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EXHIBIT 1.1
SABRATEK CORPORATION
$85,000,000 6% Convertible Notes Due 2005(1)
PURCHASE AGREEMENT
New York, New York
April 8, 1998
Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Sabratek Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to the parties named in Schedule I hereto (the "Initial
Purchasers"), for whom you are acting as representative (the "Representative"),
$85,000,000 principal amount of its 6% Convertible Notes Due 2005 (the "Firm
Securities"). The Securities are convertible into shares of common stock of the
Company, par value $0.01 per share (the "Common Stock"), at the conversion price
set forth herein. The Company also proposes to grant to the Initial Purchasers
an option to purchase up to $12,750,000 additional principal amount of such
Notes to cover over-allotments, if any (the "Option Securities" and, together
with the Firm Securities, the "Securities"). The Securities are to be issued
under an indenture (the "Indenture") to be dated as of April 14, 1998, between
the Company and LaSalle National Bank, as trustee (the "Trustee"). If you are
the only Initial Purchasers, all references herein to the Representative shall
be deemed to be to the Initial Purchasers.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities or the Common Stock issuable upon
conversion thereof under the Securities Act of 1933, as amended (the "Act"). You
have advised the Company that the Initial Purchasers will make an offering of
the Securities purchased by them hereunder in accordance with Section 4 hereof,
as soon as you deem advisable.
In connection with the sale of the Securities, the Company has prepared
an offering memorandum, dated April 8,1998 (the "Offering Memorandum"). The
Offering Memorandum sets forth certain information concerning the Company, the
Securities and the
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(1) Plus an option to purchase up to $12,750,000 additional principal amount of
such Notes to cover over-allotments.
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Common Stock issuable upon conversion thereof. The Company hereby confirms that
it has authorized the use of the Offering Memorandum in connection with the
offering and resale of the Securities by the Initial Purchasers. Any references
herein to the Offering Memorandum shall be deemed to include all exhibits
thereto and all documents incorporated by reference therein that were filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on
or before the date and time that this Agreement is executed and delivered by the
parties hereto (the "Execution Time"); and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Offering Memorandum
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the Execution Time that is incorporated by reference therein.
The holders of the Securities or the Common Stock issuable upon
conversion thereof will be entitled to the benefits of the Registration
Agreement to be dated April 14, 1998, between the Company and the Initial
Purchasers (the "Registration Agreement"), substantially in the form of Exhibit
C hereto.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Initial Purchaser as set forth below in this
Section 1.
(a) The Offering Memorandum as of its date did not, and (as the same
may have been amended or supplemented) as of the Closing Date will not,
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the
information contained in or omitted from the Offering Memorandum in reliance
upon and in conformity with information furnished in writing to the Company
by or on behalf of the Initial Purchasers through the Representative
specifically for inclusion in the Offering Memorandum (and any amendment or
supplement thereof or thereto). All documents incorporated by reference in
the Offering Memorandum that were filed under the Exchange Act on or before
the Execution Time complied, and all such documents that are filed under the
Exchange Act after the Execution Time and on or before the Closing Date will
comply, in all material respects with the applicable requirements of the
Exchange Act and the rules thereunder in effect as of the date of filing.
(b) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act in
connection with the offering of the Securities.
(c) Neither the Company, nor to the knowledge of the Company any of its
Affiliates (as defined in Rule 501(b) of Regulation D under the Act
("Regulation D")), nor any person acting on its or the knowledge of the
Company on the behalf of any of its
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Affiliates (other than the Initial Purchasers, as to whom the Company makes
no representation) has directly or indirectly (i) made offers or sales of
any security, or solicited offers to buy any security, under circumstances
that would require the registration of the Securities or the Common Stock
issuable upon conversion thereof under the Act or (ii) engaged in any form
of general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in the
United States.
(d) Assuming compliance by each of the Initial Purchasers with their
agreements and the accuracy of their representations contained herein, it is
not necessary in connection with the offer, sale and delivery of the
Securities or the Common Stock issuable upon conversion thereof in the
manner contemplated by this Agreement and the Offering Memorandum to
register the Securities or such Common Stock under the Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(e) None of the Company or any person acting on behalf of the Company,
or to the knowledge of the Company its Affiliates or any person acting on
behalf of its Affiliates (other than the Initial Purchasers, as to whom the
Company makes no representation) has engaged in any directed selling efforts
(as that term is defined in Regulation S under the Act ("Regulation S"))
with respect to the Securities or the Common Stock issuable upon conversion
thereof, and each of the Company, its Affiliates and any person acting on
its or their behalf has complied with the offering restrictions requirement
of Regulation S.
(f) The Company is subject to the reporting requirements of Section 13
or Section 15(d) of the Exchange Act and has timely filed all reports
required to be filed thereunder within the last 12 months.
