The Scotts Miracle-Gro Company UNDERWRITING AGREEMENT dated January 11, 2010 Banc of America Securities LLC
January 11, 0000
XXXX XX XXXXXXX SECURITIES LLC
As Representative of the several Underwriters
Xxx Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Introductory. The Scotts Miracle-Gro Company, an Ohio corporation (the “Company”), proposes
to issue and sell to the several underwriters named in Schedule A hereto (the
“Underwriters”), for whom you (the “Representative”) are acting as representative, $200,000,000
principal amount of its 7.25% Senior Notes due 2018 (the “Notes”). The Notes will be guaranteed
(collectively, the “Guarantees”) by each of the subsidiary guarantors named in Schedule B
hereto (the “Guarantors”). The Notes and the Guarantees are collectively referred to herein as the
“Securities.” The Securities will be issued pursuant to an indenture to be dated as of the Closing
Date (as defined in Section 4 hereof) (the “Base Indenture”), among the Company, the Guarantors and
U.S. Bank National Association, as trustee (the “Trustee”). Certain terms of the Securities will
be established pursuant to a supplemental indenture (the “Supplemental Indenture”) to the Base
Indenture (together with the Base Indenture, the “Indenture”).
The Company hereby confirms its engagement of Scotia Capital (USA) Inc. (“Scotia”), and Scotia
hereby confirms its agreement with the Company to render services, as the “qualified independent
underwriter”, within the meaning of NASD Conduct Rule 2720(f)(12) of the Financial Industry
Regulatory Authority, Inc. (“FINRA”) with respect to the offering and sale of the Notes. Scotia,
solely in its capacity as the qualified independent underwriter and not otherwise, is referred to
herein as the “QIU.” As compensation for the services of the QIU hereunder, the Company agrees to
pay the QIU $25,000 on the Closing Date.
1. Representations and Warranties. The Company and each Guarantor, jointly and
severally, represent and warrant to, and agree with, each of the Underwriters as of the date hereof
that:
(a) The Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (File No. 333-163330), which contains a
base prospectus (the “Base Prospectus”), to be used in connection with the public offering
and sale of the Securities. Such registration statement, as amended, including the
financial statements, exhibits and schedules thereto, at each time of effectiveness under
the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Securities Act”), including any required information deemed to be a part
thereof at the time of effectiveness pursuant to Rule 430B or 430C under the Securities Act
or the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (collectively, the
“Exchange Act”), is called the “Registration
Statement.” Any preliminary prospectus supplement relating to the Securities that is filed
with the Commission pursuant to Rule 424(b), together with the Base Prospectus, is hereafter
called a “Preliminary Prospectus.” The term “Prospectus” shall mean the final prospectus
supplement relating to the Securities that is first filed pursuant to Rule 424(b) after the
date and time that this Agreement is executed and delivered by the parties hereto, including
the Base Prospectus. Any reference herein to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act;
any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the Exchange Act, and
incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be;
and any reference to any amendment to the Registration Statement shall be deemed to refer to
and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is incorporated by reference in
the Registration Statement.
(b) Compliance with Registration Requirements. The Company meets the requirements for
use of Form S-3 under the Securities Act. The Registration Statement has become effective
upon filing with the Commission under the Securities Act. No stop order suspending the
effectiveness of the Registration Statement is in effect, the Commission has not issued any
order or notice preventing or suspending the use of the Registration Statement, any
Preliminary Prospectus or the Prospectus and no proceedings for such purpose or pursuant to
Section 8A of the Securities Act have been instituted or are pending or, to the best
knowledge of the Company and the Guarantors, are contemplated or threatened by the
Commission.
Each of the Preliminary Prospectus and the Prospectus when filed complied in all
material respects with the Securities Act. Each of the Registration Statement and any
post-effective amendment thereto, at each time of effectiveness, at the date hereof and at
the Closing Date, complied and will comply in all material respects with the Securities Act
and did not and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements
therein not misleading. The Prospectus, as amended or supplemented, as of its date, at the
time of any filing pursuant to Rule 424(b) and, at the Closing Date, did not and will not
contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from the
Registration Statement or any post-effective amendment thereto, or the Preliminary
Prospectus or the Prospectus, or any amendments or supplements thereto, made in reliance
upon and in conformity with information relating to any Underwriter furnished to the Company
in writing by the Representative expressly for use therein, it being understood and agreed
that the only such information furnished by the Representative consists of the information
described as such in Section 8(b) hereof.
-2-
The documents incorporated by reference in the Registration Statement, the Disclosure
Package (as defined herein) and the Prospectus, when they were filed with the Commission
conformed in all material respects to the requirements of the Exchange Act. Any further
documents so filed and incorporated by reference in the Registration Statement, the
Disclosure Package and the Prospectus or any further amendment or supplement thereto, when
such documents are filed with the Commission will conform in all material respects to the
requirements of the Exchange Act. All documents incorporated or deemed to be incorporated
by reference in the Registration Statement, the Disclosure Package and the Prospectus, as of
their respective dates, when taken together with the other information in the Disclosure
Package, at the Applicable Time and, when taken together with the other information in the
Prospectus, at the Closing Date, did not or will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(c) Well-Known Seasoned Issuer. (i) At the time of filing the Registration Statement,
(ii) at the time of the most recent amendment thereto for the purposes of complying with
Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective
amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or
form of prospectus), (iii) at the time the Company or any person acting on its behalf
(within the meaning, for this clause only, of Rule 163(c) of the Securities Act) made any
offer relating to the Securities in reliance on the exemption of Rule 163 of the Securities
Act, and (iv) at the Applicable Time (with such date and time being used as the
determination date for purposes of this clause (iv)), the Company was and is a “well-known
seasoned issuer” as defined in Rule 405 of the Securities Act. The Registration Statement
is an “automatic shelf registration statement,” as defined in Rule 405 of the Securities Act
that has been filed with the Commission not earlier than three years prior to the Closing
Date; the Company has not received from the Commission any notice pursuant to Rule 401(g)(2)
of the Securities Act objecting to use of the automatic shelf registration statement form;
and the Company has not otherwise ceased to be eligible to use the automatic shelf
registration form.
(d) Disclosure Package. The term “Disclosure Package” shall mean (i) the Preliminary
Prospectus, including the Base Prospectus, (ii) the issuer free writing prospectuses as
defined in Rule 433 of the Securities Act (each, an “Issuer Free Writing Prospectus”), if any, identified
in Schedule C hereto, (iii) any other free writing prospectus that the parties
hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package
and (iv) the Final Term Sheet (as defined herein), which also shall be identified in
Schedule C hereto. As of 3:20 pm (Eastern time) on the date of this Agreement (the
“Applicable Time”), the Disclosure Package did not contain any untrue statement of a
material fact or omit 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. The
preceding sentence does not apply to statements in or omissions from the Disclosure Package
based upon and in conformity with written information furnished to the Company by any
Underwriter through the Representative specifically for use therein, it being understood and
agreed that the only such information furnished by or on
-3-
behalf of any Underwriter consists
of the information described as such in Section 8(b) hereof.
(e) Company Not Ineligible Issuer. (i) At the earliest time after the filing of the
Registration Statement relating to the Securities that the Company or another offering
participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities
Act) and (ii) as of the Applicable Time (with such date being used as the determination date
for purposes of this clause (ii)), the Company was not and is not an “ineligible issuer” (as
defined in Rule 405 of the Securities Act), without taking account of any determination by
the Commission pursuant to Rule 405 of the Securities Act that it is not necessary that the
Company be considered an “ineligible issuer.”
(f) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the offering of Securities
under this Agreement or until any earlier date that the Company notified or notifies the
Representative as described in the next sentence, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information contained in
the Registration Statement, the Disclosure Package or the Prospectus. If at any time
following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or
development as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement, the Preliminary
Prospectus or the Prospectus, the Company has promptly notified or will promptly notify the
Representative and has promptly amended or supplemented or will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict. Any Issuer Free Writing Prospectus not identified on Schedule C,
when taken together with the Disclosure Package, did not, and at the Closing Date will not,
contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing three sentences do not apply to statements in or
omissions from any Issuer Free Writing Prospectus based upon and in conformity with written
information furnished to the Company by any Underwriter through the Representative
specifically for use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in Section 8(b)
hereof.
(g) Distribution of Offering Material by the Company and the Guarantors. Neither the
Company nor the Guarantors have distributed or will distribute, prior to the later of the
Closing Date and the completion of the Underwriters’ distribution of the Securities, any
offering material in connection with the offering and sale of the Securities other than the
Preliminary Prospectus, the Prospectus and any Issuer Free Writing Prospectus reviewed and
consented to by the Representative.
(h) No Applicable Registration or Other Similar Rights. There are no persons with
registration or other similar rights to have any equity or debt securities registered for
sale under the Registration Statement or included in the offering contemplated by this
Agreement, except for such rights as have been duly waived or are not applicable to the
offering of the Securities.
