85,000,000 AGGREGATE PRINCIPAL AMOUNT JAKKS PACIFIC, INC.
|
XXXXXXX
XXXXX, XXXXXX, XXXXXX & XXXXX
|
|
|
INCORPORATED
|
|
$85,000,000
AGGREGATE PRINCIPAL AMOUNT
JAKKS
PACIFIC, INC.
4.50%
CONVERTIBLE SENIOR NOTES
DUE
2014
dated
November 4, 2009
November
4, 2009
Xxxxxxx
Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
|
|
Incorporated
|
One
Bryant Park
Ladies
and Gentlemen:
JAKKS
Pacific, Inc., a Delaware corporation (the “Company”), proposes to issue and
sell to Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated (“MLPFS” or the
“Initial Purchaser”) $85,000,000 in aggregate principal amount of its 4.50%
Convertible Senior Notes due 2014 (the “Firm Notes”). In addition, the
Company has granted to the Initial Purchaser an option to purchase up to an
additional $15,000,000 in aggregate principal amount of its 4.50% Convertible
Senior Notes due 2014 (the “Optional Notes” and, together with the Firm Notes,
the “Notes”), as provided in Section 2.
The Notes
will be convertible on the terms, and subject to the conditions, set forth in
the indenture (the “Indenture”) to be entered into between the Company and Xxxxx
Fargo Bank NA, as trustee (the “Trustee”), on the Closing Date (as defined
herein). This Agreement, the Indenture and the Notes are referred to
herein collectively as the “Operative Documents.” As used herein,
“Conversion Shares” means the fully paid, nonassessable shares of common stock,
par value $.001 per share, of the Company (the “Common Stock”) to be received by
the holders of the Notes upon conversion of the Notes pursuant to the terms of
the Notes and the Indenture. The Notes will be convertible initially at a
conversion rate of 63.2091 shares per $1,000 principal amount of the Notes, on
the terms, and subject to the conditions, set forth in the
Indenture.
The Notes
will be offered and sold to the Initial Purchaser without being registered under
the Securities Act of 1933, as amended, and the rules and regulations of the
Securities and Exchange Commission (the “Commission”) thereunder (the
“Securities Act”), in reliance upon an exemption therefrom.
The
Company understands that the Initial Purchaser proposes to make an offering of
the Notes on the terms and in the manner set forth herein and in the Disclosure
Package (as defined below), including the Preliminary Offering Memorandum (as
defined below), and the Final Offering Memorandum (as defined below) and agrees
that the Initial Purchaser may resell, subject to the conditions set forth
herein, all or a portion of the Notes to purchasers (the “Subsequent
Purchasers”) at any time after the date of this Agreement.
The
Company has prepared an offering memorandum, dated the date hereof, setting
forth information concerning the Company, the Notes and the Common Stock, in
form and substance reasonably satisfactory to the Initial Purchaser. As
used in this Agreement, “Offering Memorandum” means, collectively, the
Preliminary Offering Memorandum dated as of November 4, 2009 (the “Preliminary
Offering Memorandum”) and the offering memorandum dated the date hereof (the
“Final Offering Memorandum”), each as then amended or supplemented by the
Company. As used herein, each of the terms “Disclosure Package”, “Offering
Memorandum”, “Preliminary Offering Memorandum” and “Final Offering Memorandum”
shall include in each case the documents incorporated or deemed to be
incorporated by reference therein.
1
The
Company hereby confirms its agreements with the Initial Purchaser as
follows:
Section 1. Representations, Warranties and
Covenants of the Company.
The
Company hereby represents and warrants to, and covenants with, the Initial
Purchaser as follows:
(a)
No Registration.
Assuming the accuracy of the representations and warranties of the Initial
Purchaser contained in Section 6 and their compliance with the agreements set
forth therein, it is not necessary, in connection with the issuance and sale of
the Notes to the Initial Purchaser, the offer, resale and delivery of the Notes
by the Initial Purchaser and the conversion of the Notes into Conversion Shares,
in each case in the manner contemplated by this Agreement, the Indenture, the
Disclosure Package and the Offering Memorandum, to register the Notes or the
Conversion Shares under the Securities Act.
(b)
No Integration.
None of the Company or any of its subsidiaries has, directly or through any
agent, sold, offered for sale, solicited offers to buy or otherwise negotiated
in respect of, any “security” (as defined in the Securities Act) that is or will
be integrated with the sale of the Notes or the Conversion Shares in a manner
that would require registration under the Securities Act of the Notes or the
Conversion Shares.
(c)
Rule 144A. No
securities of the same class (within the meaning of Rule 144A(d)(3) under the
Securities Act) as the Notes are listed on any national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) or quoted on an automated inter-dealer quotation
system.
(d)
Exclusive Agreement.
Since January 1, 2006, the Company has not paid or agreed to pay to any
person any compensation for soliciting another person to purchase any securities
of the Company (except as contemplated in this Agreement).
(e)
Offering
Memoranda. The Company hereby confirms that it has authorized the
use of the Disclosure Package, including the Preliminary Offering Memorandum,
and the Final Offering Memorandum in connection with the offer and sale of the
Notes by the Initial Purchaser. Each document, if any, filed or to be
filed pursuant to the Exchange Act and incorporated by reference in the
Disclosure Package or the Final Offering Memorandum complied when it was filed,
or will comply when it is filed, as the case may be, in all material respects
with the Exchange Act and the rules and regulations of the Commission
thereunder. The Preliminary Offering Memorandum, at the date thereof, did
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. At the date of
this Agreement, the Closing Date and on any Subsequent Closing Date, the Final
Offering Memorandum did not and will not (and any amendment or supplement
thereto, at the date thereof, at the Closing Date and on any Subsequent Closing
Date, will 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; provided
that the Company makes no representation or warranty as to information contained
in or omitted from the Preliminary Offering Memorandum or the Final Offering
Memorandum in reliance upon and in conformity with written information furnished
to the Company by the Initial Purchaser expressly for use therein, it being
understood and agreed that the only such information furnished by the Initial
Purchaser consists of the information described as such in Section 8
hereof.
2
(f)
Disclosure
Package. The term “Disclosure
Package” shall mean (i) the Preliminary Offering Memorandum, as amended or
supplemented at the Applicable Time, (ii) the Final Term Sheet (as defined
herein) and (iii) any other writings that the
parties expressly agree in writing to treat as part of the Disclosure Package
(“Issuer Written Information”). As of 5:00 p.m., New York time, on
the date of execution and delivery 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 the Initial Purchaser for use therein,
it being understood and agreed that the only such information furnished by the
Initial Purchaser consists of the information described as such in Section 8
hereof.
(g)
Statements in Offering
Memorandum. The statements in the Disclosure Package and the Final
Offering Memorandum under the headings “Certain United States Income Tax
Considerations” and “Risk Factors – The outcome of litigation in which we have
been named as a defendant is unpredictable and a materially adverse decision in
any such matter could have a material adverse affect on our financial position
and results of operations, “Risk Factors – An adverse outcome in the litigation
commenced against us and against our video game joint venture with THQ by WWE,
or a decline in the popularity of WWE, could adversely impact our interest in
that joint venture,” and “Legal Proceedings,” insofar as such statements
summarize legal matters, agreements, documents or proceedings discussed therein,
are accurate and fair summaries of such legal matters, agreements, documents or
proceedings.
