The Scotts Miracle-Gro Company PURCHASE AGREEMENT dated December 13, 2010 Merrill Lynch, Pierce, Fenner & Smith Incorporated
Exhibit 10.1
The Scotts Miracle-Gro Company
dated December 13, 2010
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
December 13, 2010
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
As representative of the several Initial Purchasers
Xxx Xxxxxx Xxxx
Xxx Xxxx, XX 00000
INCORPORATED
As representative of the several Initial Purchasers
Xxx Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Introductory. The Scotts Miracle-Gro Company, an Ohio corporation (the “Company”), proposes
to issue and sell to Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (“Xxxxxxx Xxxxx” or the
“Representative”) and the other several initial purchasers named in Schedule A hereto
(collectively with the Representative, the “Initial Purchasers”), $200,000,000 aggregate principal
amount of its 6.625% Senior Notes due 2020 (the “Notes”). The payment of principal of, premium, if
any, and interest on the Notes will be fully and unconditionally guaranteed on a senior unsecured
basis, jointly and severally, by (i) each of the subsidiary guarantors named in Schedule B
hereto and (ii) any subsidiary of the Company that executes an additional guarantee in accordance
with the terms of the Indenture (as defined below) and their respective successors and assigns
(collectively, the “Guarantors”) pursuant to their guarantees (the “Guarantees”). The Notes and
the Guarantees are collectively referred to herein as the “Securities.”
The Securities will be issued pursuant to an indenture to be dated as of the Closing Date (as
defined in Section 3 hereof) (the “Indenture”), among the Company, the Guarantors and U.S. Bank
National Association, as trustee (the “Trustee”). Notes will be issued only in book-entry form in
the name of Cede & Co., as nominee of The Depository Trust Company (the “Depositary”) pursuant to a
letter of representations, dated January 12, 2010, and as supplemented on or before the Closing
Date (the “DTC Agreement”), between the Company and the Depositary.
The holders of the Notes will be entitled to the benefits of a registration rights agreement,
to be dated as of the Closing Date (the “Registration Rights Agreement”), among the Company, the
Guarantors and the Representative, pursuant to which the Company and the Guarantors will be
required to file with the Securities and Exchange Commission (the “Commission”), under the
circumstances set forth therein, (i) a registration statement under the Securities Act of 1933 (as
amended, the “Securities Act,” which term, as used herein, includes the rules and regulations of
the Commission promulgated thereunder) relating to another series of debt securities of the Company
with terms substantially identical to the Notes (the “Exchange Notes”) to be offered in exchange
for the Notes (the “Exchange Offer”) and (ii) a shelf registration statement pursuant to Rule 415
of the Securities Act relating to the resale by certain holders of the Notes, and in each case, to
use its reasonable best efforts to cause such registration statements to be declared effective.
The Exchange Notes and the Guarantees attached thereto are herein collectively referred to as the
“Exchange Securities.”
This Agreement, the Registration Rights Agreement, the DTC Agreement, the Securities, the
Exchange Securities and the Indenture are referred to herein as the “Transaction
Documents.”
The Company understands that the Initial Purchasers propose to make an offering of the
Securities on the terms and in the manner set forth herein and in the Pricing Disclosure Package
(as defined below) and agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers (the “Subsequent Purchasers”) on the
terms set forth in the Pricing Disclosure Package (the first time when sales of the Securities are
made is referred to as the “Time of Sale”). The Securities are to be offered and sold to or
through the Initial Purchasers without being registered with the Commission under the Securities
Act, in reliance upon exemptions therefrom. Pursuant to the terms of the Securities and the
Indenture, investors who acquire Securities shall be deemed to have agreed that Securities may only
be resold or otherwise transferred, after the date hereof, if such Securities are registered for
sale under the Securities Act or if an exemption from the registration requirements of the
Securities Act is available (including the exemptions afforded by Rule 144A under the Securities
Act (“Rule 144A”) or Regulation S under the Securities Act (“Regulation S”)).
The Company has prepared and delivered to each Initial Purchaser copies of a Preliminary
Offering Memorandum, dated December 13, 2010 (the “Preliminary Offering Memorandum”), and has
prepared and delivered to each Initial Purchaser copies of a Pricing Supplement, dated December 13,
2010 (the “Pricing Supplement”), describing the terms of the Securities, each for use by such
Initial Purchaser in connection with its solicitation of offers to purchase the Securities. The
Preliminary Offering Memorandum and the Pricing Supplement are herein referred to as the “Pricing
Disclosure Package.” Promptly after this Agreement is executed and delivered, the Company will
prepare and deliver to each Initial Purchaser a final offering memorandum dated the date hereof
(the “Final Offering Memorandum”).
All references herein to the terms “Pricing Disclosure Package” and “Final Offering
Memorandum” shall be deemed to mean and include all information filed under the Securities Exchange
Act of 1934 (as amended, the “Exchange Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder) prior to the Time of Sale and incorporated by
reference in the Pricing Disclosure Package (including the Preliminary Offering Memorandum) or the
Final Offering Memorandum (as the case may be), and all references herein to the terms “amend,”
“amendment” or “supplement” with respect to the Final Offering Memorandum shall be deemed to mean
and include all information filed under the Exchange Act after the Time of Sale and incorporated by
reference in the Final Offering Memorandum.
The Company hereby confirms its agreements with the Initial Purchasers as follows:
1. Representations and Warranties. The Company and each Guarantor, jointly and
severally, represent and warrant to, and agree with, each Initial Purchaser that, as of the date
hereof and as of the Closing Date (references in this Section 1 to the “Offering Memorandum” are to
(x) the Pricing Disclosure Package in the case of representations and warranties made as of the
date hereof and (y) the Pricing Disclosure Package and the Final Offering Memorandum in the case of
representations and warranties made as of the Closing Date):
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(a) No Registration Required. Subject to compliance by the Initial Purchasers with the
representations and warranties set forth in Section 2 hereof and with the procedures set
forth in Section 8 hereof, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser in the
manner contemplated by this Agreement and the Offering Memorandum to register the Securities
under the Securities Act or, until such time as the Exchange Securities are issued pursuant
to an effective registration statement, to qualify the Indenture under the Trust Indenture
Act of 1939 (the “Trust Indenture Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder).
(b) No Integration of Offerings or General Solicitation. None of the Company, its
affiliates (as such term is defined in Rule 501 under the Securities Act) (each, an
“Affiliate”), or any person acting on its or any of their behalf (other than the Initial
Purchasers, as to whom the Company makes no representation or warranty) has, directly or
indirectly, solicited any offer to buy or offered to sell, or will, directly or indirectly,
solicit any offer to buy or offer to sell, in the United States or to any United States
citizen or resident, any security which is or would be integrated with the sale of the
Securities in a manner that would require the Securities to be registered under the
Securities Act. None of the Company, its Affiliates, or any person acting on its or any of
their behalf (other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has engaged or will engage, in connection with the offering of
the Securities, in any form of general solicitation or general advertising within the
meaning of Rule 502 under the Securities Act. With respect to those Securities sold in
reliance upon Regulation S, (i) none of the Company, its Affiliates or any person acting on
its or their behalf (other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S and (ii) each of the Company and its Affiliates and any
person acting on its or their behalf (other than the Initial Purchasers, as to whom the
Company makes no representation or warranty) has complied and will comply with the offering
restrictions set forth in Regulation S.
(c) Eligibility for Resale under Rule 144A. The Securities are eligible for resale
pursuant to Rule 144A and will not be, at the Closing Date, of the same class as securities
listed on a national securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated interdealer quotation system.
(d) The Pricing Disclosure Package and Offering Memorandum. Neither the Pricing
Disclosure Package, as of the Time of Sale, nor the Final Offering Memorandum, as of its
date or (as amended or supplemented in accordance with Section 3(a), as applicable) as of
the Closing Date, contains an untrue statement of a material fact or omits 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; provided that this representation,
warranty and agreement shall not apply to statements in or omissions from the Pricing
Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto
made in reliance upon and in conformity with information furnished to the Company in writing
by any Initial Purchaser through the Representative expressly for use in the Pricing
Disclosure Package, the Final Offering Memorandum or amendment or
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supplement thereto, as the case may be. The Pricing Disclosure Package contains, and
the Final Offering Memorandum will contain, all the information specified in, and meeting
the requirements of, Rule 144A.
(e) Company Additional Written Communications. The Company has not prepared, made,
used, authorized, approved or distributed and will not prepare, make, use, authorize,
approve or distribute any written communication that constitutes an offer to sell or
solicitation of an offer to buy the Securities other than (i) the Pricing Disclosure
Package, (ii) the Final Offering Memorandum and (iii) any electronic road show or other
written communications, in each case used in accordance with Section 3(a). Each such
communication by the Company or its agents and representatives pursuant to clause (iii) of
the preceding sentence (each, a “Company Additional Written Communication”), when taken
together with the Pricing Disclosure Package, did not as of the Time of Sale, and at the
Closing Date will not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that this representation,
warranty and agreement shall not apply to statements in or omissions from each such Company
Additional Written Communication made in reliance upon and in conformity with information
furnished to the Company in writing by any Initial Purchaser through the Representative
expressly for use in any Company Additional Written Communication.