(g) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Act.
(h) The Company has agreed to permit the Securities to be designated
PORTAL eligible securities, will pay the requisite fees related thereto and
has been advised by the National Association of Securities Dealers, Inc.
PORTAL Market that as of the Closing Date the Securities will have been
designated PORTAL eligible securities in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc.
(i) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), without
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taking account of any exemption arising out of the number of holders of the
Company's securities, and, if the Company conducts its business as set forth
in the Offering Memorandum and complies with the covenants binding upon it
under the Indenture, will not become an "investment company" and will not be
required to be registered under the Investment Company Act.
(j) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Agreement).
(k) The information provided by the Company pursuant to Section 5(g)
hereof will not, at the date thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(l) Except with respect to the credit agreement dated March 26, 1997
by and between the Company and LaSalle National Bank NI (with respect to
which the Company shall receive a waiver prior to closing), neither the
issue and sale of the Securities (assuming compliance by the Company and the
Initial Purchasers with their covenants set forth in this Agreement), the
execution and delivery of the Indenture and the Registration Agreement, the
consummation of any other of the transactions contemplated in this Agreement
or the Registration Agreement nor the fulfillment of the terms of this
Agreement or the Registration Agreement will conflict with, result in a
breach or violation of, or constitute a default under any law or the
Certificate of Incorporation or by-laws of the Company or the terms of any
indenture or other agreement or instrument to which the Company or any of
its subsidiaries is a party or bound, or any judgment, order or decree
applicable to the Company or any of the Company's subsidiaries of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Company or any of the Company's subsidiaries, which
breach, violation or default is reasonably likely to have a material adverse
effect on the financial condition, earnings, business or properties of the
Company and its subsidiaries on a consolidated basis (a "Material Adverse
Effect").
(m) The Indenture has been duly authorized, executed and delivered,
and constitutes a legal, valid and binding instrument enforceable against
the Company in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time to time in
effect and assuming that the Indenture has been duly authorized, executed
and delivered by, and is a valid and binding agreement of the Trustee); and
the Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and
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paid for by the Initial Purchasers pursuant to this Agreement, will
constitute legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture; and the Notes will comply in all material
respects with the description thereof set forth under the heading
"Description of Notes" in the Offering Memorandum, insofar as such
statements purport to summarize certain provisions of the Securities and the
Indenture, provide a fair summary of such provisions.
(n) The shares of Common Stock issuable upon conversion the Securities
have been duly authorized for issuance, and when issued upon conversion of
the Securities in accordance with the terms of such Securities will be
validly issued, fully paid and nonassessable; and the capital stock of the
Company conforms in all material respects to the description thereof
contained in the Offering Memorandum.
(o) This Agreement and the Registration Agreement have been duly
authorized, executed and delivered by the Company.
(p) Each "significant subsidiary" (as defined in Rule 1-02(w) of
Regulation S-X under the Act and the Exchange Act) of the Company is listed
in Schedule II hereto.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
96.75% of the principal amount thereof, plus accrued interest, if any, from
April 14, 1998 to the Closing Date, the principal amount of the Firm Securities
set forth opposite such Initial Purchaser's name in Schedule I hereto. Each
Security will be convertible at the option of the holder into shares of Common
Stock at a conversion price of $40.46 ("Conversion Price"), which Conversion
Price is subject to adjustment in certain events, as provided in the Indenture.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option (the "Option") to the Initial Purchasers to purchase, severally and not
jointly, the Option Securities at a purchase price of 96.75% of the principal
amount thereof, plus accrued interest, if any, from April 14, 1998, to the
settlement date for the Option Securities. The Option may be exercised only to
cover over-allotments in the sale of the Firm Securities by the Initial
Purchasers. The Option may be exercised in whole or in part at any time (but not
more than once) on or before the 30th day after the date of the Offering
Memorandum upon written or telegraphic notice by the Representative to the
Company setting forth the principal amount of Option Securities as to which the
Initial Purchasers are exercising the Option and the settlement date therefor.
Delivery of certificates for the Option Securities, and payment therefor, shall
be made as provided in Section 3 hereof. The principal amount of Option
Securities to be purchased by each Initial
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Purchaser shall be the same percentage of the total principal amount of Option
Securities to be purchased by the Initial Purchasers as such Initial Purchaser
is purchasing of the Firm Securities, subject to such adjustments as the
Representative shall deem advisable.