(h)
Offering Materials Furnished
to Initial Purchaser. The Company has delivered to the Initial
Purchaser copies of the materials contained in the Disclosure Package and the
Final Offering Memorandum, each as amended or supplemented, in such quantities
and at such places as the Initial Purchaser has reasonably
requested.
(i)
Authorization of the Purchase
Agreement. This Agreement has been duly authorized, executed and
delivered by the Company.
(j)
Authorization of the
Indenture. The Indenture has been duly authorized by the Company;
on the Closing Date, the Indenture will have been duly executed and delivered by
the Company and, assuming due authorization, execution and delivery thereof by
the Trustee, will constitute a legally valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles; and the Indenture
conforms in all material respects to the description thereof contained in the
Disclosure Package and the Final Offering Memorandum.
3
(k)
Authorization of the
Notes. The Notes have been duly authorized by the Company; when the
Notes are executed, authenticated and issued in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchaser pursuant to
this Agreement on the respective Closing Date (assuming due authentication of
the Notes by the Trustee), such Notes will constitute legally valid and binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles; and the Notes will
conform in all material respects to the description thereof contained in the
Disclosure Package and the Final Offering Memorandum.
(l)
Authorization of the
Conversion Shares. The Conversion Shares have been duly authorized
and reserved and, when issued upon conversion of the Notes in accordance with
the terms of the Notes and the Indenture, will be validly issued, fully paid and
nonassessable, and the issuance of such shares will not be subject to any
preemptive or similar rights.
(m)
No Material Adverse
Change. Except as otherwise disclosed in the Disclosure Package and
the Final Offering Memorandum (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement), subsequent to the respective
dates as of which information is given in the Disclosure Package: (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 condition, financial or
otherwise, or in the earnings, business, properties, operations or prospects,
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 material liability or
obligation, indirect, direct or contingent, nor entered into any material
transaction or agreement; and (iii) except for distributions paid by
THQ/JAKKS Pacific, LLC (the “Joint Venture”) in the ordinary course of business
consistent with past practice pursuant to the terms of the operating agreement
of the Joint Venture, 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.
(n)
Independent
Accountants. XXX Xxxxxxx, 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 as a part
of or incorporated by reference in the Disclosure Package and the Final Offering
Memorandum, are independent registered 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.
(o)
Preparation of the Financial
Statements. The financial statements and the supporting schedules
included or incorporated by reference in the Disclosure Package and the Final
Offering Memorandum and in the Company’s Current Report on Form 8-K filed with
the Commission on October 21, 2009 (the “Third Quarter Earnings 8-K”) present
fairly the consolidated financial position of the Company and its consolidated
subsidiaries as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. 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 Disclosure Package, the Final Offering Memorandum under
the captions “Summary—Recent Developments” and “Capitalization” and the Third
Quarter Earnings 8-K fairly present the information set forth therein on a basis
consistent with that of the audited financial statements contained in the
Disclosure Package and the Final Offering Memorandum. The Company’s ratios
of earnings to fixed charges set forth in the Disclosure Package and the Final
Offering Memorandum have been calculated in compliance with Item 503(d) of
Regulation S-K under the Securities Act.
4
(p)
Incorporation and Good
Standing of the Company and its Subsidiaries. Each of the Company
and its subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has corporate power and authority 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 Final Offering Memorandum and, in the case of the
Company, to enter into and perform its obligations under this Agreement.
The Company and each of its subsidiaries is duly qualified as a foreign
corporation 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, result in a material adverse effect on the
condition, financial or otherwise, or on the earnings, business, properties,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity (a “Material Adverse Effect”). All of the issued and
outstanding shares of capital stock of each subsidiary have been duly authorized
and validly issued, are fully paid and nonassessable and are owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim. Other than the
Joint Venture, Jakks Pacific Iberia S.L., JAKKS Pacific (Canada), Inc. and
Creative Designs International (UK) Ltd., 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 December 31, 2008.
(q)
Capitalization and Other
Capital Stock Matters. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Disclosure Package and the
Final Offering Memorandum under the caption “Capitalization” (other than for
subsequent issuances, if any, pursuant to employee benefit plans described in
the Disclosure Package and the Final Offering Memorandum or upon exercise of
outstanding options described in the Disclosure Package and the Final Offering
Memorandum, as the case may be). The Common Stock (including the
Conversion Shares) conforms in all material respects to the description thereof
contained in the Disclosure Package and the Final Offering Memorandum. All
of the issued and outstanding shares of Common Stock have been duly authorized
and validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the outstanding
shares of Common Stock were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for,
any capital stock of the Company or any of its subsidiaries other than those
accurately described in the Disclosure Package and the Final Offering
Memorandum. The description of the Company’s stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
thereunder, set forth or incorporated by reference in the Disclosure Package and
the Final Offering Memorandum accurately and fairly presents and summarizes such
plans, arrangements, options and rights.
5
(r)
Non-Contravention of Existing
Instruments; No Further Authorizations or Approvals Required.
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, would be in default)
(“Default”) under its charter or by-laws, (ii) in Default under any indenture,
mortgage, loan or credit agreement, deed of trust, note, contract, franchise,
lease or other agreement, obligation, condition, covenant or instrument to which
the Company or such subsidiary is a party or by which it may be bound
(including, without limitation, the Company’s 4.625% Convertible Senior Notes
due 2023 or the related indenture), 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 clause (ii) or (iii) only, for such Defaults as would not,
individually or in the aggregate, have a Material Adverse Effect.
The
Company’s execution, delivery and performance of the Operative Documents and
consummation of the transactions contemplated thereby, by the Disclosure Package
and by the Final Offering Memorandum (i) have been duly authorized by all
necessary corporate action of the Company and will not result in any Default
under the charter or by-laws of the Company or any subsidiary, (ii) will
not conflict with or constitute a breach of, or 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.
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 execution, delivery and performance of the Operative
Documents and consummation of the transactions contemplated thereby, by the
Disclosure Package and by the Final Offering Memorandum, except such as have
been obtained or made by the Company and are in full force and effect under the
Securities Act, applicable state securities or blue sky laws and from the
Financial Industry Regulatory Authority (“FINRA”). 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.
(s)
No Stamp or Transfer
Taxes. There are no stamp or other issuance or transfer taxes or
duties or other similar fees or charges under federal law or the laws of any
state, or any political subdivision thereof, or any other U.S. or non-U.S.
governmental authority required to be paid in connection with the execution and
delivery of this Agreement or the issuance or sale by the Company of the Notes
or upon the issuance of Common Stock upon the conversion thereof.
(t)
No Material Actions or
Proceedings. Except as otherwise disclosed in the Disclosure
Package and the Final Offering Memorandum, there are no legal or governmental
actions, suits or proceedings pending or, to the best of the Company’s
knowledge, threatened against or affecting the Company or any of its
subsidiaries, (i) which has as the subject thereof the Company, any officer
or director of, or property owned or leased by, the Company or any of its
subsidiaries or (ii) relating to environmental or discrimination matters,
where in either 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 any officer or director of, or property owned or leased by, the
Company or any of its subsidiaries and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to have a
Material Adverse Effect or adversely affect the consummation of the transactions
contemplated by this Agreement.
