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EXHIBIT 1.1
$300,000,000
DEL MONTE CORPORATION
9 1/4% SENIOR SUBORDINATED NOTES DUE 2011
PLACEMENT AGREEMENT
May 3, 2001
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May 3, 2001
Xxxxxx Xxxxxxx & Co. Incorporated
Banc of America Securities LLC
Deutsche Banc Alex. Xxxxx Inc.
Xxxxx Securities Inc.
ABN AMRO Incorporated
BMO Xxxxxxx Xxxxx Corp.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
DEL MONTE CORPORATION, a New York corporation (the "COMPANY"), proposes
to issue and sell to the several purchasers named in Schedule I hereto (the
"PLACEMENT AGENTS") $300,000,000 principal amount of its 9 1/4% Senior
Subordinated Notes due 2011 (the "SECURITIES") to be issued pursuant to the
provisions of an Indenture (the "INDENTURE") among the Company, Del Monte Foods
Company, a Delaware corporation ("HOLDINGS"), and Bankers Trust Company, as
Trustee (the "TRUSTEE"). In connection with the issuance of the Securities, the
Company and Holdings will enter into a Registration Rights Agreement (the
"Registration Rights Agreement") with the Placement Agents. The Securities will
be guaranteed by Holdings pursuant to guarantees (the "GUARANTEES") endorsed on
the Securities.
The Securities will be offered 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").
In connection with the sale of the Securities, the Company has prepared
a preliminary offering memorandum (the "PRELIMINARY MEMORANDUM") and will
prepare a final offering memorandum (the "FINAL MEMORANDUM" and the Preliminary
Memorandum, each a "MEMORANDUM") including or incorporating by reference a
description of the terms of the Securities, the terms of the offering and a
description of the Company and Holdings. As used herein, the term "Memorandum"
shall include 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 or Final Memorandum, as the case may be, that are
filed subsequent to the date of such Memorandum with the Securities and Exchange
Commission (the "COMMISSION") pursuant to the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT").
1. Representations and Warranties. The Company and Holdings, jointly and
severally, represent and warrant to, and agree with, you that:
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(a) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated or deemed to be incorporated by
reference in either Memorandum complied or will comply when so filed in
all material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder and (ii) the Preliminary
Memorandum does not contain, and the Final Memorandum, in the form used
by the Placement Agents to confirm sales and on the Closing Date (as
defined in Section 4), will not contain, any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in either Memorandum based upon information relating to any
Placement Agent furnished to the Company in writing by such Placement
Agent through you expressly for use therein.
(b) Each of the Company and Holdings 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 each 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 on Holdings, the
Company and the Company's subsidiaries (the "Subsidiaries"), taken
together as a whole. Holdings does not have any subsidiaries other than
the Company.
(c) Each Subsidiary 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 each
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 on Holdings, the Company and
the Subsidiaries, taken together as a whole; all of the issued shares of
capital stock of the Company and each Subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable and are
owned directly by the Company or Holdings, as the case may be, free and
clear of all liens, encumbrances, equities or claims, except that the
shares of capital stock of the Company secure the obligations of
Holdings under its existing credit facility.
(d) This Agreement has been duly authorized, executed and
delivered by the Company and Holdings.
(e) The Securities 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 Placement Agents in accordance with the
terms of this Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and general principles of equity, and will be entitled
to the benefits of the Indenture; and the Guarantees have been duly
authorized and, when the Guarantees and
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the Securities have been executed and the Securities have been
authenticated, all in accordance with the provisions of the Indenture,
and the Securities have been delivered to and paid for by the Placement
Agents in accordance with the terms of this Agreement, the Guarantees
will be valid and binding obligations of Holdings, enforceable in
accordance with their terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
general principles of equity and will be entitled to the benefits of the
Indenture.
(f) The Indenture has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company and
Holdings, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and general principles of equity; and the Registration
Rights Agreement has been duly authorized, executed and delivered by,
and is a valid and binding agreement of, the Company, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally and general
principles of equity.
(g) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture, the Registration Rights Agreement and the Securities and the
execution and delivery by Holdings of, and the performance by Holdings
of its obligations under, this Agreement, the Indenture, the
Registration Rights Agreement and the Guarantees will not contravene any
provision of applicable law or the certificate of incorporation or
by-laws of the Company or Holdings or any agreement or other instrument
binding upon the Company or Holdings or any of the Subsidiaries that is
material to Holdings or the Company and the Subsidiaries, taken together
as a whole, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over Holdings or the Company or any
of the Subsidiaries, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required
for the performance by the Company of its obligations under this
Agreement, the Indenture, the Registration Rights Agreement or the
Securities or for the performance by Holdings of its obligations under
this Agreement, the Indenture, the Registration Rights Agreement and the
Guarantees, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Securities and except such as may be required under the Securities Act
in connection with the performance by the Company and Holdings of their
obligations under the Registration Rights Agreement.