3. Delivery and Payment. Delivery of and payment for the Firm
Securities and Option Securities (if the Option provided for in Section 2(b)
hereof shall have been exercised on or before the first business day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on April 14,
1998, or such later date (not later than April 21, 1998) as the Representative
shall designate, which date and time may be postponed by agreement between the
Representative and the Company or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representative for the
respective accounts of the Initial Purchasers against payment by the Initial
Purchasers through the Representative of the purchase price thereof to the
Company by wire transfer of same day funds to such account as the Company shall
designate at least two business days in advance of the Closing Date. Delivery of
the Securities shall be made at such location as the Representative shall
reasonably designate at least one business day in advance of the Closing Date
and payment for the Securities shall be made at the office of Xxxx & Xxxxxxx
("Counsel for the Company), 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000. Certificates for the Securities shall be registered in such
names and in such denominations as the Representative may request not less than
one full business day in advance of the Closing Date.
The Company agrees, if so requested by the Representative, to have the
Securities available for inspection, checking and packaging by the
Representative in New York, New York, not later than 1:00 PM on the business day
prior to the Closing Date.
If the Option is exercised after the first business day prior to the
Closing Date, the Company will deliver (at the expense of the Company) to the
Representative, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date
specified by the Representative (which shall be within three business days after
exercise of the Option), certificates for the Option Securities in such names
and denominations as the Representative shall have requested against payment of
the purchase price thereof by wire transfer of same day funds to such account as
the Company shall designate at least two business days in advance of the date on
which such payment is required to be made. If settlement for the Option
Securities occurs after the Closing Date, the Company will deliver to the
Representative on the settlement date for the Option Securities, and the
obligation of the Initial Purchasers to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering of Securities; Restrictions on Transfer. Each Initial
Purchaser, severally and not jointly, represents and warrants to and agrees with
the Company that:
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(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to persons it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Act) and that, in
connection with each such sale, it has taken or will take reasonable steps
to ensure that the purchaser of such Securities is aware that such sale is
being made in reliance on Rule 144A or (ii) in accordance with the
restrictions set forth in Exhibit A hereto.
(b) It is an institution which is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
(c) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities 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.
5. Agreements. The Company agrees with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and Xxxxx,
Xxxxx & Xxxxx ("Counsel for the Initial Purchasers"), without charge, during
the period mentioned in paragraph (b) below, as many copies of the Offering
Memorandum and any supplements and amendments thereof or thereto as they may
reasonably request. The Company will pay the expenses of printing or other
production of all documents relating to the offering.
(b) Prior to the completion of the distribution of the Securities by
the Initial Purchasers (as determined by the Initial Purchasers), the
Company will not amend or supplement the Offering Memorandum without your
prior consent, which consent shall not be unreasonably withheld.
(c) If at any time prior to the completion of the distribution of the
Securities by the Initial Purchasers (as determined and notified to the
Company by the Representative), any event occurs as a result of which the
Offering Memorandum as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which
they were made not misleading, or if it shall be necessary to amend or
supplement the Offering Memorandum (including any document incorporated by
reference therein which was filed under the Exchange Act) to comply with
applicable law, the Company promptly will notify the Representative of the
same and, subject to paragraph (b) of this Section 5, will prepare and
provide to the Representative pursuant to paragraph (a) of this Section 5 an
amendment or supplement which will correct such statement or omission or
effect such compliance and, in the case of such an amendment or supplement
which is to be filed under the Exchange Act and which is incorporated by
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reference in the Offering Memorandum, will file such amendment or supplement
with the Commission.
(d) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Initial Purchasers may
designate, will maintain such qualifications in effect so long as required
for the sale of the Securities, provided that the Company by reason of any
such qualification for sale shall not be required to (i) qualify as a
foreign corporation or (ii) file a general consent to service of process in
any such jurisdiction where it is not presently qualified or (iii) become
subject to taxation as a foreign corporation. The Company will promptly
advise the Representative of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(e) Neither the Company nor any person acting on its behalf, nor to
the knowledge of the Company any of its Affiliates nor any person acting on
their behalf, will directly or indirectly (i) make any offers or sales of
any security, or solicit offers to buy any security, under circumstances
that would require the registration of the Securities or the Common Stock
issuable upon conversion thereof under the Act or (ii) engage in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in the
United States.
(f) Neither the Company nor any person acting on its behalf, nor any
of its Affiliates nor any person acting on their behalf, will engage in any
directed selling efforts with respect to the Securities within the meaning
of Regulation S, and each of the Company, its Affiliates and each such
person acting on its or their behalf will comply with the offering
restrictions requirement of Regulation S.