6
(u)
Labor Matters. No
labor problem or dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent, and the Company is not aware
of any existing, threatened or imminent labor disturbance by the employees of
any of its or its subsidiaries’ principal suppliers, contractors or customers,
that could have a Material Adverse Effect.
(v)
Intellectual Property
Rights. Except as otherwise disclosed in the Disclosure Package and
the Final Offering Memorandum, 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 mark registrations,
trade names, copyrights, licenses, inventions, trade secrets, technology,
know-how and other intellectual property (collectively, the “Intellectual
Property”) necessary for the conduct of the Company’s business as now conducted
or as proposed in the Disclosure Package and the Final Offering Memorandum to be
conducted. Except as set forth in the Disclosure Package and the Final
Offering Memorandum, (a) no party has been granted an exclusive license to use
any portion of such Intellectual Property owned by the Company; (b) to the
Company’s knowledge, there is no material infringement by third parties of any
such Intellectual Property owned by or exclusively licensed to the Company; (c)
there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the Company’s rights in or to any
material Intellectual Property, and the Company is unaware of any facts that
would form a reasonable basis for any such claim; (d) there is no pending or, to
the Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and the
Company is unaware of any facts that would form a reasonable basis for any such
claim; and (e) there is no pending or, to the Company’s 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 is unaware
of any other fact that would form a reasonable basis for any such
claim.
(w)
All Necessary Permits,
etc. 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, 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, could have a Material Adverse Effect.
(x)
Title to
Properties. The Company and each of its subsidiaries has good and
marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 1(o) above, in each case free and
clear of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, 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 are not material and 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.
7
(y)
Tax Law Compliance.
The Company and its consolidated subsidiaries have filed all necessary
federal, state, local and foreign income and franchise tax returns in a timely
manner and have paid all taxes required to be paid by any of them and, if due
and payable, any related or similar assessment, fine or penalty levied against
any of them, except for any taxes, assessments, fines or penalties as may be
being contested in good faith and by appropriate proceedings. The Company
has made appropriate provisions in the financial statements referred to in
Section 1(o) above in respect of all federal, state, local and foreign income
and franchise taxes for all current or prior periods as to which the tax
liability of the Company or any of its consolidated subsidiaries has not been
finally determined.
(z)
Company Not an “Investment
Company”. The Company has been advised of the rules and
requirements under the Investment Company Act of 1940, as amended, and the
rules and regulations promulgated thereunder (the “Investment Company
Act”). The Company is not, and after receipt of payment for the Notes and
the application of the proceeds thereof as contemplated under the caption “Use
of Proceeds” in the Disclosure Package and the Final Offering Memorandum will
not be, an “investment company” within the meaning of the Investment Company Act
and will conduct its business in a manner so that it will not become subject to
the Investment Company Act.
(aa)
Compliance with Reporting
Requirements. The Company is subject to and in full compliance with
the reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.
(bb)
Insurance. The
Company and its subsidiaries are insured by recognized, financially sound and
reputable institutions with policies in such amounts and with such deductibles
and covering such risks as are generally deemed reasonable and 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 terrorism or vandalism and
earthquakes. All policies of insurance and fidelity or surety bonds
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
and instruments in all material respects; and there are no claims by the Company
or any of its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; and neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for. The Company has no reason 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 have a Material Adverse Effect.
(cc)
No Restriction on Dividends or
other Distributions. Other than prohibitions contained in the
operating agreement of the Joint Venture, no subsidiary of the Company is
currently prohibited, directly or indirectly, from paying any dividends or other
distributions to the Company, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
subsidiary’s property or assets to the Company or any other subsidiary of the
Company, except as described in or contemplated by the Disclosure Package and
the Final Offering Memorandum.
(dd)
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 Notes. The Company
acknowledges that the Initial Purchaser may engage in passive market making
transactions in the Common Stock on the Nasdaq Global Select Market in
accordance with Regulation M under the Exchange Act.
8
(ee)
Related Party
Transactions. There are no material business relationships or
related-party transactions involving the Company or any subsidiary or any other
person that have not been described in the Disclosure Package or the Final
Offering Memorandum.
(ff)
No General Solicitation.
None of the Company or any of its affiliates (as defined in Rule 501(b)
of Regulation D under the Securities Act (“Regulation D”)), has, directly or
through an agent, engaged in any form of general solicitation or general
advertising in connection with the offering of the Notes or the Conversion
Shares (as those terms are used in Regulation D) under the Securities Act or in
any manner involving a public offering within the meaning of Section 4(2) of the
Securities Act; the Company has not entered into any contractual arrangement
with respect to the distribution of the Notes or the Conversion Shares except
for this Agreement, and the Company will not enter into any such
arrangement.
(gg)
No Unlawful Contributions or
Other Payments. Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is aware of or has taken any
action, directly or indirectly, that would result in a 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, its affiliates have conducted their
businesses in compliance with the FCPA and have instituted and maintain policies
and procedures designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.
(hh)
No Conflict with Money
Laundering Laws. The operations of the Company and its subsidiaries
are and have been conducted at all times in compliance 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, threatened.
(ii)
No Conflict with OFAC
Laws. Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or affiliate of
the Company or any of its subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
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.
9
(jj)
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 Section 302 of the United States Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and the
regulations and published interpretations thereunder with respect to a Plan,
determined without regard to any waiver of such obligations or extension of any
amortization period; (ii) an audit or, to the Company’s knowledge, 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 the Company or any of its subsidiaries that could have a
Material Adverse Effect; (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 the Company or any of its
subsidiaries that could have a Material Adverse Effect. 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 and its subsidiaries compared to
the amount of such contributions made in the Company and its subsidiaries’ most
recently completed fiscal year; (ii) a material increase in the Company and its
subsidiaries’ “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 and its subsidiaries’ most recently
completed fiscal year; (iii) any event or condition giving rise to a liability
under Title IV of ERISA that could have a Material Adverse Effect; or (iv) the
filing of a claim by one or more employees or former employees of the Company or
any of its subsidiaries related to its or their employment that could have a
Material Adverse Effect. 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 the Company or any of its subsidiaries may have
any liability.
(kk)
Brokers. 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.
(ll)
Xxxxxxxx-Xxxxx
Compliance. There is and has been no failure on the part of the
Company and any of the Company’s directors or officers, in their capacities as
such, to comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated in connection therewith (the “Xxxxxxxx-Xxxxx
Act”), including Section 402 related to loans and Sections 302 and 906 related
to certifications.
(mm)
Internal Controls and
Procedures. The Company maintains (i) effective internal control
over financial reporting as defined in Rule 13a-15 of the Securities Exchange
Act of 1934, as amended (“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.
10
(nn)
No Material Weakness in
Internal Controls. Except as disclosed in the Disclosure Package
and the Final Offering Memorandum, since the end of the Company’s most recent
audited 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.
