
securities laws of any State of the United States or any other applicable
jurisdiction and (y) they will deliver to each person to whom such Units or an
interest therein is transferred a notice substantially to the effect of the
foregoing.
(e) The Initial Purchaser and its affiliates or any person acting on
its or their behalf have not engaged or will not engage in any directed
selling efforts within the meaning of Regulation S with respect to the Units.
(f) The Units offered and sold by the Initial Purchaser pursuant
hereto in reliance on Regulation S have been and will be offered and sold only
in offshore transactions.
(g) The sale of the Units offered and sold by the Initial Purchaser
pursuant hereto in reliance on Regulation S is not part of a plan or scheme to
evade the registration provisions of the Securities Act.
(h) With respect to Units to be sold pursuant to Regulation S of the
Securities Act, the Initial Purchaser agrees that it has not offered or sold
and will not offer or sell such Units in the United States or to, or for the
benefit or account of, a U.S. Person (other than a distributor), in each case,
as defined in Rule 902 under the Securities Act (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later of
the commencement of the offering of the Units pursuant hereto and the Closing
Date, other than in accordance with Regulation S of the Securities Act or
another exemption from the registration requirements of the Securities Act.
17
The Initial Purchaser agrees that, during such 40-day restricted period, it
will not cause any advertisement with respect to the Units (including any
"tombstone" advertisement) to be published in any newspaper or periodical or
posted in any public sale and will not issue any circular relating to the
Units, except such advertisements that are permitted by and which include the
statements required by Regulation S.
The Initial Purchaser acknowledges that the Issuers and, for purposes
of the opinions to be delivered to the Initial Purchaser pursuant to Section 9
hereof, counsel to the Issuers and counsel to the Initial Purchaser will rely
upon the accuracy and truth of the foregoing representations, and the Initial
Purchaser hereby consents to such reliance.
8. Indemnification. (a) As of the date hereof, the Issuers, and as of
the Consummation, the Guarantors, agree, jointly and severally, to indemnify
and hold harmless the Initial Purchaser, its directors, its officers and each
person, if any, who controls the Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), the Preliminary Offering Memorandum or any Rule 144A
Information provided by the Issuers or any Guarantor to any holder or
prospective purchaser of Units pursuant to Section 5(h) or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Initial Purchaser furnished in
writing to the Issuers by the Initial Purchaser; provided, however, that the
foregoing indemnity agreement with respect to any Preliminary Offering
Memorandum shall not inure to the benefit of the Initial Purchaser if the
Initial Purchaser fails to deliver an Offering Memorandum (as then amended or
supplemented, provided by the Issuers to the Initial Purchaser in the
requisite quantity and on a timely basis to permit proper delivery on or prior
to the Closing Date) to the person asserting any losses, claims, damages and
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Memorandum,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, if such material misstatement or omission or alleged material
misstatement or omission was cured in the Offering Memorandum.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Issuers and the Guarantors and their respective directors and officers and
each person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) the Issuers or any Guarantor
to the same extent as the foregoing indemnity from the Issuers and the
Guarantors to the Initial Purchaser but only with reference to information
relating to the Initial Purchaser furnished in writing to the Issuers by the
Initial Purchaser expressly for use in the Preliminary Offering Memorandum or
the Offering Memorandum.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"Indemnified Party"), the Indemnified Party shall promptly notify the person
against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of all fees and expenses of such counsel, as incurred
(except that, in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Initial Purchaser shall
not be required to assume the defense of such action pursuant to this Section
8(c), but may employ separate counsel and participate in the defense
18
thereof, but the fees and expenses of such counsel, except as provided below,
shall be at the expense of the Initial Purchaser). Any Indemnified Party shall
have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of the Indemnified Party unless (i) the employment of such counsel
shall have been specifically authorized in writing by the Indemnifying Party,
(ii) the Indemnifying Party shall have failed to assume the defense of such
action or employ counsel reasonably satisfactory to the Indemnified Party or
(iii) the named parties to any such action (including any impleaded parties)
include both the Indemnified Party and the Indemnifying Party, and the
Indemnified Party shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Party (in which case the
Indemnifying Party shall not have the right to assume the defense of such
action on behalf of the Indemnified Party). In any such case, the Indemnifying
Party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all Indemnified Parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, in the case of the
parties indemnified pursuant to Section 8(a), and by the Issuers, in the case
of parties indemnified pursuant to Section 8(b). The Indemnifying Party shall
indemnify and hold harmless the Indemnified Party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (i) effected with its written consent or (ii) effected without
its written consent if the settlement is entered into more than twenty
business days after the Indemnifying Party shall have received a request from
the Indemnified Party for reimbursement for the fees and expenses of counsel
(in any case where such fees and expenses are at the expense of the
Indemnifying Party) and, prior to the date of such settlement, the
Indemnifying Party shall have failed to comply with such reimbursement
request. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the Indemnified Party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the Indemnified
Party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the Indemnified Party from all liability on claims
that are or could have been the subject matter of such action and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of the Indemnified Party.
