AMERICAN PACIFIC CORPORATION (a Delaware corporation) 9% Senior Notes due 2015 PURCHASE AGREEMENT
Exhibit 10.1
EXECUTION VERSION
$110,000,000
AMERICAN PACIFIC CORPORATION
(a Delaware corporation)
(a Delaware corporation)
9% Senior Notes due 2015
January 30, 2007
January 30, 2007
Wachovia Capital Markets, LLC
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
American Pacific Corporation, a Delaware corporation (the “Company”), proposes to issue and
sell to Wachovia Capital Markets, LLC (the “Initial Purchaser”) $110,000,000 aggregate principal
amount of its 9% Senior Notes due 2015 (the “Notes”), which will be unconditionally guaranteed on a
senior basis as to principal, premium, if any, and interest (the “Guarantees”) by the subsidiaries
of the Company named in Schedule I hereto (each individually, a “Guarantor” and collectively, the
“Guarantors”). The Notes will be issued pursuant to an Indenture (the “Indenture”) dated as of the
Closing Date (as defined in Section 2) among the Company, the Guarantors and Xxxxx Fargo Bank,
National Association, as Trustee (the “Trustee”). This Agreement, the Registration Rights
Agreement, to be dated the Closing Date, between the Initial Purchaser, the Company and the
Guarantors (the “Registration Rights Agreement”) and the Indenture are hereinafter collectively
referred to as the “Transaction Documents” and the execution and delivery of the Transaction
Documents and the Credit Facility (as defined below) and the transactions contemplated herein and
therein are hereinafter referred to as the “Transactions.”
The Notes (and the related Guarantees) will be offered and sold through the Initial Purchaser
without being registered under the Securities Act of 1933, as amended (the “Securities Act”), to
qualified institutional buyers in compliance with the exemption from registration provided by Rule
144A under the Securities Act, and in offshore transactions in reliance on Regulation S under the
Securities Act (“Regulation S”). The Initial Purchaser has advised the Company that it will offer
and sell the Notes purchased by it hereunder in accordance with Section 3 hereof as soon as it
deems advisable.
In connection with the sale of the Notes, the Company has prepared a preliminary offering
memorandum, dated January 19, 2007 (the “Preliminary Memorandum”), the Offering Memorandum (as
defined below) and a Final Offering Memorandum (as defined below), dated the date hereof. The
Final Memorandum, the Preliminary Memorandum, and the Offering Memorandum are referred to herein as
a “Memorandum.” Each Memorandum sets forth certain information concerning the Company, the
Guarantors, the Notes, the Transaction Documents and the Transactions. The Company hereby confirms
that it has authorized the use of the Preliminary Memorandum and the Offering Memorandum, and any
amendment or supplement thereto, in connection with the offer and sale of the Notes by the Initial
Purchaser. As used herein, the term “Memorandum” shall include, except where specifically noted,
in each case the documents incorporated by reference therein. The terms “supplement,” “amendment”
and “amend” as used herein with respect to a Memorandum shall include all documents deemed to be
incorporated by reference in the Preliminary Memorandum, the Offering Memorandum or Final
Memorandum
that are filed with the Securities and Exchange Commission (the “Commission”) pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), prior to the Time of Sale (as
defined below).
Prior to the time when the sales of the Notes were first made (the “Time of Sale”), the
Company has prepared and delivered to the Initial Purchaser a pricing supplement (the “Pricing
Supplement”) dated January 30, 2007. The Pricing Supplement together with the Preliminary
Memorandum is referred to herein as the “Offering Memorandum.”
Promptly after the Time of Sale and in any event no later than the second business day
following the Time of Sale, the Company will prepare and deliver to the Initial Purchaser a Final
Offering Memorandum (the “Final Memorandum”), which will consist of the Preliminary Offering
Memorandum with such changes therein as are required to reflect the information contained in the
Pricing Supplement, and from and after the time such Final Memorandum is delivered to the Initial
Purchaser, all references herein to the Offering Memorandum shall be deemed to be a reference to
both the Offering Memorandum and the Final Memorandum.
In connection with the consummation of the transactions described herein, the Company will
enter into an amended and restated $20.0 million senior secured credit facility (the “Credit
Facility”) among the Company, the Guarantors, the lenders from time to time parties thereto, and
Wachovia Bank, National Association, as administrative agent.
1. Representations and Warranties of the Company and the Guarantors. The Company and
the Guarantors jointly and severally represent and warrant to, and agree with, the Initial
Purchaser that:
(a) The Preliminary Memorandum does not contain; the Offering Memorandum at the Time of
Sale and at the Closing Date; and the Final Memorandum, and any amendment or supplement
thereto does not and will not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations or warranties set forth in this paragraph shall not apply to
statements in or omissions from any Memorandum made in reliance upon and in conformity with
information furnished in writing to the Company by the Initial Purchaser expressly for use
therein, as specified in Section 10. The statistical and industry data included in each
Memorandum are based on or derived from sources that the Company believes to be reliable and
accurate.
(b) The Company has been duly organized and is validly existing as a corporation in
good standing under the laws of the State of Delaware. The Company is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction in which the conduct of its business or its ownership or leasing of property
requires such qualification, except where the failure to so qualify or be in good standing
would not have a Material Adverse Effect. “Material Adverse Effect” shall mean a material
adverse change in or effect on or any development having a prospective material adverse
effect on (i) the business, operations, properties, assets, liabilities, stockholders’
equity, earnings, condition (financial or otherwise), results of operations or
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management of the Company and its subsidiaries, considered as one enterprise, whether or
not in the ordinary course of business, or (ii) the ability of the Company and each
Guarantor to perform its obligations under the Notes or the Transaction Documents.
(c) The Company and each Guarantor has full power (corporate and other) to own or lease
its properties and conduct its business as described in each Memorandum; and the Company and
each Guarantor has full power (corporate and other) to enter into the Transaction Documents
and to carry out all the terms and provisions hereof and thereof to be carried out by it.
(d) The capitalization of the Company is as set forth in the Offering Memorandum under
the heading “Capitalization.” All of the issued shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable; and none of
the outstanding shares of capital stock of the Company was issued in violation of the
preemptive or other similar rights of any security holder of the Company.
(e) Each subsidiary of the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct its business as
described in the Offering Memorandum and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect; all of the
issued capital stock of each subsidiary of the Company has been duly and validly authorized
and issued, is fully paid and non-assessable, and is owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims.
(f) No subsidiary of the Company is prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such subsidiary’s capital
stock, from repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary’s property or assets to the Company or
any other subsidiary of the Company, except as provided by applicable laws or regulations,
by the Indenture or as disclosed in the Offering Memorandum.
(g) Deloitte & Touche LLP, who has certified the consolidated historical financial
statements included in the Offering Memorandum and delivered its report with respect to the
audited consolidated historical financial statements in the Offering Memorandum, is an
independent public accountant with respect to the Company within the meaning of the
Securities Act and the applicable rules and regulations thereunder.
(h) The consolidated historical financial statements (including the notes thereto) of
the Company and its consolidated subsidiaries in the Offering Memorandum fairly present the
financial position, results of operations, cash flows and changes in stockholders’ equity of
the Company and its consolidated subsidiaries as of the dates and for the periods specified
therein; since the date of the latest of such financial statements, there has been no change
nor any development or event involving a prospective change
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which, individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect; such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied throughout the periods
involved (except as otherwise expressly disclosed in the notes thereto) and comply as to
form with the applicable accounting requirements of Regulation S-X under the Securities Act;
the information set forth under the captions “Offering Memorandum Summary — Summary
Consolidated Financial Information” and “Selected Historical Consolidated Financial
Information” in the Offering Memorandum has been fairly extracted from the consolidated
historical financial statements of the Company and its consolidated subsidiaries, fairly
presents the information included therein and has been compiled on a basis consistent with
that of the audited consolidated historical financial statements included in the Offering
Memorandum; and the ratios of earnings to fixed charges set forth in the Offering Memorandum
under the caption “Selected Historical Consolidated Financial Information” have been
calculated in compliance with Item 503(d) of Regulation S-K under the Securities Act.
(i) Subsequent to the respective dates as of which information is given in the Offering
Memorandum, (i) none of the Company and its subsidiaries have incurred any material
liability or obligation, direct or contingent, or entered into any material transaction in
each case not in the ordinary course of business; (ii) the Company has not purchased any of
its outstanding capital stock, and has not declared, paid or otherwise made any dividend or
distribution of any kind on any class of its capital stock; and (iii) there has not been any
material change in the capital stock, short-term debt or long-term debt of the Company and
its subsidiaries, except as disclosed in the Offering Memorandum.
(j) The Company and each of its subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are executed in
accordance with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of consolidated historical 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.