(oo)
Disclosure
Controls. The Company and its subsidiaries maintain an effective
system of “disclosure controls and procedures” (as defined in Rule 13a-15 of the
Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Commission’s rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions regarding required
disclosure. 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.
(pp)
Stock Options.
With respect to the stock options (the “Stock Options”) granted pursuant to the
stock-based compensation plans of the Company and its subsidiaries (the “Company
Stock Plans”), (i) each Stock Option designated by the Company or the relevant
subsidiary of the Company at the time of grant as an “incentive stock option”
under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”),
so qualifies, (ii) each grant of a Stock Option was duly authorized no later
than the date on which the grant of such Stock Option was by its terms to be
effective (the “Grant Date”) by all necessary corporate action, including, as
applicable, approval by the board of directors of the Company or the relevant
subsidiary of the Company (or a duly constituted and authorized committee
thereof) and any required stockholder approval by the necessary number of votes
or written consents, and the award agreement governing such grant (if any) was
duly executed and delivered by each party thereto, (iii) each such grant was
made in accordance with the terms of the Company Stock Plans, the Exchange Act
and all other applicable laws and regulatory rules or requirements, including
the Nasdaq Marketplace Rules and any other exchange on which the securities of
the Company or the relevant subsidiary of the Company are traded, (iv) the per
share exercise price of each Stock Option was equal to or greater than the fair
market value of a share of Common Stock on the applicable Grant Date and (v)
each such grant was properly accounted for in accordance with GAAP in the
consolidated financial statements (including the related notes) of the Company
and disclosed in the Company’s filings with the Commission in accordance with
the Exchange Act and all other applicable laws. Neither the Company nor
any of its subsidiaries has knowingly granted, and there is no and has been no
policy or practice of the Company or any of its subsidiaries of granting, Stock
Options prior to, or otherwise coordinating the grant of Stock Options with, the
release or other public announcement of material information regarding the
Company or its subsidiaries or their results of operations or
prospects.
(qq)
Lending Relationship.
Except as disclosed in the Disclosure Package and the Final Offering
Memorandum, the Company (i) does not have any material lending or
other relationship with any bank or lending affiliate of the Initial Purchaser
and (ii) does not intend to use any of the proceeds from the sale of the
Notes hereunder to repay any outstanding debt owed to any affiliate of the
Initial Purchaser.
Any
certificate signed by an officer of the Company and delivered to the Initial
Purchaser or to counsel for the Initial Purchaser shall be deemed to be a
representation and warranty by the Company to the Initial Purchaser as to the
matters set forth therein.
11
Section
2. Purchase, Sale and Delivery of the Notes
(a)
The Firm Notes.
The Company agrees to issue and sell to the Initial Purchaser the Firm
Notes upon the terms herein set forth. On the basis of the
representations, warranties and agreements herein contained, and upon the terms
but subject to the conditions herein set forth, the Initial Purchaser agrees to
purchase from the Company $85,000,000 aggregate principal amount of Firm
Notes. The purchase price per Firm Note to be paid by the Initial
Purchaser to the Company shall be 96.50% of the aggregate principal amount
thereof.
(b)
The Closing Date.
Delivery of the Firm Notes to be purchased by the Initial Purchaser and payment
therefor shall be made at the offices of Xxxxxx & Bird LLP, 000 Xxxxx Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (or such other place as
may be agreed to by the Company and MLPFS) at 9:00 a.m., New York time, on
November 10, 2009, or such other time and date not later than 1:30 p.m., New
York time, November 10, 2009 as MLPFS shall designate by notice to the Company
(the time and date of such closing are called the “Closing Date”).
(c)
The Optional Notes; any
Subsequent Closing Date. In addition, on the basis of the
representations, warranties and agreements herein contained, and upon the terms
but subject to the conditions herein set forth, the Company hereby grants an
option to the Initial Purchaser to purchase up to an $15,000,000 aggregate
principal amount of Optional Notes from the Company at the same price as the
purchase price per Firm Note to be paid by the Initial Purchaser for the Firm
Notes. The option granted hereunder may be exercised at any time and from
time to time upon notice by MLPFS to the Company, which notice may be given at
any time within 30 days from the date of this Agreement. Such notice
shall set forth (i) the amount (which shall be an integral multiple of
$1,000 in aggregate principal amount) of Optional Notes as to which the Initial
Purchaser are exercising the option, (ii) the names and denominations in
which the Optional Notes are to be registered and (iii) the time, date and
place at which such Optional Notes will be delivered (which time and date may be
simultaneous with, but not earlier than, the Closing Date; and in such case the
term “Closing Date” shall refer to the time and date of delivery of the Firm
Notes and the Optional Notes). Each time and date of delivery, if
subsequent to the Closing Date, is called a “Subsequent Closing Date” and shall
be determined by MLPFS and shall not be earlier than the Closing Date nor later
than 10 business days after delivery of such notice of exercise.
(d)
Payment for the
Notes. Payment for the Notes shall be made at the Closing Date
(and, if applicable, at any Subsequent Closing Date) by wire transfer of
immediately available funds to the order of the Company.
(e)
Delivery of the
Notes. The Company shall deliver, or cause to be delivered, to the
Initial Purchaser the Firm Notes at the Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The Company shall also deliver, or cause to be
delivered, to the Initial Purchaser the Optional Notes the Initial Purchaser has
agreed to purchase at the Closing Date or any Subsequent Closing Date, as the
case may be, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. Delivery of
the Firm Notes and the Optional Notes shall be made through the facilities of
The Depository Trust Company unless MLPFS 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 Initial
Purchaser.
12
Section
3. Covenants of the Company
The
Company covenants and agrees with the Initial Purchaser as follows:
(a)
MLPFS’s Review of Proposed
Amendments and Supplements. During such period beginning on the
date hereof and ending on the date of the completion of the resale of the Notes
by the Initial Purchaser (as notified by the Initial Purchaser to the Company),
prior to amending or supplementing the Disclosure Package or the Final Offering
Memorandum, the Company shall furnish to MLPFS for review a copy of each such
proposed amendment or supplement, and the Company shall not print, use or
distribute such proposed amendment or supplement to which MLPFS reasonably
objects.
(b)
Amendments and Supplements to
the Offering Memorandum and Other Securities Act Matters. If, at any time prior
to the completion of the resale of the Notes by the Initial Purchaser (as
notified by the Initial Purchaser to the Company), any event or development
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Disclosure Package or the Final Offering Memorandum in order that
the Disclosure Package or the Final Offering Memorandum will not include an
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 in the opinion of MLPFS or counsel for the Initial Purchaser it is otherwise
necessary to amend or supplement the Disclosure Package or the Final Offering
Memorandum to comply with law, the Company shall promptly notify the Initial
Purchaser and prepare, subject to Section 3(a) hereof, such amendment or
supplement as may be necessary to correct such untrue statement or
omission.
(c)
Copies of Disclosure Package
and the Offering Memorandum. The Company agrees to furnish to the
Initial Purchaser, without charge, until the earlier of nine months after the
date hereof or the completion of the resale of the Notes by the Initial
Purchaser (as notified by the Initial Purchaser to the Company) as many copies
of the materials contained in the Disclosure Package and the Final Offering
Memorandum and any amendments and supplements thereto as the Initial Purchaser
may reasonably request.