(d) To the extent the indemnification provided for in this Section 8
is unavailable to an Indemnified Party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then
each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers and the Guarantors, on the one hand, and the Initial Purchaser, on the
other hand, from the offering of the Units or (ii) if the allocation provided
by clause 8(d)(i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause 8(d)(i) above but also the relative fault of the Issuers and the
Guarantors, on the one hand, and the Initial Purchaser, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Issuers and
the Guarantors, on the one hand, and the Initial Purchaser, on the other hand,
shall be deemed to be in the same proportion as the total net proceeds from
the offering of the Units (after underwriting discounts and commissions, but
before deducting expenses) received by the Issuers, and the total discounts
and commissions received by the Initial Purchaser bear to the total price to
investors of the Units, in each case, as set forth in the table on the cover
page of the Offering Memorandum. The relative fault of the Issuers and the
Guarantors, on the one hand, and the Initial Purchaser, on the other hand,
shall be
19
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 Issuers and the
Guarantors, on the one hand, or the Initial Purchaser, on the other hand, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Issuers and the Guarantors, and the Initial Purchaser agree that
it would not be just and equitable if contribution pursuant to this Section
8(d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an Indemnified Party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such Indemnified Party in connection with
investigating or defending any matter, including any action, that could have
given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 8, the Initial Purchaser shall
not be required to contribute any amount in excess of the amount by which the
total discounts and commissions received by the Initial Purchaser exceeds the
amount of any damages which the Initial Purchaser has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
Indemnified Party at law or in equity.
9. Conditions of Initial Purchaser's Obligations. The obligations of
the Initial Purchaser to purchase the Units under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Issuers and the
Guarantors contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) On or after the date hereof, (i) there shall not have occurred
any downgrading, suspension or withdrawal of, nor shall any notice have been
given of any potential or intended downgrading, suspension or withdrawal of,
or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of any Issuer or any Guarantor or any securities of any Issuer or any
Guarantor (including, without limitation, the placing of any of the foregoing
ratings on credit watch with negative or developing implications or under
review with an uncertain direction) by any "nationally recognized statistical
rating organization" (as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act), (ii) there shall not have occurred any change, nor
shall any notice have been given of any potential or intended change, in the
outlook for any rating of any Issuer or any Guarantor or any securities of any
Issuer or any Guarantor by any such rating organization and (iii) no such
rating organization shall have given notice that it has assigned (or is
considering assigning) a lower rating to the Units than that on which the
Units were marketed.
(c) Since the respective dates as of which information is given in
the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change or any
development in the condition, financial or otherwise, or the earnings,
business, management or operations of the Issuers and their subsidiaries,
taken as a whole, (ii) there shall not have been any change or any development
involving a prospective change in the capital stock or in the long-term debt
of the Issuers or any of their
20
subsidiaries and (iii) neither of the Issuers nor any of their subsidiaries
shall have incurred any liability or obligation, direct or contingent, the
effect of which, in any such case described in clause 9(c)(i), 9(c)(ii) or
9(c)(iii), in the judgment of the Initial Purchaser, is material and adverse
and, in the judgment of the Initial Purchaser, makes it impracticable to
market the Units on the terms and in the manner contemplated in the Offering
Memorandum.