(h) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of Holdings, the Company and the Subsidiaries, taken together
as a whole from that set forth in the Final Memorandum.
(i) There are no legal or governmental proceedings pending or
threatened to which the Company or Holdings or any of the Subsidiaries
is a party or to which any of the properties of the Company or Holdings
or any of the Subsidiaries is subject, other than proceedings accurately
described in all material respects in each Memorandum and proceedings
that would not have a material adverse effect on (i) Holdings, the
Company
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and the Subsidiaries, taken together as a whole, (ii) the power or
ability of the Company to perform its obligations under this Agreement,
the Indenture, the Registration Rights Agreement or the Securities or to
consummate the transactions contemplated by the Final Memorandum, or
(iii) on the power or ability of Holdings to perform its obligations
under this Agreement, the Indenture, the Registration Rights Agreement
or the Guarantees.
(j) The Company, Holdings and the Subsidiaries (i) are in
compliance with all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on Holdings, the Company and the Subsidiaries,
taken together as a whole.
(k) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on Holdings, the Company and the
Subsidiaries, taken together as a whole.
(l) Neither the Company nor Holdings is, and after giving effect
to the offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Memorandum, neither the
Company nor Holdings will be required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(m) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate," which
term includes, without limitation, Holdings) of the Company has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) that is or will be integrated with the
sale of the Securities or the Guarantees in a manner that would require
the registration under the Securities Act of the Securities or the
Guarantees, or (ii) engaged in any form of general solicitation or
general advertising (as those forms are used in Regulation D under the
Securities Act) in connection with the offering of the Securities or the
Guarantees or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(n) None of the Company, its Affiliates or any person acting on
its or their behalf has engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the
Securities or the Guarantees and the Company and its
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Affiliates and any person acting on its or their behalf have complied
and will comply with the offering restrictions requirement of Regulation
S.
(o) Assuming the accuracy of the representations and warranties
and the performance of the agreements of the Placement Agents contained
in Section 7 of this Agreement, it is not necessary in connection with
the offer, sale and delivery of the Securities or the Guarantees to the
Placement Agents in the manner contemplated by this Agreement to
register the Securities or the Guarantees under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "TRUST INDENTURE ACT").
(p) Assuming the accuracy of the representations and warranties
and the performance of the agreements of the Placement Agents contained
in Section 7 of this Agreement, the Securities and the Guarantees
satisfy the requirements set forth in Rule 144A(d)(3) under the
Securities Act.
(q) Subsequent to the respective dates as of which information is
given in the Memorandum, (1) Holdings, the Company nor the Subsidiaries
have incurred any material liability or obligation, direct or
contingent, or entered into any material transaction not in the ordinary
course of business; (2) neither the Company nor Holdings has purchased
any of its outstanding capital stock, or declared, paid or otherwise
made any dividend or distribution of any kind on its capital stock other
than ordinary and customary dividends; and (3) there has not been any
material adverse change in the capital stock, short-term debt or
long-term debt of the Holdings, the Company and the Subsidiaries, except
in each case as described in the Memorandum.
(r) Holdings, the Company and the Subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them that is material
to the business of Holdings, the Company and the Subsidiaries, taken
together as a whole, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Memorandum
or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property
by Holdings, the Company and the Subsidiaries; and any real property and
buildings held under lease by Holdings, the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by Holdings,
the Company and the Subsidiaries, in each case except as described in
the Memorandum.
(s) Holdings, the Company and the Subsidiaries own or possess, or
can acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names currently employed by them in connection with the business now
operated by them, and none of Holdings, the Company or any of the
Subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision,
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ruling or finding, would result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business or
operations of Holdings, the Company and the Subsidiaries, taken together
as a whole.
(t) No material labor dispute with the employees of Holdings, the
Company or any of the Subsidiaries exists, except as described in the
Memorandum, or, to the knowledge of Holdings, the Company or any of the
Subsidiaries, is imminent; and none of Holdings, the Company or any of
the Subsidiaries is aware of any existing, threatened or imminent labor
disturbance by the employees of any of its or their principal suppliers,
manufacturers or contractors that could result in any material adverse
change in the condition, financial or otherwise, or in the earnings,
business or operations of Holdings, the Company and the Subsidiaries,
taken together as a whole.