(g) The Company shall, during any period prior to the Registration
Termination Date in which the Company is not subject to Section 13 or 15(d)
of the Exchange Act, make available, upon request, to any holder of
Securities or Common Stock issuable upon conversion thereof in connection
with any sale thereof and any prospective purchaser of Securities or Common
Stock issuable upon conversion thereof from such holder the information
specified in Rule 144A(d)(4) under the Act. The term "Registration
Termination Date" means the earliest of (i) the second anniversary date of
the Closing Date, (ii) the date on which the Securities and the Common Stock
issuable upon conversion thereof may be sold by non-affiliates of the
Company pursuant to paragraph (k) of Rule 144 (or any successor provision)
promulgated by the Securities and Exchange Commission (the "Commission")
under the Act and (iii) such earlier date on which all the Securities or the
Common Stock issuable upon conversion thereof have
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been sold pursuant to the Shelf Registration Statement (as defined in the
Registration Agreement) to be filed pursuant to the Registration Agreement.
(h) The Company will not, and will use its best efforts to cause each
of its Affiliates not to, resell any Securities or the Common Stock issuable
upon conversion thereof which constitute "restricted securities" under Rule
144 that have been reacquired by any of them, except pursuant to a
registration statement.
(i) The Company shall include information substantially in the form
set forth in Exhibit B in the Offering Memorandum.
(j) The Company shall use its reasonable efforts in cooperation with
the Initial Purchasers to permit the Securities to be eligible for clearance
and settlement through The Depository Trust Company.
(k) The Company will not, for a period of 90 days following the date
of this Agreement, without the prior written consent of Xxxxx Xxxxxx Inc.,
which consent shall not be unreasonably withheld, offer, sell or contract to
sell, or otherwise dispose of directly or indirectly, or announce the
offering of, any other shares of Common Stock; provided, however, that (a)
the Company may issue Common Stock, or grant options to purchase Common
Stock, to employees and directors of the Company, (b) the Company may issue
Common Stock or securities convertible into or exchangeable for Common Stock
or issue or assume warrants or options to purchase Common Stock in
connection with the acquisition of the assets, business, capital stock, or
securities convertible into or exchangeable for the capital stock, of any
person and (c) the Company may issue Common Stock, or issue options or
warrants to purchase Common Stock, in connection with any investment or
business arrangement entered into with any customer or vendor of the
Company.
(l) The Company shall use its best efforts to obtain the waiver from
LaSalle National Bank NI referred to in Section 1(l) of this Agreement.
(m) The Company will promptly advise the Representative when, prior to
the completion of the distribution of the Securities by the Initial
Purchasers, any document filed under the Exchange Act which is incorporated
by reference in the Offering Memorandum shall have been filed with the
Commission.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Firm Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date
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pursuant to Section 3 hereof, to the accuracy of the statements of the Company
made in any certificates pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions:
(a) The Company shall have furnished to the Representative the opinion
of Counsel for the Company, dated the Closing Date, addressing the following
matters:
(A) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with full corporate power and authority to own
its properties and conduct its business as described or
incorporated by reference in the Offering Memorandum;
(B) the Company's authorized capital stock is as set forth or
incorporated by reference in the Offering Memorandum; the capital
stock of the Company conforms as to legal matters in all material
respects to the description thereof contained or incorporated by
reference in the Offering Memorandum; the outstanding shares of
Common Stock have been duly and validly authorized and issued and,
assuming receipt by the Company of the consideration therefor, are
fully paid and nonassessable; and the holders of outstanding
shares of Common Stock of the Company are not entitled to
preemptive rights;
(C) each of the Company's subsidiaries, has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the state of its incorporation, with
full corporate power and authority to own its properties and
conduct its business as described or incorporated by reference in
the Offering Memorandum; and each of the Company and each of its
subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which
the conduct of its business requires such qualification or in
which it owns or leases material properties, in each case except
for those jurisdictions where the failure to so qualify or to be
in good standing would not have a Material Adverse Effect;
(D) All the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly and validly authorized
and issued and, assuming receipt by such subsidiaries of the
consideration therefor, are fully paid and nonassessable, and,
except as otherwise set forth or incorporated by reference in the
Offering Memorandum, to the knowledge of such counsel, all
outstanding shares of capital stock of each of the
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Company's subsidiaries are owned by the Company free and clear of
any perfected security interest and any other security interests,
claims, liens or encumbrances;
(E) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and
assuming that the Indenture has been duly authorized, executed and
delivered by, and is a valid and binding agreement of the
Trustee); and the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Initial
Purchasers pursuant to this Agreement, will constitute legal,
valid and binding obligations of the Company entitled to the
benefits of the Indenture; and the statements set forth under the
heading "Description of Notes" in the Offering Memorandum, insofar
as such statements purport to summarize certain provisions of the
Securities and the Indenture, provide a fair summary of such
provisions;
(F) the shares of Common Stock issuable upon conversion the
Securities have been duly authorized for issuance, and when issued