(k) The Company is subject to and in full compliance with the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act. The documents incorporated or deemed to be
incorporated by reference in the Offering Memorandum at the time they were filed with the
Commission complied and will comply in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated thereunder and,
when read together with the other information in the Offering Memorandum, at the date of the
Offering Memorandum and as of the Closing Date, do not and will not include an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Company has established and maintains disclosure
controls and procedures (as such term is
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defined in Rules 13a-15 and 15d-14 under the Exchange Act); such disclosure controls
and procedures are designed to provide reasonable assurances that material information
relating to the Company and Subsidiaries is made known to the chief executive officer and
chief financial officer of the Company by others within the Company or any subsidiary, and
such disclosure controls and procedures are reasonably effective to perform the functions
for which they were established subject to the limitations of any such control system; the
Company’s auditors and the audit committee of the board of directors of the Company have
been advised of: (A) any significant deficiencies in the design or operation of internal
controls which could adversely affect the Company’s ability to record, process, summarize,
and report financial data; and (B) any fraud, whether or not material, that involves
management or other employees who have a role in the Company’s internal controls; and since
the date of the most recent evaluation of such disclosure controls and procedures, there
have been no significant changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.
(l) This Agreement has been duly authorized, executed and delivered by the Company and
each Guarantor.
(m) The Indenture and the Registration Rights Agreement have been duly authorized by
the Company and each Guarantor and, on the Closing Date, will have been duly executed and
delivered by the Company and each Guarantor, and will constitute the legal, valid and
binding obligations of the Company and each Guarantor, enforceable against the Company and
each Guarantor in accordance with their respective terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors’ rights generally and except as enforcement thereof is
subject to general principles of equity; and the Indenture and the Registration Rights
Agreement will conform to the description thereof in the Offering Memorandum and will be
substantially in the form previously delivered to you.
(n) The Indenture conforms in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the “Trust Indenture Act”), and to the rules and
regulations of the commission applicable to an indenture that is qualified thereunder.
(o) The Notes have been duly authorized and, on the Closing Date, when executed and
authenticated in the manner provided for in the Indenture and delivered to and paid for by
the Initial Purchaser as provided in this Agreement, will constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforcement of creditors’ rights
generally and except as enforcement thereof is subject to general principles of equity, and
will be entitled to the benefits of the Indenture and the Registration Rights Agreement; the
Guarantees have been duly authorized and, on the Closing Date, upon the due issuance and
delivery of the related Notes and the due endorsement of the Guarantees thereon, will have
been duly executed, endorsed and delivered and will constitute valid and legally binding
obligations of each of the Guarantors, and will be entitled
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to the benefits of the Indenture; the Exchange Notes (as defined in the Registration
Rights Agreement) have been duly authorized and, when executed and authenticated in the
manner provided for in the Registration Rights Agreement and the Indenture, will constitute
the legal, valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors’
rights generally and except as enforcement thereof is subject to general principles of
equity, and will be entitled to the benefits of the Indenture and the Registration Rights
Agreement; and the Notes and the Exchange Notes will conform to the descriptions thereof in
the Offering Memorandum.
(p) The execution, delivery and performance by the Company and each Guarantor of this
Agreement and the other Transaction Documents, the issuance and sale of the Notes and the
compliance by the Company and each Guarantor with all of the provisions of the Notes, the
Indenture, the Registration Rights Agreement and this Agreement and the consummation of the
transactions contemplated hereby and thereby will not (i) conflict with, result in a breach
or violation of, the certificate of incorporation or by-laws of the Company or any of its
subsidiaries, (ii) conflict with, result in a breach or violation of, or constitute a
default under, any indenture, mortgage, deed of trust or loan agreement, stockholders’
agreement or any other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is bound or any
of their respective properties are subject, or with or any statute, rule or regulation or
any judgment, order or decree of any governmental authority or court or any arbitrator
applicable to the Company or any of its subsidiaries, except, in the case of this clause
(ii), for such conflicts, breaches, violations or defaults which would not, individually or
in the aggregate, result in a Material Adverse Effect, or (iii) (assuming the accuracy of
the Initial Purchaser’s representations and warranties contained herein) require the
consent, approval, authorization, order, registration or filing or qualification with, any
governmental authority or court, or body or arbitrator having jurisdiction over the Company
or any of its subsidiaries, except (x) such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer or sale, or resale by the Initial
Purchaser, of the Notes and by Federal and state securities laws with respect to the
obligations of the Company and the Guarantors under the Registration Rights Agreement or (y)
where the failure to obtain such consents, approvals, authorizations, orders, registrations,
filings or qualifications could not reasonably be expected to have a Material Adverse
Effect.
(q) No legal or governmental proceedings or investigations are pending or, to the
Company’s knowledge, threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its subsidiaries is subject,
other than proceedings accurately described in the Preliminary Memorandum and the Offering
Memorandum and such proceedings or investigations that would not, singly or in the
aggregate, result in a Material Adverse Effect.
(r) There are no relationships, direct or indirect, between or among the Company or any
of its subsidiaries, on the one hand, and the respective directors, officers or
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stockholders of the Company or any of its subsidiaries, on the other hand, that would
be required by Regulation S-K to be disclosed in an annual report on Form 10-K and there are
no contracts or other documents that would be required by the Securities Act to be disclosed
in a prospectus were the Notes being issued and sold in a public offering registered on Form
S-1 under the Securities Act that are not so disclosed in the Company’s public filings with
the Commission.
(s) The Company and its Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act (“Regulation D”)) have not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Notes, will not distribute
any offering material in connection with the offering and sale of the Notes other than the
Preliminary Memorandum, the Offering Memorandum or any amendment or supplement thereto.
(t) The Company and its subsidiaries have not sustained, since the date of the latest
audited consolidated historical financial statements included in the Offering Memorandum
(exclusive of any amendment or supplement thereto), any loss or interference with its
business or properties from fire, explosion, flood, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental action, order
or decree (whether domestic or foreign) otherwise than as set forth in the Offering
Memorandum (exclusive of any amendment or supplement thereto) or as would not, individually
or in the aggregate, have a Material Adverse Effect; and, since such date, there has not
occurred any change or development having a Material Adverse Effect.
(u) The statements set forth in the Offering Memorandum under the caption “Description
of Notes,” insofar as they purport to constitute a summary of the terms of the Notes, and
under the captions “Management,” “Certain Relationships and Related Transactions,”
“Description of Other Indebtedness,” “Material U.S. Federal Tax Income Considerations,”
“Exchange Offer; Registration Rights,” insofar as they purport to summarize the provisions
of the laws and documents referred to therein, fairly and accurately summarize the subject
matter thereof in all material respects.
(v) The Company and its subsidiaries have good and marketable title in fee simple to
all items of real property and good and marketable title to all personal property owned by
each of them, free and clear of any pledge, lien, encumbrance, security interest or other
defect or claim of any third party, except as set forth in the Offering Memorandum or as
would not, individually or in the aggregate, have a Material Adverse Effect. Any property
leased by the Company and its subsidiaries is held under valid, subsisting and enforceable
leases, and there is no default under any such lease or any other event that with notice or
lapse of time or both would constitute a default thereunder.
(w) No “prohibited transaction” (as defined in Section 406 of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986,
as amended from time to time (the “Code”)) or “accumulated funding deficiency” (as defined
in Section 302 of ERISA) or any of the events set forth in Section
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4043(c) of ERISA (other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred, exists or is reasonably expected
to occur with respect to any employee benefit plan (as defined in Section 3(3) of ERISA)
which the Company or any of its subsidiaries maintains, contributes to or has any obligation
to contribute to, or with respect to which the Company or any of its subsidiaries has any
liability, direct or indirect, contingent or otherwise (a “Plan”) in each case as had or
could reasonably be expected to have a Material Adverse Effect; each Plan is in compliance
in all material respects with applicable law, including ERISA and the Code; none of the
Company or any of its subsidiaries has incurred or expects to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from, any Plan; and each Plan
that is intended to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or failure to act, which could
reasonably be expected to cause the loss of such qualification.
(x) Except as disclosed in each Memorandum, no labor dispute with the employees of the
Company or any of its subsidiaries exists, is imminent or is, to the Company’s knowledge,
threatened, and the senior officers of the Company and its subsidiaries are not aware of any
existing, imminent or threatened labor disturbance by the employees of any of their
respective principal suppliers, manufacturers, customers or contractors, which, in either
case, could reasonably be expected to result in a Material Adverse Effect.
(y) No proceedings for the merger, consolidation, liquidation or dissolution of the
Company or any Guarantor or the sale of all or a material part of the assets of the Company
and its subsidiaries or any material acquisition by the Company or any Guarantor are pending
or contemplated.
(z) The Company and each of its subsidiaries owns or otherwise possesses
adequate rights to use all material patents, trademarks, service marks, trade names and
copyrights, all applications and registrations for each of the foregoing, and all other
material proprietary rights and confidential information necessary to conduct their
respective businesses as currently conducted; none of the Company or any of its subsidiaries
has received any notice, or is otherwise aware, of any infringement of or conflict with the
rights of any third party with respect to any of the foregoing, except for any infringement
or conflict which would not individually or in the aggregate, have a Material Adverse
Effect.