(u) Holdings, the Company and each of the Subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; none Holdings, the Company or any
of the Subsidiaries has been refused any insurance coverage sought or
applied for; and none of Holdings, the Company or any of the
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 its business at a cost that would not materially and adversely
affect the condition, financial or otherwise, or the earnings, business
or operations of Holdings, the Company and the Subsidiaries, taken
together as a whole, except as described in the Memorandum.
(v) Holdings, the Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate
federal, state or foreign authorities necessary to conduct their
respective businesses, and none of Holdings, the Company or any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of Holdings, the Company and the
Subsidiaries, taken together as a whole, except as described in the
Memorandum.
(w) Holdings, the Company and each of the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (3) access to assets is permitted only in
accordance with management's general or specific authorization; and (4)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Placement Agents, and each Placement Agent, upon the basis of the
representations and
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warranties herein contained, but subject to the conditions hereinafter stated,
agrees, severally and not jointly, to purchase from the Company the respective
principal amount of Securities set forth in Schedule I hereto opposite its name
at a purchase price of 97.25% of the principal amount thereof (the "PURCHASE
PRICE").
The Company and Holdings hereby agree that, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Placement Agents,
they will not, during the period beginning on the date hereof and continuing
through and including the Closing Date, offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company or Holdings or warrants
to purchase debt securities of the Company or Holdings substantially similar to
the Securities (other than the sale of the Securities under this Agreement).
3. Terms of Offering. You have advised the Company that the Placement
Agents will make an offering of the Securities purchased by the Placement Agents
hereunder on the terms to be set forth in the Final Memorandum, as soon as
practicable after this Agreement is entered into as in your judgment is
advisable.
4. Payment and Delivery. Payment for the Securities shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such Securities for the respective accounts of the several Placement
Agents at 10:00 a.m., New York City time, on May 15, 2001, or at such other time
on the same or such other date, not later than May 22, 2001, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "CLOSING DATE."
Certificates for the Securities shall be in definitive form or global
form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Securities shall
be delivered to you on the Closing Date for the respective accounts of the
several Placement Agents, with any transfer taxes payable in connection with the
transfer of the Securities to the Placement Agents duly paid, against payment of
the Purchase Price therefor.
5. Conditions to the Placement Agents' Obligations. The several
obligations of the Placement Agents to purchase and pay for the Securities on
the Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded the Company or Holdings or any of the Company's or
Holdings' securities by any "nationally recognized statistical
rating organization," as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the
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earnings, business or operations of Holdings, the Company and the
Subsidiaries, taken together as a whole, from that set forth in
the Final Memorandum (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Securities on the terms and
in the manner contemplated in the Final Memorandum.
(b) The Placement Agents shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 5(a)(i) and to the
effect that the representations and warranties of the Company contained
in this Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date. The officer signing and delivering such
certificate may rely upon the best of his or her knowledge as to
proceedings threatened.
(c) The Placement Agents shall have received on the Closing Date
an opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP, outside counsel for the
Company, dated the Closing Date, to the effect set forth in Exhibit A.
Such opinion shall be rendered to the Placement Agents at the request of
the Company and shall so state therein.
(d) The Placement Agents shall have received on the Closing Date
an opinion of Xxxxx X. Xxxxxxx, Associate General Counsel of Holdings,
dated the Closing Date, to the effect set forth in Exhibit B. Such
opinion shall be rendered to the Placement Agents at the request of the
Company and shall so state therein.
(e) The Placement Agents shall have received on the Closing Date
an opinion of Xxxxx & Xxxx LLP, counsel for the Placement Agents, dated
the Closing Date, to the effect set forth in Exhibit C.
(f) The Placement Agents 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 Placement Agents, from KPMG LLP, independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Final Memorandum; provided that the
letter delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(g) The Placement Agents shall have received on each of the date
hereof and the Closing Date a certificate, dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Placement Agents, from the Company, signed by the principal
financial or accounting officer of the Company, to the effect that the
signer of such certificate has performed ( or members of his staff
acting under his supervision have performed) certain specified
procedures as a result of which such signer has determined that certain
numerical and statistical information set forth in the Final
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Memorandum, specified by the Placement Agents, has been derived from,
and agrees with, the records of the Company.