(f) Incorporated Documents. The documents incorporated by reference in the Offering
Memorandum at the time they were or hereafter are filed with the Commission (collectively,
the “Incorporated Documents”) complied and will comply in all material respects with the
requirements of the Exchange Act. Each such Incorporated Document, when taken together with
the Pricing Disclosure Package, did not as of the Time of Sale, and at the Closing Date will
not, contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Any further documents so filed and incorporated by
reference in the Offering Memorandum, when such documents are filed with the Commission,
will comply in all material respects with the requirements of the Exchange Act.
(g) The Purchase Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors.
(h) The Registration Rights Agreement and DTC Agreement. The Registration Rights
Agreement has been duly authorized and, on the Closing Date, will have been duly executed
and delivered by, and will constitute a valid and binding agreement of, the Company and the
Guarantors, enforceable against the Company and each of the Guarantors in accordance with
its terms, except as the 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 except as rights to
indemnification may be limited by applicable law. The DTC Agreement has been duly
authorized and, on the Closing Date, will have been duly executed and delivered by, and will
constitute a valid and binding agreement of, the Company, enforceable
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in accordance with its terms, except as the 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.
(i) Authorization of the Notes, the Guarantees and the Exchange Securities. The Notes
to be purchased by the Initial Purchasers from the Company will on the Closing Date be in
the form contemplated by the Indenture, have been duly authorized for issuance and sale
pursuant to this Agreement and the Indenture and, at the Closing Date, will have been duly
executed by the Company and, when authenticated in the manner provided for in the Indenture
and delivered against payment of the purchase price therefor, will constitute valid and
binding obligations of the Company, enforceable against the Company in accordance with their
terms, except as the 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 will be entitled to the
benefits of the Indenture. The Exchange Notes have been duly and validly authorized for
issuance by the Company, and when duly executed by the Company and authenticated in
accordance with the terms of the Indenture, the Registration Rights Agreement and the
Exchange Offer, will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or affecting enforcement of the rights and remedies of creditors or by general principles of
equity and will be entitled to the benefits of the Indenture. The Guarantees of the Notes
on the Closing Date and the Guarantees of the Exchange Notes when issued will be in the
respective forms contemplated by the Indenture and have been duly authorized for issuance
pursuant to this Agreement and the Indenture; the Guarantees of the Notes, at the Closing
Date, will have been duly executed by each of the Guarantors and, when the Notes have been
authenticated in the manner provided for in the Indenture and issued and delivered against
payment of the purchase price therefor, the Guarantees of the Notes will constitute valid
and binding agreements of the Guarantors; and, when the Exchange Notes have been
authenticated in the manner provided for in the Indenture and issued and delivered in
accordance with the Registration Rights Agreement, the Guarantees of the Exchange Notes will
constitute valid and binding agreements of the Guarantors, in each case, enforceable in
accordance with their terms, except as the 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 will be entitled to
the benefits of the Indenture.
(j) Authorization of the Indenture. The Indenture has been duly authorized by the
Company and the Guarantors and, at the Closing Date, will have been duly executed and
delivered by the Company and the Guarantors and will constitute a valid and binding
agreement of the Company and the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms, except as the 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.
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(k) Distribution of Offering Material by the Company and the Guarantors. Neither the
Company nor the Guarantors have distributed or will distribute, prior to the later of the
Closing Date and the completion of the Initial Purchasers’ distribution of the Securities,
any offering material in connection with the offering and sale of the Securities other than
the Pricing Disclosure Package, the Final Offering Memorandum and any Company Additional
Written Communication reviewed and consented to by the Representative.
(l) No Material Adverse Change. Except as otherwise disclosed in the Offering
Memorandum (exclusive of any amendment or supplement thereto), (i) there has been no
material adverse change, or any development that could reasonably be expected to result in a
material adverse change in the financial condition, earnings, business, properties or
operations, whether or not arising from transactions in the ordinary course of business, of
the Company and its subsidiaries, considered as one entity (any such change is called a
“Material Adverse Change”); (ii) the Company and its subsidiaries, considered as one entity,
have not incurred any liability or obligation, indirect, direct or contingent, nor entered
into any material transaction or agreement, in each case, that is material to the Company
and its subsidiaries taken as a whole; and (iii) except for the Company’s publicly announced
first quarter dividend paid on December 10, 2010, 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.
(m) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the
Company and its subsidiaries has been duly incorporated or organized and is validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization
and has the requisite power and authority, corporate or other, to own or lease, as the case
may be, and operate its properties and to conduct its business as described in the Offering
Memorandum and, in the case of the Company and the Guarantors, to enter into and perform its
obligations under each of the Transaction Documents to which it is a party. Each of the
Company and each Guarantor is duly qualified as a foreign corporation or other entity to
transact business and is in good standing in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change. All of the issued and outstanding shares of capital stock or other
ownership interests of each subsidiary have been duly authorized and validly issued, are
fully paid and nonassessable and, except for directors’ qualifying shares, are owned by the
Company, directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim, other than as disclosed in the Offering
Memorandum. The Company does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries listed in Exhibit 21 to the
Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2010 (the
“Company 10-K”).
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(n) Capitalization and Other Capital Stock Matters. At September 30, 2010, on a
consolidated basis, the Company had, and after giving pro forma effect to the issuance and
sale of the Securities pursuant hereto the Company would have had, the capitalization as set
forth in the Offering Memorandum under the caption “Capitalization” under the columns
“Actual” and “As Adjusted,” respectively. All of the issued and outstanding common shares
of the Company have been duly authorized and validly issued and are fully paid and
nonassessable.
(o) Description of Documents. Each Transaction Document will conform in all material
respects to the descriptions thereof in the Offering Memorandum.
(p) Regulations T, U and X. None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of the Securities)
will violate or result in a violation of Section 7 of the Exchange Act, or any regulation
promulgated thereunder, including, without limitation, Regulations T, U, and X of the Board
of Governors of the Federal Reserve System.
(q) Non-Violation of Existing Instruments. Neither the Company nor any of its
subsidiaries is (i) in violation or in default (or, with the giving of notice or lapse of
time or both, would be in default) under (“Default”) its Articles of Incorporation, charter,
Codes of Regulation, by-laws or any similar organizational documents, (ii) in Default under
any indenture, mortgage, loan or credit agreement, deed of trust, note, contract, franchise,
lease or other agreement or instrument to which the Company or such subsidiary is a party or
by which it may be bound (including, without limitation, the Company’s Amended and Restated
Credit Agreement, dated as of February 7, 2007, as amended, by and among the Company, the
guarantors party thereto and the several banks and other financial institutions a party
thereto from time to time and the Company’s 7.25% Senior Notes due 2018 issued on January
14, 2010), or to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an “Existing Instrument”), or (iii) in violation of any
statute, law, rule, regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having jurisdiction
over the Company or such subsidiary or any of its properties, as applicable, except, with
respect to clauses (ii) and (iii) only, for such Defaults or violations as would not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse
Change or, with respect to clause (iii) only, for such violations as are described in the
Offering Memorandum. The execution, delivery and performance of the Transaction Documents
by the Company and the Guarantors party thereto, and the issuance and delivery of the
Securities or the Exchange Securities, and consummation of the transactions contemplated
hereby and thereby and by the Offering Memorandum (i) have been duly authorized by all
necessary corporate (or similar) action and will not result in any Default under the charter
or by-laws or similar organizational documents of the Company or any subsidiary, (ii) will
not constitute a Default or a Debt Repayment Triggering Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, or require the consent of any
other party to, any Existing Instrument, and (iii) will not result in any violation of any
statute, law, rule, regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory
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body, administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its or their properties,
except with respect to clauses (ii) and (iii) only, for such violations or Defaults as would
not, individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change. As used herein, a “Debt Repayment Triggering Event” means any event or
condition which gives, or with the giving of notice or lapse of time would give, the holder
of any note, debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of its subsidiaries.
(r) No Further Authorizations or Approvals Required. No consent, approval,
authorization or other order of, or registration or filing with, any court or other
governmental or regulatory authority or agency is required for the Company’s or any
Guarantor’s execution, delivery and performance of the Transaction Documents by the Company
and the Guarantors to the extent a party thereto, or the issuance and delivery of the
Securities or the Exchange Securities, or consummation of the transactions contemplated
hereby and thereby and by the Offering Memorandum, except (i) such as have been obtained or
made by the Company and are in full force and effect under the Securities Act, (ii) as may
be required under the applicable securities laws of the several states of the United States
or provinces of Canada and (iii) such as may be required by the Securities Act, the Trust
Indenture Act of 1939 or the securities laws of the several states of the United States or
provinces of Canada with respect to the Company’s obligations under the Registration Rights
Agreement.
(s) No Material Actions or Proceedings. Except as otherwise disclosed in the Offering
Memorandum, there are no legal or governmental actions, suits or proceedings pending or, to
the best of the Company’s and the Guarantors’ knowledge, threatened (i) against the Company
or any of its subsidiaries, (ii) which has as the subject thereof any property owned or
leased by, the Company or any of its subsidiaries or (iii) relating to environmental or
discrimination matters, where in any such case (A) there is a reasonable possibility that
such action, suit or proceeding might be determined adversely to the Company or such
subsidiary or property owned or leased by, the Company or any of its subsidiaries and (B)
any such action, suit or proceeding, if so determined adversely, would reasonably be
expected to result in a Material Adverse Change or materially adversely affect the
consummation of the transactions contemplated by this Agreement.