(d) The Initial Purchaser shall have received on the Closing Date a
certificate dated the Closing Date and after the Consummation, signed by the
Chief Executive Officer, Chairman of the Board, President or a Vice President
and the chief financial officer, principal accounting officer or equivalent
financial officer responsible for the financial statements, of the Issuers and
the Guarantors, confirming the matters set forth in Sections 9(a), 9(b) and
9(c) and stating that the Issuers and each Guarantor has complied with all the
agreements and satisfied all of the conditions herein contained and required
to be complied with or satisfied on or prior to the Closing Date.
(e) The Initial Purchaser shall have received on the Closing Date a
certificate dated the Closing Date and after the Consummation, signed by the
Chief Executive Officer, Chairman of the Board, President or a Vice President
and the chief financial officer, principal accounting officer or equivalent
financial officer responsible for the financial statements, of the Issuers and
the Guarantors, substantially in the form set forth in Exhibit B hereto.
(f) The Initial Purchaser shall have received on the Closing Date an
opinion (satisfactory to the Initial Purchaser and counsel for the Initial
Purchaser), dated the Closing Date, of Xxxxx Xxxx & Xxxxxxxx, counsel for the
Issuers, to the effect that:
(i) the execution and delivery of this Agreement, the
Registration Rights Agreement, the Indenture and the Notes and
compliance by the Issuers to the extent a party thereto, with the
provisions thereof will not conflict with, constitute a default under
or violate (i) any of the terms, conditions or provisions of the
certificate of incorporation or bylaws of the Issuers, (ii) any of
the terms, conditions or provisions of any Operative Document, and
(iii) any New York, Delaware corporate, or federal law or regulation
(other than federal and state securities or blue sky laws, as to
which we express no opinion);
(ii) no consent, approval, waiver, license or authorization or
other action by or filing with any New York, Delaware corporate, or
federal governmental authority is required in connection with the
execution and delivery by the Issuers of this Agreement, the
Registration Rights Agreement, the Warrant Agreement, the Warrant
Registration Rights Agreement, the Indenture and the Securities or
the consummation by the Issuers of their obligations thereunder,
except for (i) the applicable requirements of federal and state
securities or blue sky laws, as to which we express no opinion and
(ii) those already obtained and which are in full force and effect;
(iii) the Series A Notes have been duly authorized by the
Company and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Initial Purchaser in accordance with the terms of this Agreement,
will be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights
generally, (y) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability and (z) to the extent that a waiver of rights under any
usury or stay law may be unenforceable; we express no opinion,
however, as to the applicability
21
(and, if applicable, the effect) of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Bankruptcy Code or any comparable provision of state law to the
questions addressed above or on the conclusions expressed with
respect thereto;
(iv) the Warrants have been duly authorized by Holdings and, on
the Closing Date, when countersigned by the Warrant Agent and issued
and delivered in accordance with the terms of this Agreement and the
Warrant Agreement, the Warrants will be the valid and binding
obligations of Holdings, enforceable against Holdings in accordance
with their terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance or similar
laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(v) the Warrant Shares have been duly and validly authorized
for issuance by Holdings, and when issued and delivered upon payment
of the exercise price pursuant to the terms of the Warrants and the
Warrant Agreement will be fully paid and nonassessable and will not
be subject to any preemptive or similar statutory rights;
(vi) the Indenture has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms, except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally, (y) rights of acceleration and
the availability of equitable remedies may be limited by equitable