(aa) The Company and each of its subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts and
with such deductibles as are prudent in the business in which it is engaged; and none of the
Company or any of its subsidiaries has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue their respective businesses
at a cost that would not have a Material Adverse Effect.
(bb) Except as disclosed in the Offering Memorandum, the Company and each of its
subsidiaries has complied with all laws, ordinances, regulations and orders
applicable to the Company and its subsidiaries, and their respective businesses, and none of
the
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Company or any of its subsidiaries has received any notice to the contrary; and each of
the Company and its subsidiaries possesses all certificates, authorizations,
permits, licenses, approvals, orders and franchises (collectively, “Licenses”) necessary to
conduct their respective businesses in the manner and to the full extent now operated or
proposed to be operated as described in the Offering Memorandum, in each case issued by the
appropriate federal, state, local or foreign governmental or regulatory authorities
(collectively, the “Agencies”), except where the failure to so comply or to possess such
Licenses would not have a Material Adverse Effect. The Licenses are in full force and
effect and no proceeding has been instituted or, to the Company’s knowledge, is threatened
or contemplated which in any manner affects or calls into question the validity or
effectiveness thereof, except where such invalidity or ineffectiveness thereof would not,
individually or in the aggregate, have a Material Adverse Effect.
(cc) The operation of the business of the Company and its subsidiaries in
the manner and to the full extent now operated or proposed to be operated as described in
the Offering Memorandum is in accordance with the Licenses and all orders, rules and
regulations of the Agencies, and no event has occurred which permits (nor has an event
occurred which with notice or lapse of time or both would permit) the revocation or
termination of any necessary Licenses or which might result in any other impairment of the
rights of the Company therein or thereunder, and the Company and each of its subsidiaries
is in compliance with all statutes, orders, rules and regulations of the
Agencies relating to or affecting its operations in each case except as would not,
individually or in the aggregate, have a Material Adverse Effect.
(dd) There is and has been no failure on the part of the Company or any of the
Company’s directors or officers, in their capacities as such, to comply in all material
respects with any provision of the Sarbanes Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes Oxley Act”) that are currently applicable
to the Company, including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(ee) (i) The Company and each of its subsidiaries is and has been in
compliance with all applicable laws, statutes, ordinances, rules, regulations, orders,
judgments, decisions, decrees, standards, and requirements relating to: human health and
safety; pollution; management, disposal or release of any chemical substance, product or
waste; and protection, cleanup, remediation or corrective action relating to the environment
or natural resources (“Environmental Law”);
(ii) The Company and each of its subsidiaries has obtained and is in
compliance with the conditions of all permits, authorizations, licenses, approvals
and variances necessary under any Environmental Law for the continued conduct in the
manner now conducted of their respective businesses (“Environmental Permits”);
(iii) There are no past or present conditions or circumstances, including but
not limited to pending changes in any Environmental Law or Environmental Permits,
that are likely to interfere with the conduct of the business of the
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Company and its subsidiaries in the manner now conducted or which would interfere
with compliance with any Environmental Law or Environmental Permits; and
(iv) There are no past or present conditions or circumstances at, or arising
out of, their respective businesses, assets and properties of the Company and each
of its subsidiaries or any business, assets or properties formerly leased, operated
or owned by the Company or any of its subsidiaries, including but not limited to
on-site or off-site disposal or release of any chemical substance, product or waste,
which may give rise to: (i) liabilities or obligations for any cleanup, remediation
or corrective action under any Environmental Law; (ii) claims arising under any
Environmental Law for personal injury, property damage, or damage to natural
resources; (iii) liabilities or obligations incurred by the Company or its
subsidiaries to comply with any Environmental Law; or (iv) fines or penalties
arising under any Environmental Law;
except in each case for any noncompliance or conditions or circumstances that, singly or in
the aggregate, would not result in a Material Adverse Effect or as disclosed in the Offering
Memorandum.
(ff) Neither the Company nor any Guarantor is in violation of its certificate of
incorporation or its bylaws, and no default or breach exists, and no event has occurred
that, with notice or lapse of time or both, would constitute a default in the due
performance and observation of any term, covenant or condition of any indenture, mortgage,
deed of trust, lease, loan agreement, stockholders’ agreement or any other agreement or
instrument to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of their respective properties
are subject, in each case except as would not, individually or in the aggregate result in a
Material Adverse Effect.
(gg) The Company and each of its subsidiaries has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested extensions thereof and has
paid all taxes required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith and for which
the Company and its subsidiaries retains adequate reserves and except where the failure to
file such tax returns or pay such taxes or other assessments, fines or penalties would not,
individually or in the aggregate, have a Material Adverse Effect.
(hh) Except as disclosed in the Offering Memorandum, there are no contracts, agreements
or understandings between the Company or any of its subsidiaries and any person granting
such person the right to require the Company or any of its subsidiaries to file a
registration statement under the Securities Act or to require the Company to include any
securities held by any person in any registration statement filed by the Company under the
Securities Act.
(ii) Neither the Company nor any Guarantor is, nor after giving effect to the offering
and sale of the Notes and the application of the proceeds thereof as described in
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the Offering Memorandum will be, an “investment company,” or a company “controlled” by
an “investment company,” within the meaning of the Investment Company Act of 1940, as
amended (the “Investment Company Act”).
(jj) Within the preceding six months, none of the Company or any of its Affiliates has,
directly or through any agent, made offers or sales of any security of the Company, or
solicited offers to buy or otherwise negotiated in respect of any securities of the Company
of the same or a similar class as the Notes, other than the Notes offered or sold to the
Initial Purchaser hereunder.
(kk) None of the Company or any of its Affiliates has, directly or through any person
acting on its or their behalf (other than the Initial Purchaser, as to which no statement is
made), offered, solicited offers to buy or sold the Notes by any form of general
solicitation or general advertising (within the meaning of Regulation D) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities Act.
(ll) None of the Company, any of its Affiliates, nor any person acting on its or their
behalf (other than the Initial Purchaser, as to which no statement is made), has engaged in
any directed selling efforts with respect to the Notes, and each of them has complied with
the offering restrictions requirement of Regulation S under the Securities Act (“Regulation
S”). Terms used in this paragraph have the meanings given to them by Regulation S.
(mm) None of the Company or any of its Affiliates has taken, directly or indirectly,
any action designed to cause or result in, or which has constituted or which might
reasonably be expected to cause or result in, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Notes; nor has the
Company or any of its Affiliates paid or agreed to pay to any person any compensation for
soliciting another to purchase any securities of the Company (except as contemplated by this
Agreement).
(nn) The Notes satisfy the eligibility requirements of Rule 144A(d)(3) under the
Securities Act.
(oo) Assuming the accuracy of the representations and warranties of the Initial
Purchaser in Section 3 hereof and compliance by the Initial Purchaser with the procedures
set forth in Section 3 hereof, it is not necessary in connection with the offer, sale and
delivery of the Notes to the Initial Purchaser in the manner contemplated by this Agreement
and disclosed in each Memorandum to register the Notes or the related Guarantees under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.
(pp) None of the Transactions (including, without limitation, the use of proceeds from
the sale of the Notes) will violate or result in a violation of Section 7 of the Exchange
Act or any regulation promulgated thereunder, including, without limitation, Regulations T,
U and X of the Board of Governors of the Federal Reserve System.
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(qq) There are, and during the last 12 months there have been, no material disputes
between the Company and any of its ten largest suppliers (as measured by dollar volume of
goods purchased by the Company) (“Material Suppliers”) or ten largest customers (as measured
by dollar volume of goods sold by the Company) (“Material Customers”). The Company’s
relations with its Material Suppliers and Material Customers are, to the Company’s
knowledge, good, and the Company has received no notice, and is not otherwise aware, of any
anticipated material dispute with any of its Material Suppliers and Material Customers, or
that (i) any Material Supplier intends to cease or materially reduce its supply to the
Company or (ii) any Material Customer intends to cease or materially reduce its purchases
from the Company.
(rr) Except as disclosed in the Offering Memorandum, there are no agreements,
arrangements or understandings that will require the payment of any commissions, fees or
other remuneration to any investment banker, broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement.
(ss) The Company does not intend to treat any of the transactions contemplated by the
Transaction Documents as being a “reportable transaction” (within the meaning of Treasury
Regulation Section 1.6011-4). In the event the Company determines to take any action
inconsistent with such intention, it will promptly notify the Initial Purchaser thereof. If
the Company so notifies the Initial Purchaser, the Company acknowledges that the Initial
Purchaser may treat its purchase and resale of Notes as part of a transaction that is
subject to Treasury Regulation Section 301.6112-1, and the Initial Purchaser will maintain
the lists and other records required by such Treasury Regulation.
(tt) The Company has been advised by the NASD’s PORTAL Market that the Notes have been
designated PORTAL-eligible securities in accordance with the rules and regulations of the
NASD.
(uu) There are no stamp or other issuance or transfer taxes or duties or other similar
fees or charges required to be paid in connection with the execution and delivery of this
Agreement or the issuance or sale by the Company of the Notes.