-4-
(i) No Material Adverse Change. Except as otherwise disclosed in the Disclosure
Package and the Prospectus (exclusive of any amendment or supplement thereto), (i) there has
been no material adverse change, or any development that could reasonably be expected to
result in a material adverse change in the financial condition, earnings, business,
properties or operations, whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiaries, considered as one entity (any such change is
called a “Material Adverse Change”); (ii) the Company and its subsidiaries, considered as
one entity, have not incurred any liability or obligation, indirect, direct or contingent,
nor entered into any material transaction or agreement, in each case, that is material to
the Company and its subsidiaries taken as a whole; and (iii) except for the Company’s
publicly announced first quarter dividend paid on December 10, 2009, there has been no
dividend or distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, any of its subsidiaries on any class of
capital stock or repurchase or redemption by the Company or any of its subsidiaries of any
class of capital stock.
(j) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the
Company and its subsidiaries has been duly incorporated or organized and is validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization
and has the requisite power and authority, corporate or other, to own or lease, as the case
may be, and operate its properties and to conduct its business as described in the
Disclosure Package and the Prospectus and, in the case of the Company and the Guarantors, to
enter into and perform its obligations under this Agreement. Each of the Company and each
Guarantor is duly qualified as a foreign corporation or other entity to transact business
and is in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of business, except
for such jurisdictions where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse
Change. All of the issued and outstanding shares of capital stock or other ownership
interests of each subsidiary have been duly authorized and validly issued, are fully paid
and nonassessable and, except for directors’ qualifying shares, are owned by the Company,
directly or through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim, other than as disclosed in the Disclosure Package and
Prospectus. The Company does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries listed in Exhibit 21 to the
Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2009 (the
“Company 10-K”).
(k) Capitalization and Other Capital Stock Matters. At September 30, 2009, on a
consolidated basis, the Company had, and after giving pro forma effect to the issuance and
sale of the Securities pursuant hereto the Company would have had, the capitalization as set
forth in the Disclosure Package and the Prospectus under the caption “Capitalization” under
the columns “Actual” and “As Adjusted,” respectively. All of the issued and outstanding
common shares of the Company have been duly authorized and validly issued and are fully paid
and nonassessable.
-5-
(l) The Securities. The Notes to be purchased by the Underwriters from the Company are
in the form contemplated by the Indenture, have been duly authorized by the Company for
issuance and sale pursuant to this Agreement and the Indenture and, at the Closing Date,
will have been duly executed by the Company and, when authenticated in the manner provided
for in the Indenture and delivered against payment of the purchase price therefor, will
constitute valid and binding obligations of the Company, enforceable in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable principles, and will
be entitled to the benefits of the Indenture. The Guarantees of the Notes are in the
respective forms contemplated by the Indenture, have been duly authorized by the Guarantors
for issuance and sale pursuant to this Agreement and the Indenture and, at the Closing Date,
will have been duly executed by each of the Guarantors and, when the Notes have been
authenticated in the manner provided for in the Indenture and delivered against payment of
the purchase price therefor, will constitute valid and binding obligations of the
Guarantors, enforceable in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles, and will be entitled to the benefits of the Indenture.
(m) The Indenture. The Indenture has been duly qualified under the Trust Indenture
Act. The Indenture has been duly authorized by the Company and the Guarantors and, at the
Closing Date, will have been duly executed and delivered by the Company and the Guarantors
and will constitute a valid and binding agreement of the Company and the Guarantors,
enforceable in accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general equitable
principles.
(n) Description of Documents. The Securities and the Indenture will conform in all
material respects to the descriptions thereof in the Disclosure Package and the Prospectus
under the captions “Description of the Notes” and “Description of the Debt Securities and
the Guarantees.”
(o) Regulations T, U and X. None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of the Securities)
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.
(p) Non-Violation of Existing Instruments. Neither the Company nor any of its
subsidiaries is (i) in violation or in default (or, with the giving of notice or lapse of
time or both, would be in default) under (“Default”) its Articles of Incorporation, charter,
Codes of Regulation, by-laws or any similar organizational documents, (ii) in Default under
any indenture, mortgage, loan or credit agreement, deed of trust, note, contract, franchise,
lease or other agreement or instrument to which the Company or such subsidiary is
-6-
a party or by which it may be bound (including, without limitation, the Company’s
Amended and Restated Credit Agreement, dated as of February 7, 2007, as amended, by and
among the Company, the guarantors party thereto and the several banks and other financial
institutions a party thereto from time to time), or to which any of the property or assets
of the Company or any of its subsidiaries is subject (each, an “Existing Instrument”), or
(iii) in violation of any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or such subsidiary or any of its properties,
as applicable, except, with respect to clauses (ii) and (iii) only, for such Defaults or
violations as would not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change or, with respect to clause (iii) only, for such violations as
are described in the Disclosure Package and Prospectus. The Company’s and each Guarantor’s
execution, delivery and performance of this Agreement and consummation of the transactions
contemplated hereby (i) have been duly authorized by all necessary corporate (or similar)
action and will not result in any Default under the charter or by-laws or similar
organizational documents of the Company or any subsidiary, (ii) will not constitute a
Default or a Debt Repayment Triggering Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, or require the consent of any other party
to, any Existing Instrument, and (iii) will not result in any violation of any statute, law,
rule, regulation, judgment, order or decree applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any of its
subsidiaries or any of its or their properties, except with respect to clauses (ii) and
(iii) only, for such violations or Defaults as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change. As used herein, a “Debt
Repayment Triggering Event” means any event or condition which gives, or with the giving of
notice or lapse of time would give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by the Company
or any of its subsidiaries.
(q) No Further Authorizations or Approvals Required. No consent, approval,
authorization or other order of, or registration or filing with, any court or other
governmental or regulatory authority or agency is required for the Company’s or any
Guarantor’s execution, delivery and performance of this Agreement and consummation of the
transactions contemplated hereby, except such as may be required under applicable state
securities or blue sky laws.
(r) No Material Actions or Proceedings. Except as otherwise disclosed in the
Disclosure Package and the Prospectus, there are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company’s and the Guarantors’ knowledge,
threatened (i) against the Company or any of its subsidiaries, (ii) which has as the subject
thereof any property owned or leased by, the Company or any of its subsidiaries or (iii)
relating to environmental or discrimination matters, where in any such case (A) there is a
reasonable possibility that such action, suit or proceeding might be determined adversely to
the Company or such subsidiary or property owned or leased by, the Company or any
-7-
of its subsidiaries and (B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material Adverse Change or materially
adversely affect the consummation of the transactions contemplated by this Agreement.
(s) Exchange Act Compliance. The Company is subject to and in compliance in all
material respects with the reporting requirements of Section 13 or 15(d) of the Exchange
Act.
(t) Independent Accountants. Deloitte & Touche LLP, who have expressed their opinion
with respect to the financial statements (which term as used in this Agreement includes the
related notes thereto) and supporting schedules included or incorporated by reference in the
Registration Statement, the Disclosure Package and the Prospectus, are independent public
accountants with respect to the Company as required by the Securities Act and the Exchange
Act and the applicable published rules and regulations thereunder and the rules of the
Public Company Accounting Oversight Board (United States).
(u) Preparation of Financial Statements. The financial statements filed with the
Commission as a part of or incorporated by reference in the Registration Statement and
included or incorporated by reference in the Disclosure Package and the Prospectus present
fairly in all material respects the consolidated financial position of the Company and its
subsidiaries as of and at the dates indicated and the results of their operations and cash
flows for the periods specified. The supporting schedules included or incorporated by
reference in the Registration Statement present fairly in all material respects the
information required to be stated therein. Such financial statements and supporting
schedules comply as to form with the applicable accounting requirements of Regulation S-X
and have been prepared in conformity with generally accepted accounting principles as
applied in the United States (“GAAP”) applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto. The financial
data set forth in the Preliminary Prospectus and the Prospectus under the captions
“Summary—Summary Consolidated Historical Financial Data” and “Capitalization” fairly present
in all material respects the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Registration Statement. The Company’s
ratios of earnings to fixed charges set forth in each of the Preliminary Prospectus and the
Prospectus under the captions “Summary—Summary Consolidated Historical Financial Data” and
in Exhibit 12.1 to the Registration Statement have been calculated in compliance in all
material respects with the requirements of Item 503(d) of Regulation S-K under the
Securities Act.
(v) Underwriting Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and each Guarantor.
(w) Intellectual Property Rights. The Company and its subsidiaries own, possess,
license or have other rights to use, on reasonable terms, all patents, patent applications,
trade and service marks, trade and service xxxx registrations, trade names, copyrights,
licenses and other intellectual property (collectively, the “Intellectual Property”)
necessary for the conduct of the Company’s business as now
conducted. Except as
-8-
disclosed in the Disclosure Package and the Prospectus, (a) no party has been granted an
exclusive license to use any portion of such Intellectual Property owned by the Company that
is material to the business of the Company and its subsidiaries; (b) to the Company’s and
the Guarantors’ best knowledge, there is no material infringement by third parties of any
such Intellectual Property owned by or exclusively licensed to the Company that is material
to the business of the Company and its subsidiaries; (c) there is no pending or, to the
Company’s and the Guarantors’ best knowledge, threatened action, suit, proceeding or claim
by others challenging the rights of the Company and its subsidiaries in or to any material
Intellectual Property, and the Company and the Guarantors are unaware of any facts which
would form a reasonable basis for any such claim; (d) to the Company’s and the Guarantors’
best knowledge, there is no pending or threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual Property, and the Company
and the Guarantors are unaware of any facts which would form a reasonable basis for any such
claim; and (e) there is no pending or, to the Company’s and the Guarantors’ best knowledge,
threatened action, suit, proceeding or claim by others that the Company’s business as now
conducted infringes or otherwise violates any patent, trademark, copyright, trade secret or
other proprietary rights of others, and the Company and the Guarantors are unaware of any
other fact which would form a reasonable basis for any such claim, except in the case of
clauses (c), (d) and (e), any action, suit proceeding or claim which would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse Change.