principles of general applicability and (z) to the extent that a
waiver of rights under any usury or stay law may be unenforceable; we
express no opinion, however, as to the applicability (and, if
applicable, the effect) of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Bankruptcy Code or any comparable provision of state law to the
questions addressed above or on the conclusions expressed with
respect thereto;
(vii) this Agreement has been duly authorized, executed and
delivered by the Issuers;
(viii) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as (x) the enforceability thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, (y) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability and (z) as
rights to indemnity and contribution thereunder may be limited by
applicable law;
(ix) the Series B Notes have been duly authorized by the Company;
(x) the Warrant Agreement has been duly and validly authorized,
executed and delivered by Holdings and is a valid and binding
agreement of Holdings, enforceable against Holdings in accordance
with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance or similar
laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(xi) the Warrant Registration Rights Agreement has been duly
and validly authorized, executed and delivered by Holdings and is a
valid and binding agreement of Holdings, enforceable against Holdings
in accordance with its terms, except as (i) the enforceability
thereof may be limited
22
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally, (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability and (iii) as rights to indemnity and contribution
thereunder may be limited by applicable law;
(xii) the statements under the captions "Certain Relationships
and Related Party Transactions--the Recapitalization--Investors
Agreement," "Description of New Credit Facility," "Description of
Units," "Description of Notes," "Description of Warrants," and "Plan
of Distribution" in the Offering Memorandum, insofar as such
statements constitute a summary of legal matters or documents
referred to therein, fairly summarize in all material respects the
legal matters or documents referred to therein;
(xiii) the Indenture complies as to form in all material
respects with the requirements of the TIA, and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder; and
(xiv) it is not necessary in connection with the offer, sale
and delivery of the Units to the Initial Purchaser in the manner
contemplated by this Agreement or in connection with the initial
placement of the Units by the Initial Purchaser in the manner
contemplated by the Offering Memorandum pursuant to Exempt Resales to
qualify the Indenture under the TIA, and no registration under the
Securities Act of the Units is required for the sale of the Units to
the Initial Purchaser as contemplated by this Agreement or for the
initial placement of the Units by the Initial Purchaser in the manner
contemplated by the Offering Memorandum pursuant to Exempt Resales
assuming that (i) the Initial Purchaser is a QIB or a Regulation S
Purchaser, (ii) the accuracy of, and compliance with, the Initial
Purchaser's representations and agreements contained in Section 7 of
this Agreement, and (iii) the accuracy of the agreements and
representations of the Issuers set forth in Sections 5(h) and (m) and
6(hh), (ii), (jj), (kk), (ll), (mm) and (oo) of this Agreement. Such
counsel may state that it expresses no opinion as to any other offer
or resale.
In addition, such counsel shall state that it has participated in the
preparation of the Offering Memorandum and any amendments or supplements
thereto, if applicable, and that although such counsel has not independently
verified the accuracy, completeness or fairness of the statements contained
therein, no facts have come to such counsel's attention to cause it to believe
that, as of the date of the Offering Memorandum or as of the Closing Date, the
Offering Memorandum, as amended or supplemented, if applicable (except for the
financial statements and other financial or statistical data included therein
or omitted therefrom, as to which such counsel need not express any belief)
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The opinion of Xxxxx Xxxx & Xxxxxxxx described in this Section 9(f)
shall be rendered to the Initial Purchaser at the request of the Issuers and
shall so state therein.