upon conversion of the Securities in accordance with the terms of
such Securities will be validly issued, fully paid and
nonassessable;
(G) this Agreement and the Registration Agreement have been
duly authorized, executed and delivered by the Company;
(H) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or
governmental agency, authority or body involving the Company or
any of its subsidiaries of a character required to be disclosed in
the Offering Memorandum which is not adequately disclosed in the
Offering Memorandum, and, to the knowledge of such counsel, there
is no contract or other document of a character required to be
described in the Offering Memorandum which is not described as
required, and the statements set forth in the Offering Memorandum
under the headings "Risk Factors--No Assurance of Regulatory
Clearance; Strict Governmental Regulation," "Business--Strategic
Partnerships," "Business Intellectual Property,"
"Business--Litigation" and "Business--Government Regulation",
insofar
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as such statements constitute a summary of legal matters,
documents or proceedings referred to therein, provide a fair
summary of such legal matters, documents and proceedings;
(I) to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body
is required for the consummation by the Company of the
transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue
sky laws (as to which such counsel need express no opinion) of any
jurisdiction in connection with the purchase and distribution of
the Securities by the Initial Purchasers and such other approvals
(specified in such opinion) as have been obtained;
(J) neither the issue and sale of the Securities (assuming
compliance by the Company and the Initial Purchasers with their
covenants set forth in this Agreement), the execution and delivery
of the Indenture and the Registration Agreement, the consummation
of any other of the transactions contemplated in this Agreement or
the Registration Agreement nor the fulfillment of the terms of
this Agreement or the Registration Agreement will conflict with,
result in a breach or violation of, or constitute a default under
any law or the Certificate of Incorporation or by-laws of the
Company or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Company or any
of the Company's subsidiaries is a party or bound, or any
judgment, order or decree known to such counsel to be applicable
to the Company or to any of its subsidiaries of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Company or any of the Company's
subsidiaries, which breach, violation or default is reasonably
likely to have a Material Adverse Effect;
(K) assuming the accuracy of the representations and
warranties of the Initial Purchasers and compliance thereby with
their agreements contained herein, it is not necessary in
connection with the offer, sale and delivery of the Securities in
the manner contemplated by this Agreement to register the
Securities under the Act or to qualify the Indenture under the
Trust Indenture Act; and
(L) the Company is not an "investment company" within the
meaning of the Investment Company Act, without taking account of
any exemption arising out of the number of holders of the
Company's securities, and, if the Company conducts its business as
set forth in the
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Offering Memorandum and complies with the covenants binding upon
it under the Indenture, will not become an "investment company"
and will not be required to be registered under the Investment
Company Act.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York, the General Corporation Law of the State of Delaware or the United
States, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel whom they believe to be reliable and who are reasonably
satisfactory to counsel for the Initial Purchasers and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and public officials. References to the Offering Memorandum in this
paragraph (a)(i) include any supplements thereto at the Closing Date.
In addition, such counsel shall state that in the course of the
preparation of the Offering Memorandum such counsel has participated in
discussions with Representative of the Company, the Company's accountants, the
Representative, and the Representative's counsel during which the contents of
drafts of the Offering Memorandum and portions of the documents incorporated by
reference therein were discussed and reviewed, and, although such counsel has
made no independent investigation or verification of the correctness or
completeness of the information included or incorporated by reference in the
Offering Memorandum and without assuming responsibility for the accuracy,
completeness or fairness of such information, nothing has come to such counsel's
attention that has caused such counsel to believe (except for financial
statements, schedules and other financial, market and statistical information
contained or incorporated by reference therein and information provided by the
Initial Purchasers for inclusion therein, as to all of which such counsel need
not express any belief) that the Offering Memorandum as of the date thereof or
the Closing Date contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) The Representative shall have received from Counsel for the
Initial Purchasers such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Securities, the Indenture, the
Registration Agreement, the Offering Memorandum (together with any amendment
or supplement thereof or thereto) and other related matters as the
Representative may reasonably require, and the Company shall have furnished
to such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(c) The Company shall have furnished to the Representative a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that
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14
the signers of such certificate have carefully examined the Offering
Memorandum, any amendment or supplement to the Offering Memorandum and
this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing
Date with the same effect as if made on the Closing Date and
the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at
or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Offering Memorandum (exclusive of
any amendment or supplement thereof or thereto), there has
been no change or development that would have a Material
Adverse Effect, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Offering Memorandum (exclusive of any
amendment or supplement thereof or thereto).