(h) Prior to the Closing Date, Holdings and the Company will have
duly authorized and executed, and the other parties thereto will have
executed, the Credit Agreement (as defined in the Indenture); on the
Closing Date, the Credit Agreement will have been duly delivered by the
parties thereto, Holdings and the Company will have satisfied all
conditions to closing under the Credit Agreement, the existing credit
facility described in the Final Memorandum under "Description of
Existing Indebtedness -- The Existing Credit Facility" will be
terminated, and the Credit Agreement will be a valid and binding
agreement of Holdings and the Company, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of equity.
6. Covenants of the Company and Holdings. In further consideration of
the agreements of the Placement Agents contained in this Agreement, the Company
and Holdings covenant with each Placement Agent as follows:
(a) To furnish to you in New York City, without charge, prior to
10:00 a.m. New York City time on the business day next succeeding the
date of this Agreement and during the period mentioned in Section 6(c),
as many copies of the Final Memorandum, any documents incorporated by
reference therein and any supplements and amendments thereto as you may
reasonably request.
(b) Before amending or supplementing either Memorandum, to
furnish to you a copy of each such proposed amendment or supplement and
not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the date hereof and prior to the
date on which all of the Securities shall have been sold by the
Placement Agents, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Final Memorandum in
order to make the statements therein, in the light of the circumstances
when the Final Memorandum is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Placement Agents, it is
necessary to amend or supplement the Final Memorandum to comply with
applicable law, forthwith to prepare and furnish to the Placement
Agents, either amendments or supplements to the Final Memorandum so that
the statements in the Final Memorandum as so amended or supplemented
will not, in the light of the circumstances when the Final Memorandum is
delivered to a purchaser, be misleading or so that the Final Memorandum,
as amended or supplemented, will comply with applicable law. If, in
accordance with the preceding sentence, it shall be necessary to amend
or supplement the Final Memorandum at any time prior to the expiration
of nine months after the date hereof, the Company shall prepare, file
and furnish such amendment or supplement at its own expense. Thereafter,
the Placement Agents shall bear the expense of preparing, filing and
furnishing any such amendment or supplement.
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(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company's and Holdings' counsel and the Company's
and Holdings' accountants in connection with the issuance and sale of
the Securities 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 Placement Agents, in the quantities
herein above specified, (ii) all costs and expenses related to the
transfer and delivery of the Securities to the Placement Agents,
including any transfer or other taxes payable thereon, (iii) the cost of
printing or producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Securities under state
securities laws and all expenses in connection with the qualification of
the Securities for offer and sale under state securities laws as
provided in Section 6(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Placement Agents 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 Securities, (v) the fees and expenses, if any,
incurred in connection with the admission of the Securities for trading
in PORTAL or any appropriate market system, (vi) the costs and charges
of the Trustee and any transfer agent, registrar or depositary, (vii)
the cost of the preparation, issuance and delivery of the Securities,
(viii) the costs and expenses of the Company and Holdings relating to
investor presentations on any "road show" undertaken in connection with
the marketing of the offering of the Securities, 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 with the prior approval of the Company,
travel and lodging expenses of the representatives and officers of the
Company and Holdings and any such consultants, and the cost of any
aircraft chartered in connection with the road show, and (ix) all other
cost 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 this
Section, Section 8, and the last paragraph of Section 10, the Placement
Agents will pay all of their costs and expenses, including fees and
disbursements of their counsel, transfer taxes payable on resale of any
of the Securities by them and any advertising expenses connected with
any offers they may make.
(f) Neither the Company nor any Affiliate will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which could be integrated
with the sale of the Securities or the Guarantees in a manner which
would require the registration under the Securities Act of the
Securities or the Guarantees.
(g) Not to solicit any offer to buy or offer or sell the
Securities or the Guarantees by means of any form of general
solicitation or general advertising (as those terms are
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used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
(h) While any of the Securities or the Guarantees endorsed
thereon remain "restricted securities" within the meaning of the
Securities Act, to make available, upon request, to any seller or holder
of such Securities or any prospective purchaser designated by such
seller or holder, the information specified in Rule 144A(d)(4) under the
Securities Act, unless Holdings is then subject to Section 13 or 15(d)
of the Exchange Act.
(i) If requested by you, to use its reasonable best efforts to
permit the Securities to be designated PORTAL securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the PORTAL Market.