(t) Exchange Act Compliance. The Company is subject to and in compliance in all
material respects with the reporting requirements of Section 13 or 15(d) of the Exchange
Act.
(u) Independent Accountants. Deloitte & Touche LLP, who have expressed their opinion
with respect to the financial statements (which term as used in this Agreement includes the
related notes thereto) and supporting schedules filed with the Commission and included in or
incorporated by reference in the Offering Memorandum, are independent public accountants
with respect to the Company as required by the Securities Act and the Exchange Act and the
applicable published rules and regulations thereunder and the rules of the Public Company
Accounting Oversight Board (United States).
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(v) Preparation of Financial Statements. The financial statements, together with the
related schedules and notes, included in or incorporated by reference in the Offering
Memorandum present fairly in all material respects the consolidated financial position of
the Company and its subsidiaries as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. 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 Offering Memorandum under the captions “Summary—Summary
Consolidated Historical Financial Data” and “Capitalization” fairly present in all material
respects the information set forth therein on a basis consistent with that of the audited
financial statements contained in the Company’s Form 10-K filed with the Commission for the
fiscal year ended September 30, 2010. The Company’s ratios of earnings to fixed charges set
forth in each of the Offering Memorandum under the captions “Summary—Summary Consolidated
Historical Financial Data have been calculated in compliance in all material respects with
the requirements of Item 503(d) of Regulation S-K under the Securities Act. The pro forma
financial data of the Company and its subsidiaries included in the Offering Memorandum
present fairly the information contained therein, have been prepared in accordance with the
Commission’s rules and guidelines with respect to pro forma financial data and have been
properly presented on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(w) Intellectual Property Rights. The Company and its subsidiaries own, possess,
license or have other rights to use, on reasonable terms, all patents, patent applications,
trade and service marks, trade and service xxxx registrations, trade names, copyrights,
licenses and other intellectual property (collectively, the “Intellectual Property”)
necessary for the conduct of the Company’s business as now conducted. Except as disclosed
in the Offering Memorandum, (a) no party has been granted an exclusive license to use any
portion of such Intellectual Property owned by the Company that is material to the business
of the Company and its subsidiaries; (b) to the Company’s and the Guarantors’ best
knowledge, there is no material infringement by third parties of any such Intellectual
Property owned by or exclusively licensed to the Company that is material to the business of
the Company and its subsidiaries; (c) there is no pending or, to the Company’s and the
Guarantors’ best knowledge, threatened action, suit, proceeding or claim by others
challenging the rights of the Company and its subsidiaries in or to any material
Intellectual Property, and the Company and the Guarantors are unaware of any facts which
would form a reasonable basis for any such claim; (d) to the Company’s and the Guarantors’
best knowledge, there is no pending or threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual Property, and the Company
and the Guarantors are unaware of any facts which would form a reasonable basis for any such
claim; and (e) there is no pending or, to the Company’s and the Guarantors’ best knowledge,
threatened action, suit, proceeding or claim by others that the Company’s business as now
conducted infringes or otherwise violates any patent, trademark, copyright, trade secret or
other proprietary rights of others, and the Company
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and the Guarantors are unaware of any other fact which would form a reasonable basis
for any such claim, except in the case of clauses (c), (d) and (e), any action, suit
proceeding or claim which would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change.
(x) All Necessary Permits, etc. Except as otherwise disclosed in the Offering
Memorandum, the Company and each subsidiary possess such valid and current licenses,
certificates, authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective businesses, except where
the failure to possess the same would not reasonably be expected to result in a Material
Adverse Change, and neither the Company nor any subsidiary has received any notice of
proceedings relating to the revocation or modification of, or non-compliance with, any such
license, certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would reasonably be expected to
result in a Material Adverse Change.
(y) Title to Properties. The Company and each of its subsidiaries has good and (in the
case of real property only) marketable title to all the properties and assets reflected as
owned in the financial statements referred to in Section 1(v) above (or elsewhere in the
Offering Memorandum) and material to the Company and its subsidiaries taken as a whole, in
each case free and clear of any security interests, mortgages, liens, encumbrances, claims
and other defects, except as disclosed in the Offering Memorandum and except such as do not
materially and adversely affect the value of such property and do not materially interfere
with the use made or proposed to be made of such property by the Company or such subsidiary.
The real property, improvements, equipment and personal property held under lease by the
Company or any subsidiary are held under valid and enforceable leases, with such exceptions
as do not materially interfere with the use made or proposed to be made of such real
property, improvements, equipment or personal property by the Company or such subsidiary.
(z) Tax Law Compliance. Except for (i) the payment of any taxes that are currently
being contested in good faith by appropriate proceedings and for which the Company has
established adequate reserves in accordance with GAAP or (ii) the filings of tax returns or
the payment of any taxes which would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Change, the Company and its subsidiaries have (A)
timely paid all federal, state, local and foreign taxes (including any related interest and
penalties) required to be paid by any of them (whether or not shown on a tax return),
including as a withholding agent through the date hereof and (B) timely filed all federal,
state, local and foreign tax returns required to be filed through the date hereof. The
Company has made adequate charges, accruals and reserves in accordance with GAAP in the
applicable financial statements referred to in Section 1(v) above in respect of all federal,
state, local and foreign taxes for all periods as to which the tax liability of the Company
or its subsidiaries has not been finally determined, except to the extent that the failure
to make such charges, accruals and reserve would not reasonably be expected to result in a
Material Adverse Change. There is no tax deficiency that has been, or could reasonably be
expected to be, asserted against the Company or its
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subsidiaries or any of their respective properties or assets that would reasonably be
expected, individually or in the aggregate, to result in a Material Adverse Change.
(aa) Company Not an “Investment Company.” Neither the Company nor any Guarantor is, or
after receipt of payment for the Securities and the application of the proceeds thereof as
contemplated under the caption “Use of Proceeds” in the Pricing Disclosure Package and the
Final Offering Memorandum will be, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended (the “Investment Company Act”).
(bb) Insurance. Each of the Company and its subsidiaries maintain insurance in such
amounts and with such deductibles and covering such risks as are generally customary for
their businesses including, but not limited to, policies covering real and personal property
owned or leased by the Company and its subsidiaries against theft, damage, destruction, acts
of vandalism and earthquakes. All policies of insurance insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees, officers and directors are
in full force and effect; the Company and its subsidiaries are in compliance with the terms
of such policies in all material respects; and there are no material claims by the Company
or any of its subsidiaries under any such policy as to which any insurance company is
denying liability or defending under a reservation of rights clause. The Company has no
reasonable basis to believe that it or any subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a Material Adverse Change.
(cc) No Restrictions on Dividends. No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary’s shares of capital stock or other ownership
interests, from repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary’s property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated by the Offering
Memorandum.
(dd) Solvency. The Company and the Guarantors taken as a whole are, and immediately
after the Closing Date will be, Solvent. As used herein, the term “Solvent” means, with
respect to any person on a particular date, that on such date (i) the fair market value of
the assets of such person is greater than the total amount of liabilities (including
contingent liabilities) of such person, (ii) the present fair salable value of the assets of
such person is greater than the amount that will be required to pay the probable liabilities
of such person on its debts as they become absolute and matured, (iii) such person is able
to realize upon its assets and pay its debts and other liabilities, including contingent
obligations, as they mature and (iv) such person does not have unreasonably small capital.
(ee) No Price Stabilization or Manipulation. The Company has not taken and will not
take, directly or indirectly, any action designed to or that might be reasonably
-11-
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(ff) Related Party Transactions. There are no business relationships or related-party
transactions involving the Company or any subsidiary which is required by the Securities Act
to be disclosed in a registration statement on Form S-1 which is not so disclosed in the
Offering Memorandum.
(gg) Disclosure Controls. The Company and its subsidiaries maintain an effective
system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the
Exchange Act). The Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the
Exchange Act.
(hh) Internal Controls and Procedures. The Company maintains (i) effective internal
control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act, and
(ii) a system of internal accounting controls sufficient to provide reasonable assurance
that (A) transactions are executed in accordance with management’s general or specific
authorizations; (B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (C) access to assets is permitted only in accordance with
management’s general or specific authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(ii) No Material Weakness in Internal Controls. Except as disclosed in the Offering
Memorandum, since the end of the Company’s most recent fiscal year, there has been (i) no
material weakness in the Company’s internal control over financial reporting (whether or not
remediated) and (ii) no change in the Company’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
(jj) No Unlawful Contributions or Other Payments. Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company and the Guarantors, any director, officer,
agent, employee or affiliate of the Company or any of its subsidiaries is aware of or has
taken any action, directly or indirectly, that would result in a violation by such persons
of the FCPA, including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer, payment,
promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign
official” (as such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the FCPA, and the
Company, its subsidiaries and, to the knowledge of the Company and the Guarantors, its
affiliates have conducted their businesses in compliance in all material respects with the
FCPA and have instituted and maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance
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therewith. “FCPA” means Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.
(kk) No Conflict with Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance in all material respects
with applicable financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all
applicable jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company and the Guarantors, threatened.
(ll) No Conflict with OFAC Laws. Neither the Company nor any of its subsidiaries nor,
to the knowledge of the Company and the Guarantors, any director, officer, agent, employee
or affiliate of the Company or any of its subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.