(d) At the Closing Date, KPMG Peat Marwick, LLP shall have
furnished to the Representative a letter or letters, dated as of the
Closing Date, in form and substance satisfactory to the Representative,
confirming that they are independent certified public accountants with
respect to the Company within the meaning of Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants (the "AICPA") and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by
reference in the Offering Memorandum and reported on by them
comply in form in all material respects with the applicable
accounting requirements of the Exchange Act and the related
published rules and regulations thereunder;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review in accordance with the
standards established by the AICPA of the unaudited interim
financial information as indicated in their report included or
incorporated by reference in the Offering Memorandum; carrying
out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and
executive, option, compensation and audit committees of the
Company and the Company's subsidiaries; and inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to
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15
December 31, 1997, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Offering Memorandum
do not comply in form in all material respects with
applicable accounting requirements and with the
published rules and regulations of the Commission
with respect to financial statements included or
incorporated by reference in quarterly reports on
Form 10-Q under the Exchange Act; and said unaudited
financial statements are not, in all material
respects, in conformity with generally accepted
accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated by
reference in the Offering Memorandum; or
(2) with respect to the period subsequent to December
31, 1997, there were any changes, at a specified date
not more than three business days prior to the date
of the letter, in the long-term debt of the Company
and its subsidiaries or capital stock of the Company
or decreases in the stockholders' equity of the
Company or working capital of the Company and its
subsidiaries as compared with the amounts shown on
the December 31, 1997 consolidated balance sheet
included or incorporated by reference in the Offering
Memorandum, or for the period from January 1, 1998 to
such specified date there were any decreases, as
compared with the corresponding period in the
preceding year, in net income before income taxes or
in total or per share amounts of net income or
operating income of the Company and its subsidiaries,
except in all instances for changes or decreases set
forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is
not deemed necessary by the Representative.
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Offering
Memorandum agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal
interpretation.
References to the Offering Memorandum in this paragraph (d)
include any amendment or supplement thereof or thereto at the date of
the letter.
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16
(e) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Offering Memorandum (exclusive
of any amendment or supplement thereof or thereto), there shall not
have been (i) any change or decrease specified in the letter or letters
referred to in paragraph (d) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect
of which, in any case referred to in clause (i) or (ii) above, is, in
the judgment of the Representative, so material and adverse as to make
it impractical or inadvisable to market the Securities as contemplated
by the Offering Memorandum.
(f) Prior to the Closing Date, the Company shall have
furnished to the Representative such further information, certificates
and documents as the Representative may reasonably request.
(g) At the Closing Date, the Company shall execute and deliver
to the Representative the Registration Agreement in the form of Exhibit
C hereto.
(h) At the Closing Date, the Company shall have received from
LaSalle National Bank NI, the waiver referred to in Section1(l) of this
Agreement.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representative and Counsel for the
Initial Purchasers, this Agreement and all obligations of the Initial Purchasers
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representative. Notice of such cancellation shall be given to the Company in
writing or by telephone or telefax confirmed in writing and the Company shall
thereupon have no further obligation hereunder except as expressly provided in
Section 7 and Section 8 hereof.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Counsel for the Company, 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 on the Closing Date.
7. Reimbursement of Initial Purchasers' Expenses. If the sale
of the Securities provided for herein is not consummated because any condition
to the obligations of the Initial Purchasers set forth in Section 6 hereof is
not satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Initial Purchasers in payment for the
Securities, the Company will reimburse the Initial Purchasers severally upon
demand for all out-of-pocket expenses
16
17
(including reasonable fees and disbursements of counsel) that shall have been
reasonably incurred by them in connection with the proposed purchase and sale of
the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum or any
information provided by the Company to any holder or prospective purchaser of
Securities pursuant to Section 5(g), or in any amendment thereof or supplement
thereto, or arise out of or are 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, in light of the circumstances in which they were made,
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Offering Memorandum, or in
any amendment thereof or supplement thereto, in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any Initial
Purchasers through the Representative specifically for inclusion therein and
provided further that the Company shall not be liable to any Initial Purchaser
under the indemnity agreement in this subsection (a) with respect to the
Offering Memorandum to the extent that any such loss, claim, damage or liability
of such Initial Purchaser results from the fact that such Initial Purchaser sold
Securities to a person as to whom it shall be established that there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the Offering Memorandum or the Offering Memorandum as then amended or
supplemented if the Company has previously furnished copies thereof to such
Initial Purchaser and the loss, claim, damage or liability of such Initial
Purchaser results from an untrue statement or omission of a material fact
contained in the Offering Memorandum that was corrected in the Offering
Memorandum as then amended or supplemented. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Initial Purchaser severally agrees to indemnify and
hold harmless the Company, its directors, its officers, and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each Initial
Purchaser, but only with reference to written information
17
18
relating to such Initial Purchaser furnished to the Company by or on behalf of
such Initial Purchaser through the Representative specifically for inclusion in
the Offering Memorandum, or in any amendment thereof or supplement thereto. This
indemnity agreement will be in addition to any liability which any Initial
Purchaser may otherwise have. The Company acknowledges that the statements set
forth in the last paragraph of the cover page, the last paragraph on the inside
front cover page and under the heading "Plan of Distribution" in the Offering
Memorandum constitute the only information furnished in writing by or on behalf
of the Initial Purchasers for inclusion in the Offering Memorandum, and you, as
the Representative, confirm that such statements are correct.