(g) The Initial Purchaser shall have received on the Closing Date an opinion
(satisfactory to the Initial Purchaser and counsel for the Initial Purchaser),
dated the Closing Date, of Xxxxxx X. Xxxxxxxxxxx, Esq., general counsel for
the Issuer, to the effect that:
(i) each of the Issuers is a corporation duly formed, validly
existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as described in
the Offering
23
Memorandum. Each of the Issuers is duly qualified to transact
business and is in good standing as a foreign corporation in each
jurisdiction where the character of its activities requires such
qualification, except where the failure of the Issuers to be so
qualified would not have a Material Adverse Effect;
(ii) the execution and delivery of this Agreement, the
Registration Rights Agreement, the Warrant Agreement, the Warrant
Registration Rights Agreement, the Indenture and the Securities and
compliance by the Issuers to the extent a party thereto, with the
provisions thereof will not conflict with, constitute a default under
or violate (i) any of the terms, conditions or provisions of the
certificate of incorporation or bylaws of the Issuers, (ii) any of
the terms, conditions or provisions of any document, agreement or
other instrument set forth on Exhibit C attached hereto, (iii) any
Delaware corporate, or federal law or regulation (other than federal
and state securities or blue sky laws, as to which such counsel
expresses no opinion), and (iii) any judgment, writ, injunction,
decree, order or ruling of any court or governmental authority
binding on the Issuers or any of their subsidiaries, except as
disclosed in the Offering Memorandum;
(iii) to such counsel's knowledge, there is no material
document, agreement or other instrument that will remain in effect
after the issuance of the Securities to which any Issuer is a party
(other than the Registration Rights Agreement and the Warrant
Registration Rights Agreement) granting any person the right to
require the Issuers to file a registration statement under the
Securities Act with respect to any securities of the Issuers or to
require the Issuers to include such securities with the Units
registered pursuant to any Registration Statement;
(iv) the Issuers are not and, after giving effect to the
offering and sale of the Units in accordance with the terms of this
Agreement and the application of the net proceeds thereof as
described in the Offering Memorandum under the captions "Use of
Proceeds," will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(v) to such counsel's knowledge, (a) neither of the Issuers nor
any of their domestic subsidiaries is in violation of its respective
organizational documents, (b) neither of the Issuers nor any of their
subsidiaries is in default in the performance of any obligation,
agreement, covenant or condition contained in any material document,
agreement or other instrument to which the Issuers or any of their
subsidiaries is a party or by which any of them or their respective
property is bound, in each case except where such violation or
default would not have a Material Adverse Effect; and
(vi) the statements under the captions "Certain Relationships
and Related Party Transactions" in the Offering Memorandum, insofar
as such statements constitute a summary of the legal matters or
documents referred to therein, fairly present in all material
respects such legal matters, or documents.
The opinion of Xxxxxx X. Xxxxxxxxxxx, Esq. described in this Section
9(g) shall be rendered to the Initial Purchaser at the request of the Issuers
and shall so state therein.
(h) The Initial Purchaser shall have received, at the Closing Date,
an opinion, dated the Closing Date, of Xxxxxx & Xxxxxxx, counsel for the
Initial Purchaser, in form and substance satisfactory to the Initial
Purchaser.
(i) The Initial Purchaser shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof
or the Closing Date, as the case may be, in form and substance
24
satisfactory to the Initial Purchaser from PricewaterhouseCoopers LLP,
independent public accountants, containing the information and statements of
the type ordinarily included in accountants' "comfort letters" with respect to
the financial statements and certain financial information contained in the
Offering Memorandum.
(j) The Securities shall have been approved by the NASD for trading
and duly listed in PORTAL.
(k) The Initial Purchaser shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company, the Guarantors and the Trustee.
(l) The Company shall have executed the Registration Rights Agreement
and the Initial Purchaser shall have received an original copy thereof, duly
executed by the Company and the Guarantors.
(m) The Issuers and the Guarantors shall have executed this Agreement
and the Initial Purchaser shall have received an original copy thereof, duly
executed by the Issuers and the Guarantors.
(n) Holdings shall have executed the Warrant Agreement and the
Warrant Registration Rights Agreement and the Initial Purchaser shall have
received counterparts, conformed as executed thereof.
(o) Neither of the Issuers nor the Guarantors shall have failed at or
prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Issuers
or the Guarantors at or prior to the Closing Date.
10. Effectiveness of Agreement and Termination. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto other than the Sierra Entities.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchaser by written notice to the Issuers if any
of the following has occurred: (i) any outbreak or escalation of hostilities
or other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchaser's judgment, is material and adverse and, in the
Initial Purchaser's judgment, makes it impracticable to market the Units on
the terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the American Stock Exchange, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the
Chicago Board of Trade or the Nasdaq National Market or limitation on prices
for securities or other instruments on any such exchange or the Nasdaq
National Market, (iii) the suspension of trading of any securities of the
Issuers or any Guarantor on any exchange or in the over-the-counter market,
(iv) the enactment, publication, decree or other promulgation of any federal
or state statute, regulation, rule or order of any court or other governmental
authority which, in the Initial Purchaser's opinion, materially and adversely
affects, or will materially and adversely affect, the business, prospects,
financial condition or results of operations of the Issuers and their
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action
by any federal, state or local government or agency in respect of its monetary
or fiscal affairs which, in the Initial Purchaser's opinion, has a material
adverse effect on the financial markets in the United States.