(mm) Compliance with and Liability under Environmental Laws. Except as otherwise
disclosed in the Offering Memorandum, (i) neither the Company nor any of its subsidiaries is
in violation of any federal, state, local or foreign law, regulation, order, permit or other
requirement relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata and natural resources such as wetlands, flora and fauna), including
without limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, pesticides, wastes, toxic
substances, hazardous substances, petroleum and petroleum products (collectively, “Materials
of Environmental Concern”), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Materials of
Environment Concern (collectively, “Environmental Laws”), which violation includes, but is
not limited to, noncompliance with any permits or other governmental authorizations required
for the operation of the business of the Company or its subsidiaries under applicable
Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the
Company or any of its subsidiaries received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that alleges that the Company
or any of its subsidiaries is in violation of any Environmental Law, except as would not,
reasonably be expected to, individually or in the aggregate, result in a Material Adverse
Change; (ii) there is no claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Company has received written notice,
and no written notice by any person or entity alleging
-13-
actual or potential liability under any Environmental Law, including without
limitation, liability for investigatory costs, cleanup costs, governmental response costs,
natural resource damages, property damages, personal injuries, attorneys’ fees or penalties
arising out of, based on or resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location (collectively, “Environmental
Claims”), pending or, to the best of the Company’s and the Guarantors’ knowledge, threatened
against the Company or any of its subsidiaries or any person or entity whose liability for
any Environmental Claim the Company or any of its subsidiaries has retained or assumed
either contractually or by operation of law, except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change; (iii) to the best
of the Company’s and the Guarantors’ knowledge, there are no past, present or anticipated
future actions, activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or disposal of any Material
of Environmental Concern, that could reasonably be expected to result in a violation of any
Environmental Law, require expenditures to be incurred pursuant to Environmental Law, or
form the basis of a potential Environmental Claim against the Company or any of its
subsidiaries or against any person or entity whose liability for any Environmental Claim the
Company or any of its subsidiaries has retained or assumed either contractually or by
operation of law, except as would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change; and (iv) neither the Company nor any of its
subsidiaries is subject to any pending or threatened proceeding under Environmental Law to
which a governmental authority is a party and which is reasonably likely to result in
monetary sanctions of $100,000 or more.
(nn) Periodic Review of Costs of Environmental Compliance. In the ordinary course of
its business, the Company conducts a periodic review of the effect of Environmental Laws on
the business, operations and properties of the Company and its subsidiaries, in the course
of which it identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to third parties).
(oo) ERISA Compliance. None of the following events has occurred or exists: (i) a
failure to fulfill the obligations, if any, under the minimum funding standards of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and the regulations and published interpretations thereunder with respect to a
Plan and Section 412 of the Internal Revenue Code of 1986, as amended (the “Code”),
determined without regard to any waiver of such obligations or extension of any amortization
period that would reasonably be expected to result in a Material Adverse Change; (ii) an
audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the
Pension Benefit Guaranty Corporation or any other federal or state governmental agency or
any foreign regulatory agency with respect to the employment or compensation of employees by
any member of the Company that would reasonably be expected to result in a Material Adverse
Change; (iii) any breach of any contractual obligation, or any violation of law or
applicable qualification standards, with respect to the employment or compensation of
employees by any member of the Company that would
-14-
reasonably be expected to result in a Material Adverse Change. None of the following
events has occurred or is reasonably likely to occur: (i) a material increase in the
aggregate amount of contributions required to be made to all Plans in the current fiscal
year of the Company compared to the amount of such contributions made in the Company’s most
recently completed fiscal year; (ii) a material increase in the Company’s “accumulated
post-retirement benefit obligations” (within the meaning of Statement of Financial
Accounting Standards 106) compared to the amount of such obligations in the Company’s most
recently completed fiscal year; or (iii) any event or condition giving rise to a liability
under Title IV of ERISA that would reasonably be expected to result in a Material Adverse
Change; (iv) any prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, with respect to any pension plan or welfare plan (excluding
transactions effected pursuant to a statutory or administrative exemption) that would
reasonably be expected to result in a Material Adverse Change; or (v) the filing of a claim
by one or more employees or former employees of the Company related to their employment that
would reasonably be expected to result in a Material Adverse Change. For purposes of this
paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of ERISA)
subject to Title IV of ERISA with respect to which any member of the Company may have any
liability.
(pp) Labor Matters. No labor disturbances by the employees of the Company or any of
its subsidiaries has occurred that would, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change.
(qq) Brokers. Other than the Initial Purchasers’ discount pursuant to Section 2 of
this Agreement, there is no broker, finder or other party that is entitled to receive from
the Company any brokerage or finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement.
(rr) Xxxxxxxx-Xxxxx Compliance. The Company and its directors and officers, in their
capacities as such, are in compliance in all material respects with the applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Xxxxxxxx-Xxxxx Act”), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
(ss) Ratings. No “nationally recognized statistical rating organization” as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act (i) has imposed (or has
informed the Company that it is considering imposing) any condition (financial or otherwise)
on the Company’s retaining any rating assigned to the Company or any of its subsidiaries or
any of their debt or preferred stock or (ii) has indicated to the Company that it is
considering (a) the downgrading, suspension, or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in, any rating so
assigned or (b) any change in the outlook for any rating of the Company or any securities of
the Company.
(tt) Lending Relationship. Except as disclosed in the Offering Memorandum, the Company
(i) does not have any material lending or other relationship with any bank or lending
affiliate of any Initial Purchaser and (ii) does not intend to use any of the
-15-
proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to
any affiliate of any Initial Purchaser.
(uu) Statistical and Market Related Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and market-related data
included in each of the Offering Memorandum is not based on or derived from sources that are
reliable and accurate in all material respects.
(vv) Regulation S. The Company, the Guarantors and their respective affiliates and all
persons acting on their behalf (other than the Initial Purchasers, as to whom the Company
and the Guarantors make no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with the offering of the
Securities outside the United States and, in connection therewith, the Offering Memorandum
will contain the disclosure required by Rule 902. The Securities sold in reliance on
Regulation S will be represented upon issuance by a temporary global security that may not
be exchanged for definitive securities until the expiration of the 40-day restricted period
referred to in Rule 903 of the Securities Act and only upon certification of beneficial
ownership of such Securities by non-U.S. persons or U.S. persons who purchased such
Securities in transactions that were exempt from the registration requirements of the
Securities Act.
Any certificate signed by an officer of the Company and delivered to the Representatives or to
counsel for the Initial Purchasers shall be deemed to be a representation and warranty by the
Company to each Initial Purchaser as to the matters set forth therein.
2. Purchase and Sale. The Company agrees to issue and sell to the several Initial
Purchasers the Notes, and the Initial Purchasers agree, severally and not jointly, to purchase from
the Company the respective aggregate principal amount of Notes set forth opposite their names on
Schedule A, in each case upon the terms herein set forth and, on the basis of the
representations, warranties and agreements and upon the terms but subject to the conditions herein
set forth. The purchase price per Note to be paid by the several Initial Purchasers to the Company
shall be equal to 98.25% of the principal amount thereof.
3. Delivery and Payment.
(a) The Closing Date. Delivery of certificates for the Securities to be purchased by the
Initial Purchasers and payment therefor shall be made at the offices of Xxxxxx Xxxxxx & Xxxxxxx
LLP, 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 (or such other place as may be agreed to by the
Company and the Representative) at 9:00 a.m. New York time, on December 16, 2010, or such other
time and date as the Representative shall designate by notice to the Company (the time and date of
such closing are called the “Closing Date”). Delivery of the Securities shall be made through the
facilities of the Depositary. The Company hereby acknowledges that circumstances under which the
Representative may provide notice to postpone the Closing Date as originally scheduled include, but
are in no way limited to, any determination by the Company or the Initial Purchasers to recirculate
to investors copies of an amended or supplemented Offering Memorandum or a delay as contemplated by
the provisions of Section 11 hereof.
-16-
(b) Delivery of the Securities. The Company shall deliver, or cause to be delivered, to the
Representative for the accounts of the several Initial Purchasers, the Securities 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 certificates for the Securities shall be in such
denominations and registered in the name of Cede & Co., as nominee of the Depositary, pursuant to
the DTC Agreement, and shall be made available for inspection on the business day preceding the
Closing Date at a location in New York City, as the Representative may designate. Such
certificates for Securities shall be delivered at the Closing to the Trustee as custodian for the
Depositary. 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 Purchasers.
(c) Initial Purchasers as Qualified Institutional Buyers. Each Initial Purchaser severally
and not jointly represents and warrants to, and agrees with, the Company that:
(i) it has not offered or sold, and it will not offer or sell Securities except (a) to
persons who it reasonably believes are “qualified institutional buyers” within the meaning
of Rule 144A (“Qualified Institutional Buyers”) in transactions meeting the requirements of
Rule 144A or (b) to non-U.S. persons outside the United States to whom the offeror or seller
reasonably believes offers and sales of the Securities may be made in reliance upon
Regulation S upon the terms and conditions set forth in Annex I hereto, which Annex I is
hereby expressly made a part hereof;
(ii) it is an institutional “accredited investor” within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act; and
(iii) it has not offered or sold, and it will not offer or sell Securities by, any form
of general solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Securities Act.