(c) 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 the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to 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. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) 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 the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party; provided, however, the indemnifying party shall not
be liable for the fees, costs or expenses of more than one separate counsel
(plus one local counsel in any jurisdiction), selected by Xxxxx Xxxxxx Inc., in
any single action or proceeding for all of the indemnified parties unless the
indemnifying party consents or unless a
18
19
bona fide conflict of interest requires separate counsel for particular
indemnified parties. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company and by
the Initial Purchasers from the offering of the Securities; provided, however,
that in no case shall any Initial Purchaser be responsible for any amount in
excess of the purchase discount or commission applicable to the Securities
purchased by such Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Initial Purchasers shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Initial Purchasers in connection with the statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses), and
benefits received by the Initial Purchasers shall be deemed to be equal to the
total purchase discounts and commissions, in each case as set forth on the cover
page of the Offering Memorandum. Relative fault shall be determined by reference
to whether any alleged untrue statement or omission relates to information
provided by the Company or the Initial Purchasers. The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation that does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Initial Purchaser within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser,
and each person who controls the Company within the meaning of either the Act or
the Exchange Act and each officer and director of the Company shall have the
same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
19
20
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such non-defaulting Initial Purchasers do not purchase
all the Securities, this Agreement will terminate without liability to any
non-defaulting Initial Purchaser or the Company. In the event of a default by
any Initial Purchaser as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Representative shall
determine in order that the required changes in the Offering Memorandum or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Initial Purchaser of its liability, if
any, to the Company or any non-defaulting Initial Purchaser for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by notice given to
the Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in or quotation of the Company's Common Stock shall have
been suspended by the Commission or the National Association of Securities
Dealers Automated Quotation National Market or trading in securities generally
on the New York Stock Exchange or the National Association of Securities Dealers
Automated Quotation National Market shall have been suspended or limited or
minimum prices shall have been established on either of such Exchange or Market
System, (ii) a banking moratorium shall have been declared either by Federal or
New York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Representative,
impracticable or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Offering Memorandum (exclusive of any
amendment or supplement thereof or thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force
20
21
and effect, regardless of any investigation made by or on behalf of the Initial
Purchasers or the Company or any of the officers, directors or controlling
persons referred to in Section 8 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representative, will be
mailed, delivered or telefaxed and confirmed to them in writing, care of Xxxxx
Xxxxxx Inc. at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000; or, if sent to
the Company, will be mailed, delivered or telefaxed and confirmed to it in
writing at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000, attention: Xxxxxxx
X. Xxxxxx.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and, except as expressly set forth in Section 5(g) hereof, no other person will
have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York without regard
to the conflicts of laws rules thereof.
15. Business Day. For purposes of this Agreement, "business
day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which banking institutions in the City of New York, New York are
authorized or obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
21
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and the Initial Purchasers.
Very truly yours,
SABRATEK CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President, Chief
Financial Officer and Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
XXXXX XXXXXX INC.
For itself and the other Initial
Purchasers named in Schedule I to the
foregoing Agreement
BY: XXXXX XXXXXX INC.
By /s/ Xxxxxxx Xxxxxxxxx
------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Director
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SCHEDULE I
Principal Amount of
Firm Securities
INITIAL PURCHASERS to be Purchased
------------------ ---------------
Xxxxx Xxxxxx Inc.................................................. $85,000,000
-----------
Total.......................................................... $85,000,000
===========
24
SCHEDULE II
List of Significant Subsidiaries
Pursuant to Section 1(p)
None.