(d)
Blue Sky Compliance.
The Company shall cooperate with the Initial Purchaser and counsel for
the Initial Purchaser, as the Initial Purchaser may reasonably request from time
to time, to qualify or register the Notes 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 Initial Purchaser, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long as
required for the distribution of the Notes. The Company shall not be
required to qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where it is
not presently qualified or where it would be subject to taxation as a foreign
corporation, other than those arising out of the offering or sale of the Notes
in any jurisdiction where it is not now so subject. The Company will
advise the Initial Purchaser promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Notes 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 shall use its best efforts
to obtain the withdrawal thereof at the earliest possible
moment.
13
(e)
Rule 144A
Information. For so long as any of the Notes are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, the
Company shall provide to any holder of the Notes or to any prospective purchaser
of the Notes designated by any holder, upon request of such holder or
prospective purchaser, information required to be provided by Rule 144A(d)(4) of
the Securities Act if, at the time of such request, the Company is not subject
to the reporting requirements under Section 13 or 15(d) of the Exchange
Act.
(f)
Compliance with Securities
Law. The Company will comply with all applicable securities and
other laws, rules and regulations, including, without limitation, the
Xxxxxxxx-Xxxxx Act, and use its best efforts to cause the Company’s directors
and officers, in their capacities as such, to comply with such laws, rules and
regulations, including, without limitation, the provisions of the Xxxxxxxx-Xxxxx
Act.
(g)
Legends. Each of
the Notes will bear, to the extent applicable, the legend contained in “Notice
to Investors” in the Disclosure Package and the Final Offering Memorandum for
the time period and upon the other terms stated therein.
(h)
Written Information Concerning
the Offering. Without the prior
written consent of the MLPFS, the Company will not give to any prospective
purchaser of the Notes or any other person not in its employ any written
information concerning the offering of the Notes other than the Disclosure
Package, the Final Offering Memorandum or any other offering materials prepared
by or with the prior consent of the Initial Purchaser.
(i)
No General
Solicitation. The Company will not, and will cause its subsidiaries
not to, solicit any offer to buy or offer to sell the Notes by means of any form
of general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
(j)
No Integration.
The Company will not, and will cause its subsidiaries not to, sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
“security” (as defined in the Securities Act) in a transaction that could be
integrated with the sale of the Notes in a manner that would require the
registration under the Securities Act of the Notes.
(k)
No Directed Selling
Efforts. None of the Company, its Affiliates, or any person acting
on its or their behalf will engage in any directed selling efforts with respect
to the Notes, and each of them will comply with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the
meanings given to them by Regulation S.
(l)
Information to
Publishers. Any information provided by the Company to publishers
of publicly available databases about the terms of the Notes and the Indenture
shall include a statement that the Notes have not been registered under the
Securities Act and are subject to restrictions under Rule 144A of the Securities
Act and Regulation S.
(m)
DTC. The Company
will cooperate with the Initial Purchaser and use its best efforts to permit the
Notes to be eligible for clearance and settlement through The Depository Trust
Company.
(n)
Rule 144 Tolling.
During the period of six months after the last Closing Date, the Company will
not, and will not permit any of its “affiliates” (as defined in Rule 144 under
the Securities Act) to, resell any of the Notes that constitute “restricted
securities” under Rule 144 that have been reacquired by any of
them.
14
(o)
Use of Proceeds.
The Company shall apply the net proceeds from the sale of the Notes sold by it
in the manner described under the caption “Use of Proceeds” in the Disclosure
Package and the Final Offering Memorandum.
(p)
Transfer Agent.
The Company shall engage and maintain, at its expense, a registrar and transfer
agent for the Common Stock.
(q)
Available Conversion
Shares. The Company will reserve and keep available at all times,
free of pre-emptive rights, the full number of Conversion Shares.
(r)
Conversion Price.
Between the date hereof and the Closing Date, the Company will not do or
authorize any act or thing that would result in an adjustment of the conversion
price.
(s)
Company to Provide Interim
Financial Statements and Other Information. Prior to the Closing
Date, the Company will furnish to the Initial Purchaser, as soon as they have
been prepared by or are available to the Company, a copy of any unaudited
interim financial statements of the Company for any period subsequent to the
period covered by the most recent financial statements appearing in the
Disclosure Package and the Final Offering Memorandum.
(t)
Agreement Not to Offer or Sell
Additional Securities. During the period commencing on the date
hereof and ending on the 90th day
following the date of the Final Offering Memorandum (the “Lock-Up Period”), the
Company will not, without the prior written consent of MLPFS (which consent may
be withheld at the sole discretion of MLPFS), directly or indirectly, sell,
offer, contract to sell or grant any option to buy, pledge, transfer or
establish an open “put equivalent position” or liquidate or decrease a “call
equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act,
or otherwise dispose of or transfer (or enter into any transaction that is
designed to, or might reasonably be expected to, result in the disposition of),
or announce the offering of, or file any registration statement under the
Securities Act in respect of, any shares of Common Stock, options or warrants to
acquire shares of the Common Stock or securities exchangeable or exercisable for
or convertible into shares of Common Stock (in each case other than as
contemplated by this Agreement with respect to the Notes); provided, however,
that the Company may issue shares of its Common Stock upon exercise of options
pursuant to any stock option, stock bonus or other stock plan or arrangement
existing and in effect on the date hereof and described in the Disclosure
Package and (ii) grant options to purchase its Common Stock or issue restricted
shares of its Common Stock pursuant to any stock option, stock bonus or other
stock plan or arrangement existing and in effect on the date hereof and
described in the Disclosure Package, provided that such newly granted option or
restricted shares shall not vest within the Lock-Up Period.
(u)
Future Reports to
Stockholders. The Company will make available to its stockholders
as soon as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the date of the Final Offering Memorandum), to make
available to its stockholders consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable
detail.
15
(v)
Future Reports to the Initial
Purchaser. To the extent not otherwise publicly available, during
the period of five years hereafter, the Company will furnish to the Initial
Purchaser at Xxx Xxxxxx Xxxx, Xxx Xxxx, XX 00000: (i) 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; (ii) 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; and (iii) as soon as available,
copies of any report or communication of the Company mailed generally to holders
of its capital stock.
(w)
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.
(x)
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 Notes.
(y)
New Lock-Up Agreements.
The Company will enforce all agreements between the Company and any of
its security holders to be entered into pursuant to this agreement that prohibit
the sale, transfer, assignment, pledge or hypothecation of any of the Company’s
securities. In addition, the Company will direct the transfer agent to
place stop transfer restrictions upon any such securities of the Company that
are bound by such “lock-up” agreements for the duration of the periods
contemplated in such agreements.
(z)
DTC. The Company
will cooperate with the Initial Purchaser and use its best efforts to permit the
Notes to be eligible for clearance and settlement through The Depository Trust
Company.
(aa)
Final Term Sheet.
The Company will prepare a final term sheet, containing solely a description of
the Notes and the offering thereof, in the form approved by you and attached as
Schedule A
hereto (the “Final Term Sheet”).