4. Covenants. The Company and the Guarantors, jointly and severally, covenant and
agree with each of the Initial Purchasers as follows:
(a) Preparation of Final Offering Memorandum; Initial Purchasers’ Review of Proposed
Amendments and Supplements and Company Additional Written Communications. As promptly as
practicable following the Time of Sale and in any event not later than the second business
day following the date hereof, the Company will prepare and deliver to the Initial
Purchasers the Final Offering Memorandum, which shall consist of the Preliminary Offering
Memorandum as modified only by the information contained in the Pricing Supplement. The
Company will not amend or supplement the Preliminary Offering Memorandum or the Pricing
Supplement. The Company will not amend or supplement the Final Offering Memorandum prior to
the Closing Date unless the Representative shall previously have been furnished a copy of
the proposed amendment or supplement at least two business days prior to the proposed use or
filing, and shall not have objected to such amendment or supplement. Before making,
preparing, using, authorizing, approving or distributing any Company Additional Written
Communication, the Company will furnish to the Representative a copy of such written
communication for
-17-
review and will not make, prepare, use, authorize, approve or distribute any such
written communication to which the Representative reasonably objects.
(b) Amendments and Supplements to the Final Offering Memorandum and Other Securities
Act Matters. If at any time prior to the Closing Date (i) any event shall occur or
condition shall exist as a result of which any of the Pricing Disclosure Package as then
amended or supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading or (ii) it is necessary to
amend or supplement any of the Pricing Disclosure Package to comply with law, the Company
and the Guarantors will immediately notify the Initial Purchasers thereof and forthwith
prepare and (subject to Section 4(a) hereof) furnish to the Initial Purchasers such
amendments or supplements to any of the Pricing Disclosure Package as may be necessary so
that the statements in any of the Pricing Disclosure Package as so amended or supplemented
will not, in the light of the circumstances under which they were made, be misleading or so
that any of the Pricing Disclosure Package will comply with all applicable law. If, prior
to the completion of the placement of the Securities by the Initial Purchasers with the
Subsequent Purchasers, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Final Offering Memorandum, as then amended or
supplemented, in order to make the statements therein, in the light of the circumstances
when the Final Offering Memorandum is delivered to a Subsequent Purchaser, not misleading,
or if in the judgment of the Representative or counsel for the Initial Purchasers it is
otherwise necessary to amend or supplement the Final Offering Memorandum to comply with law,
the Company and the Guarantors agree to promptly prepare (subject to Section 4 hereof), file
with the Commission and furnish at its own expense to the Initial Purchasers, amendments or
supplements to the Final Offering Memorandum so that the statements in the Final Offering
Memorandum as so amended or supplemented will not, in the light of the circumstances at the
Closing Date and at the time of sale of Securities, be misleading or so that the Final
Offering Memorandum, as amended or supplemented, will comply with all applicable law.
Following the consummation of the Exchange Offer or the effectiveness of an applicable
shelf registration statement and for so long as the Securities are outstanding, if, in the
judgment of the Representative, the Initial Purchasers or any of their affiliates (as such
term is defined in the Securities Act) are required to deliver a prospectus in connection
with sales of, or market-making activities with respect to, the Securities, the Company and
the Guarantors agree to periodically amend the applicable registration statement so that the
information contained therein complies with the requirements of Section 10 of the Securities
Act, to amend the applicable registration statement or supplement the related prospectus or
the documents incorporated therein when necessary to reflect any material changes in the
information provided therein so that the registration statement and the prospectus 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 existing as of
the date the prospectus is so delivered, not misleading and to provide the Initial
Purchasers with copies of each amendment or supplement filed and such other documents as the
Initial Purchasers may reasonably request.
-18-
The Company hereby expressly acknowledges that the indemnification and contribution
provisions of Sections 9 and 10 hereof are specifically applicable and relate to each
offering memorandum, registration statement, prospectus, amendment or supplement referred to
in this Section 4.
(c) Copies of the Offering Memorandum. The Company agrees to furnish the Initial
Purchasers, without charge, as many copies of the Pricing Disclosure Package and the Final
Offering Memorandum and any amendments and supplements thereto (including any documents
incorporated or deemed incorporated by reference therein) as they shall reasonably request.
(d) Blue Sky Compliance. The Company and the Guarantors shall cooperate with the
Representative and counsel for the Initial Purchasers to qualify or register the Securities
for sale under (or obtain exemptions from the application of) the state securities or blue
sky laws or Canadian provincial securities laws or other foreign laws of those jurisdictions
designated by the Representative and consented to by the Company, and the Company and the
Guarantors shall comply in all material respects with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required for the
distribution of the Securities. None of the Company and the Guarantors shall be required to
(i) qualify as a foreign corporation or other entity or as a dealer in securities in any
such jurisdiction where it would not otherwise be required to so qualify, (ii) file any
general consent to service of process in any such jurisdiction or (iii) subject itself to
taxation in any such jurisdiction if it is not otherwise so subject. The Company and the
Guarantors will advise the Representative promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Securities for offering, sale or
trading in any jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company and the Guarantors shall use their best efforts to
obtain the withdrawal thereof at the earliest possible moment.
(e) Additional Issuer Information. Prior to the completion of the placement of the
Securities by the Initial Purchasers with the Subsequent Purchasers, the Company shall file,
on a timely basis, with the Commission and the NYSE all reports and documents required to be
filed under Section 13 or 15 of the Exchange Act. Additionally, at any time when the
Company is not subject to Section 13 or 15 of the Exchange Act, for the benefit of holders
and beneficial owners from time to time of the Securities, the Company shall furnish, at its
expense, upon request, to holders and beneficial owners of Securities and prospective
purchasers of Securities information (“Additional Issuer Information”) satisfying the
requirements of Rule 144A(d).
(f) No Integration. The Company agrees that it will not and will cause its Affiliates
not to make any offer or sale of securities of the Company of any class if, as a result of
the doctrine of “integration” referred to in Rule 502 under the Securities Act, such offer
or sale would render invalid (for the purpose of (i) the sale of the Securities by the
Company to the Initial Purchasers, (ii) the resale of the Securities by the Initial
Purchasers to Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent
Purchasers to others) the exemption from the registration requirements of the Securities Act
-19-
provided by Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or
otherwise.
(g) No General Solicitation or Directed Selling Efforts. The Company agrees that it
will not and will not permit any of its Affiliates or any other person acting on its or
their behalf (other than the Initial Purchasers, as to which no covenant is given) to (i)
solicit offers for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in
any manner involving a public offering within the meaning of Section 4(2) of the Securities
Act or (ii) engage in any directed selling efforts with respect to the Securities within the
meaning of Regulation S, and the Company will and will cause all such persons to comply with
the offering restrictions requirement of Regulation S with respect to the Securities.
(h) No Restricted Resales. 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
have been reacquired by any of them.
(i) Legended Securities. Each certificate for a Note will bear the legend contained in
“Notice to Investors” in the Preliminary Offering Memorandum for the time period and upon
the other terms stated in the Preliminary Offering Memorandum.
(j) Use of Proceeds. The Company shall apply the net proceeds from the sale of the
Securities sold by it in the manner described under the caption “Use of Proceeds” in the
Pricing Disclosure Package.
(k) Agreement Not to Offer to Sell Additional Securities. During the period of 90 days
following the date of this Agreement, the Company will not, without the prior written
consent of Xxxxxxx Xxxxx (which consent may be withheld at the sole discretion of Xxxxxxx
Xxxxx, directly or indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1
under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or
file any registration statement under the Securities Act in respect of, any debt securities
of the Company or securities exchangeable for or convertible into debt securities of the
Company (other than as contemplated by this Agreement and to register the Exchange
Securities).
(l) Depositary. The Company shall use commercially reasonable efforts to obtain the
approval of the Depositary to permit the Notes to be eligible for “book-entry” transfer and
settlement through the facilities of the Depositary, and agrees to comply with all of its
agreements set forth in the representation letters of the Company to the Depositary relating
to the approval of the Notes by the Depositary for “book-entry” transfer.
(m) Future Reports to the Representative. During the period of two years hereafter the
Company will furnish to the Representative (i) to the extent not available on the
Commission’s Next-Generation XXXXX filing system, as soon as practicable after the end of
each fiscal year, copies of the Annual Report of the Company containing the
-20-
balance sheet of the Company as of the close of such fiscal year and statements of
income, stockholders’ equity and cash flows for the year then ended and the opinion thereon
of the Company’s independent public or certified public accountants; and (ii) to the extent
not available on the Commission’s Next-Generation XXXXX filing system, as soon as
practicable after the filing thereof, copies of each proxy statement, Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, FINRA or any securities exchange.
(n) No Manipulation of Price. The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any securities of the Company to facilitate the sale or resale
of the Securities.
(o) 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.
The Representative on behalf of the several Initial Purchasers may, in its sole discretion,
waive in writing the performance by the Company or any Guarantor of any one or more of the
foregoing covenants or, subject to the written consent of the Company, extend the time for their
performance.