25
EXHIBIT A
SELLING RESTRICTIONS FOR OFFERS AND
SALES OUTSIDE THE UNITED STATES
(1)(a) The Securities have not been and will not be registered under
the Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in accordance with Regulation S
under the Act or pursuant to an exemption from the registration requirements of
the Act. Each Initial Purchaser represents and agrees that, except as otherwise
permitted by Section 4(a)(i) of the Agreement to which this is an exhibit, it
has offered and sold the Securities, and will offer and sell the Securities, (i)
as part of their distribution at any time and (ii) otherwise until 40 days after
the later of the commencement of the offering and the Closing Date, only in
accordance with Rule 903 of Regulation S under the Act. Accordingly, each
Initial Purchaser represents and agrees that 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 with respect to the Securities, and that
it and they have complied and will comply with the offering restrictions
requirements of Regulation S. Each Initial Purchaser agrees that, at or prior to
the confirmation of sale of Securities (other than a sale of Securities pursuant
to Section 4(a)(i) of the Agreement to which this is an exhibit), it shall have
sent to each distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Securities from it during the restricted
period a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and December 10, 1997, except in either case in accordance
with Regulation S or Rule 144A under the Securities Act. Terms used
above have the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except with its affiliates
or with the prior consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it has not
offered or sold, and, prior to the expiry of six months from the closing of the
offering of the Notes, will not offer
A-1
26
or sell, any Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or as agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom, within the meaning of the Public
Offers of Securities Regulations 1995 (the "Regulations"), (ii) it has complied
and will comply with all applicable provisions of the Financial Services Xxx
0000 and the Regulations with respect to anything done by it in relation to the
Securities in, from or otherwise involving the United Kingdom, and (iii) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issue of the Securities to a
person who is of a kind described in Article 11(3) of the Financial Services Xxx
0000 (Investment Advertisements) (Exemptions) Order 1996 (as amended) or is a
person to whom such document may otherwise lawfully be issued or passed on.
A-2
27
EXHIBIT B
NOTICE TO INVESTORS
Because of the following restrictions, purchasers are advised to
consult legal counsel prior to making any offer, resale, pledge or other
transfer of the Notes offered hereby or the shares of Common Stock issuable upon
conversion thereof.
Each purchaser of Notes offered hereby will be deemed to have
represented and agreed as follows (terms used herein that are defined in Rule
144A ("Rule 144A"), Regulation D ("Regulation D") or Regulation S ("Regulation
S") under the Securities Act, are used herein as defined therein);
(1) The purchaser is (A)(i) a Qualified Institutional Buyer, (ii)
aware that the sale to it is being made in reliance on Rule 144A, and
(iii) acquiring such Notes for its own account or for the account of a
Qualified Institutional Buyer, or (B) not a U.S. Person and is
purchasing such Notes is an offshore transaction pursuant to Regulation
S.
(2) The purchaser understands that the Notes are being offered in
a transaction not involving any public offering in the United States
within the meaning of Securities Act, that the Notes and the Common
Stock issuable upon the conversion thereof have not been and, except as
described in this Offering Circular, will not be registered under the
Securities Act and that (A) if the future it decides to offer, resell,
pledge or otherwise transfer any Notes or Common Stock issued upon the
conversion thereof, such Notes or Common Stock may be offered, resold,
pledged or otherwise transferred only (i) inside the United States to a
person whom the seller reasonably believes is a Qualified Institutional
Buyer in a transaction meeting the requirements of Rule 144A, (ii)
outside the United States in a transaction complying with the
provisions of Rule 903 or Rule 904 under the Securities Act, (iii)
pursuant to an exemption from registration under the Securities Act
provided by Rule 144 (if available), or (iv) pursuant to an effective
registration statement under the Securities Act, in each of cases (i)
through (iv) in accordance with any applicable securities laws of any
state of the United States, and (B) the purchaser will, and such
subsequent holder is required to, notify any subsequent purchaser from
it of such Notes or Common Stock of the resale restrictions referred to
in (A) above.
(3) The purchaser understands that the Notes will, until the
second anniversary of their date of original issuance, unless otherwise
agreed by the Company and the Holder thereof, bear a legend
substantially to the following effect:
B-1
28
THIS NOTE (OR, IT PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
THIS NOTE AND THE COMMON STOCK ISSUABLE UPON THE CONVERSION
THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN
THE ABSENCE OF SUCH REGISTRATION OR IN A TRANSACTION EXEMPT FROM,
OR NOT SUBJECT TO, THE SECURITIES ACT. EACH PURCHASER OF THIS NOTE
THAT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE AND THE COMMON STOCK ISSUABLE, UPON THE CONVERSION
THEREOF MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS NOTE AND THE COMMON STOCK ISSUABLE UPON THE
CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) INSIDE THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN A TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 903
OR RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER (IF AVAILABLE), OR (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE.
The Common Stock issuable upon the conversion of the Notes will bear a
comparable legend.
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29
The Notes will be available initially only in book-entry form. The
Notes, whether sold pursuant to Rule 144A, Regulation S or otherwise; will be
issued in the form of a restricted Global Share Certificate (as defined herein)
bearing the legend (set forth above). The Global Share Certificate will be
deposited with, or on behalf of, DTC and registered in its name or in the name
of Cede & Co., its nominee. Beneficial interests in the Global Share Certificate
will be shown on, and transfer thereof will be effected through, records
maintained by DTC and its Participants (as defined herein). See "Description of
Notes--Book Entry; Delivery and Form; Global Certificate."
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30
EXHIBIT C
FORM OF REGISTRATION AGREEMENT