(j) None of the Company, its Affiliates or any person acting on
its or their behalf will engage in any directed selling efforts (as that
term is defined in Regulation S) with respect to the Securities or the
Guarantees, and the Company and its Affiliates and each person acting on
its or their behalf will comply with the offering restrictions
requirement of Regulation S.
(k) During the period of two years after the Closing Date, the
Company and Holdings will not, and will not permit any of their
respective "affiliates" (as defined in Rule 144 under the Securities
Act) to resell any of the Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them.
7. Offering of Securities; Restrictions on Transfer. (a) Each Placement
Agent, severally and not jointly, represents and warrants that such Placement
Agent is a qualified institutional buyer as defined in Rule 144A under the
Securities Act (a "QIB"). Each Placement Agent, severally and not jointly,
agrees with the Company that (i) it will not solicit offers for, or offer or
sell, Securities or Guarantees by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (ii) it will solicit offers for Securities only from,
and will offer Securities only to, persons that it reasonably believes to be (A)
in the case of offers inside the United States, QIBs and (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
organized 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 Securities are
deemed to have represented and agreed as provided in the Final Memorandum under
the caption "Transfer Restrictions."
As used in this Section 7(a), the terms "UNITED STATES" and "U.S.
PERSON" have the meanings set forth in Regulation S under the Securities Act.
(b) Each Placement Agent, severally and not jointly, represents,
warrants, and agrees with respect to offers and sales outside the United
States that:
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(i) such Placement Agent understands that no action has
been or will be taken in any jurisdiction by the Company that
would permit a public offering of the Securities or the
Guarantees, or possession or distribution of either Memorandum or
any other offering or publicity material relating to the
Securities or the Guarantees, in any country or jurisdiction
where action for that purpose is required;
(ii) such Placement Agent will comply with all applicable
laws and regulations in each jurisdiction in which it acquires,
offers, sells or delivers Securities or Guarantees or has in its
possession or distributes either Memorandum or any such other
material, in all cases at its own expense;
(iii) the Securities and the Guarantees have not been
registered under 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 except in accordance with Rule 144A or
Regulation S under the Securities Act or pursuant to another
exemption from the registration requirements of the Securities
Act;
(iv) such Placement Agent has offered the Securities and
the Guarantees and will offer and sell the Securities and the
Guarantees (A) as part of their 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 7(a);
accordingly, neither such Placement Agent, its Affiliates nor any
persons acting on its or their behalf have engaged or will engage
in any directed selling efforts (within the meaning of Regulation
S) with respect to the Securities or the Guarantees, and any such
Placement Agent, its Affiliates and any such persons have
complied and will comply with the offering restrictions
requirement of Regulation S;
(v) such Placement Agent has (A) not offered or sold and,
[prior to the date six months after the Closing Date,] will not
offer or sell any Securities to persons in the United Kingdom
except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995, as
amended; (B) complied and will comply with all applicable
provisions of the Financial Services Xxx 0000 with respect to
anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (C) only issued or
passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article
11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996, as amended, or is a
person to whom such document may otherwise lawfully be issued or
passed on;
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(vi) such Placement Agent understands that the Securities
and the Guarantees have not been and will not be registered under
the Securities and Exchange Law of Japan, and represents that it
has not offered or sold, and agrees not to offer or sell,
directly or indirectly, any Securities or Guarantees in Japan or
for the account of any resident thereof except pursuant to any
exemption from the registration requirements of the Securities
and Exchange Law of Japan and otherwise in compliance with
applicable provisions of Japanese law; and
(vii) such Placement Agent agrees that, at or prior to
confirmation of sales of the Securities, it will have sent to
each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities
from it during the restricted period a confirmation or notice to
substantially the following effect:
"The securities covered hereby have not been registered
under the U.S. Securities Act of 1933 (the "Securities Act") and
may not be offered and 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 and the closing
date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used
above have the meaning given to them by Regulation S."
Except when the context otherwise requires, terms used in this Section
7(b) have the meanings given to them by Regulation S.
8. Indemnity and Contribution. (a) The Company and Holdings, jointly and
severally, agree to indemnify and hold harmless each Placement Agent and each
person, if any, who controls any Placement Agent within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in either
Memorandum (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Placement Agent furnished to the
Company in writing by such Placement Agent through you expressly for use
therein.
(b) Each Placement Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company and Holdings, their respective
directors and officers and each person, if any, who controls the Company
or Holdings within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company and Holdings to such Placement
Agent, but only with reference to information relating to such Placement
Agent furnished to the
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Company in writing by such Placement Agent through you expressly for use
in either Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 8(a) or 8(b), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the indemnifying
party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties and that
all such fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by Xxxxxx Xxxxxxx & Co.