Section
4. Payment of Expenses
The
Company agrees to pay the following costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby: (i) all expenses incident to the
issuance and delivery of the Notes (including all printing and engraving costs),
(ii) all fees and expenses of the Trustee under the Indenture incident to
the performance by the Trustee of its obligations thereunder, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Notes to the Initial Purchaser, (iv) all fees and expenses
of the Company’s counsel, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, shipping and distribution of the materials contained in
the Disclosure Package, including the Preliminary Offering Memorandum, and the
Final Offering Memorandum, all amendments and supplements thereto and this
Agreement, (vi) all filing fees, attorneys’ fees and expenses incurred by the
Company or the Initial Purchaser in connection with qualifying or registering
(or obtaining exemptions from the qualification or registration of) all or any
part of the Notes for offer and sale under the state securities or blue sky laws
or the provincial securities laws of Canada, and, if requested by the Initial
Purchaser, preparing and printing a “Blue Sky Survey” or memorandum, and any
supplements thereto, advising the Initial Purchaser of such qualifications,
registrations and exemptions, (vii) the expenses of the Company and the
Initial Purchaser in connection with the marketing and offering of the Notes,
including all transportation and other expenses incurred in connection with
presentations to prospective purchasers of the Notes, and (viii) the fees
and expenses associated with listing the Conversion Shares on the Nasdaq Global
Select Market. Except as provided in this Section 4, Section 7
and Section 10 hereof, the Initial Purchaser shall pay its own expenses,
including the fees and disbursements of its counsel.
16
Section
5. Conditions of the Obligations of the Initial Purchaser
The
obligations of the Initial Purchaser to purchase and pay for the Notes as
provided herein on the Closing Date and, with respect to the Optional Notes, any
Subsequent Closing Date, shall be subject to the accuracy of the representations
and warranties on the part of the Company set forth in Section 1 hereof as
of the date hereof and as of the Closing Date as though then made and, with
respect to the Optional Notes, as of any Subsequent Closing Date as though then
made, to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the timely performance by the Company of
its covenants and other obligations hereunder, and to each of the following
additional conditions:
(a)
Accountants’ Comfort
Letter. On the date hereof, the Initial Purchaser shall have
received from BDO Xxxxxxx, LLP, independent public accountants for the Company,
a letter dated the date hereof addressed to the Initial Purchaser, the form of
which is attached as Exhibit
A.
(b)
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 and, with respect to the Optional
Notes, any Subsequent Closing Date:
(i) in
the judgment of MLPFS there shall not have occurred any Material Adverse
Change;
(ii) there
shall not have been any change or decrease specified in the letter or letters
referred to in paragraph (a) of this Section 5 which is, in the sole judgment of
MLPFS, so material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of the Notes as contemplated by the
Disclosure Package and the Final Offering Memorandum; 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 any securities of the Company or any of its subsidiaries by any
“nationally recognized statistical rating organization” as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
(c)
Opinion of Counsel for the
Company. On each of the Closing Date and any Subsequent Closing
Date, the Initial Purchaser shall have received the favorable opinion of Xxxxx
Xxxxxxxxx LLP, counsel for the Company, dated as of such Closing Date or
Subsequent Closing Date, substantially in the form which is attached as Exhibit B.
17
(d)
Opinion of Counsel for the
Initial Purchaser. On the Closing Date and any Subsequent Closing
Date, the Initial Purchaser shall have received the favorable opinion of Xxxxxx
& Bird LLP, counsel for the Initial Purchaser, dated as of such Closing Date
or Subsequent Closing Date, in form and substance satisfactory to, and addressed
to, the Initial Purchaser, with respect to the issuance and sale of the Notes,
the Disclosure Package, the Preliminary Offering Memorandum, the Final Offering
Memorandum and other related matters as the Initial Purchaser 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.
(e)
Officers’
Certificate. On the Closing Date and any Subsequent Closing Date,
the Initial Purchaser 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 such Closing Date or Subsequent Closing Date, to the effect that the signers
of such certificate have carefully examined the Disclosure Package, including
the Preliminary Offering Memorandum, and the Final Offering Memorandum, any
amendments or supplements thereto and this Agreement, to the effect set forth in
subsection (b)(iii) of this Section 5, and further to the effect
that:
(i) for
the period from and after the date of this Agreement and prior to such Closing
Date or Subsequent 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 such Closing Date or Subsequent
Closing Date with the same force and effect as though expressly made on and as
of such Closing Date or such Subsequent 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
such Closing Date or Subsequent Closing Date.
(f)
Bring-down Comfort
Letter. On the Closing Date and any Subsequent Closing Date, the
Initial Purchaser shall have received from BDO Xxxxxxx, LLP, independent public
accountants for the Company, a letter dated such date, in form and substance
satisfactory to the Initial Purchaser, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a)
of this Section 5, except that the specified date referred to therein for
the carrying out of procedures shall be no more than three business days prior
to such Closing Date or Subsequent Closing Date.
(g)
Chief Financial Officer’s
Certificate. On the Closing Date, the Initial Purchaser shall have
received a certificate signed by the Chief Financial Officer of the Company
certifying as to the preparation, completeness and accuracy of certain financial
and statistical data relating to the Company included in the Disclosure Package
in the form attached as Exhibit
C.
(h)
Lock-Up Agreement from Certain
Securityholders of the Company. On or prior to the date hereof, the
Company shall have furnished to the Initial Purchaser an agreement in the form
of Exhibit D hereto
from directors and executive officers of the Company, and such agreement shall
be in full force and effect on each of the Closing Date and any Subsequent
Closing Date.
18
(i)
The Company shall have caused the Conversion Shares to be approved for listing,
subject to notice of issuance, on the Nasdaq Global Select Market, and
satisfactory evidence of such actions has been provided to the Initial
Purchaser.
(j)
Additional
Documents. On or before each of the Closing Date and any Subsequent
Closing Date, the Initial Purchaser and counsel for the Initial Purchaser shall
have received such information, documents and opinions as they may reasonably
require for the purposes of enabling them to pass upon the issuance and sale of
the Notes as contemplated herein, or in order to evidence the accuracy of any of
the representations and warranties, or the satisfaction of any of the conditions
or agreements, herein contained.
If any
condition specified in this Section 5 is not satisfied when and as required to
be satisfied, this Agreement may be terminated by MLPFS by notice to the Company
at any time on or prior to the Closing Date and, with respect to the Optional
Notes, at any time prior to the applicable Subsequent Closing Date, which
termination shall be without liability on the part of any party to any other
party, except that Section 4, Section 7, Section 8,
Section 9 and Section 13 shall at all times be effective and shall survive
such termination.