(x) All Necessary Permits, etc. Except as otherwise disclosed in the Disclosure
Package and the Prospectus, the Company and each subsidiary possess such valid and current
licenses, certificates, authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct their respective businesses,
except where the failure to possess the same would not reasonably be expected to result in a
Material Adverse Change, and neither the Company nor any subsidiary has received any notice
of proceedings relating to the revocation or modification of, or non-compliance with, any
such license, certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would reasonably be expected to
result in a Material Adverse Change.
(y) Title to Properties. The Company and each of its subsidiaries has good and (in the
case of real property only) marketable title to all the properties and assets reflected as
owned in the financial statements referred to in Section 1(u) above (or elsewhere in the
Disclosure Package and the Prospectus) and material to the Company and its subsidiaries
taken as a whole, in each case free and clear of any security interests, mortgages, liens,
encumbrances, claims and other defects, except as disclosed in the Disclosure Package and
the Prospectus and except such as do not materially and adversely affect the value of such
property and do not materially interfere with the use made or proposed to be made of such
property by the Company or such subsidiary. The real property, improvements, equipment and
personal property held under lease by the Company or any subsidiary are held under valid and
enforceable leases, with such exceptions as do not materially interfere with the use made or
proposed to be made of such real property, improvements, equipment or personal property by
the Company or such subsidiary.
-9-
(z) Tax Law Compliance. Except for (i) the payment of any taxes that are currently
being contested in good faith by appropriate proceedings and for which the Company has
established adequate reserves in accordance with GAAP or (ii) the filings of tax returns or
the payment of any taxes which would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Change, the Company and its subsidiaries have (A)
timely paid all federal, state, local and foreign taxes (including any related interest and
penalties) required to be paid by any of them (whether or not shown on a tax return),
including as a withholding agent through the date hereof and (B) timely filed all federal,
state, local and foreign tax returns required to be filed through the date hereof. The
Company has made adequate charges, accruals and reserves in accordance with GAAP in the
applicable financial statements referred to in Section 1(u) above in respect of all federal,
state, local and foreign taxes for all periods as to which the tax liability of the Company
or its subsidiaries has not been finally determined, except to the extent that the failure
to make such charges, accruals and reserve would not reasonably be expected to result in a
Material Adverse Change. There is no tax deficiency that has been, or could reasonably be
expected to be, asserted against the Company or its subsidiaries or any of their respective
properties or assets that would reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Change.
(aa) Company Not an “Investment Company.” Neither the Company nor any Guarantor is, or
after receipt of payment for the Securities and the application of the proceeds thereof as
contemplated under the caption “Use of Proceeds” in each of the Preliminary Prospectus and
the Prospectus will be, an “investment company” within the meaning of the Investment Company
Act of 1940, as amended (the “Investment Company Act.”)
(bb) Insurance. Each of the Company and its subsidiaries maintain insurance in such
amounts and with such deductibles and covering such risks as are generally customary for
their businesses including, but not limited to, policies covering real and personal property
owned or leased by the Company and its subsidiaries against theft, damage, destruction, acts
of vandalism and earthquakes. All policies of insurance insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees, officers and directors are
in full force and effect; the Company and its subsidiaries are in compliance with the terms
of such policies in all material respects; and there are no material claims by the Company
or any of its subsidiaries under any such policy as to which any insurance company is
denying liability or defending under a reservation of rights clause. The Company has no
reasonable basis to believe that it or any subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a Material Adverse Change.
(cc) No Restrictions on Dividends. No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary’s shares of capital stock or other ownership
interests, 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
-10-
Company or any other subsidiary of the Company, except as described in or contemplated by
the Disclosure Package and the Prospectus.
(dd) Solvency. The Company and the Guarantors taken as a whole are, and immediately
after the Closing Date will be, Solvent. As used herein, the term “Solvent” means, with
respect to any person on a particular date, that on such date (i) the fair market value of
the assets of such person is greater than the total amount of liabilities (including
contingent liabilities) of such person, (ii) the present fair salable value of the assets of
such person is greater than the amount that will be required to pay the probable liabilities
of such person on its debts as they become absolute and matured, (iii) such person is able
to realize upon its assets and pay its debts and other liabilities, including contingent
obligations, as they mature and (iv) such person does not have unreasonably small capital.
(ee) No Price Stabilization or Manipulation. The Company has not taken and will not
take, directly or indirectly, any action designed to or that might be reasonably expected to
cause or result in stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(ff) Related Party Transactions. There are no business relationships or related-party
transactions involving the Company or any subsidiary required to be described in the
Preliminary Prospectus or the Prospectus that have not been described as required.
(gg) Disclosure Controls. The Company and its subsidiaries maintain an effective
system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the
Exchange Act). The Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the
Exchange Act.
(hh) Internal Controls and Procedures. The Company maintains (i) effective internal
control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act, and
(ii) a system of internal accounting controls sufficient to provide reasonable assurance
that (A) transactions are executed in accordance with management’s general or specific
authorizations; (B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (C) access to assets is permitted only in accordance with
management’s general or specific authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(ii) No Material Weakness in Internal Controls. Except as disclosed in the Disclosure
Package and the Prospectus, since the end of the Company’s most recent fiscal year, there
has been (i) no material weakness in the Company’s internal control over financial reporting
(whether or not remediated) and (ii) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting.
-11-
(jj) No Unlawful Contributions or Other Payments. Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company and the Guarantors, 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 violation by such persons
of 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 and the Guarantors, its
affiliates have conducted their businesses in compliance in all material respects 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. “FCPA” means
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.
(kk) No Conflict with Money Laundering Laws. 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
applicable jurisdictions, 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
best knowledge of the Company and the Guarantors, threatened.
(ll) No Conflict with OFAC Laws. Neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company and the Guarantors, 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. Treasury
Department (“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.
(mm) Compliance with and Liability under Environmental Laws. Except as otherwise
disclosed in the Disclosure Package and the Prospectus, (i) neither the Company nor any of
its subsidiaries is in violation of any federal, state, local or foreign law, regulation,
order, permit or other requirement relating to pollution or protection of human health or
the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata and natural resources such as wetlands, flora and fauna),
including without limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants,
contaminants,
-12-
pesticides, wastes, toxic substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials of Environmental Concern”), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environment Concern (collectively, “Environmental Laws”), which
violation includes, but is not limited to, noncompliance with any permits or other
governmental authorizations required for the operation of the business of the Company or its
subsidiaries under applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company or any of its subsidiaries received any written
communication, whether from a governmental authority, citizens group, employee or otherwise,
that alleges that the Company or any of its subsidiaries is in violation of any
Environmental Law, except as would not, reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Change; (ii) there is no claim, action or cause of
action filed with a court or governmental authority, no investigation with respect to which
the Company has received written notice, and no written notice by any person or entity
alleging actual or potential liability under any Environmental Law, including without
limitation, liability for investigatory costs, cleanup costs, governmental response costs,
natural resource damages, property damages, personal injuries, attorneys’ fees or penalties
arising out of, based on or resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location (collectively, “Environmental
Claims”), pending or, to the best of the Company’s and the Guarantors’ knowledge, threatened
against the Company or any of its subsidiaries or any person or entity whose liability for
any Environmental Claim the Company or any of its subsidiaries has retained or assumed
either contractually or by operation of law, except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change; (iii) to the best
of the Company’s and the Guarantors’ knowledge, there are no past, present or anticipated
future actions, activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or disposal of any Material
of Environmental Concern, that could reasonably be expected to result in a violation of any
Environmental Law, require expenditures to be incurred pursuant to Environmental Law, or
form the basis of a potential Environmental Claim against the Company or any of its
subsidiaries or against any person or entity whose liability for any Environmental Claim the
Company or any of its subsidiaries has retained or assumed either contractually or by
operation of law, except as would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change; and (iv) neither the Company nor any of its
subsidiaries is subject to any pending or threatened proceeding under Environmental Law to
which a governmental authority is a party and which is reasonably likely to result in
monetary sanctions of $100,000 or more.
(nn) Periodic Review of Costs of Environmental Compliance. In the ordinary course of
its business, the Company conducts a periodic review of the effect of Environmental Laws on
the business, operations and properties of the Company and its subsidiaries, in the course
of which it identifies and evaluates associated costs and liabilities (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).