5. Payment of Expenses. The Company and the Guarantors, jointly and severally, agree
to pay all costs, fees and expenses incurred in connection with the performance of their
obligations hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the Securities
(including all printing and engraving costs), (ii) all necessary issue, transfer and other stamp
taxes in connection with the issuance and sale of the Securities to the Initial Purchasers, (iii)
all fees and expenses of the Company’s and the Guarantors’ counsel, independent public or certified
public accountants and other advisors, (iv) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Pricing Disclosure Package and the
Final Offering Memorandum (including financial statements and exhibits), and all amendments and
supplements thereto, and the mailing and delivering of copies thereof to the Initial Purchasers and
dealers, and the Transaction Documents, (v) all filing fees, attorneys’ fees and expenses incurred
by the Company, the Guarantors or the Initial Purchasers in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of) all or any part of
the Securities for offer and sale under the securities laws of the several states of the United
States, the provinces of Canada or other jurisdictions designated by the Initial Purchasers
(including, without limitation, the cost of preparing, printing and mailing preliminary and final
blue sky or legal investment memoranda and any related supplements to the Pricing Disclosure
Package or the Final Offering Memorandum), (vi) the fees and expenses of the Trustee, including the
fees and disbursements of counsel for the Trustee in connection with the Indenture, the Securities
and the Exchange Securities, (vii) any fees payable in connection with the rating of the Securities
or the Exchange Securities with the ratings agencies, (viii) any filing fees incident to, and any
reasonable fees and disbursements of counsel to the Initial Purchasers in connection with the
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review by FINRA, if any, of the terms of the sale of the Securities or the Exchange Securities,
(ix) all fees and expenses (including reasonable fees and expenses of counsel) of the Company and
the Guarantors in connection with approval of the Securities by the Depositary for “book-entry”
transfer, and (x) all other costs and expenses incident to the performance of their obligations
hereunder which are not otherwise specifically provided for in this Section 5. It is understood,
however, that, except as provided in this Section 5, Section 7, Section 9 and Section 12 hereof,
the Initial Purchasers will pay all of their own costs and expenses, including the fees and
expenses of their counsel.
6. Conditions to the Obligations of the Initial Purchasers. The obligations of the
Initial Purchasers hereunder shall be subject to the condition that all representations and
warranties of the Company and each Guarantor herein are true and correct at and as of the date
hereof and the Closing Date, the condition that the Company and each Guarantor shall have performed
all of their respective obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) Accountants’ Comfort Letter. On the date hereof, the Initial Purchasers shall have
received from Deloitte & Touche LLP, independent public accountants for the Company, a
letter dated the date hereof addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, covering certain financial information
included in or incorporated by reference in the Pricing Disclosure Package and other
customary information.
(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:
(i) in the judgment of the Representative there shall not have occurred any
Material Adverse Change, the effect of which is so material and adverse as to make
it impracticable or inadvisable to proceed with the offering, sale or delivery of
the Securities on the terms and in the manner contemplated by this Agreement, the
Pricing Disclosure Package and the Final Offering Memorandum;
(ii) there shall not have been any change or decrease specified in the letter
or letters referred to in paragraph (a) of this Section 6 which is, in the judgment
of the Representative, so material and adverse as to make it impractical or
inadvisable to proceed with the offering, sale or delivery of the Securities as
contemplated by this Agreement, the Pricing 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 the Company or any of its subsidiaries or any of their debt or preferred
stock by any “nationally recognized statistical rating organization” as such term is
defined in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, and no such organization
shall have publicly announced that it has under surveillance or review, with
possible negative implications, any such rating.
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(c) Opinion of Counsel for the Company and the Guarantors. On the Closing Date, the
Initial Purchasers shall have received (i) the opinion and disclosure letter of Hunton &
Xxxxxxxx LLP, counsel for the Company and the Guarantors, substantially in the forms of
Exhibits A-1 and A-2, respectively, (ii) the opinion of Xxxxxxx X. Xxxxxxxx,
the General Counsel of the Company, substantially in the form of Exhibit B, and
(iii) the disclosure letter of Xxxxxx Xxxxxx Xxxxxxxx LLP, special environmental counsel for
the Company, substantially in the form of Exhibit C, each dated as of the Closing
Date and addressed to the Initial Purchasers.
(d) Opinion of Counsel for the Initial Purchasers. On the Closing Date, the
Representative shall have received the opinion and negative assurance letter of Xxxxxx
Xxxxxx & Xxxxxxx LLP, counsel for the Initial Purchasers, dated as of such Closing
Date, in form and substance satisfactory to, and addressed to, the Initial Purchasers, with
respect to the issuance and sale of the Notes, the Final Offering Memorandum (together with
any supplement thereto), the Pricing Disclosure Package and other related matters as the
Representative may reasonably require, and the Company shall have furnished to such counsel
such documents as they reasonably request for the purpose of enabling them to pass upon such
matters.
(e) Officers’ Certificate. On the Closing Date, the Representative shall have received
a written certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting Officer of the
Company, dated as of the Closing Date, to the effect that the signers of such certificate
have carefully examined the Pricing Disclosure Package, the Final Offering Memorandum and
any amendment or supplement thereto and this Agreement, to the effect set forth in
subsection (b)(iii) of this Section 6, and further to the effect that:
(i) for the period from and after the date of this Agreement and prior to the
Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations and warranties of the Company set forth in Section 1
of this Agreement were true and correct as of the date hereof and are true and
correct on and as of the Closing Date with the same force and effect as though
expressly made on and as of the Closing Date; and
(iii) the Company has complied with all the agreements hereunder and satisfied
all the conditions on its part to be performed or satisfied hereunder at or prior to
the Closing Date.
(f) Bring-down Comfort Letter. On the Closing Date, the Initial Purchasers shall have
received from Deloitte & Touche LLP, independent public accountants for the Company, a
letter dated such date, in form and substance reasonably satisfactory to the Representative,
to the effect that they reaffirm the statements made in the letter furnished by them
pursuant to subsection (a) of this Section 6, except that (i) it shall cover certain
financial information included in or incorporated by reference in the Final Offering
Memorandum and any amendment or supplement thereto and (ii) the specified date
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referred to therein for the carrying out of procedures shall be no more than three
business days prior to the Closing Date, as the case may be.
(g) Form of Securities, Indenture and Registration Rights Agreement. The Securities,
the Indenture and the Registration Rights Agreement shall be executed by the Company, or the
Guarantors, as the case may be, in form and substance reasonably satisfactory to the
Representative and the Trustee.
(h) Closing Documents. At the Closing Date, the Company and the Guarantors shall have
furnished counsel for the Company, the Guarantors or the Initial Purchasers, as the case may
be, such documents as they reasonably require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties or fulfillment of any of the conditions
herein contained.
If any condition specified in this Section 6 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representative by notice to the Company at any
time on or prior to the Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 5, Section 7, Section 9, Section 10, Section 14
and Section 18 shall at all times be effective and shall survive such termination.
7. Reimbursement of Initial Purchasers’ Expenses.
(a) If this Agreement is terminated by the Representative pursuant to Section 6, Section 11 or
Section 12, or if the sale to the Initial Purchasers of the Notes on the Closing Date is not
consummated because of any refusal, inability or failure on the part of the Company or any
Guarantor to perform any agreement herein or to comply with any provision hereof, the Company and
the Guarantors, jointly and severally, agree to reimburse the Representative and the other Initial
Purchasers (or such Initial Purchasers as have terminated this Agreement with respect to
themselves), severally, upon demand for all out-of-pocket expenses that shall have been reasonably
incurred by the Representative and the Initial Purchasers in connection with the proposed purchase
and the offering and sale of the Securities, including but not limited to fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile and telephone charges.
8. Offer, Sale and Resale Procedures. Each of the Initial Purchasers, on the one
hand, and the Company and each of the Guarantors, on the other hand, hereby agree to observe the
following procedures in connection with the offer and sale of the Securities:
(a) Offers and sales of the Securities will be made only by the Initial Purchasers or
Affiliates thereof qualified to do so in the jurisdictions in which such offers or sales are
made.
(b) The Securities will be offered by approaching prospective Subsequent Purchasers on
an individual basis. No general solicitation or general advertising (within the meaning of
Rule 502 under the Securities Act) will be used in the United States in connection with the
offering of the Securities. No directed selling efforts (within the
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meaning of Rule 902 under the Securities Act) will be made in the United States in
connection with any of the Notes to be sold pursuant to Regulation S.
(c) Upon original issuance by the Company, and until such time as the same is no longer
required under the applicable requirements of the Securities Act, the Securities (and all
securities issued in exchange therefor or in substitution thereof, other than the Exchange
Securities) shall bear the following legend:
“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE
SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY
EVIDENCED HEREBY.”
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Following the sale of the Securities by the Initial Purchasers to Subsequent Purchasers
pursuant to the terms hereof, the Initial Purchasers shall not be liable or responsible to the
Company for any losses, damages or liabilities suffered or incurred by the Company, including any
losses, damages or liabilities under the Securities Act, arising from or relating to any resale or
transfer of any Security.
9. Indemnification.
(a) Indemnification of the Initial Purchasers. The Company and the Guarantors agree, jointly
and severally, to indemnify and hold harmless each Initial Purchaser, its directors, officers,
employees, agents and affiliates, and each person, if any, who controls any Initial Purchaser
within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Initial Purchaser, director, officer, employee,
agent, affiliate 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
Preliminary Offering Memorandum, Pricing Supplement, any Company Additional Written Communication
or the Final Offering Memorandum (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact, in each case, necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
and to reimburse each Initial Purchaser, its directors, officers, employees, agents, affiliates and
each such controlling person for any and all expenses (including, subject to Section 9(c), the
reasonable fees and disbursements of counsel chosen by Xxxxxxx Xxxxx) as such expenses are
reasonably incurred by such Initial Purchaser, or its directors, officers, employees, agents and
affiliates or such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the Representative expressly for
use in the Preliminary Offering Memorandum, the Pricing Supplement, any Company Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement thereto). The
indemnity agreement set forth in this Section 9(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) Indemnification of the Company and the Guarantors, Directors, Officers and Employees.
Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless the
Company and the Guarantors, each of their respective directors, officers and employees and each
person, if any, who controls the Company or any of the Guarantors within the meaning of the
Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, or any such director, officer, employee or controlling person may
become subject, insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum, the Pricing
Supplement, any Company Additional Written Communication or the Final Offering Memorandum (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 necessary to make the statements
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therein, in the light of the circumstances under which they were made, 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 Pricing
Supplement, any Company Additional Written Communication or the Final Offering Memorandum (or any
amendment or supplement thereto), in reliance upon and in conformity with written information
furnished to the Company by such Initial Purchaser through the Representative expressly for use
therein; and to reimburse the Company and the Guarantors, or any such director, officer, employee
or controlling person for any legal and other expense reasonably incurred by the Company and the
Guarantors, or any such director, officer, employee or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage, liability,
expense or action. The Company and the Guarantors hereby acknowledge that the only information
that the Initial Purchasers have furnished to the Company through the Representative expressly for
use in any the Preliminary Offering Memorandum, the Pricing Supplement, any Company Additional
Written Communication or the Final Offering Memorandum (or any amendment or supplement thereto) are
the statements set forth in the last sentence on the cover of the the Preliminary Offering
Memorandum and the Final Offering Memorandum, the fifth full paragraph of page ii of the
Preliminary Offering Memorandum and the Final Offering Memorandum, and the third paragraph, the
second sentence of the sixth paragraph and the penultimate paragraph under the caption “Plan of
Distribution” in the Preliminary Offering Memorandum and the Final Offering Memorandum. The
indemnity agreement set forth in this Section 9(b) shall be in addition to any liabilities that
each Initial Purchaser may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 9 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 9, notify the indemnifying party in writing of the commencement thereof; but the
failure to so notify the indemnifying party (i) will not relieve it from liability under paragraph
(a) or (b) above unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b) above. In case
any such action is brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or that there may be
legal defenses available to it and/or the other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party under this
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Section 9 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 immediately preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the reasonable fees and disbursements
of more than one separate counsel (other than a single local counsel in each relevant
jurisdiction)), reasonably approved by the indemnifying party (or by Xxxxxxx Xxxxx in the case of
Section 9(b)), representing all indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the reasonable fees and disbursements of counsel shall be at the
expense of the indemnifying party (it being understood, however, that the indemnifying party shall
not be liable for the reasonable fees and disbursements of more than one separate counsel (other
than a single local counsel in each relevant jurisdiction)).
(d) Settlements. The indemnifying party under this Section 9 shall not be liable for any
settlement of any proceeding effected without its written consent, which shall not be withheld
unreasonably, but if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect
of which any indemnified party is or could have been a party and indemnity was or could have been
sought hereunder by such indemnified party, unless such settlement, compromise or consent (i)
includes an unconditional release of such indemnified party from all liability on claims that are
the subject matter of such action, suit or proceeding and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
10. Contribution.
(a) If the indemnification provided for in Section 9 is for any reason unavailable to or
otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, from the offering of the Securities pursuant
to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and the Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or
omissions or inaccuracies in the representations and warranties herein 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 and the Guarantors, on the one hand,
and the Initial Purchasers, on the other hand, in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities pursuant to this Agreement (before deducting
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expenses) received by the Company and the Guarantors, and the total discount received by the
Initial Purchasers bear to the aggregate initial offering price of the Securities. The relative
fault of the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other
hand, shall be determined by reference to, among other things, whether any such untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to information supplied by
the Company and the Guarantors, on the one hand, or the Initial Purchasers, 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 9(c), any reasonable legal or other fees or disbursements reasonably incurred by such party
in connection with investigating or defending any action or claim.
The Company and the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 10 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred to in this Section
10.
Notwithstanding the provisions of this Section 10, no Initial Purchaser shall be required to
contribute any amount in excess of the discount received by such Initial Purchaser in connection
with the Securities distributed by it. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’
obligations to contribute pursuant to this Section 10 are several, and not joint, in proportion to
their respective purchasing commitments as set forth opposite their names in Schedule A.
For purposes of this Section 10, each director, officer, affiliate, 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, officer and employee of the Company or a Guarantor, and each person,
if any, who controls the Company or a Guarantor within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company and the Guarantors.
11. Default of One or More of the Several Initial Purchasers. If, on the Closing
Date, any one or more of the several Initial Purchasers shall fail or refuse to purchase Securities
that it or they have agreed to purchase hereunder on such date, and the aggregate principal amount
of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or
refused to purchase does not exceed 10% of the aggregate principal amount of the Securities to be
purchased on such date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the principal amount of Securities to be purchased set forth opposite their
respective names on Schedule A bears to the aggregate principal amount of Securities set
forth opposite the names of all such non-defaulting Initial Purchasers, or in such other
proportions as may be specified by the Representative with the consent of the non-defaulting
Initial Purchasers, to purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on such date. If, on the Closing Date, any one
or more of the Initial Purchasers shall fail or refuse to purchase Securities and the principal
amount of Securities with respect
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to which such default occurs exceeds 10% of the principal amount of Securities to be purchased
on such date, and arrangements satisfactory to the Representative and the Company for the purchase
of such Securities are not made within 48 hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of Section 5, Section
7, Section 9, Section 10, Section 14 and Section 18 shall at all times be effective and shall
survive such termination. In any such case either the Representative or the Company shall have the
right to postpone the Closing Date, but in no event for longer than seven days in order that the
required changes, if any, to the Final Offering Memorandum or any other documents or arrangements
may be effected. As used in this Agreement, the term “Initial Purchaser” shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this Section 11. Any
action taken under this Section 11 shall not relieve any defaulting Initial Purchaser from
liability in respect of any default of such Initial Purchaser under this Agreement.
12. Termination of this Agreement. Prior to the Closing Date, this Agreement may be
terminated by the Representative by notice given to the Company if at any time (i) trading or
quotation in any of the Company’s securities shall have been suspended or materially limited by the
Commission or by the New York Stock Exchange, or trading in securities generally on the New York
Stock Exchange shall have been suspended or materially limited; (ii) a general banking moratorium
shall have been declared by federal or New York authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United States has occurred; (iii) in
the judgment of the Representative there shall have occurred a Material Adverse Change, the effect
of which is so material and adverse as to make it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner contemplated by this
Agreement, the Pricing Disclosure Package and the Final Offering Memorandum; or (iv) there shall
have occurred any outbreak or escalation of hostilities involving the United States or any crisis
or calamity, or any substantial change in the United States or international financial markets, or
any substantial change or development involving the United States’ or international political,
financial or economic conditions, as in the judgment of the Representative is material and adverse
and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the
Securities in the manner and on the terms described in the Pricing Disclosure Package and the Final
Offering Memorandum or to enforce contracts for the sale of securities. Any termination pursuant
to this Section 12 shall be without liability on the part of (a) the Company or any Guarantor to
any Initial Purchaser, except that the Company shall be obligated to reimburse the expenses of the
Representative and the Initial Purchasers pursuant to Sections 5, 7, 9 and 10 hereof or (b) any
Initial Purchaser to the Company.
13. No Advisory or Fiduciary Responsibility. The Company and each Guarantor
acknowledge and agree that: (i) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the public offering price of the Securities and any
related discounts and commissions, is an arm’s-length commercial transaction between the Company
and each Guarantor, on the one hand, and the several Initial Purchasers, on the other hand, and the
Company and each Guarantor are capable of evaluating and understanding and understand and accept
the terms, risks and conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to such transaction
each Initial Purchaser is and has been acting solely as a principal and is not the financial
advisor, agent or fiduciary of the Company, the Guarantors or any of their respective affiliates,
stockholders, creditors or employees or any other party; (iii) no Initial Purchaser has assumed or
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will assume an advisory, agency or fiduciary responsibility in favor of the Company or any
Guarantor with respect to any of the transactions contemplated hereby or the process leading
thereto (irrespective of whether such Initial Purchaser has advised or is currently advising the
Company or any Guarantor on other matters) and no Initial Purchaser has any obligation to the
Company or any Guarantor with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement; (iv) the several Initial Purchasers and their respective
affiliates may be engaged in a broad range of transactions that involve interests that differ from
those of the Company and the Guarantors and that the several Initial Purchasers have no obligation
to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and
(v) the Initial Purchasers have not provided any legal, accounting, regulatory or tax advice with
respect to the offering contemplated hereby and the Company and the Guarantors have consulted their
own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.
This Agreement supersedes all prior agreements and understandings (whether written or oral)
between the Company, the Guarantors and the several Initial Purchasers, or any of them, with
respect to the subject matter hereof. The Company and each Guarantor hereby waive and release, to
the fullest extent permitted by law, any claims that the Company or any Guarantor may have against
the several Initial Purchasers with respect to any breach or alleged breach of agency or fiduciary
duty.