(vv) None of the Company, its subsidiaries or, to the knowledge of the Company, any
director, officer, agent, employee or Affiliate of the Company or any of its subsidiaries is
aware of or has taken any action, directly or indirectly, that would result in a material
violation by such Persons of Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder (the “FCPA”), including, without limitation, making use of
the mails or any means or instrumentality of interstate commerce corruptly in furtherance of
an offer, payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign political party or
official thereof or any candidate for foreign political office, in contravention of the
FCPA; and the Company, its subsidiaries and, to the knowledge of the Company, its Affiliates
have conducted their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.
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(ww) The operations of the Company and its subsidiaries are and have been conducted at
all times in compliance in all material respects with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the U.S. PATRIOT Act, the rules
and regulations thereunder, and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its subsidiaries
with respect to the Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(xx) None of the Company, any of its subsidiaries or, to the knowledge of the Company,
any director, officer, agent, employee or Affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the Offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
Each certificate signed by any officer of the Company or the Guarantors and delivered to the
Initial Purchaser or its counsel pursuant to this Agreement shall be deemed to be a representation
and warranty by the Company or the Guarantors, as the case may be, to the Initial Purchaser as to
the matters covered thereby.
2. Purchase, Sale and Delivery of the Notes. On the basis of the representations,
warranties, agreements and covenants herein contained and subject to the terms and conditions
herein set forth, the Company agrees to issue and sell $110,000,000 aggregate principal amount of
Notes, and the Initial Purchaser agree to purchase from the Company the principal amount of Notes
at a purchase price equal to 97.25% of the principal amount thereof (the “Purchase Price”). One or
more certificates in definitive form or global form, as instructed by the Initial Purchaser for the
Notes that the Initial Purchaser has agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Initial Purchaser requests upon notice to
the Company not later than one full business day prior to the Closing Date (as defined below),
shall be delivered by or on behalf of the Company to the Initial Purchaser for the account of the
Initial Purchaser, with any transfer taxes payable in connection with the transfer of the Notes to
the Initial Purchaser duly paid, against payment by or on behalf of the Initial Purchaser of the
Purchase Price therefor by wire transfer in Federal or other funds immediately available to the
account of the Company. Such delivery of and payment for the Notes shall be made at the offices of
Xxxxxx Xxxxxx & Xxxxxxx llp (“Counsel for the Initial Purchaser”), 00 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York City time, on February 6,2007, or at such other place,
time or date as the Initial Purchaser and the Company may agree upon, such time and date of
delivery against payment being herein referred to as the “Closing Date.” The Company will make
such certificate or certificates for the Notes available for examination by the Initial Purchaser
at the New York, New York offices of Counsel for the
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Initial Purchaser not later than 10:00 A.M., New York City time on the business day prior to
the Closing Date.
3. Offering of the Notes and the Initial Purchaser’s Representations and Warranties.
The Initial Purchaser represents and warrants to and agrees with the Company that:
(a) It is a qualified institutional buyer as defined in Rule 144A under the Securities
Act (a “QIB”).
(b) It has solicited, and will solicit, offers for such Notes only from, and has
offered, and will offer, such Notes only to, persons that it reasonably believes to be (A)
in the case of offers inside the United States, QIBs (B) in the case of offers outside the
United States, to persons other than U.S. persons (“foreign purchasers,” which term shall
include dealers or other professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than an estate or trust)) in
reliance upon Regulation S under the Securities Act that, in each case, in purchasing such
Notes are deemed to have represented and agreed as provided in the Offering Memorandum under
the caption “Notice to Investors.”
(c) It has not offered or sold, and will not offer or sell, the Notes using any form of
general solicitation or general advertising (within the meaning of Regulation D) or in any
manner involving a public offering within the meaning of Section 4(2) under the Securities
Act.
(d) With respect to offers and sales outside the United States:
(i) at or prior to the confirmation of any sale of any Notes sold in reliance
on Regulation S, it will have sent to each distributor, dealer or other person
receiving a selling concession, fee or other remuneration that purchases Notes from
it during the distribution compliance period (as defined in Regulation S) a
confirmation or notice substantially to the following effect:
“The Notes covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons, (i) as part of their distribution at any time; or
(ii) otherwise until 40 days after the later of the commencement of the
offering of the Notes and February 6, 2007, except in either case in
accordance with Regulation S or Rule 144A under the Securities Act. Terms
used above have the meanings given to them by Regulation S.”; and
(ii) the Initial Purchaser has offered the Notes and will offer and sell the
Notes (A) as part of its distribution at any time and (B) otherwise until 40 days
after the later of the commencement of the offering and the Closing Date, only in
accordance with Rule 903 of Regulation S or as otherwise permitted in Section 3(b);
accordingly, the Initial Purchaser has not engaged nor will engage in any directed
selling efforts (within the meaning of Regulation S) with respect to the
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Notes, and the Initial Purchaser has complied and will comply with the offering
restrictions requirements of Regulation S.
Terms used in this Section 3(d) have the meanings given to them by Regulation S.
4. Covenants of the Company. The Company covenants and agrees with the Initial
Purchaser that:
(a) The Company will prepare the Offering Memorandum in the form approved by the
Initial Purchaser and will not amend or supplement the Offering Memorandum or the Final
Memorandum including by filing documents under the Exchange Act which are incorporated by
reference therein without first furnishing to the Initial Purchaser a copy of such proposed
amendment or supplement or filing and will not use or file any amendment or supplement to
which the Initial Purchaser may reasonably object.
(b) The Company will furnish to the Initial Purchaser and to Counsel for the Initial
Purchaser concurrently with the Time of Sale and during the period referred to in paragraph
(c) below, without charge, as many copies of the Offering Memorandum and any amendments and
supplements thereto as they may reasonably request.
(c) At any time prior to the completion of the distribution of the Notes by the Initial
Purchaser, if any event occurs or condition exists as a result of which the Offering
Memorandum, as then amended or supplemented, would include any untrue statement of a
material fact or omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, or if it should be
necessary to amend or supplement the Offering Memorandum, to comply with applicable law, the
Company will promptly (i) notify the Initial Purchaser of the same; (ii) subject to the
requirements of paragraph (a) of this Section 4, prepare and provide to the Initial
Purchaser, at its own expense, an amendment or supplement to the Offering Memorandum, so
that the statements in the Offering Memorandum as so amended or supplemented will not, in
the light of the circumstances when the Offering Memorandum, is delivered to a purchaser, be
misleading or so that the Offering Memorandum, as amended or supplemented, will comply with
applicable law; and (iii) supply any supplemented or amended Offering Memorandum, to the
Initial Purchaser and Counsel for the Initial Purchaser, without charge, in such quantities
as may be reasonably requested.
(d) The Company will (i) qualify the Notes and the Guarantees for sale by the Initial
Purchaser under the laws of such jurisdictions as the Initial Purchaser may designate and
(ii) maintain such qualifications for so long as required for the sale of the Notes by the
Initial Purchaser. The Company will promptly advise the Initial Purchaser of the receipt by
the Company of any notification with respect to the suspension of the qualification of the
Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(e) At any time prior to the completion of the distribution of the Notes by the Initial
Purchaser, the Company will deliver to the Initial Purchaser such additional information
concerning the business and financial condition of the Company as the Initial
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Purchaser may from time to time request and whenever it or any of its subsidiaries
publishes or makes available to the public (by filing with any regulatory authority or
securities exchange or by publishing a press release or otherwise) any information that
would reasonably be expected to be material in the context of the issuance of the Notes
under this Agreement, shall promptly notify the Initial Purchaser as to the nature of such
information or event. The Company will likewise notify the Initial Purchaser of (i) any
decrease in the rating of the Notes or any other debt securities of the Company by any
nationally recognized statistical rating organization (as defined in Rule 436(g)(2) under
the Securities Act) or (ii) any notice or public announcement given of any intended or
potential decrease in any such rating or that any such securities rating agency has under
surveillance or review, with possible negative implications, its rating of the Notes,
promptly after the Company becomes aware of any such decrease, notice or public
announcement. The Company will also, for a period of five years from the Closing Date,
deliver to the Initial Purchaser, as soon as available and without request, copies of any
reports and financial statements furnished to or filed with the Commission to the extent
such reports and financial statements are not publicly available on the Commission’s
Electronic Data Gathering and Retrieval System.
(f) The Company will not, and will not permit any of its Affiliates to, resell any of
the Notes that have been acquired by any of them, other than pursuant to an effective
registration statement under the Securities Act or in accordance with Rule 144 under the
Securities Act.
(g) Except as contemplated in the Registration Rights Agreement, none of the Company or
any of its Affiliates, nor any person acting on its or their behalf (other than the Initial
Purchaser or any of its Affiliates, as to which no statement is made) will, directly or
indirectly, make offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the Notes under the Securities
Act.