-13-
(oo) ERISA Compliance. None of the following events has occurred or exists: (i) a
failure to fulfill the obligations, if any, under the minimum funding standards of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and the regulations and published interpretations thereunder with respect to a
Plan and Section 412 of the Internal Revenue Code of 1986, as amended (the “Code”),
determined without regard to any waiver of such obligations or extension of any amortization
period that would reasonably be expected to result in a Material Adverse Change; (ii) an
audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the
Pension Benefit Guaranty Corporation or any other federal or state governmental agency or
any foreign regulatory agency with respect to the employment or compensation of employees by
any member of the Company that would reasonably be expected to result in a Material Adverse
Change; (iii) any breach of any contractual obligation, or any violation of law or
applicable qualification standards, with respect to the employment or compensation of
employees by any member of the Company that would reasonably be expected to result in a
Material Adverse Change. None of the following events has occurred or is reasonably likely
to occur: (i) a material increase in the aggregate amount of contributions required to be
made to all Plans in the current fiscal year of the Company compared to the amount of such
contributions made in the Company’s most recently completed fiscal year; (ii) a material
increase in the Company’s “accumulated post-retirement benefit obligations” (within the
meaning of Statement of Financial Accounting Standards 106) compared to the amount of such
obligations in the Company’s most recently completed fiscal year; or (iii) any event or
condition giving rise to a liability under Title IV of ERISA that would reasonably be
expected to result in a Material Adverse Change; (iv) any prohibited transaction, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, with respect to any pension
plan or welfare plan (excluding transactions effected pursuant to a statutory or
administrative exemption) that would reasonably be expected to result in a Material Adverse
Change; or (v) the filing of a claim by one or more employees or former employees of the
Company related to their employment that would reasonably be expected to result in a
Material Adverse Change. For purposes of this paragraph, the term “Plan” means a plan
(within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect to
which any member of the Company may have any liability.
(pp) Labor Matters. No labor disturbances by the employees of the Company or any of
its subsidiaries has occurred that would, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change.
(qq) Brokers. Other than the underwriting discount pursuant to Section 2 of this
Agreement and the compensation to be paid to the QIU pursuant to this Agreement, there is no
broker, finder or other party that is entitled to receive from the Company any brokerage or
finder’s fee or other fee or commission as a result of any transactions contemplated by this
Agreement.
(rr) Xxxxxxxx-Xxxxx Compliance. The Company and its directors and officers, in their
capacities as such, are in compliance in all material respects with the applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated
-14-
in connection therewith (the “Xxxxxxxx-Xxxxx Act”), including Section 402 related to
loans and Sections 302 and 906 related to certifications.
(ss) Ratings. No “nationally recognized statistical rating organization” as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act (i) has imposed (or has
informed the Company that it is considering imposing) any condition (financial or otherwise)
on the Company’s retaining any rating assigned to the Company or any of its subsidiaries or
any of their debt or preferred stock or (ii) has indicated to the Company that it is
considering (a) the downgrading, suspension, or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in, any rating so
assigned or (b) any change in the outlook for any rating of the Company or any securities of
the Company.
(tt) Lending Relationship. Except as disclosed in the Disclosure Package and the
Prospectus, the Company (i) does not have any material lending or other relationship with
any bank or lending affiliate of any Underwriter and (ii) does not intend to use any of the
proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any
affiliate of any Underwriter.
(uu) Statistical and Market Related Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and market-related data
included in each of the Disclosure Package and the Prospectus is not based on or derived
from sources that are reliable and accurate in all material respects.
Any certificate signed by an officer of the Company and delivered to the Representatives or to
counsel for the Underwriters shall be deemed to be a representation and warranty by the Company to
each Underwriter as to the matters set forth therein.
2. Purchase and Sale. The Company agrees to issue and sell to the several
Underwriters the Notes upon the terms herein set forth and, on the basis of the representations,
warranties and agreements and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company the respective
aggregate principal amount of Notes set forth opposite their names on Schedule A. The
purchase price per Note to be paid by the several Underwriters to the Company shall be equal to
97.129% of the principal amount thereof.
3. Delivery and Payment.
(a) Delivery of certificates for the Securities to be purchased by the Underwriters and
payment therefor shall be made at the offices of Xxxxxx Xxxxxx & Xxxxxxx LLP, 00 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000 (or such other place as may be agreed to by the Company and the
Representative) at 9:00 a.m. New York time, on January 14, 2010, or such other time and date as the
Representative shall designate by notice to the Company (the time and date of such closing are
called the “Closing Date”). Delivery of the Securities shall be made through the facilities of The
Depository Trust Company (“DTC”) unless the Representative shall otherwise instruct.
-15-
(b) Public Offering of the Notes. The Representative hereby advises the Company that the
Underwriters intend to offer for sale to the public, as described in the Disclosure Package and the Prospectus, their respective portions of the Notes as soon after this
Agreement has been executed as the Representative, in its sole judgment, has determined is
advisable and practicable.
(c) Payment for the Notes. Payment for the Notes shall be made on the Closing Date by wire
transfer of immediately available funds to the order of the Company.
It is understood that the Representative has been authorized, for its own account and the
accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of
the purchase price for, the Notes. Banc of America Securities LLC, individually and not as the
Representative of the Underwriters, may (but shall not be obligated to) make payment for any Notes
to be purchased by any Underwriter whose funds shall not have been received by the Representative
by the Closing Date for the account of such Underwriter, but any such payment shall not relieve
such Underwriter from any of its obligations under this Agreement.
(d) Delivery of the Notes. Delivery of the Notes shall be made through the facilities of DTC
unless the Representative shall otherwise instruct. Time shall be of the essence, and delivery at
the time and place specified in this Agreement is a further condition to the obligations of the
Underwriters.
(e) Delivery of Prospectus to the Underwriters. Not later than 10:00 a.m. on the second
business day following the date the Notes are first released by the Underwriters for sale to the
public, the Company shall deliver or cause to be delivered, copies of the Prospectus in such
quantities and at such places as the Representative shall reasonably request.
4. Covenants. The Company and the Guarantors, jointly and severally, covenant and
agree with each of the Underwriters as follows:
(a) Representative Review of Proposed Amendments and Supplements. During the period
beginning at the Applicable Time and ending on the later of the Closing Date or such date,
as in the opinion of counsel for the Underwriters, the Prospectus is no longer required by
law to be delivered in connection with sales by an Underwriter or dealer, including in
circumstances where such requirement may be satisfied pursuant to Rule 172 (the “Prospectus
Delivery Period”), prior to amending or supplementing the Registration Statement, the
Disclosure Package or the Prospectus, the Company shall furnish to the Representative for
review a copy of each such proposed amendment or supplement (within a reasonable amount of
time prior to such proposed filing or use, as the case may be), and the Company shall not
file or use any such proposed amendment or supplement to which the Representative reasonably
objects.
(b) Securities Act Compliance. After the date of this Agreement and during the
Prospectus Delivery Period, the Company shall promptly advise the Representative in writing
(i) when the Registration Statement, if not effective at the Applicable Time, shall have
become effective, (ii) of the receipt of any comments of, or requests for additional or
supplemental information from, the Commission, (iii) of the time and date of any filing
-16-
of any post-effective amendment to the Registration Statement or any amendment or supplement to
any Preliminary Prospectus or the Prospectus, (iv) of the time and date that
any post-effective amendment to the Registration Statement becomes effective, and (v)
of the issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order or notice preventing or suspending the use of the
Registration Statement, any Preliminary Prospectus or the Prospectus, or of any receipt by
the Company of any notification with respect to the suspension of the qualification of the
Notes for sale in any jurisdiction or of the threatening or initiation of any proceedings
for any of such purposes (including any notice or order pursuant to Section 8A or Rule
401(g)(2) of the Securities Act). The Company shall use commercially reasonable efforts to
prevent the issuance of any such stop order or notice of prevention or suspension of such
use. If the Commission shall enter any such stop order or issue any such notice at any
time, the Company will use commercially reasonable efforts to obtain the lifting or reversal
of such order or notice at the earliest possible moment, or, subject to Section 4(a), will
file an amendment to the Registration Statement or will file a new registration statement
and use its reasonable best efforts to have such amendment or new registration statement
declared effective as soon as practicable. Additionally, the Company agrees that it shall
comply with the provisions of Rules 424(b) and 430B, as applicable, under the Securities
Act, including with respect to the timely filing of documents thereunder, and will use
commercially reasonable efforts to confirm that any filings made by the Company under such
Rule 424(b) were received in a timely manner by the Commission.
(c) Exchange Act Compliance. During the Prospectus Delivery Period, the Company will
file all documents required to be filed with the Commission and the New York Stock Exchange
pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and within the time
periods required by the Exchange Act.
(d) Final Term Sheet. The Company will prepare a final term sheet in a form approved
by the Representative, and will file such term sheet pursuant to Rule 433(d) under the
Securities Act within the time required by such rule (such term sheet, the “Final Term
Sheet”).