Incorporated, in the case of parties indemnified pursuant to Section
8(a), and by the Company, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. 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 the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such
settlement is entered into more than 90 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with
such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification provided for in Section
8(a) or 8(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to
15
16
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
Holdings on the one hand and the Placement Agents on the other hand from
the offering of the Securities or (ii) if the allocation provided by
clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause 8(d)(i) above but also the relative fault of the
Company and Holdings on the one hand and of the Placement Agents on the
other hand in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and Holdings on the one hand and the Placement Agents on the
other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from
the offering of the Securities (before deducting expenses) received by
the Company and the total discounts and commissions received by the
Placement Agents, in each case as set forth in the Final Memorandum,
bear to the aggregate offering price of the Securities. The relative
fault of the Company and Holdings on the one hand and of the Placement
Agents on the other hand 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 and Holdings or by
the Placement Agents and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Placement Agents' respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective
principal amount of Securities they have purchased hereunder, and not
joint.
(e) The parties agree that it would not be just or equitable if
contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Placement Agents were treated as one entity for
such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 8(d). The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in Section 8(d)
shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 8, no Placement
Agent shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities resold by it in the
initial placement of such Securities were offered to investors exceeds
the amount of any damages that such Placement Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 8 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at
law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of
the Company and Holdings contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any
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termination of this Agreement, (ii) any investigation made by or on
behalf of any Placement Agent or any person controlling any Placement
Agent or by or on behalf of the Company, Holdings, their respective
officers or directors or any person controlling the Company or Holdings
and (iii) acceptance of and payment for any of the Securities.
9. Termination. This Agreement shall be subject to termination by notice
given by you to the Company and Holdings, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of
any securities of the Company or Holdings shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses 9(a)(i) through 9(a)(iv),
such event, singly or together with any other such event, makes it, in your
judgment, impracticable to market the Securities on the terms and in the manner
contemplated in the Final Memorandum.
10. Effectiveness; Defaulting Placement Agents. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Placement Agents shall
fail or refuse to purchase Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Placement Agent or Placement Agents agreed but failed or refused
to purchase is not more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date, the other Placement Agents shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule I bears to the aggregate
principal amount of Securities set forth opposite the names of all such
non-defaulting Placement Agents, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Placement Agent or
Placement Agents agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Securities that any Placement
Agent has agreed to purchase pursuant to this Agreement be increased pursuant to
this Section 10 by an amount in excess of one-ninth of such principal amount of
Securities without the written consent of such Placement Agent. If, on the
Closing Date, any Placement Agent or Placement Agents shall fail or refuse to
purchase Securities which it or they have agreed to purchase hereunder on such
date and the aggregate principal amount of Securities with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date, and arrangements satisfactory to you
and the Company for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Placement Agent or of the Company. In any such case either
you or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Final Memorandum or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall
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not relieve any defaulting Placement Agent from liability in respect of any
default of such Placement Agent under this Agreement.
If this Agreement shall be terminated by the Placement Agents, or any of
them, because of any failure or refusal on the part of the Company or Holdings
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Company or Holdings shall be unable to perform their
respective obligations under this Agreement, the Company and Holdings will
reimburse the Placement Agents or such Placement Agents as have so terminated
this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the reasonable fees and disbursements of their counsel)
reasonably incurred by such Placement Agents in connection with this Agreement
or the offering contemplated hereunder.
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11. Counterparts. This Agreement may be signed in any number of
counterparts, which may be delivered by facsimile, each of which shall be an
original, with the same effect as if the actual signatures thereto and hereto
were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
DEL MONTE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Treasurer
DEL MONTE FOODS COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Treasurer
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Banc of America Securities LLC
Deutsche Banc Alex. Xxxxx Inc.
Xxxxx Securities Inc.
ABN AMRO Incorporated
BMO Xxxxxxx Xxxxx Corp.
Acting severally on behalf of themselves and
the several Placement Agents named in
Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: /s/ Xxxxx X. Xxxxxxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxxxxxx
Title: Principal
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SCHEDULE I
PRINCIPAL AMOUNT OF
PLACEMENT AGENT SECURITIES TO BE PURCHASED
-------------------------- --------------------------
Xxxxxx Xxxxxxx & Co. Incorporated.............................