Section
6. Representations, Warranties and Agreements of Initial
Purchaser
The
Initial Purchaser represents and warrants that it is a “qualified institutional
buyer”, as defined in Rule 144A of the Securities Act. The Initial
Purchaser agrees with the Company that:
(a)
it has not offered or sold, and will not offer or sell, any Notes within the
United States or to, or for the account or benefit of, U.S. persons (x) as part
of their distribution at any time or (y) otherwise until one year after the
later of the commencement of the offering of the Notes pursuant hereto and the
date of closing of the offering of the Notes pursuant hereto
except:
(i) to
those it reasonably believes to be “qualified institutional buyers” (as defined
in Rule 144A under the Securities Act) or
(ii) in
accordance with Rule 903 of Regulation S;
(b)
neither it nor any person acting on its behalf has made or will make offers or
sales of the Notes in the United States by means of any form of general
solicitation or general advertising (within the meaning of Regulation D) in the
United States;
(c)
in connection with each sale pursuant to Section 6(a)(i), it has taken or will
take reasonable steps to ensure that the purchaser of such Notes is aware that
such sale is being made in reliance on Rule 144A;
(d)
any information provided by the Initial Purchaser to publishers of publicly
available databases about the terms of the Notes and the Indenture shall include
a statement that the Notes have not been registered under the Securities Act and
are subject to restrictions under Rule 144A under the Securities Act and
Regulation S;
(e)
it will not engage in hedging transactions with regard to the Notes prior to the
expiration of the distribution compliance period as (defined in Regulation S),
unless in compliance with the Securities Act;
19
(f)
neither it, nor any of its Affiliates nor any person acting on its or their
behalf has engaged or will engage in any directed selling efforts (within the
meaning of Regulation S) with respect to the Notes;
(g)
it has not entered and will not enter into any contractual arrangement with any
distributor (within the meaning of Regulation S) with respect to the
distribution of the Notes, except with its affiliates or with the prior written
consent of the Company;
(h)
it and they have complied and will comply with the offering restrictions
requirement of Regulation S;
(i)
at or prior to the confirmation of sale of Notes (other than a sale of Notes
pursuant to Section 6(a)(ii) of this Agreement), it shall have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Notes from it during the distribution compliance
period (within the meaning of Regulation S) a confirmation or notice to
substantially the following effect:
“The
Notes covered hereby have not been registered under the U.S. Securities Act of
1933 (the “Securities Act”) and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons (i) as part of
their distribution at any time or (ii) otherwise until one year after the later
of the commencement of the offering and the date of closing of the offering,
except in either case in accordance with Regulation S or Rule 144A under the
Securities Act. Additional restrictions on the offer and sale of the Notes
and the Common Stock issuable upon conversion thereof are described in the
offering memorandum for the Notes. Terms used in this paragraph have the
meanings given to them by Regulation S.”; and
(j)
it acknowledges that additional restrictions on the offer and sale of the Notes
and the Common Stock issuable upon conversion thereof are described in the
Disclosure Package and the Final Offering Memorandum.
Section
7. Reimbursement of Initial Purchaser’s Expenses
If this
Agreement is terminated pursuant to Section 5 or Section 10(i)(A), or if
the sale to the Initial Purchaser of the Notes on the Closing Date or any
Subsequent Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Initial Purchaser
upon demand for all out-of-pocket expenses that shall have been reasonably
incurred by the Initial Purchaser in connection with the proposed purchase and
the offering and sale of the Notes, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges.
20
Section
8. Indemnification
(a)
Indemnification of the Initial
Purchaser. The Company agrees to indemnify and hold harmless the
Initial Purchaser, its directors, officers, employees and agents, and each
person, if any, who controls the Initial Purchaser within the meaning of the
Securities Act or the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which the Initial Purchaser, director, officer,
employee, agent 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 statement or
alleged untrue statement of a material fact contained in the Company’s Current
Report on Form 8-K furnished to the Commission on November 5, 2009, the
Preliminary Offering Memorandum, the Final Offering Memorandum, the information contained in the Final Term Sheet, any
Issuer Written Information or any other written information used by or on behalf
of the Company in connection with the offer or sale of the Notes (or any
amendment or supplement to the foregoing), 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 the Initial Purchaser, its officers,
directors, employees, agents and each such controlling person for any and all
expenses (including the fees and disbursements of counsel chosen by MLPFS) as
such expenses are reasonably incurred by such Initial Purchaser, or its
officers, directors, employees, 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 based upon and in conformity with written information furnished
to the Company by the Initial Purchaser expressly for use in the Preliminary
Offering Memorandum, the Final Offering Memorandum, the Final Term Sheet, any Issuer Written Information
or any other written information used by or on behalf of the Company in
connection with the offer or sale of the Notes (or any amendment or
supplement thereto), it being understood and agreed that the only such
information furnished by the Initial Purchaser consists of the information
described as such in Section 8(b) hereof. 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, its Directors and Officers. The Initial Purchaser agrees
to indemnify and hold harmless the Company, each of its directors, each of its
officers and each person, if any, who controls the Company 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 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 Preliminary Offering Memorandum, the Final
Offering Memorandum, the information contained in
the Final Term Sheet, any Issuer Written Information or any other written
information used by or on behalf of the Company in connection with the offer or
sale of the Notes (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 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 Preliminary Offering Memorandum, the Final Offering Memorandum, the Final Term Sheet, any Issuer Written Information
or any other written information used by or on behalf of the Company in
connection with the offer or sale of the Notes (or any amendment or
supplement thereto), in reliance upon and in conformity with written information
furnished to the Company by MLPFS expressly for use therein; and to reimburse
the Company, or any such director, officer or controlling person for any legal
and other expense (including the fees and disbursements of counsel chosen by the
Company) reasonably incurred by the Company, or any such director, officer or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. The Company hereby acknowledges that the only information that the
Initial Purchaser has furnished to the Company expressly for use in the
Preliminary Offering Memorandum, the Final Offering Memorandum, the Final Term Sheet, any Issuer Written Information
or any other written information used by or on behalf of the Company in
connection with the offer or sale of the Notes (or any amendment or
supplement thereto) are the statements set forth in Schedule B. The
indemnity agreement set forth in this Section 8(b) shall be in addition to
any liabilities that the Initial Purchaser may otherwise have.
21
(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 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 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 expenses of more than one
separate counsel (other than local counsel), reasonably approved by the
indemnifying party (or by MLPFS in the case of Section 8(b)), representing
the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying
party.
(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 is 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. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 8(c) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement, 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 (x) 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 (y) 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.
22
Section
9. Contribution
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, on
the one hand, and the Initial Purchaser, on the other hand, from the offering of
the Notes 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, on the one
hand, and the Initial Purchaser, on the other hand, in connection with the
untrue statements or omissions or alleged untrue statements or alleged omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Initial Purchaser, on the
other hand, in connection with the offering of the Notes pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Notes pursuant to this Agreement (before
deducting expenses) received by the Company, and the total purchase discount
received by the Initial Purchaser bear to the aggregate initial offering price
of the Notes. The relative fault of the Company, on the one hand, and the
Initial Purchaser, 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 relates to
information supplied by the Company, on the one hand, or the Initial Purchaser,
on the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The
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 legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.
The
Company and the Initial Purchaser agree that it would not be just and equitable
if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in this Section 9.
Notwithstanding
the provisions of this Section 9, the Initial Purchaser shall not be required to
contribute any amount in excess of the purchase discount or commission received
by the Initial Purchaser in connection with the Notes purchased by it
hereunder. 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. For purposes of this Section 9, each director,
officer, employee and agent of an Initial Purchaser and each person, if any, who
controls an Initial Purchaser within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company, each officer of the Company, and
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act shall have the same rights to contribution as
the Company.