(e) Permitted Free Writing Prospectuses. The Company represents that it has not made,
and agrees that, unless it obtains the prior written consent of the Representative, it will
not make, any offer relating to the Notes that constitutes or would constitute an Issuer
Free Writing Prospectus or that otherwise constitutes or would constitute a “free writing
prospectus” (as defined in Rule 405 of the Securities Act) or a portion thereof required to
be filed by the Company with the Commission or retained by the Company under Rule 433 of the
Securities Act; provided that the prior written consent of the Representative hereto shall
be deemed to have been given in respect of the Free Writing Prospectuses included in
Schedule C hereto and any electronic road show. Any such free writing prospectus
consented to by the Representative is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be,
each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, and (ii) has
complied and will comply, as the case may be, with the requirements of Rules 164 and 433 of
the Securities Act applicable to any Permitted Free Writing Prospectus, including in respect
of timely filing with the Commission, legending
-17-
and record keeping. The Company consents to
the use by any Underwriter of a free writing prospectus that (a) is not an “issuer free
writing prospectus” as defined in Rule 433,
or (b) contains only (1) information describing the preliminary terms of the Securities
or their offering, (2) information that describes the final terms of the Securities or their
offering and that is included in the Final Term Sheet of the Company contemplated in
Section 1(d) or (3) information permitted under Rule 134 under the Securities Act; provided
that each Underwriter severally covenants with the Company not to take any action without
the Company’s consent which consent shall be confirmed in writing that would result in the
Company being required to file with the Commission under Rule 433(d) under the Securities
Act a free writing prospectus prepared by or on behalf of such Underwriter that otherwise
would not be required to be filed by the Company thereunder, but for the action of the
Underwriter.
(f) Amendments and Supplements to the Registration Statement, Disclosure Package and
Prospectus and Other Securities Act Matters. If, during the Prospectus Delivery Period, any
event or development shall occur or condition exist as a result of which the Disclosure
Package or the Prospectus as then amended or supplemented would include any untrue statement
of a material fact or omit to state any material fact necessary in order to make the
statements therein in the light of the circumstances under which they were made or then
prevailing, as the case may be, not misleading, or if it shall be necessary to amend or
supplement the Disclosure Package or the Prospectus, or to file under the Exchange Act any
document incorporated by reference in the Disclosure Package or the Prospectus, in order to
make the statements therein, in the light of the circumstances under which they were made or
then prevailing, as the case may be, not misleading, or if in the opinion of the
Representative it is otherwise necessary to amend or supplement the Registration Statement,
the Disclosure Package or the Prospectus, or to file under the Exchange Act any document
incorporated by reference in the Disclosure Package or the Prospectus, or to file a new
registration statement containing the Prospectus, in order to comply with law, including in
connection with the delivery of the Prospectus, the Company agrees to (i) notify the
Representative of any such event or condition and (ii) promptly prepare (subject to Section
4(a) and 4(e) hereof), file with the Commission (and use its reasonable best efforts to have
any amendment to the Registration Statement or any new registration statement to be declared
effective) and furnish at its own expense to the Underwriters and to dealers, amendments or
supplements to the Registration Statement, the Disclosure Package or the Prospectus, or any
new registration statement, necessary in order to make the statements in the Disclosure
Package or the Prospectus as so amended or supplemented, in the light of the circumstances
under which they were made or then prevailing, as the case may be, not misleading or so that
the Registration Statement, the Disclosure Package or the Prospectus, as amended or
supplemented, will comply with law.
(g) Copies of any Amendments and Supplements to the Prospectus. The Company agrees to
furnish to the Representative, without charge, during the Prospectus Delivery Period, as
many copies of the Prospectus and any amendments and supplements thereto (including any
documents incorporated or deemed incorporated by reference therein) and the Disclosure
Package as the Representative may reasonably request.
-18-
(h) Copies of the Registration Statements and the Prospectus. The Company will furnish
to the Representative and counsel for the Underwriters signed copies of the
Registration Statement and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and, during the Prospectus Delivery Period, as many
copies of each Preliminary Prospectus, the Prospectus and any supplement thereto and the
Disclosure Package as the Representative may reasonably request.
(i) Blue Sky Compliance. The Company and the Guarantors shall cooperate with the
Representative and counsel for the Underwriters to qualify or register the Securities for
sale under (or obtain exemptions from the application of) the state securities or blue sky
laws or Canadian provincial securities laws or other foreign laws of those jurisdictions
designated by the Representative and consented to by the Company, and the Company and the
Guarantors shall comply in all material respects with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required for the
distribution of the Securities. None of the Company and the Guarantors shall be required to
(i) qualify as a foreign corporation or other entity or as a dealer in securities in any
such jurisdiction where it would not otherwise be required to so qualify, (ii) file any
general consent to service of process in any such jurisdiction or (iii) subject itself to
taxation in any such jurisdiction if it is not otherwise so subject. The Company and the
Guarantors will advise the Representative promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Securities for offering, sale or
trading in any jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company and the Guarantors shall use their best efforts to
obtain the withdrawal thereof at the earliest possible moment.
(j) Use of Proceeds. The Company shall apply the net proceeds from the sale of the
Securities sold by it in the manner described under the caption “Use of Proceeds” in the
Disclosure Package and the Prospectus.
(k) Agreement Not to Offer to Sell Additional Securities. During the period of 90 days
following the date of this Agreement, the Company will not, without the prior written
consent of Banc of America Securities LLC (which consent may be withheld at the sole
discretion of Banc of America Securities LLC), directly or indirectly, sell, offer, contract
or grant any option to sell, pledge, transfer or establish an open “put equivalent position”
within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement under the
Securities Act in respect of, any debt securities of the Company or securities exchangeable
for or convertible into debt securities of the Company (other than as contemplated by this
Agreement).
(l) DTC. The Company shall use commercially reasonable efforts to obtain the approval
of DTC to permit the Notes to be eligible for “book-entry” transfer and settlement through
the facilities of DTC, and agrees to comply with all of its agreements set forth in the
representation letters of the Company to DTC relating to the approval of the Notes by DTC
for “book-entry” transfer.
-19-
(m) Earnings Statement. As soon as practicable, the Company will make generally
available to its security holders and to the Representative an earnings statement (which
need not be audited) covering a period of at least twelve months beginning with the first
fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158
under the Securities Act) of the Registration Statement.
(n) Filing Fees. The Company agrees to pay the required Commission filing fees
relating to the Securities within the time required by Rule 456(b)(1) of the Securities Act
without regard to the proviso therein and otherwise in accordance with Rules 456(b) and
457(r) of the Securities Act.
(o) Compliance with Xxxxxxxx-Xxxxx Act. During the Prospectus Delivery Period, the
Company will comply in all material respects with all applicable securities and other laws,
rules and regulations, including, without limitation, the Xxxxxxxx-Xxxxx Act, and use its
reasonable best efforts to cause the Company’s directors and officers, in their capacities
as such, to comply in all material respects with such laws, rules and regulations,
including, without limitation, the provisions of the Xxxxxxxx-Xxxxx Act.
(p) Future Reports to the Representative. During the period of two years hereafter the
Company will furnish to the Representative (i) to the extent not available on the
Commission’s Next-Generation XXXXX filing system, as soon as practicable after the end of
each fiscal year, copies of the Annual Report of the Company containing the balance sheet of
the Company as of the close of such fiscal year and statements of income, stockholders’
equity and cash flows for the year then ended and the opinion thereon of the Company’s
independent public or certified public accountants; and (ii) to the extent not available on
the Commission’s Next-Generation XXXXX filing system, as soon as practicable after the
filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report
on Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the
Commission, FINRA or any securities exchange.
(q) No Manipulation of Price. The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any securities of the Company to facilitate the sale or resale
of the Securities.
(r) Investment Limitation. The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Notes in such a manner as would require the
Company or any of its subsidiaries to register as an investment company under the Investment
Company Act.
(s) Notice of Inability to Use Automatic Shelf Registration Statement Form. If at any
time during the Prospectus Delivery Period, the Company receives from the Commission a
notice pursuant to Rule 401(g)(2) or otherwise ceases to be eligible to use the automatic
shelf registration statement form, the Company will (i) promptly notify the Representative,
(ii) promptly file a new registration statement or post-effective amendment on the proper
form relating to the Notes, in a form satisfactory to the
-20-
Representative, (iii) use its best efforts to cause such registration statement of post-effective
amendment to be declared effective and (iv) promptly notify the Representative of such
effectiveness. The Company will take all other action necessary or appropriate to permit
the public offering and sale of the Notes to continue as contemplated in the registration
statement that was the subject of the Rule 401(g)(2) notice or for which the Company has
otherwise become ineligible. References herein to the Registration Statement shall include
such new registration statement or post-effective amendment, as the case may be.