Banc of America Securities LLC................................
Deutsche Banc Alex. Xxxxx Inc. ...............................
Chase Securities Inc. ........................................
ABN AMRO Incorporated.........................................
BMO Xxxxxxx Xxxxx Corp. ......................................
Total:................................................
21
EXHIBIT A
OPINION OF OUTSIDE COUNSEL FOR THE COMPANY
The opinion of the outside counsel for the Company, to be delivered
pursuant to Section 5(a) of the Placement Agreement shall be to the effect that:
A. Each of the Company and Holdings has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own its property and to conduct its business as described in the
Final Memorandum.
B. The Placement Agreement has been duly authorized, executed and
delivered by the Company and Holdings.
C. The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Placement Agents in accordance with the
terms of the Placement 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 Guarantees have been duly authorized and,
when the Guarantees and the Securities have been executed and the Securities
have been authenticated, all in accordance with the provisions of the Indenture,
and the Securities have been delivered to and paid for by the Placement Agents
in accordance with the terms of the Placement Agreement, the Guarantees will be
valid and binding obligations of Holdings, enforceable in accordance with their
terms.
D. The Indenture has been duly authorized, executed and delivered by,
and is a valid and binding agreement of, the Company and Holdings, enforceable
in accordance with its terms; and the Registration Rights Agreement has been
duly authorized, executed and delivered by, and is a valid and binding agreement
of, the Company and Holdings, enforceable in accordance with its terms.
E. The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Placement Agreement, the Indenture,
the Registration Rights Agreement and the Securities and the execution and
delivery by Holdings of, and the performance by Holdings of its obligations
under, the Placement Agreement, the Indenture, the Registration Rights Agreement
and the Guarantees will not contravene any provision of California, New York or
United States federal law or the Delaware General Corporation Law known by us to
be applicable to the Company or Holdings and implicated in similar transactions,
or the certificate of incorporation or by-laws of the Company or Holdings or the
amended and restated credit facility, and to our knowledge no consent, approval,
authorization or order of, or qualification with, any California, New York,
Delaware or United States federal governmental body or agency is required for
the performance by the Company of its obligations under the Placement Agreement,
the Indenture, the Registration Rights Agreement or the Securities or for the
performance by Holdings of its obligations under the Placement Agreement, the
Indenture, the Registration Rights Agreement or the Guarantees, except such as
may be required by the
A-1
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securities or Blue Sky laws of the various states in connection with the offer
and sale of the Securities and the Guarantees and such as may be required under
the Securities Act in connection with the performance by the Company and
Holdings of their obligations under the Registration Rights Agreement.
F. Neither the Company nor Holdings is, and after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof
as described in the Final Memorandum, neither the Company nor Holdings will be
required to register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
G. The statements in the Final Memorandum under the captions
"Description of Amended and Restated Credit Facility," "Description of Existing
Indebtedness", "Description of the Notes" and "Transfer Restrictions", in each
case, insofar as such statements constitute summaries of the Indenture, the
Securities, the Guarantees, the Registration Rights Agreement, or of the other
documents, legal matters or proceedings referred to therein, fairly summarize
the matters referred to therein in all material respects.
H. The statements in the Final Memorandum under the caption "Certain
Federal Income Tax Considerations," insofar as such statements constitute a
summary of the United States federal tax laws referred to therein, are accurate
and fairly summarize in all material respects the United States federal tax laws
referred to therein.
I. Assuming the accuracy of the representations and warranties and the
performance of the obligations of the Company, Holdings and the Placement Agents
contained in the Placement Agreement and of each of the persons to whom the
Placement Agents initially resells the Securities as specified in the Final
Memorandum, it is not necessary in connection with the offer, sale and delivery
of the Securities to the Placement Agents under the Placement Agreement or in
connection with the initial resale of such Securities by the Placement Agents in
accordance with the Placement Agreement to register the Securities or the
Guarantees under the Securities Act or to qualify the Indenture under the Trust
Indenture Act, it being understood that no opinion is expressed as to any
subsequent resale or other transfer of any Security.