(h) None of the Company or any of its Affiliates, nor any person acting on its or their
behalf (other than the Initial Purchaser or any of its Affiliates, as to which no statement
is made), will solicit any offer to buy or offer to sell the Notes by means of any form of
general solicitation or general advertising (within the meaning of Regulation D) or in any
manner involving a public offering within the meaning of Section 4(2) of the Securities Act.
(i) None of the Company or any of its Affiliates, nor any person acting on its or their
behalf (other than the Initial Purchaser or any of its Affiliates, as to which no statement
is made), will engage in any directed selling efforts (within the meaning of Regulation S)
with respect to the Notes, and each of them will comply with the offering restrictions
requirements of Regulation S.
(j) None of the Company or any of its Affiliates, nor any person acting on its or their
behalf (other than the Initial Purchaser or any of its Affiliates, as to which no statement
is made), will sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any securities of the same or a similar class as the Notes, other than the
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Notes offered or sold to the Initial Purchaser hereunder in a manner which would
require the registration under the Securities Act of the Notes.
(k) So long as any of the Notes are “restricted securities” within the meaning of Rule
144(a)(3) under the Securities Act, at any time that the Company is not then subject to
Section 13 or 15(d) of the Exchange Act, the Company will provide at its expense to each
holder of the Notes and to each prospective purchaser (as designated by such holder) of the
Notes, upon the request of such holder or prospective purchaser, any information required to
be provided by Rule 144A(d)(4) under the Securities Act. (This covenant is intended to be
for the benefit of the holders, and the prospective purchasers designated by such holders
from time to time, of the Notes.)
(l) The Company will apply the net proceeds from the sale of the Notes as set forth
under “Use of Proceeds” in the Offering Memorandum.
(m) Until completion of the distribution, neither the Company nor any of its Affiliates
will take, directly or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of
the Notes.
(n) For so long as any Notes are outstanding, the Company and its subsidiaries will
conduct its operations in a manner that will not subject the Company or any subsidiary to
registration as an investment company under the Investment Company Act.
(o) Each Note will bear a legend substantially to the following effect (and consistent
with the Registration Rights Agreement and the Indenture) until such legend shall no longer
be necessary or advisable because the Notes are no longer subject to the restrictions on
transfer described therein:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, THE SECURITIES ACT, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER JURISDICTION AND IN ACCORDANCE WITH THE TRANSFER RESTRICTIONS CONTAINED IN
THE INDENTURE UNDER WHICH THIS NOTE WAS ISSUED.
(p) The Company will not, directly or indirectly, offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company or warrants to purchase debt
securities of the Company substantially similar to the Notes (other than the Notes offered
pursuant to this Agreement) for a period of 90 days after the date hereof, without the prior
written consent of Wachovia Capital Markets, LLC.
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(q) The Company will, promptly after it has notified the Initial Purchaser of any
intention by the Company to treat the Transactions as being a “reportable transaction”
(within the meaning of Treasury Regulation Section 1.6011-4), deliver a duly completed copy
of IRS Form 8886 or any successor form to the Initial Purchaser.
(r) The Company acknowledges and agrees that the Initial Purchaser is acting solely in
the capacity of an arm’s length contractual counterparty to the Company with respect to the
offering of the Notes and the Guarantees contemplated hereby (including in connection with
determining the terms of the offering) and not as a financial advisor or a fiduciary to, or
an agent of, the Company or any other person. Additionally, the Initial Purchaser is not
advising the Company or any other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction. The Company shall consult with its own advisors
concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the Initial
Purchaser shall have no responsibility or liability to the Company with respect thereto. Any
review by the Initial Purchaser of the Company, the transactions contemplated hereby or
other matters relating to such transactions will be performed solely for the benefit of the
Initial Purchaser and shall not be on behalf of the Company.
4A. Other Agreements. In relation to each Member State of the European Economic Area
that has implemented the Prospectus Directive (each, a “Relevant Member State”), the Initial
Purchaser represents and agrees that with effect from and including the date on which the
Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation
Date”) it has not made and will not make an offer of Notes to the public in that Relevant Member
State prior to the publication of a prospectus in relation to the Notes that has been approved by
the competent authority in that Relevant Member State or, where appropriate, approved in another
Relevant Member State and notified to the competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that it may, with effect from and including the
Relevant Implementation Date, make an offer of Notes to the public in that Relevant Member State at
any time:
| • | to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; | ||
| • | to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year, (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or | ||
| • | in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive. |
The Initial Purchaser represents and agrees that:
| • | it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment |
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| activity (within the meaning of Section 21 of the Financial Services and Markets Xxx 0000 (the “FSMA”) received by it in connection with the issue or sale of the Notes in circumstances in which either Section 21(1) of the FSMA does not apply or where the exemptions in Section 21(1) of the FMSA do apply to us; and | |||
| • | it has complied and will comply with all applicable provisions of the FSMA and all applicable regulations made thereunder with respect to anything done by it in relation to the notes in, from or otherwise involving the United Kingdom. |
5. Expenses.
(a) Whether or not the transactions contemplated in this Agreement are consummated or this
Agreement is terminated, the Company and the Guarantors will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company’s counsel and the Company’s accountants in connection
with the issuance and sale of the Notes and all other fees or expenses in connection with the
preparation of each Memorandum and all amendments and supplements thereto, including all printing
costs associated therewith, and the delivering of copies thereof to the Initial Purchaser, in the
quantities herein above specified, (ii) all costs and expenses related to the transfer and delivery
of the Notes to the Initial Purchaser, including any transfer or other taxes payable thereon, (iii)
the cost of producing any Blue Sky or legal investment memorandum in connection with the offer and
sale of the Notes under state securities laws and all expenses in connection with the qualification
of the Notes for offer and sale under state securities laws as provided in Section 4(d) hereof,
including filing fees and the reasonable fees and disbursements of Counsel for the Initial
Purchaser in connection with such qualification and in connection with the Blue Sky or legal
investment memorandum, (iv) any fees charged by rating agencies for the rating of the Notes, (v)
all document production charges and expenses of counsel to the Initial Purchaser (but not including
their fees for professional services) in connection with the preparation of this Agreement, (vi)
the fees and expenses, if any, incurred in connection with the admission of the Notes for trading
in PORTAL or any appropriate market system, (vii) the costs and charges of the Trustee and any
transfer agent, registrar or depositary, (viii) the cost of the preparation, issuance and delivery
of the Notes, (ix) all costs and expenses relating to investor presentations, including any “road
show” presentations undertaken in connection with the marketing of the offering of the Notes,
including, without limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the road show
presentations, travel and lodging expenses of the Initial Purchaser and officers of the Company and
any such consultants, and the cost of any aircraft chartered in connection with the road show, and
(x) all other costs and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It is understood, however,
that except as provided in Section 5(b) of this Agreement and Section 5 of the engagement letter
dated December 21, 2006, between Wachovia Capital Markets, LLC and the Company (which shall remain
in full force and effect notwithstanding the execution of this Agreement), the Initial Purchaser
will pay all of its costs and expenses, including fees and disbursements of its counsel, transfer
taxes payable on resale of any of the Notes by them and any advertising expenses connected with any
offers they may make.
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(b) If the sale of the Notes provided for herein is not consummated because any condition to
the obligations of the Initial Purchaser set forth in Section 6 hereof is not satisfied, because
this Agreement is terminated pursuant to Section 9 hereof or because of any failure, refusal or
inability on the part of the Company to perform all obligations and satisfy all conditions on its
part to be performed or satisfied hereunder other than by reason of a default by the Initial
Purchaser, the Company will reimburse the Initial Purchaser upon demand for all reasonable
out-of-pocket expenses (including counsel fees and disbursements) that shall have been incurred by
them in connection with the proposed purchase and sale of the Notes; provided,
however, that the obligations of the Company under this Section 5(b) shall be in addition
to, and not in place of, the provisions for expense reimbursement set forth in the Engagement
Letter.
6. Conditions to the Initial Purchaser’s Obligations. The obligations of the Initial
Purchaser to purchase and pay for the Notes shall be subject to the accuracy of the representations
and warranties of the Company in Section 1 hereof, in each case as of the date hereof and as of the
Closing Date, as if made on and as of the Closing Date, to the accuracy of the statements of the
Company’s officers made pursuant to the provisions hereof, to the performance by the Company of its
covenants and agreements hereunder and to the following additional conditions:
(a) The Initial Purchaser shall have received an opinion, dated the Closing Date, of
Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company, and Santoro, Driggs, Walch, Kearney,
Xxxxxxx & Xxxxxxxx, Nevada counsel to the Company, in form and substance satisfactory to the
Initial Purchaser, to the effect set forth in Exhibit A-1 and A-2 hereto.
(b) The Initial Purchaser shall have received an opinion, dated the Closing Date, of
Xxxxxx Xxxxxx & Xxxxxxx llp, Counsel for the Initial Purchaser, with respect to the
issuance and sale of the Notes and such other related matters as the Initial Purchaser may
reasonably require, and the Company shall have furnished to such counsel such documents as
it may reasonably request for the purpose of enabling it to pass upon such matters.