5. Payment of Expenses. The Company and the Guarantors, jointly and severally, agree
to pay all costs, fees and expenses incurred in connection with the performance of their
obligations hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the Securities
(including all printing and engraving costs), (ii) all necessary issue, transfer and other stamp
taxes in connection with the issuance and sale of the Securities to the Underwriters, (iii) all
fees and expenses of the Company’s and the Guarantors’ counsel, independent public or certified
public accountants and other advisors, (iv) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration Statement (including
financial statements, exhibits, schedules, consents and certificates of experts), each Issuer Free
Writing Prospectus, each Preliminary Prospectus and the Prospectus, and all amendments and
supplements thereto, and the mailing and delivering of copies thereof to the Underwriters and
dealers, this Agreement, the Indenture and the Securities, (v) all filing fees, attorneys’ fees and
expenses incurred by the Company, the Guarantors or the Underwriters in connection with qualifying
or registering (or obtaining exemptions from the qualification or registration of) all or any part
of the Securities for offer and sale under the securities laws of the several states of the United
States, the provinces of Canada or other jurisdictions designated by the Underwriters (including,
without limitation, the cost of preparing, printing and mailing preliminary and final blue sky or
legal investment memoranda), (vi) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and the Securities, (vii)
any fees payable in connection with the rating of the Securities with the ratings agencies, (viii)
the filing fees for FINRA’s review of the offering of the Securities, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with compliance with FINRA’s rules and
regulations, (ix) all fees and expenses (including reasonable fees and expenses of counsel) of the
Company and the Guarantors in connection with approval of the Securities by DTC for “book-entry”
transfer, (x) all expenses incident to the “road show” for the offering of the Securities,
including the cost of any chartered airplane or other transportation, (xi) all other fees, costs
and expenses referred to in Item 14 of Part II of the Registration Statement, (xii) the fees and
expenses of the QIU and (xiii) all other costs and expenses incident to the performance of their
obligations hereunder which are not otherwise specifically provided for in this Section 5. It is
understood, however, that, except as provided in this Section 5, Section 7, Section 8 and Section
11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees and
expenses of their counsel.
6. Conditions to the Obligations of the Underwriters. The obligations of the
Underwriters hereunder shall be subject, in their discretion, to the condition that all
representations and warranties of the Company and each Guarantor herein are true and correct at and
as of the date hereof and the Closing Date, the condition that the Company and each Guarantor shall
have
-21-
performed all of their respective obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) Accountants’ Comfort Letter. On the date hereof, the Underwriters shall have
received from Deloitte & Touche LLP, independent public accountants for the Company, a
letter dated the date hereof addressed to the Underwriters, in form and substance reasonably
satisfactory to the Representative, covering certain financial information included in or
incorporated by reference in the Disclosure Package and other customary information.
(b) Compliance with Registration Requirements; No Stop Order; No Objection from FINRA.
For the period from and after effectiveness of this Agreement and prior to the Closing Date
and, with respect to the Securities:
(i) the Company shall have filed the Prospectus with the Commission (including
the information required by Rules 430A, 430B and 430C under the Securities Act) in
the manner and within the time period required by Rule 424(b) under the Securities
Act;
(ii) the Final Term Sheet and any other material required to be filed by the
Company pursuant to Rule 433(d) under the Securities Act shall have been filed with
the Commission within the applicable time periods prescribed for such filings under
such Rule 433;
(iii) no stop order suspending the effectiveness of the Registration Statement,
or any post-effective amendment to the Registration Statement, shall be in effect
and no proceedings for such purpose or pursuant to Section 8A of the Securities Act
shall have been instituted or threatened by the Commission; and the Company shall
not have received from the Commission any notice pursuant to Rule 401(g)(2) of the
Securities Act objecting to use of the automatic shelf registration statement form;
and
(iv) FINRA shall have advised the Representative in writing that it has no
objection to the underwriting and other terms and arrangements related to the
offering of the Securities.
(c) No Material Adverse Change or Ratings Agency Change. For the period from and after
the date of this Agreement and prior to the Closing Date:
(i) in the judgment of the Representative there shall not have occurred any
Material Adverse Change, the effect of which is so material and adverse as to make
it impracticable or inadvisable to proceed with the offering, sale or delivery of
the Securities on the terms and in the manner contemplated by this Agreement and the
Disclosure Package and the Prospectus;
(ii) there shall not have been any change or decrease specified in the letter
or letters referred to in paragraph (a) of this Section 6 which is, in the judgment
of the Representative, so material and adverse as to make it impractical or
-22-
inadvisable to proceed with the offering, sale or delivery of the Securities as
contemplated by this Agreement and the Disclosure Package and the Prospectus; and
(iii) 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 any of its subsidiaries or any of their debt or preferred
stock by any “nationally recognized statistical rating organization” as such term is
defined 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,
with possible negative implications, any such rating.
(d) Opinion of Counsel for the Company and the Guarantors. On the Closing Date, the
Underwriters shall have received (i) the opinion and negative assurance letter of Vorys,
Xxxxx, Xxxxxxx & Xxxxx LLP, counsel for the Company and the Guarantors, substantially in the
forms of Exhibits A-1 and A-2, (ii) the opinion of Xxxxxxx X. Xxxxxxxx, the
General Counsel of the Company, substantially in the form of Exhibit B, (iii) the
negative assurance letter of Xxxxxx Xxxxxx Xxxxxxxx LLP, special environmental counsel for
the Company, substantially in the form of Exhibit C, and (iv) the opinion of Xxxxxx
Xxxxxx Rosenman LLP, New York counsel for the Company and the Guarantors, substantially in
the form of Exhibit D, each dated as of the Closing Date and addressed to the
Underwriters.
(e) Opinion of Counsel for the Underwriters. On the Closing Date, the Representative
shall have received the opinion and negative assurance letter of Xxxxxx Xxxxxx & Xxxxxxx
LLP, counsel for the Underwriters, dated as of such Closing Date, in form and
substance satisfactory to, and addressed to, the Underwriters, with respect to the issuance
and sale of the Notes, the Registration Statement, the Prospectus (together with any
supplement thereto), the Disclosure Package and other related matters as the Representative
may reasonably require, and the Company shall have furnished to such counsel such documents
as they reasonably request for the purpose of enabling them to pass upon such matters.
(f) Officers’ Certificate. On the Closing Date, the Representative shall have received
a written certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting Officer of the
Company, dated as of the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Disclosure Package, the Prospectus
and any amendment or supplement thereto, any Issuer Free Writing Prospectus and any
amendment or supplement thereto and this Agreement, to the effect set forth in subsections
(b) and (c)(iii) of this Section 6, and further to the effect that:
(i) for the period from and after the date of this Agreement and prior to the
Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations and warranties of the Company set forth in Section 1
of this Agreement are true and correct on and as of the Closing Date with
-23-
the same force and effect as though expressly made on and as of the Closing
Date; and
(iii) the Company has complied with all the agreements hereunder and satisfied
all the conditions on its part to be performed or satisfied hereunder at or prior to
the Closing Date.
(g) Bring-down Comfort Letter. On the Closing Date, the Underwriters shall have
received from Deloitte & Touche LLP, independent public accountants for the Company, a
letter dated such date, in form and substance reasonably satisfactory to the Representative,
to the effect that they reaffirm the statements made in the letter furnished by them
pursuant to subsection (a) of this Section 6, except that (i) it shall cover certain
financial information included in or incorporated by reference in the Prospectus and any
amendment or supplement thereto and (ii) the specified date referred to therein for the
carrying out of procedures shall be no more than three business days prior to the Closing
Date, as the case may be.
(h) Form of Securities and Indenture. The Securities and the Indenture shall be
executed by the Company, or the Guarantors, as the case may be, in form and substance
reasonably satisfactory to the Representative and the Trustee.
(i) Closing Documents. At the Closing Date, the Company and the Guarantors shall have
furnished counsel for the Company, the Guarantors or the Underwriters, as the case may be,
such documents as they reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties or fulfillment of any of the conditions
herein contained.
If any condition specified in this Section 6 is not satisfied when and as required to
be satisfied, this Agreement may be terminated by the Representative by notice to the
Company at any time on or prior to the Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 5, Section 7,
Section 8, Section 9, Section 13 and Section 17 shall at all times be effective and shall
survive such termination.
7. Reimbursement of Underwriters’ Expenses.
(a) If this Agreement is terminated by the Representative pursuant to Section 6, Section 10 or
Section 11, or if the sale to the Underwriters of the Notes on the Closing Date is not consummated
because of any refusal, inability or failure on the part of the Company or any Guarantor to perform
any agreement herein or to comply with any provision hereof, the Company and the Guarantors,
jointly and severally, agree to reimburse the Representative and the other Underwriters (or such
Underwriters as have terminated this Agreement with respect to themselves), severally, upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by the Representative and
the Underwriters in connection with the proposed purchase and the offering and sale of the
Securities, including but not limited to fees and disbursements of counsel, printing expenses,
travel expenses, postage, facsimile and telephone charges.