11. Initial Purchaser's Information.
The Issuers and the Initial Purchaser acknowledge and agree for all
purposes under this Agreement that the statements with respect to the offering
of the Notes set forth in the stabilization language in the first
25
paragraph of page (i); and the first sentence of the third paragraph, the
fourth sentence of the sixth paragraph and the eighth paragraph under the
caption "Plan of Distribution" in such Offering Memorandum constitute the only
information furnished to the Issuers in writing by the Initial Purchaser
expressly for use in the Offering Memorandum.
12. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Issuers or any
Guarantor, at 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000,
Telecopier No.: 000-000-0000, and (ii) if to the Initial Purchaser, to
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, or in any case to such
other address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Issuers, the Guarantors and the Initial
Purchaser set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and
payment for the Units, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of the Initial Purchaser, the
officers or directors of the Initial Purchaser, any person controlling the
Initial Purchaser, the Issuers, any Guarantor, the officers or directors of
the Issuers or any Guarantor, or any person controlling the Issuers or any
Guarantor, (ii) acceptance of the Units and payment for them hereunder and
(iii) termination of this Agreement.
If for any reason the Units are not delivered by or on behalf of the
Issuers as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), the Issuers and the Guarantors, jointly and
severally, agree to reimburse the Initial Purchaser for all out-of-pocket
expenses (including the fees and disbursements of counsel) incurred by them
(provided that the Sierra Entities shall not be responsible for any of the
fees and expenses described in this paragraph unless and until the
Consummation). Notwithstanding any termination of this Agreement, the Issuers
shall be liable for all expenses which they have agreed to pay pursuant to
Section 5(i) hereof. The Issuers and each Guarantor also agree, jointly and
severally, to reimburse the Initial Purchaser and its officers, directors and
each person, if any, who controls such Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act for any and
all fees and expenses (including without limitation the fees and expenses of
counsel) incurred by them in connection with enforcing their rights under this
Agreement (including without limitation their rights under Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Issuers, the
Guarantors, the Initial Purchaser, the Initial Purchaser's directors and
officers, any controlling persons of the Initial Purchaser referred to herein,
the directors and officers of the Issuers and the Guarantors, any controlling
persons of the Issuers or the Guarantors referred to herein and their
respective successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include
a purchaser of any of the Units from the Initial Purchaser merely because of
such purchase.
This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
26
Please confirm that the foregoing correctly sets forth the agreement
among the Issuers, the Guarantors and the Initial Purchaser.
Very truly yours,
XXXXXXX RIVER LABORATORIES, INC.
By:_____________________________________
Name:
Title:
XXXXXXX RIVER LABORATORIES HOLDINGS, INC.
By:_____________________________________
Name:
Title:
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:__________________________________
Name:
Title:
Accepted as of the consummation of the
Sierra Acquisition by SBI Holdings, Inc.,
Sierra Biomedical, Inc. and Sierra
Biomedical San Diego, Inc., each a
Guarantor, it being understood that the
provisions applicable hereto and binding
on the Guarantors are only effective
immediately upon the consummation of the
Sierra Acquisition:
SBI HOLDINGS, INC.
By:_________________________________
Name:
Title:
SIERRA BIOMEDICAL, INC.
By:_________________________________
Name:
Title:
SIERRA BIOMEDICAL SAN DIEGO, INC.