(c) The Initial Purchaser shall have received on each of the date hereof and the
Closing Date a letter, dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to the Initial Purchaser and Counsel for the Initial
Purchaser, from Deloitte & Touche LLP, independent public accountants, containing statements
and information of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the consolidated historical financial statements and certain
financial information contained in the Offering Memorandum;
provided that the letter shall
use a “cut-off date” within three business days of the date of such letter and that their
procedures, shall extend to financial information in the Final Memorandum not contained in
the Preliminary Memorandum. References to the Offering Memorandum in this paragraph (c)
with respect to either letter referred to above shall include any amendment or supplement
thereto at the date of such letter.
(d) (i) None of the Company nor any of its subsidiaries, shall have sustained, since
the date of the latest audited consolidated historical financial statements included in
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the Offering Memorandum (exclusive of any amendment or supplement thereto), any loss or
interference with their respective businesses or properties from fire, explosion, flood,
accident or other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree (whether domestic or foreign) otherwise
than as set forth in the Offering Memorandum (exclusive of any amendment or supplement
thereto); and (ii) since the respective dates as of which information is given in each
Memorandum, there shall not have been any change in the capital stock or long-term debt of
the Company and its subsidiaries, or any change in or effect on or any development having a
prospective change in or effect on the business, operations, properties, assets,
liabilities, stockholders’ equity, earnings, condition (financial or otherwise), results of
operations or management of the Company and its subsidiaries, whether or not in the ordinary
course of business, otherwise than as set forth in each such Memorandum (exclusive of any
amendment or supplement thereto), the effect of which, in any such case described in clause
(i) or (ii), is, in the sole judgment of the Initial Purchaser, so material and adverse as
to make it impracticable or inadvisable to market the Notes on the terms and in the manner
described in the Offering Memorandum (exclusive of any amendment or supplement thereto).
(e) None of the information set forth in the sections of the Offering Memorandum
entitled “Use of Proceeds,” “Certain Relationships and Related Transactions” and “Offering
Memorandum Summary—Recent Developments” shall have changed, nor shall there have been any
change in the information with respect to the directors and officers of the Company from
what is set forth in the section of the Offering Memorandum entitled “Management,” if the
effect of any such change, individually or in the aggregate, in the sole judgment of the
Initial Purchaser makes it impracticable or inadvisable to proceed with the offering or the
delivery of the Notes on the terms and in the manner described in the Offering Memorandum,
exclusive of any amendment or supplement thereto.
(f) The Initial Purchaser shall have received a certificate, dated the Closing Date and
in form and substance satisfactory to the Initial Purchaser, of the Chief Executive Officer
and the Chief Financial Officer of the Company as to the accuracy of the representations and
warranties of the Company in this Agreement at and as of the Closing Date; that the Company
has performed all covenants and agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date; and as to the matters set forth in
Sections 6(d) and (e).
(g) The Notes shall have received initial ratings by Standard & Poor’s and Xxxxx’x,
and, subsequent to the date hereof, there shall not have been any decrease in the rating of
the Notes or any of the Company’s other securities by any “nationally recognized statistical
rating agency,” as that term is defined by the Commission for purposes of Rule 436(g)(2)
under the Securities Act, and no such organization shall have publicly announced that it has
under surveillance or review its ratings of the Securities or any of the Company’s other
securities or any notice or public announcement given of any intended or potential decrease
in any such rating or that any such securities rating agency
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has under surveillance or review, with possible negative implications, its rating of the Notes.
(h) The Notes shall have been designated for trading on PORTAL.
(i) The Notes shall be eligible for clearance and settlement through the Depository
Trust Company.
(j) On or before the Closing Date, the Initial Purchaser and Counsel for the Initial
Purchaser shall have received such further certificates, documents or other information as
they may have reasonably requested from the Company.
(k) The Company and the Guarantors shall have executed and delivered the documentation
with respect to the Credit Facility and the Initial Purchaser shall have received copies
thereof.
7. Indemnification and Contribution.
(a) The Company and each Guarantor, jointly and severally, agrees to indemnify and hold
harmless the Initial Purchaser, its affiliates, 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 Initial Purchaser against any losses, claims, damages or liabilities, joint or several, to
which the Initial Purchaser or such other person may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained in the Preliminary
Memorandum, the Offering Memorandum or any amendment or supplement thereto; or (ii) the omission or
alleged omission to state in the Preliminary Memorandum, the Offering Memorandum or any amendment
or supplement thereto a material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading, and will reimburse, as incurred, the Initial
Purchaser and each such other person for any legal or other expenses reasonably incurred by the
Initial Purchaser or such other person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim, damage, liability or
action; provided, however, that the Company and the Guarantors will not be liable
in any such case to the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Memorandum, the Offering Memorandum or any amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the Company by the Initial
Purchaser specifically for use therein as set forth in Section 10 hereof.
(b) The Initial Purchaser will indemnify and hold harmless the Company and the Guarantors and
their respective affiliates, directors, 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) any of the Company
or the Guarantors against any losses, claims, damages or liabilities joint or several to which the
Company, the Guarantors, any such affiliates, directors or officers or such controlling person may
become subject, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or
-22-
alleged untrue statement of any material fact contained in the Preliminary Memorandum or any amendment
or supplement thereto, or (ii) the omission or alleged omission to state in the Preliminary Memorandum,
or the Offering Memorandum or any amendment or supplement thereto
a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the Company by the Initial
Purchaser specifically for use therein as set forth in Section 10 hereof and, subject to the
limitation set forth immediately preceding this clause, will reimburse as incurred, any legal or
other expenses reasonably incurred by the Company or the Guarantors or any such affiliates,
directors or officers or such controlling person in connection with investigating, defending
against or appearing as a third-party witness in connection with, any such loss, claim, damage,
liability or action in respect thereof.
(c) Promptly after receipt by any person to whom indemnity may be available under this Section
7 (the “indemnified party”) of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any person from whom indemnity may be
sought under this Section 7 (the “indemnifying party”), notify such indemnifying party of the
commencement thereof; but the failure so to notify such indemnifying party will not relieve such
indemnifying party from any liability which it may have under this Section 7 to the extent it is
not materially prejudiced as a proximate result of the failure or any other liability which it may
have to such indemnified party otherwise than under this Section 7. In case any such action is
brought against any indemnified party, and such indemnified party notifies the relevant
indemnifying party of the commencement thereof, such indemnifying party will be entitled to
participate therein and, to the extent that it may wish, to assume the defense thereof, jointly
with any other indemnifying party similarly notified, with counsel satisfactory to such indemnified
party; provided, however, that if the named parties in any such action (including
impleaded parties) include both the indemnified party and the indemnifying party and the
indemnified party shall have concluded, based on advice of outside counsel, that there may be one
or more legal defenses available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party or that representation of both parties by
the same counsel would be inappropriate due to actual or potential differing interests between
them, the indemnifying party shall not have the right to direct the defense of such action on
behalf of such indemnified party or parties and such indemnified party or parties shall have the
right to select separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from an indemnifying party to an indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of counsel appointed to defend
such action, such indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense thereof, unless (i)
such indemnified party shall have employed separate counsel in accordance with the proviso to the
immediately preceding sentence or (ii) such indemnifying party does not promptly retain counsel
satisfactory to such indemnified party or (iii) such indemnifying party has authorized the
employment of counsel for such indemnified party at the expense of the indemnifying party. After
such notice from an indemnifying party to an indemnified party, such indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by such
-23-
indemnified party without the written consent of such indemnifying party. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated by (i), (ii) or
(iii) of the third sentence of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent if (x) such
settlement is entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (y) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement. An indemnifying party will
not, without the prior written consent of the indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect
of which indemnification may be sought hereunder (whether or not the indemnified party or any other
person that may be entitled to indemnification hereunder is a party to such claim, action, suit or
proceeding) unless such settlement, compromise or consent includes an unconditional release of the
indemnified party and such other persons from all liability arising out of such claim, action, suit
or proceeding.