-24-
8. Indemnification.
(a) Indemnification of the Underwriters. The Company and the Guarantors agree, jointly and
severally, to indemnify and hold harmless each Underwriter, its directors, officers, employees,
agents and affiliates, and each person, if any, who controls any Underwriter within the meaning of
the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such controlling person may become subject, insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430B or 430C under the Securities Act, or the omission
or alleged omission therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading; or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in any Issuer Free Writing Prospectus, any Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact, in each case, necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading, and to
reimburse each Underwriter, its officers, directors, employees, agents and each such controlling
person for any and all expenses (including, subject to Section 8(c), the reasonable fees and
disbursements of counsel chosen by Banc of America Securities LLC) as such expenses are reasonably
incurred by such Underwriter, or its officers, directors, employees and agents or such controlling
person in connection with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with written information
furnished to the Company by the Representative expressly for use in the Registration Statement, any
Issuer Free Writing Prospectus, any Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto). The indemnity agreement set forth in this Section 8(a) shall be in addition
to any liabilities that the Company may otherwise have.
(b) Indemnification of the Company and the Guarantors, Directors, Officers and Employees.
Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company and
the Guarantors, each of their respective directors, officers and employees and each person, if any,
who controls the Company or any of the Guarantors within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the
Company, or any such director, officer, employee or controlling person may become subject, insofar
as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Issuer Free Writing Prospectus, any Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto), or arises out of or is based
upon the omission or alleged omission to state therein a material fact required to be stated
therein (in the case of the Registration Statement) or necessary to make the statements therein not
misleading, in each case to the extent, and only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the Registration Statement,
any Issuer Free Writing Prospectus, any Preliminary Prospectus or the
-25-
Prospectus (or any amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the Representative
expressly for use therein; and to reimburse the Company and the Guarantors, or any such director,
officer, employee or controlling person for any legal and other expense reasonably incurred by the
Company and the Guarantors, or any such director, officer, employee or controlling person in
connection with investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. The Company and the Guarantors hereby acknowledge that the
only information that the Underwriters have furnished to the Company through the Representative
expressly for use in the Registration Statement, any Issuer Free Writing Prospectus, any
Preliminary Prospectus or the Prospectus (or any amendment or supplement thereto) are the
statements set forth in the third, eighth and ninth paragraphs under the caption “Underwriting” in
the Prospectus. The indemnity agreement set forth in this Section 8(b) shall be in addition to any
liabilities that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the
failure to so notify the indemnifying party (i) will not relieve it from liability under paragraph
(a) or (b) above unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above.
In case any such action is brought against any indemnified party and such indemnified party seeks
or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or that there may be
legal defenses available to it and/or the other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party under this Section 8
for any legal or other expenses subsequently incurred by such indemnified party in connection with
the defense thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the reasonable fees and disbursements of more than one
separate counsel (other than a single local counsel in each relevant jurisdiction)), reasonably
approved by the indemnifying party (or by Banc of America Securities LLC in the case of Section
8(b)), representing all indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party
to
-26-
represent the indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the reasonable fees and disbursements of counsel shall be at the
expense of the indemnifying party (it being understood, however, that the indemnifying party shall
not be liable for the reasonable fees and disbursements of more than one separate counsel (other
than a single local counsel in each relevant jurisdiction)).
(d) Settlements. The indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent, which shall not be withheld
unreasonably, 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 against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect
of which any indemnified party is or could have been a party and indemnity was or could have been
sought hereunder by such indemnified party, unless such settlement, compromise or consent (i)
includes an unconditional release of such indemnified party from all liability on claims that are
the subject matter of such action, suit or proceeding and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(e) Indemnification of the QIU. Without limitation and in addition to its obligation under
the other subsections of this Section 8, the Company agrees to indemnify and hold harmless the QIU,
its officers and employees and each person, if any, who controls the QIU within the meaning of the
Securities Act or the Exchange Act from and against any loss, claim, damage, liabilities or
expense, as incurred, arising out of or based upon the QIU’s acting as a “qualified independent
underwriter” (within the meaning of NASD Conduct Rule 2720(f)(12) of FINRA in connection with the
offering contemplated by this Agreement, and agrees to reimburse each such indemnified person for
any legal or other expense reasonably incurred by them in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability, expense or action;
provided, however, that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or expense results from the gross negligence or willful
misconduct of the QIU.
9. Contribution.
(a) If the indemnification provided for in Section 8 is for any reason unavailable to or
otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one
hand, and the Underwriters, on the other hand, from the offering of the Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (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 (i) above but also the relative fault of the Company and the Guarantors, on the one hand,
and the Underwriters, on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein which resulted in such losses,
-27-
claims, damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantors, on the one hand,
and the Underwriters, on the other hand, in connection with the offering of the Securities pursuant
to this Agreement shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the Guarantors, and the total underwriting discount received by the
Underwriters, in each case as set forth on the front cover page of the Prospectus bear to the
aggregate initial public offering price of the Securities as set forth on such cover. The relative
fault of the Company and the Guarantors, on the one hand, and the Underwriters, on the other hand,
shall be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact or any such
inaccurate or alleged inaccurate representation or warranty relates to information supplied by the
Company and the Guarantors, on the one hand, or the Underwriters, on the other hand, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the limitations set forth in
Section 8(c), any reasonable legal or other fees or disbursements reasonably incurred by such party
in connection with investigating or defending any action or claim.
The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the underwriting commissions received by such Underwriter in
connection with the Securities underwritten by it and distributed to the public. 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 Underwriters’ obligations to contribute pursuant to this Section 9 are
several, and not joint, in proportion to their respective underwriting commitments as set forth
opposite their names in Schedule A. For purposes of this Section 9, each director,
officer, employee and agent of an Underwriter and each person, if any, who controls an Underwriter
within the meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director, officer and employee of the Company or a
Guarantor, and each person, if any, who controls the Company or a Guarantor within the meaning of
the Securities Act and the Exchange Act shall have the same rights to contribution as the Company
and the Guarantors.
10. Default of One or More of the Several Underwriters. If, on the Closing Date, any
one or more of the several Underwriters 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 Underwriter or Underwriters agreed but failed or refused to purchase does not
exceed 10% of the aggregate principal amount of the Securities to be purchased on such date, the
other Underwriters shall be obligated, severally, in the proportions that the principal
-28-
amount of Securities to be purchased set forth opposite their respective names on Schedule
A bears to the aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as may be specified by the
Representative with the consent of the non-defaulting Underwriters, to purchase the Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the Closing Date, any one or more of the Underwriters shall fail or refuse to
purchase Securities and the principal amount of Securities with respect to which such default
occurs exceeds 10% of the principal amount of Securities to be purchased on such date, and
arrangements satisfactory to the Representative and the Company for the purchase of such Securities
are not made within 48 hours after such default, this Agreement shall terminate without liability
of any party to any other party except that the provisions of Section 5, Section 7, Section 8,
Section 9, Section 13 and Section 17 shall at all times be effective and shall survive such
termination. In any such case either the Representative 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, to the Registration Statement, any Issuer Free Writing Prospectus, the Preliminary
Prospectus or the Prospectus or any other documents or arrangements may be effected. As used in
this Agreement, the term “Underwriter” shall be deemed to include any person substituted for a
defaulting Underwriter under this Section 10. Any action taken under this Section 10 shall not
relieve any defaulting Underwriter from liability in respect of any default of such Underwriter
under this Agreement.
11. Termination of this Agreement. Prior to the Closing Date, this Agreement may be
terminated by the Representative by notice given to the Company if at any time (i) trading or
quotation in any of the Company’s securities shall have been suspended or materially limited by the
Commission or by the New York Stock Exchange, or trading in securities generally on the New York
Stock Exchange shall have been suspended or materially limited; (ii) a general banking moratorium
shall have been declared by federal or New York authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United States has occurred; (iii) in
the judgment of the Representative there shall have occurred a Material Adverse Change, the effect
of which is so material and adverse as to make it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner contemplated by this
Agreement and the Disclosure Package and the Prospectus, or (iv) there shall have occurred any
outbreak or escalation of hostilities involving the United States or any crisis or calamity, or any
substantial change in the United States or international financial markets, or any substantial
change or development involving the United States’ or international political, financial or
economic conditions, as in the judgment of the Representative is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities in
the manner and on the terms described in the Disclosure Package or the Prospectus or to enforce
contracts for the sale of securities. Any termination pursuant to this Section 11 shall be without
liability on the part of (a) the Company or any Guarantor to any Underwriter, except that the
Company shall be obligated to reimburse the expenses of the Representative and the Underwriters
pursuant to Sections 5, 7, 8 and 9 hereof or (b) any Underwriter to the Company.
12. No Advisory or Fiduciary Responsibility. The Company and each Guarantor
acknowledge and agree that: (i) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the public offering price of the Securities and any
related
-29-
discounts and commissions, is an arm’s-length commercial transaction between the Company and each
Guarantor, on the one hand, and the several Underwriters, on the other hand, and the Company and
each Guarantor are capable of evaluating and understanding and understand and accept the terms,
risks and conditions of the transactions contemplated by this Agreement; (ii) in connection with
each transaction contemplated hereby and the process leading to such transaction each Underwriter
is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary
of the Company, the Guarantors or any of their respective affiliates, stockholders, creditors or
employees or any other party; (iii) no Underwriter has assumed or will assume an advisory, agency
or fiduciary responsibility in favor of the Company or any Guarantor with respect to any of the
transactions contemplated hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company or any Guarantor on other matters) and
no Underwriter has any obligation to the Company or any Guarantor with respect to the offering
contemplated hereby except the obligations expressly set forth in this Agreement; (iv) the several
Underwriters and their respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company and the Guarantors and that the several
Underwriters have no obligation to disclose any of such interests by virtue of any advisory, agency
or fiduciary relationship; and (v) the Underwriters have not provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated hereby and the Company and the
Guarantors have consulted their own legal, accounting, regulatory and tax advisors to the extent
they deemed appropriate.