14. Representations and Indemnities to Survive Delivery. The respective indemnities,
agreements, representations, warranties and other statements of the Company, of its officers and of
the several Initial Purchasers set forth in or made pursuant to this Agreement (i) will remain
operative and in full force and effect, regardless of any (A) investigation, or statement as to the
results thereof, made by or on behalf of any Initial Purchaser, the officers, employees, agents or
affiliates of any 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 Securities and payment for them hereunder and (ii) will survive delivery
of and payment for the Securities sold hereunder and any termination of this Agreement. The
provisions of Section 5, Section 7, Section 9, Section 10, this Section 14 and Section 18 hereof
shall survive the termination or cancellation of this Agreement.
15. 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 the Representative:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxx Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Legal Department
Xxx Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Legal Department
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With a copy to:
Xxxxxx Xxxxxx & Xxxxxxx llp
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
If to the Company:
The Scotts Miracle-Gro Company
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Executive Vice President,
General Counsel and Corporate Secretary
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Executive Vice President,
General Counsel and Corporate Secretary
With a copy to:
Hunton & Xxxxxxxx LLP
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: J. Xxxxxx Xxxxxxxxx
0000 X Xxxxxx, XX
Xxxxxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: J. Xxxxxx Xxxxxxxxx
Any party hereto may change the address for receipt of communications by giving written notice
to the others.
16. Successors and Assigns. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Initial Purchasers pursuant to Section 11
hereof, and to the benefit of (i) the Company and the Guarantors, their respective directors,
officers and employees and any person who controls the Company or any of the Guarantors within the
meaning of the Securities Act and the Exchange Act, (ii) the Initial Purchasers, the officers,
directors, employees, affiliates and agents of the Initial Purchasers, and each person, if any, who
controls any Initial Purchaser within the meaning of the Securities Act and 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
Securities from any of the several Initial Purchasers merely because of such purchase.
17. Authority of the Representative. Any action by the Initial Purchasers hereunder
may be taken by the Representative on behalf of the Initial Purchasers, and any such action taken
by the Representative shall be binding upon the Initial Purchasers.
18. 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.
-32-
19. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Any legal suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of
the United States of America located in the City and County of New York or the courts of the State
of New York in each case located in the City and County of New York (collectively, the “Specified
Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for suits,
actions, or proceedings instituted in regard to the enforcement of a judgment of any Specified
Court in a Related Proceeding, as to which such jurisdiction is non-exclusive) of the Specified
Courts in any Related Proceeding. Service of any process, summons, notice or document by mail to
such party’s address set forth above shall be effective service of process for any Related
Proceeding brought in any Specified Court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any Related Proceeding in the Specified Courts and irrevocably
and unconditionally waive and agree not to plead or claim in any Specified Court that any Related
Proceeding brought in any Specified Court has been brought in an inconvenient forum.
20. General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of
an executed counterpart of a signature page to this Agreement by telecopier, facsimile, email or
other electronic transmission (i.e., “pdf” or “tif”) shall be effective as delivery of a manually
executed counterpart of this Agreement. This Agreement may not be amended or modified unless in
writing by all of the parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit. The Section
headings herein are for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof, including,
without limitation, the indemnification provisions of Section 9 and the contribution provisions of
Section 10, and is fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 9 and 10 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 Preliminary Offering Memorandum, Pricing
Supplement and Final Offering Memorandum (and any amendments and supplements thereto), as required
by the Securities Act and the Exchange Act.
-33-
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
| Very truly yours, THE SCOTTS MIRACLE-GRO COMPANY |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
GUARANTORS EG SYSTEMS, INC., DBA SCOTTS LAWNSERVICE XXXXXXX & CO., INC. HYPONEX CORPORATION MIRACLE-GRO LAWN PRODUCTS, INC. XXX XXXXXXXX COMPANY XXXXXXX SCIENTIFIC, INC. SCOTTS TEMECULA OPERATIONS, LLC SCOTTS MANUFACTURING COMPANY SCOTTS PRODUCTS CO. SCOTTS PROFESSIONAL PRODUCTS CO. SCOTTS-SIERRA CROP PROTECTION COMPANY SCOTTS-SIERRA HORTICULTURAL PRODUCTS COMPANY SCOTTS-SIERRA INVESTMENTS, INC. SMG GROWING MEDIA, INC. THE SCOTTS COMPANY LLC |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
| OMS INVESTMENTS, INC. SWISS FARMS PRODUCTS, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Vice President and Secretary | |||
The foregoing Agreement is hereby confirmed and accepted by the Representative as of the date
first above written.
|
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED |
||||
|
Acting as Representative of the several Initial Purchasers named in the attached Schedule A. |
||||
| By: | Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated | |||
| By: | /s/ Zehra Yasemin Esmer | |||
| Director | ||||
SCHEDULE A
| Principal Amount | ||||
| of Notes to be | ||||
| Initial Purchasers | Purchased | |||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated |
$ | 48,000,000 | ||
X.X. Xxxxxx Securities LLC |
44,000,000 | |||
BNP Paribas Securities Corp. |
12,000,000 | |||
Credit Agricole Securities (USA) Inc. |
12,000,000 | |||
Rabo Securities USA, Inc. |
12,000,000 | |||
RBS Securities Inc. |
12,000,000 | |||
Scotia Capital (USA) Inc. |
12,000,000 | |||
Xxxxx Fargo Securities, LLC |
12,000,000 | |||
Fifth Third Securities, Inc. |
9,000,000 | |||
Mizuho Securities USA Inc. |
9,000,000 | |||
Comerica Securities, Inc. |
6,000,000 | |||
Mitsubishi UFJ Securities (USA), Inc. |
6,000,000 | |||
U.S. Bancorp Investments, Inc. |
6,000,000 | |||
Total |
$ | 200,000,000 | ||
Schedule A-1
SCHEDULE B
Guarantors
EG Systems, Inc., dba Scotts LawnService, an Indiana corporation
Xxxxxxx & Co., Inc., an Indiana corporation
Hyponex Corporation, a Delaware corporation
Miracle-Gro Lawn Products, Inc., a New York corporation
OMS Investments, Inc., a Delaware corporation
Xxx XxXxxxxx Company, a California corporation
Xxxxxxx Scientific, Inc., a New York corporation
Scotts Temecula Operations, LLC, a Delaware limited liability company
Scotts Manufacturing Company, a Delaware corporation
Scotts Products Co., an Ohio corporation
Scotts Professional Products Co., an Ohio corporation
Scotts-Sierra Crop Protection Company, a California corporation
Scotts-Sierra Horticultural Products Company, a California corporation
Scotts-Sierra Investments, Inc., a Delaware corporation
SMG Growing Media, Inc., an Ohio corporation
Swiss Farms Products, Inc., a Delaware corporation
The Scotts Company LLC, an Ohio limited liability company
Xxxxxxx & Co., Inc., an Indiana corporation
Hyponex Corporation, a Delaware corporation
Miracle-Gro Lawn Products, Inc., a New York corporation
OMS Investments, Inc., a Delaware corporation
Xxx XxXxxxxx Company, a California corporation
Xxxxxxx Scientific, Inc., a New York corporation
Scotts Temecula Operations, LLC, a Delaware limited liability company
Scotts Manufacturing Company, a Delaware corporation
Scotts Products Co., an Ohio corporation
Scotts Professional Products Co., an Ohio corporation
Scotts-Sierra Crop Protection Company, a California corporation
Scotts-Sierra Horticultural Products Company, a California corporation
Scotts-Sierra Investments, Inc., a Delaware corporation
SMG Growing Media, Inc., an Ohio corporation
Swiss Farms Products, Inc., a Delaware corporation
The Scotts Company LLC, an Ohio limited liability company
Schedule B-1
Annex I
Each Initial Purchaser understands that:
Such Initial Purchaser agrees that it has not offered or sold and will not offer or sell the
Securities in the United States or to, or for the benefit or account of, a U.S. Person (other than
a distributor), in each case, as defined in Rule 902 of Regulation S (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later of the commencement of
the offering of the Securities pursuant hereto and the Closing Date, other than in accordance with
Regulation S or another exemption from the registration requirements of the Securities Act. Such
Initial Purchaser agrees that, during such 40-day restricted period, it will not cause any
advertisement with respect to the Securities (including any “tombstone” advertisement) to be
published in any newspaper or periodical or posted in any public place and will not issue any
circular relating to the Securities, except such advertisements as are permitted by and include the
statements required by Regulation S.
Such Initial Purchaser agrees that, at or prior to confirmation of a sale of Securities by it
to any distributor, dealer or person receiving a selling concession, fee or other remuneration
during the 40-day restricted period referred to in Rule 903 of Regulation S, it will send to such
distributor, dealer or person receiving a selling concession, fee or other remuneration 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, as amended (the “Securities Act”), and may not be offered and sold
within the United States or to, or for the account or benefit of, U.S. persons (i)
as part of your distribution at any time or (ii) otherwise until 40 days after the
later of the date the Securities were first offered to persons other than
distributors in reliance upon Regulation S and the Closing Date, except in either
case in accordance with Regulation S under the Securities Act (or in accordance with
Rule 144A under the Securities Act or to accredited investors in transactions that
are exempt from the registration requirements of the Securities Act), and in
connection with any subsequent sale by you of the Securities covered hereby in
reliance on Regulation S under the Securities Act during the period referred to
above to any distributor, dealer or person receiving a selling concession, fee or
other remuneration, you must deliver a notice to substantially the foregoing effect.
Terms used above have the meanings assigned to them in Regulation S under the
Securities Act.”
Annex I