(d) (i) In circumstances in which the indemnity agreement provided for in the preceding
paragraphs of this Section 7 is unavailable or insufficient, for any reason, to hold harmless an
indemnified party in respect of any losses, claims, damages or liabilities (including, without
limitation, any legal or other expenses incurred in connection with defending or investigating any
action or claim) (or actions in respect thereof) (“Losses”), the Company and the Guarantors, on the
one hand, and the Initial Purchaser, on the other, in order to provide for just and equitable
contribution, agree to contribute to the amount paid or payable by such indemnified party as a
result of such Losses to which the Company and the Guarantors, on the one hand, and the Initial
Purchaser, on the other, may be subject, in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantors, on the one hand, and the Initial
Purchaser, on the other, from the offering of the Notes or (ii) if the allocation provided by the
foregoing clause (i) is unavailable for any reason, not only such relative benefits but also the
relative fault of the Company and the Guarantors, on the one hand, and the Initial Purchaser, on
the other, in connection with the statements or omissions or alleged statements or omissions that
resulted in such Losses. The relative benefits received by the Company and the Guarantors, on the
one hand, and the Initial Purchaser, on the other, shall be deemed to be in the same proportion as
the total proceeds from the offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by the Initial Purchaser from the Company in
connection with the purchase of the Notes hereunder as set forth in the Final Memorandum. The
relative fault of the parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Guarantors or the Initial
Purchaser, the parties’ intent, relative knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable considerations appropriate
in the circumstances. The Company, the Guarantors and the Initial Purchaser agree that it would
not be just and equitable if contribution were determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable considerations referred to
above. Notwithstanding any other provision of this paragraph (d), the Initial Purchaser shall not
be obligated to make contributions hereunder that in the aggregate exceed the total underwriting
discounts and commissions received by the Initial Purchaser from the
-24-
Company in connection with the purchase of the Notes hereunder, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), 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 and each other
person listed in Section 7(a) hereof shall have the same rights to contribution as the Initial
Purchaser, and each affiliate, director or officer of the Company or any Guarantor and each person,
if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, shall have the same rights to contribution as the Company and the
Guarantors.
(e) The obligations of the Company and the Guarantors under this Section 7 shall be in
addition to any obligations or liabilities which the Company and the Guarantors may otherwise have
and the obligations of the Initial Purchaser under this Section 7 shall be in addition to any
obligations or liabilities which the Initial Purchaser may otherwise have.
8. Survival. The respective representations, warranties, agreements, covenants,
indemnities and other statements of the Company, the Guarantors, their respective officers, and the
Initial Purchaser set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, the Guarantors, their respective officers or
directors or any controlling person referred to in Section 7 hereof or the Initial Purchaser and
(ii) delivery of and payment for the Notes. The respective agreements, covenants, indemnities and
other statements set forth in Sections 5 and 7 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
9. Termination.
(a) The Initial Purchaser may terminate this Agreement with respect to the Notes by notice to
the Company at any time on or prior to the Closing Date in the event that the Company shall have
failed, refused or been unable to perform in any material respect all obligations and satisfy in
any material respect all conditions on its part to be performed or satisfied hereunder at or prior
thereto or if, at or prior to the Closing Date (i) trading in securities generally on the New York
Stock Exchange, the NASDAQ National Market or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum or maximum prices shall have been established on any such exchange or market;
(ii) there has been a material disruption in commercial banking or securities settlement, payment
or clearance services in the United States; (iii) a banking moratorium shall have been declared by
New York, North Carolina or United States authorities or (iv) there shall have been (A) an outbreak
or escalation of hostilities between the United States and any foreign power, (B) an outbreak or
escalation of any other insurrection or armed conflict involving the United States, (C) the
occurrence of any other calamity or crisis involving the United States or (D) any change in general
economic, political or financial conditions which has an effect on the U.S. financial markets or
the international financial markets that, in the case of any event described in this clause (iv),
in the sole judgment of the Initial Purchaser, makes it impracticable or inadvisable to proceed
with the offer, sale and delivery of the Notes as disclosed in
-25-
the Preliminary Memorandum or the Offering Memorandum, exclusive of any amendment or supplement thereto.
(b) Termination of this Agreement pursuant to this Section 9 shall be without liability of any
party to any other party except as provided in Sections 5 and 7 hereof.
10. Information Supplied by Initial Purchaser. The statements set forth in the second
sentence of the second paragraph, the second and fourth sentences of the third paragraph, the
second and third sentences of the sixth paragraph and the seventh paragraph under the heading “Plan
of Distribution” in the Preliminary Memorandum, the Offering Memorandum, to the extent such
statements relate to the Initial Purchaser, constitute the only information furnished by the
Initial Purchaser to the Company for the purposes of Sections 1(a) and 7 hereof.
11. Notices. All communications hereunder shall be in writing and, if sent to any of
the Initial Purchaser, shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to Wachovia Capital Markets, LLC, One Wachovia Center, 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Xxx Xxxxxx, with a copy to Xxxxxx Xxxxxx
& Xxxxxxx LLP, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxx, Esq.
and if sent to the Company or any Guarantor, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to the Company at American Pacific Corporation, 0000 Xxxxxx
Xxxxxx Xxxxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000, Attention: Chief Financial Officer, with a copy to
Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, Attention: Xxxx Xxxxxxx, Esq.
12. Successors. This Agreement shall inure to the benefit of and shall be binding
upon the Initial Purchaser, the Company and the Guarantors and their respective successors and
legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive benefit of the
Initial Purchaser, the Company and the Guarantors and their respective successors and legal
representatives, and for the benefit of no other person, except that (i) the indemnities of the
Company contained in Section 7 of this Agreement shall also be for the benefit of any person or
persons who control the Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and (ii) the indemnities of the Initial Purchaser contained in
Section 7 of this Agreement shall also be for the benefit of the affiliates, directors and officers
of the Company and the Guarantors, and any person or persons who control the Company or the
Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act. No purchaser of Notes from the Initial Purchaser shall be deemed a successor to the Initial
Purchaser because of such purchase.
13. Applicable Law. This Agreement shall be governed by the laws of the State of New
York.
-26-
14. Consent to Jurisdiction and Service of Process; Waiver of Jury Trial.
(a) All judicial proceedings arising out of or relating to this Agreement may be brought in
any state or federal court of competent jurisdiction in the State of New York, which jurisdiction
is exclusive, and the Company and the Guarantors hereby consent to the jurisdiction of such courts.
(b) Each party agrees that any service of process or other legal summons in connection with
any Proceeding may be served on it by mailing a copy thereof by registered
mail, or a form of mail substantially equivalent thereto, postage prepaid, addressed to the
served party at its address as provided for in Section 12 hereof. Nothing in this Section shall
affect the right of the parties to serve process in any other manner permitted by law.
(c) Each of the Company and the Guarantors hereby waives all right to trial by jury in any
proceeding (whether based upon contract, tort or otherwise) in any way arising out of or relating
to this Agreement. Each of the Company and the Guarantors agrees that a final judgment in any such
proceeding brought in any such court shall be conclusive and binding upon it and may be enforced in
any other courts in the jurisdiction of which it is or may be subject, by suit upon such judgment.
15. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
[The remainder of this page is intentionally left blank.]
-27-
If the foregoing correctly sets forth our understanding, please indicate your acceptance
thereof in the space provided below for that purpose, whereupon this letter shall constitute an
agreement binding the Company, the Guarantors and the Initial Purchaser.
| Very truly yours, AMERICAN PACIFIC CORPORATION |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| THE GUARANTORS AMERICAN PACIFIC CORPORATION (NEVADA) |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | President | |||
| AMERICAN AZIDE CORPORATION |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | President | |||
| AMPAC FARMS, INC. |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | President | |||
| AMPAC-ISP CORP. |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | President | |||
-28-
| ENERGETIC ADDITIVES INC., LLC |
||||
| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Manager | |||
| AMPAC FINE CHEMICALS LLC |
||||
| By: | /s/ Xxxxx Xxxxx | |||
| Name: | Xxxxx Xxxxx | |||
| Title: | President | |||
-29-
Accepted as of the date hereof.
| WACHOVIA CAPITAL MARKETS, LLC | ||||
By:
|
/s/ Xxxxx Xxxxx
Title: Vice President |
|||
-30-
SCHEDULE I
GUARANTORS
| Guarantor | Jurisdiction of Formation | |
American Pacific Corporation
|
Nevada | |
American Azide Corporation
|
Nevada | |
Ampac Farms, Inc.
|
Nevada | |
Ampac-ISP Corp., LLC
|
Delaware | |
Energetic Additives Inc., LLC
|
Nevada | |
Ampac Fine Chemicals LLC
|
California |
S-I-1
EXHIBIT A-1
FORM OF OPINION OF
XXXXXXXX & XXXXXXXX LLP
XXXXXXXX & XXXXXXXX LLP
Based upon and subject to the limitations and qualifications set forth herein, we are of the
opinion that:
(1) The Company and each Designated Guarantor is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization and has full
corporate or limited liability company, as applicable, power and authority to own or lease
its property and conduct its business as described in the Offering Memorandum and the Final
Memorandum. The Company and each Designated Guarantor is duly qualified to transact
business and in good standing in each jurisdiction in which the conduct of its business
requires such qualification, except for any such jurisdiction where the failure to be so
qualified or in good standing would not have a Material Adverse Effect.
(2) The Company and each Designated Guarantor has the corporate power and authority to
execute and deliver, and to perform and observe the provisions of, the Documents.
(3) To our knowledge and except as set forth in the Offering Memorandum and the Final
Memorandum, there are no legal or governmental proceedings pending or threatened to which
the Company or any Guarantor is a party or which any property or assets of the Company or
any Guarantor is subject which would reasonably be expected to have a Material Adverse
Effect.
(4) The Purchase Agreement has been duly authorized, executed and delivered by the
Company and each Designated Guarantor.
(5) Each of the Indenture and the Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and each Designated Guarantor, and
constitutes a legal, valid and binding agreement of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance with its terms.