This Agreement supersedes all prior agreements and understandings (whether written or oral)
between the Company, the Guarantors and the several Underwriters, or any of them, with respect to
the subject matter hereof. The Company and each Guarantor hereby waive and release, to the fullest
extent permitted by law, any claims that the Company or any Guarantor may have against the several
Underwriters with respect to any breach or alleged breach of agency or fiduciary duty.
13. Representations and Indemnities to Survive Delivery. The respective indemnities,
agreements, representations, warranties and other statements of the Company, of its officers and of
the several Underwriters set forth in or made pursuant to this Agreement (i) will remain operative
and in full force and effect, regardless of any (A) investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the QIU, the officers or employees of any
Underwriter or the QIU, or any person controlling the Underwriter, the QIU, the Company, the
officers or employees of the Company, or any person controlling the Company, as the case may be or
(B) acceptance of the Securities and payment for them hereunder and (ii) will survive delivery of
and payment for the Securities sold hereunder and any termination of this Agreement. The
provisions of Section 5, Section 7, Section 8, Section 9, this Section 13 and Section 17 hereof
shall survive the termination or cancellation of this Agreement.
14. Notices. All communications hereunder shall be in writing and shall be mailed,
hand delivered or telecopied and confirmed to the parties hereto as follows:
-30-
If to the Representative:
Banc of America Securities LLC
Xxx Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Legal Department
Xxx Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Legal Department
With a copy to:
Xxxxxx
Xxxxxx & Xxxxxxx LLP
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxx, Esq.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxx, Esq.
If to the Company:
The Scotts Miracle-Gro Company
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Executive Vice President, General Counsel and Corporate Secretary
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Executive Vice President, General Counsel and Corporate Secretary
With a copy to:
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving written notice
to the others.
15. Successors and Assigns. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant to Section 10
hereof, and to the benefit of (i) the Company and the Guarantors, their respective directors,
officers and employees and any person who controls the Company or any of the Guarantors within the
meaning of the Securities Act and the Exchange Act, (ii) the Underwriters, the officers, directors,
employees and agents of the Underwriters, and each person, if any, who controls any Underwriter
within the meaning of the Securities Act and the Exchange Act, (iii) the QIU, the QIU’s officers,
directors, employees and agents, and each person, if any, who controls the QIU within the meaning
of the Securities Act and the Exchange Act, and (iv) the respective successors and assigns of any
of the above, all as and to the extent provided in this Agreement, and no other person shall
acquire or have any right under or by virtue of this Agreement. The term “successors and
-31-
assigns” shall not include a purchaser of any of the Securities from any of the several
Underwriters merely because of such purchase.
16. Partial Unenforceability. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or enforceability of any
other Section, paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be
made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.
17. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
Any legal suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of
the United States of America located in the City and County of New York or the courts of the State
of New York in each case located in the City and County of New York (collectively, the “Specified
Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for suits,
actions, or proceedings instituted in regard to the enforcement of a judgment of any Specified
Court in a Related Proceeding, as to which such jurisdiction is non-exclusive) of the Specified
Courts in any Related Proceeding. Service of any process, summons, notice or document by mail to
such party’s address set forth above shall be effective service of process for any Related
Proceeding brought in any Specified Court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any Related Proceeding in the Specified Courts and irrevocably
and unconditionally waive and agree not to plead or claim in any Specified Court that any Related
Proceeding brought in any Specified Court has been brought in an inconvenient forum.
18. General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of
an executed counterpart of a signature page to this Agreement by telecopier, facsimile, email or
other electronic transmission (i.e., “pdf” or “tif”) shall be effective as delivery of a manually
executed counterpart of this Agreement. This Agreement may not be amended or modified unless in
writing by all of the parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit. The Section
headings herein are for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof, including,
without limitation, the indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the risks in
-32-
light of the ability of the parties to investigate the Company, its affairs and its business
in order to assure that adequate disclosure has been made in the Registration Statement, the
Disclosure Package, the Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
-33-
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
| Very truly yours, THE SCOTTS MIRACLE-GRO COMPANY |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: Xxxxx X. Xxxxx | ||||
| Title: Executive Vice President and
Chief Financial Officer |
||||
| GUARANTORS EG SYSTEMS, INC., DBA SCOTTS LAWNSERVICE XXXXXXX & CO., INC. HYPONEX CORPORATION MIRACLE-GRO LAWN PRODUCTS, INC. XXX XXXXXXXX COMPANY XXXXXXX SCIENTIFIC, INC. SCOTTS TEMECULA OPERATIONS, LLC SCOTTS MANUFACTURING COMPANY SCOTTS PRODUCTS CO. SCOTTS PROFESSIONAL PRODUCTS CO. SCOTTS-SIERRA CROP PROTECTION COMPANY SCOTTS-SIERRA HORTICULTURAL PRODUCTS COMPANY SCOTTS-SIERRA INVESTMENTS, INC. SMG GROWING MEDIA, INC. THE SCOTTS COMPANY LLC |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer | |||
| XXXXX & HAWKEN, LTD. |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Executive Vice President | |||
| OMS INVESTMENTS, INC. SWISS FARMS PRODUCTS, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxx | |||
| Title: | President and CEO | |||
The foregoing Agreement is hereby confirmed and accepted by the Representative as of the date
first above written.
|
BANC OF AMERICA SECURITIES LLC Acting as Representative of the several Underwriters named in the attached Schedule A. |
||||
| By: | Banc of America Securities LLC | |||
| By: | /s/ Xxxxx Xxxxx | |||
| Xxxxx Xxxxx | ||||
| Managing Director | ||||
SCHEDULE A
| Principal Amount of |
||||
| Notes | ||||
| to be | ||||
| Underwriters | Purchased | |||
Banc of America Securities LLC |
$ | 82,000,000 | ||
X.X. Xxxxxx Securities Inc. |
66,000,000 | |||
BMO Capital Markets Corp. |
9,000,000 | |||
BNP Paribas Securities Corp. |
9,000,000 | |||
Rabo Securities USA, Inc. |
9,000,000 | |||
Scotia Capital (USA) Inc. |
9,000,000 | |||
Calyon Securities (USA) Inc. |
4,000,000 | |||
Fifth Third Securities, Inc. |
4,000,000 | |||
PNC Capital Markets LLC |
4,000,000 | |||
RBS Securities Inc. |
4,000,000 | |||
Total |
$ | 200,000,000 | ||
Schedule A-1
SCHEDULE B
Guarantors
EG Systems, Inc., dba Scotts LawnService, an Indiana corporation
Xxxxxxx & Co., Inc., an Indiana corporation
Hyponex Corporation, a Delaware corporation
Miracle-Gro Lawn Products, Inc., a New York corporation
OMS Investments, Inc., a Delaware corporation
Xxx XxXxxxxx Company, a California corporation
Xxxxxxx Scientific, Inc., a New York corporation
Scotts Temecula Operations, LLC, a Delaware limited liability company
Scotts Manufacturing Company, a Delaware corporation
Scotts Products Co., an Ohio corporation
Scotts Professional Products Co., an Ohio corporation
Scotts-Sierra Crop Protection Company, a California corporation
Scotts-Sierra Horticultural Products Company, a California corporation
Scotts-Sierra Investments, Inc., a Delaware corporation
SMG Growing Media, Inc., an Ohio corporation
Xxxxx & Xxxxxx, Ltd., a Delaware corporation
Swiss Farms Products, Inc., a Delaware corporation
The Scotts Company LLC, an Ohio limited liability company
Xxxxxxx & Co., Inc., an Indiana corporation
Hyponex Corporation, a Delaware corporation
Miracle-Gro Lawn Products, Inc., a New York corporation
OMS Investments, Inc., a Delaware corporation
Xxx XxXxxxxx Company, a California corporation
Xxxxxxx Scientific, Inc., a New York corporation
Scotts Temecula Operations, LLC, a Delaware limited liability company
Scotts Manufacturing Company, a Delaware corporation
Scotts Products Co., an Ohio corporation
Scotts Professional Products Co., an Ohio corporation
Scotts-Sierra Crop Protection Company, a California corporation
Scotts-Sierra Horticultural Products Company, a California corporation
Scotts-Sierra Investments, Inc., a Delaware corporation
SMG Growing Media, Inc., an Ohio corporation
Xxxxx & Xxxxxx, Ltd., a Delaware corporation
Swiss Farms Products, Inc., a Delaware corporation
The Scotts Company LLC, an Ohio limited liability company
Schedule B-1
SCHEDULE C
Issuer Free Writing Prospectuses
Schedule of Free Writing Prospectuses included in the Disclosure Package:
Final Term Sheet
Exhibit C-1