By:_________________________________
Name:
Title:
SCHEDULE A
Subsidiaries
State/Country of
Name Incorporation
SBI Holdings, Inc. (simultaneously upon consummation of Nevada
the Sierra Acquisition)
Sierra Biomedical, Inc. (simultaneously upon consummation Nevada
of the Sierra Acquisition)
Sierra Biomedical San Diego, Inc. (simultaneously upon California
consummation of the Sierra Acquisition)
I.F.F.A. Credo France
S.A. Iffa Credo Belgium Belgium
Endosafe Amilabo S.A. France
CRIFFA Spain
Xxxxxxx River France, S.A. France
Xxxxxxx River WIGA (Deutschland) GmbH Germany
Elavages de Scientific Des Dombes S.A. France
Xxxxxxx River Italia, S.p.A. Italy
Xxxxxxx River Japan, Inc. Japan
Xxxxxxx River U.K. Limited England
Shamrock (Great Britain) Limited Xxxxxxx
Xxxxxxx River Endosafe Limited Xxxxxxx
Xxxxxxx River Europe GmbH Germany
Xxxxxxx River Anlab spol.s.r.o. Czech Republic
Xxxxxxx River Consulting GmbH Germany
Xxxxxxx River Sweden AB Sweden
Xxxxxxx River Hungary Hungary
S-1
ALPES SA Mexico
Spafas Jinan Poultry Company, Ltd. China
Zhanjiang A&C Biological Ltd. China
SPAFAS Australia Pty. Ltd. Australia
Xxxxxxx River Canada Corporation Canada
S-2
EXHIBIT A
Form of Registration Rights Agreement
EXHIBIT B
Company's Certificate
Xxxxxxx River Laboratories, Inc., a Delaware corporation (the
"Company") and Xxxxxxx River Laboratories Holdings, Inc., a Delaware
corporation ("Holdings"), hereby certify through their Chief Executive
Officer, Chairman of the Board, President or a Vice President and the chief
financial officer, principal accounting officer or equivalent financial
officer responsible for the financial statements, pursuant to Section 9(e) of
the Purchase Agreement dated September 23, 1999, between the Company,
Holdings, the Guarantors that are a party thereto and Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, as follows:
1. Attached hereto is a schedule listing the assumptions used by the
Company and Holdings in preparing the Company's and Holdings' calculation of
Adjusted EBITDA, which equals EBITDA plus restructuring charges, dividends
received or receivable from equity investments, Xxxxxxx River non-cash
compensation, Sierra non-cash compensation, non-recurring transaction expenses
and expected cost savings, as set forth in the Offering Memorandum. Management
of the Company and Holdings believes that such assumptions are reasonable.
Capitalized terms used herein but not otherwise defined shall have
their respective meanings set forth in the Purchase Agreement.
In witness whereof, the Company and Holdings, through the
undersigned, have executed this certificate this 29th day of September, 1999.
XXXXXXX RIVER LABORATORIES, INC.
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
XXXXXXX RIVER LABORATORIES HOLDINGS, INC.
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
EXHIBIT C
The following is a list of "Material Contracts," as required under Item
601(10) of Regulation S-K of the Exchange Act:
1. Credit Agreement, dated September 29, 1999 among Xxxxxxx River
Laboratories, Inc. and DLJ Capital Funding, Inc.
2. Recapitalization Agreement, dated July 25, 1999, by and among Bausch &
Lomb Incorporated ("Bausch & Lomb"), certain subsidiaries of Bausch &
Lomb, CRL Acquisition LLC, and DLJ Merchant Banking Partners II, L.P.
3. Joint Venture Agreement between Ajinomoto Co., Inc. and Xxxxxxx River
Breeding Laboratories, Inc. dated June 24, 1981, and ancillary
agreements, amendments and addendums. June 15, 1987 Amendment Agreement,
Amending the Joint Venture Agreement. January 17, 1994 Letter Amendment
of Joint Venture Agreement. August 30, 1996 Addendum to the Joint Venture
Agreement.
4. Merck Primate Supply Agreement between Merck & Co., Inc. and Xxxxxxx River
Laboratories, Inc. dated September 30, 1994.
5. License and Technical Assistance Agreement CRL Breeding Labs and Ajinomoto
Co., Inc. Amendment Agreement, dated March 24, 1978.