(6) The Guarantees have been duly authorized and, when executed and authenticated in
accordance with the Indenture and delivered to and paid for by the Initial Purchaser in
accordance with the terms of the Purchase Agreement, the Guarantees endorsed thereon will be
legal, valid and binding obligations of the Guarantors, enforceable against the Guarantors
in accordance with their terms.
(7) The Notes have been duly authorized 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 the Purchase Agreement and the Indenture,
will constitute the legal, valid and binding obligations of the Company, entitled
to the benefits of the Indenture and the Registration Rights Agreement and
enforceable against the Company in accordance with their terms.
(8) The Exchange Notes have been duly authorized, and when executed and authenticated
in accordance with the provisions of the Indenture and Registration Rights Agreement and
delivered to the noteholders in exchange for the Notes in accordance with the terms of the
Registration Rights Agreement, will be valid and binding obligations of the Company,
enforceable in accordance with their terms, and will be entitled to the benefits of the
Indenture and the Registration Rights Agreement.
(9) The statements set forth in the Offering Memorandum and the Final Memorandum under
the heading “Description of Notes,” insofar as they purport to constitute a summary of the
terms of the Notes (including the Guarantees) and the Indenture, and under the heading
“Exchange Offer; Registration Rights,” “Description of Other Indebtedness, “Notice to
Investors” and “Material U.S. Federal Income Tax Considerations,” insofar as they purport to
describe the provisions of the laws and documents referred to therein, are accurate,
complete and fair.
(10) Assuming (a) the accuracy of, and compliance with, the representations, warranties
and covenants of the Company in the Purchase Agreement (other than Section 1(oo) thereof),
(b) the accuracy of, and compliance with, the representations, warranties and covenants of
the Initial Purchaser in the Purchase Agreement, (c) the accuracy of the representations and
warranties of each of the purchasers to whom the Initial Purchaser initially resells the
Notes as specified in the Offering Memorandum, (d) the compliance by the Initial Purchaser
with the offering and transfer procedures and restrictions described in the Offering
Memorandum, and (e) the receipt by the purchasers to whom the Initial Purchaser initially
resells the Notes of a copy of the Offering Memorandum prior to such sale, it is not
necessary in connection with the offer, sale and delivery of the Notes in the manner
contemplated by the Purchase Agreement and the Offering Memorandum to register the Notes
under the Securities Act or to qualify the Indenture under the Trust Indenture Act (it being
understood that no opinion is being given for any subsequent resale of the Notes).
(11) The execution, delivery and performance by the Company and each Designated
Guarantor of the Documents, the Notes and the Guarantees, as applicable, the compliance by
the Company and each Guarantor with the provisions thereof and the consummation of the
transactions contemplated therein does not and will not (a) result in a breach, of violation
of, or constitute a default under, the charter and bylaws or operating agreement of the
Company and each Designated Guarantor, as applicable, or the terms of any Material Contract
to which the Company or any Guarantor is a party or bound or (b) result in the violation of
any statute or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of the Designated Guarantors known by us to be
customarily applicable to transactions of the nature contemplated by the Documents.
(12) No consent, approval, authorization or order of, or filing or registration with,
any U.S. federal or state court or governmental agency or body having jurisdiction
-2-
over the Company or any of the Guarantors or any of their respective properties or
assets is required for the execution, delivery and performance of the Purchase Agreement,
the Indenture, the Registration Rights Agreement, the Notes and the Guarantees by the
Company and each Guarantor and the consummation of the transactions contemplated thereby and
therein, except (a) with respect to the transactions contemplated by the Registration Rights
Agreement such consents, approvals, authorizations, orders, filings or registrations as may
be required under the Act and the qualification of the Indenture under the Trust Indenture
Act, (b) such consents, approvals, authorizations, orders, filings or registrations as may
be required under applicable state securities laws in connection with the purchase and
distribution of the Notes by the Initial Purchaser, subject to paragraph 10 above and (c)
for such consents, approvals, authorizations, orders, filings or registrations as have been
obtained or made.
(13) To our knowledge, neither the Company nor any of the Guarantors are in violation
of their respective charters, bylaws or operating agreements.
(14) Neither the Company nor any of the Guarantors is, or after giving effect to the
offering and sale of the Notes and the application of the net proceeds thereof as set forth
in the Offering Memorandum will be, an “investment company” or a company “controlled” by an
“investment company” as such terms are defined in the Investment Company Act of 1940, as
amended.
(15) The documents incorporated or deemed to be incorporated by reference in the
Offering Memorandum at the time they were filed with the Commission complied as to form in
all material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder.
In our capacity as counsel to the Company, we have examined the Offering Memorandum and the
Final Memorandum. In addition, we have participated in conferences with your representatives,
representatives of the Company and representatives of the accountants of the Company concerning the
Offering Memorandum and the Final Memorandum, and have considered the matters required to be stated
therein and the statements contained therein, although we have not independently verified the
accuracy, completeness or fairness of such statements, except for such statements pertaining to our
opinion set forth above in paragraph (9). Based upon and subject to the foregoing, nothing has
come to our attention that leads us to believe that the Offering Memorandum, as of the Time of Sale
and as of the date hereof, and the Final Memorandum, as of its date and as of the date hereof,
contained or contains an untrue statement of a material fact or omitted or omits to state any
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that we have not been requested to
and do not make any comment or express any belief in this paragraph with respect to the financial
statements (including the footnotes thereto), financial statement schedules and other financial and
accounting information contained in the Offering Memorandum and the Final Memorandum).
-3-
EXHIBIT A-2
FORM OF OPINION OF
SANTORO, DRIGGS, WALCH, KEARNEY,
XXXXXXX & XXXXXXXX
SANTORO, DRIGGS, WALCH, KEARNEY,
XXXXXXX & XXXXXXXX
Based upon the foregoing, and upon our examination of such questions of law and statutes of
the State of Nevada as we have considered necessary or appropriate, and subject to the assumptions,
qualifications, limitations and exceptions set forth herein, we are of the opinion that:
1. The Nevada Subsidiaries are duly organized, validly existing and in good standing
under the laws of the State of Nevada and have full corporate power and authority to own or
lease their property and conduct their business as described in the Offering Memorandum and
the Final Memorandum. The Nevada Subsidiaries are duly qualified to transact business and
in good standing in each jurisdiction in which the conduct of their business requires such
qualification, except for any such jurisdiction where the failure to be so qualified or in
good standing would not have a Material Adverse Effect.
2. The Nevada Subsidiaries have the corporate power and authority to execute and
deliver, and to perform and observe the provisions of, the Documents.
3. The Purchase Agreement has been duly authorized, executed and delivered by the
Nevada Subsidiaries.
4. Each of the Indenture and the Registration Rights Agreement has been duly
authorized, executed and delivered by the Nevada Subsidiaries and is enforceable against the
Nevada Subsidiaries in accordance with its terms.
5. The Guarantees have been duly authorized, and when executed and authenticated in
accordance with the Indenture and delivered to and paid for by the Initial Purchaser in
accordance with the terms of the Purchase Agreement, the Guarantees endorsed thereon will be
legal, valid and binding obligations of the Nevada Subsidiaries, enforceable against the
Nevada Subsidiaries in accordance with their terms.
6. The execution, delivery and performance by the Nevada Subsidiaries of the Documents
and the Guarantees, as applicable, the compliance by the Nevada Subsidiaries with the
provisions thereof and the consummation of the transactions contemplated therein does not
and will not (a) result in a breach of violation of, or constitute a default under, the
articles of incorporation or organization and bylaws or operating agreement of the Nevada
Subsidiaries, as applicable, or (b) result in the violation of any statute or any order,
rule or regulation of any court or governmental agency or body having jurisdiction over the
Nevada Subsidiaries known by us to be customarily applicable to transactions of the nature
contemplated by the Documents
7. No consent, approval, authorization or order of, or filing or registration with, any
U.S. federal or state or foreign court or governmental agency or body having jurisdiction
over the Nevada Subsidiaries or any of their respective properties or assets is required for
the execution, delivery and performance of the Purchase Agreement, the Indenture, the
Registration Rights Agreement and the Guarantees by the Nevada Subsidiaries and the
consummation of the transactions contemplated thereby and therein, except (a) as may be
required by the Act, the Trust Indenture Act of 1939 or such consents, approvals,
authorizations, orders, filings or registrations as may be required under applicable state
securities laws in connection with the purchase and distribution of the Notes and (b) for
such consents, approvals, authorizations, orders, filings or registrations as have been
obtained or made.
8. To our knowledge, the Nevada Subsidiaries are not in violation of their respective
articles of incorporation or organization, bylaws or operating agreements.
9. The Exchange Guarantees have been duly authorized, and when executed and
authenticated in accordance with the provisions of the Indenture and Registration Rights
Agreement, and delivered in exchange for the Guarantees in accordance with the terms of the
Registration Rights Agreement and the Exchange Offer, will be valid and binding obligations
of the Nevada Subsidiaries, enforceable in accordance with their terms.
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