During the course of preparing the Final Memorandum, we participated in
conferences with representatives of the Company and their independent
accountants and your representatives and your counsel, at which conferences the
contents of the Final Memorandum and related matters were discussed and have
read each document filed under the Exchange Act and incorporated by reference in
the Final Memorandum. Because the purpose of our professional engagement was not
to establish or confirm factual matters and because the scope of our examination
of the affairs of Holdings and the Company did not permit us to verify the
accuracy, completeness or fairness of the statements set forth in the Final
Memorandum, except as specifically noted herein, we are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum and we make no representation,
express or implied, that we have independently verified the accuracy,
completeness or fairness of such statements. However, based on and subject to
the foregoing, (i) nothing has come to our attention that would lead us to
believe that the Final Memorandum, on May 3, 2001 or on the date hereof,
contained or contains any untrue statement of a material
A-2
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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, and (ii) we believe that the documents incorporated by
reference in the Final Memorandum, as of the date hereof, complied as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission; provided, however, that, with respect to
clauses (i) and (ii), we express no opinion or belief as to the financial
statements, schedules or other financial or statistical data contained in or
omitted from the Final Memorandum.
A-3
24
EXHIBIT B
OPINION OF INTERNAL COUNSEL
The opinion of the Internal Counsel of the Company, to be delivered
pursuant to Section 5(d) of the Placement Agreement shall be to the effect that:
A. Each of the Company and Holdings is duly qualified to transact
business and is in good standing in the State of California and 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 in good standing would not have a material adverse effect on
Holdings and the Company and its subsidiaries, taken together as a whole.
B. 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 Final 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 in good standing would not have a material adverse effect on
Holdings and the Company and its subsidiaries, taken together as a whole; all of
the issued shares of capital stock of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable, and
are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except as described in the Final Memorandum.
C. The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Placement Agreement, the Indenture,
the Registration Rights Agreement and the Securities and the execution and
delivery by Holdings of, and the performance by Holdings of its obligations
under, the Placement Agreement, the Indenture, the Registration Rights Agreement
and the Guarantees will not contravene any provision of California or federal
law or the Delaware General Corporation Law known by such counsel to be
applicable to Holdings or the Company or the certificate of incorporation or
by-laws of the Company or Holdings or, to the best of such counsel's knowledge,
any agreement or other instrument binding upon the Company or Holdings or any of
the subsidiaries of the Company that is material to Holdings and the Company and
its subsidiaries, taken together as a whole, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or Holdings or any of the
subsidiaries of the Company, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under the Placement Agreement, the
Indenture, the Registration Rights Agreement or the Securities or for the
performance by Holdings of its obligations under the Placement Agreement, the
Indenture, the Registration Rights Agreement and the Guarantees, except such as
may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities and such as may be required
under the Securities Act in connection with the performance by the Company and
Holdings of their respective obligations under the Registration Rights
Agreement.
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D. After due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Company or Holdings
or any of the subsidiaries of the Company is a party or to which any of the
properties of the Company or Holdings or any of the subsidiaries of the Company
is subject, other than proceedings fairly summarized in all material respects in
the Final Memorandum and proceedings which such counsel believes are not likely
to have a material adverse effect on Holdings and the Company and its
subsidiaries, taken together as a whole, or on the power or ability of the
Company to perform its obligations under the Placement Agreement, the Indenture,
the Registration Rights Agreement or the Securities or to consummate the
transactions contemplated by the Final Memorandum or on the power or ability of
Holdings to perform its obligations under the Placement Agreement, the
Indenture, the Registration Rights Agreement and the Guarantees.
E. The Company and Holdings and the subsidiaries of the Company (i) are
in compliance with any and all applicable Environmental Laws, (ii) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on Holdings and the
Company and its subsidiaries, taken together as a whole.
B-2
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EXHIBIT C
OPINION OF XXXXX & WOOD LLP
The opinion of Xxxxx & Xxxx LLP to be delivered pursuant to Section 5(e)
of the Placement Agreement shall be to the effect set forth in paragraphs (B),
(C), (D) and (I) and the last paragraph of Exhibit A to the Placement Agreement
and to the further effect that the statements in the Final Memorandum under the
captions "Description of the Notes" and "Transfer Restrictions," insofar as such
statements constitute summaries of the provisions of the Indenture, Securities,
Guarantees or Registration Rights Agreement or of the legal matters referred to
therein, fairly summarize the matters referred to therein in all material
respects.
With respect to the matters set forth in the last paragraph of Exhibit A
to the Placement Agreement, Xxxxx & Wood LLP may state that their belief is
based upon their participation in the preparation of the Final Memorandum (and
any amendments or supplements thereto) and review and discussion of the contents
thereof (including the review of, but not participation in the preparation of,
the documents incorporated or deemed to be incorporated by reference therein),
but are without independent check or verification except as specified.
C-1