6. Joint Venture Contract relating to setting up of Zhanjiang A&L Biological
Ltd. between Zhanjiang Scientific and Technical Service Centre and
Xxxxxxx River Laboratories, Inc. dated March 8, 1997.
7. Technology License Contract between Xxxxxxx River Laboratories
("Licensor") and Zhanjiang A&C Biological Ltd. ("Licensee") dated
September 1, 1997.
8. Joint venture and stock purchase agreement (unsigned) between SPAFAS,
Incorporated and Xxxxxx Xxxxxx Xxxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx del
Sobral of Xxxxx, Xxxxxxx Xxxxxx Xxxxxxx, Xxxxx Xxxxxx Xxxxxxxx del Sobrae
and Xxxxxxxxx Xxxxxx Xxxxxxxx del Sobral and Aves Libres de Patogenos
Especificies, S.A. dated August 15, 1996.
9. Award/Contract between National Institute on Drug Abuse and Xxxxxxx River
Laboratories dated July 1, 1997.
10. FCRDC Contract between National Cancer Institute Research Contracts
Xxxxxx Xxxxxxxxx Cancer Research and Development Center (NCI-FCRDC) and
Xxxxxxx River Laboratories, Inc. dated September 26, 1994.
11. Strategic Partnership Agreement between Multicase, Inc. and Xxxxxxx River
Laboratories, Inc. dated January 1, 1999.
12. Ground Lease between HIC Associates (Lessor) and Xxxxxxx River
Laboratories, Inc. (Lessee) dated June 5, 1992; Real Estate Lease between
Xxxxxxx River Laboratories, Inc. (Landlord) and Xxxxxxx River Partners
L.P. (Tenant) dated December 22, 1993; and Assignment and Assumption
Agreement between Xxxxxxx River Partners, L.P. (Assignor) and Wilmington
Partners L.P. (Assignees) dated December 22, 1993.
13. Lease between Xxxxxxx X. and Xxxxxxxx Xxxxxxx and East Acres Farm, Inc.
(collectively, Landlord) and Xxxxxxx River Laboratories, Inc. (Tenant)
dated November 30, 1994; Notice of Lease between Xxxxxxx X. and Xxxxxxxx
Xxxxxxx and East Acres Farm, Inc. (collectively, Landlord) and Xxxxxxx
River Laboratories, Inc. (Tenant) filed in the office of the Worchester
Registry of Deeds on December 16, 1994 in Book 16772, page 34.
14. Agreement of Lease between Xxxxx & Associates-Philadelphia (Landlord) and
Tektagen, Inc. (Tenant) dated May 19, 1987; First Amendment to Lease
between Xxxxx & Associates-Philadelphia Limited Partnership (Landlord)
and Tektagen, Inc. (Tenant) dated November 21, 1989 (changes renewal
notice requirement); Third Amendment to Lease between PBP Realty
Partnership (Landlord) and Bionetics Corporation, successor in interest
to Xxxxxx, Inc. (Tenant) dated April 14, 1994 (increases space); Fourth
Amendment to Lease between PBP Realty Partnership (Landlord) and
Tektagen, Inc. (Tenant) dated April 1994 (increases space, extends term
and includes additional renewal options); Fifth Amendment to Lease
between PBP Realty Partnership (Landlord) and Tektagen, Inc. (Tenant)
dated August 1, 1997.
(extends term to 7/31/02 and gives one 5 year renewal option).
15. Lease Agreement between Wappoo Partners (Landlord) and Endosafe (Tenant)
dated February 28, 1993; and Assignment and Assumption of Lease Agreement
between Xxxxxxx River Laboratories, Inc. (Acquiror) and Endosafe, Inc.
(Exchangor) dated January 27, 1994.
16. Amended and Restated Distribution Agreement between Xxxxxxx River BRF,
Inc. Xxxxxxx River Laboratories, Inc., Bioculture Mauritius Ltd. and Xxxx
Xxx and Xxxx Xxxxxxxxx, dated December 23, 1997.
17. Supply Agreement for non-human primates among Sierra Biomedical, Inc. and
Scientific Resources International, Ltd., dated March 18, 1997.