23
Section
10. Termination of this Agreement
Prior to
the Closing Date and, with respect to the Optional Notes, any Subsequent Closing
Date, this Agreement may be terminated by MLPFS by notice given to the Company
if at any time (i) (A) trading or quotation in any of the Company’s
securities shall have been suspended or limited by the Commission or by the
Nasdaq Global Select Market, or (B) trading in securities generally on the New
York Stock Exchange or the Nasdaq Global Select Market shall have been suspended
or limited, or minimum or maximum prices shall have been generally established
by the Commission or FINRA or on either such stock exchange; (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; or (iii) there shall
have occurred any outbreak or escalation of national or international
hostilities or declaration of a national emergency or war by the United States
or any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States’ or international political,
financial or economic conditions, as in the judgment of MLPFS is material and
adverse and makes it impracticable or inadvisable to market the Notes in the
manner and on the terms described in the Disclosure Package and the Final
Offering Memorandum or to enforce contracts for the sale of securities.
Any termination pursuant to this Section 10 shall be without liability on
the part of (a) the Company to the Initial Purchaser, except that the
Company shall be obligated to reimburse the expenses of the Initial Purchaser
pursuant to Sections 4 and 7 hereof or (b) the Initial Purchaser
to the Company.
Section
11. No Advisory or Fiduciary Responsibility
The
Company acknowledges and agrees that: (i) the purchase and sale of the Notes
pursuant to this Agreement, including the determination of the offering price of
the Notes and any related discounts and commissions, is an arm’s-length
commercial transaction between the Company, on the one hand, and the Initial
Purchaser, on the other hand, and the Company is capable of evaluating and
understanding and understands and accepts 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 the
Initial Purchaser is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary of the Company or its affiliates,
stockholders, creditors or employees or any other party; (iii) no Initial
Purchaser has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Company with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether the
Initial Purchaser has advised or is currently advising the Company on other
matters) and the Initial Purchaser has no obligation to the Company with respect
to the offering contemplated hereby except the obligations expressly set forth
in this Agreement; (iv) the Initial Purchaser and their respective affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of the Company and that the Initial Purchaser has no
obligation to disclose any of such interests by virtue of any advisory, agency
or fiduciary relationship; and (v) the Initial Purchaser has not provided any
legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby and the Company has consulted its own legal, accounting,
regulatory and tax advisors to the extent it deemed
appropriate.
24
This
Agreement supersedes all prior agreements and understandings (whether written or
oral) between the Company and the Initial Purchaser, or any of them, with
respect to the subject matter hereof. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against the Initial Purchaser with respect to any breach or alleged
breach of agency or fiduciary duty.
Section
12. Research Analyst Independence
The
Company acknowledges that the Initial Purchaser’s research analysts and research
departments are required to be independent from their respective investment
banking divisions and are subject to certain regulations and internal policies,
and that the Initial Purchaser’s research analysts may hold views and make
statements or investment recommendations and/or publish research reports with
respect to the Company and/or the offering that differ from the views of their
respective investment banking divisions. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against the Initial Purchaser with respect to any conflict of interest
that may arise from the fact that the views expressed by their independent
research analysts and research departments may be different from or inconsistent
with the views or advice communicated to the Company by the Initial Purchaser’s
investment banking divisions. The Company acknowledges that the Initial
Purchaser is a full service securities firm and as such from time to time,
subject to applicable securities laws, may effect transactions for its own
account or the account of its customers and hold long or short positions in debt
or equity securities of the Company.
Section
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 Initial Purchaser 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 the Initial Purchaser, the officers
or employees of the Initial Purchaser, or any person controlling the Initial
Purchaser, 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 Notes and
payment for them hereunder and (ii) will survive delivery of and payment for the
Notes sold hereunder and any termination of this Agreement.
Section
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:
|
|
If
to MLPFS:
|
|
|
Xxxxxxx
Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
|
|
|
Incorporated
|
|
|
One
Bryant Park
|
|
|
New
York, NY 10036
|
|
|
Facsimile:
(000) 000-0000
|
|
|
Attention:
Syndicate Department
|
25
|
|
with
a copy to:
|
|
|
Xxxxxxx
Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
|
|
|
Incorporated
|
|
|
One
Bryant Park
|
|
|
New
York, NY 10036
|
|
|
Facsimile:
(000) 000-0000
|
|
|
Attention:
ECM – Legal
|
|
|
and:
|
|
|
Xxxxxx
& Bird LLP
|
|
|
000
Xxxxx Xxxx Xxxxxx
|
|
|
16th
Floor
|
|
|
Los
Angeles, California 90071
|
|
|
Facsimile:
(000) 000-0000
|
|
|
Attention:
Xxxxxx X. Xxxxxxx
|
|
|
If
to the Company:
|
|
|
JAKKS
Pacific, Inc.
|
|
|
00000
Xxxxxxx Xxxxx Xxxxxxx
|
|
|
Malibu,
California 90265
|
|
|
Facsimile:
(000) 000-0000
|
|
|
Attention:
Xxxx Xxxxxxxx
|
|
|
with
a copy to:
|
|
|
Xxxxx
Xxxxxxxxx LLP
|
|
|
000
Xxxxx Xxxxxx
|
|
|
New
York, New York 10022
|
|
|
Facsimile:
(000) 000-0000
|
|
|
Attention:
Xxxxx Xxxx
|
Any party
hereto may change the address for receipt of communications by giving written
notice to the others.
Section
15. Successors and Assigns
This
Agreement will inure to the benefit of and be binding upon the parties hereto,
and to the benefit of (i) the Company, its directors and any person who controls
the Company within the meaning of the Securities Act or the Exchange Act, (ii)
the Initial Purchaser, the officers, directors, employees and agents of the
Initial Purchaser and each person, if any, who controls the Initial Purchaser
within the meaning of the Securities Act or the Exchange Act and (iii) 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 assigns”
shall not include a purchaser of any of the Notes from the Initial Purchaser
merely because of such purchase.
26
Section
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.
Section
17. Governing Law Provisions; Consent to Jurisdiction
(a)
Governing Law
Provisions. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) Consent to
Jurisdiction. 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, Borough of Manhattan or the
courts of the State of New York in each case located in the City and County of
New York, Borough of Manhattan (collectively, the “Specified Courts”), and each
party irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
“Related Judgment”), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or 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 suit, action or other proceeding
brought in any such court. The parties irrevocably and unconditionally
waive any objection to the laying of venue of any suit, action or other
proceeding in the Specified Courts and irrevocably and unconditionally waive and
agree not to plead or claim in any such court that any such suit, action or
other proceeding brought in any such court has been brought in an inconvenient
forum.
Section
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. 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 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 Preliminary
Offering Memorandum and the Final Offering Memorandum.
27
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,
|
|
|
JAKKS
PACIFIC, INC.
|
|
|
By:
|
/s/ Xxxx Xxxxxxx
|
|
Title:
Chief Financial Officer
|
|
The
foregoing Purchase Agreement is hereby confirmed and accepted by the Initial
Purchaser as of the date first above written.
XXXXXXX
XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
|
By:
|
/s/ Xxxxx Xxxx
|
|
Title:
Managing Director
|
|
28
