XXXXXX CORPORATION
$60,000,000
4.00% CONVERTIBLE SENIOR NOTES DUE 2026
PURCHASE AGREEMENT
October 5, 2006
XXXXX AND COMPANY, LLC
1221 Avenue of the placecountry-regionAmericas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. XxXxxx Corporation, a Delaware corporation (the "Company"),
proposes to sell, pursuant to the terms of this Agreement, to Xxxxx and Company,
LLC (the "Initial Purchaser"), $60,000,000 aggregate principal amount of its
4.00% Convertible Senior Notes due 2026 (the "Firm Securities"). The Company
also proposes to sell to the Initial Purchaser, upon the terms and conditions
set forth in Section 3 hereof, up to an additional $12,000,000 aggregate
principal amount of its 4.00% Convertible Senior Notes due 2026 (the "Optional
Securities"). The Firm Securities and the Optional Securities are hereinafter
collectively referred to as the "Securities." The Securities are to be issued
pursuant to an Indenture to be dated as of October 12, 2006 (the "Indenture") to
be entered into by and between the Company and U.S. Bank National Association,
as trustee (the "Trustee"). The Securities will be convertible into shares of
the Company's common stock (the "Common Stock"), $0.01 par value (the
"Underlying Securities").
The Securities and the Underlying Securities will be offered and
sold to the Initial Purchaser without being registered under the Securities Act
of 1933, as amended (the "Securities Act"), in reliance upon an exemption
therefrom. The Company has prepared a preliminary offering circular dated
October 3, 2006 (the "Preliminary Offering Circular") and will prepare an
Offering Circular dated the date hereof (the "Offering Circular") setting forth
information concerning the Company, the Securities and the Underlying
Securities. Copies of the Preliminary Offering Circular have been, and copies of
the Offering Circular will be, delivered by the Company to the Initial Purchaser
pursuant to the terms of this Agreement. Any references herein to the
Preliminary Offering Circular, the Time of Sale Information (as defined below)
and the Offering Circular shall be deemed to include, as applicable, all
amendments and supplements thereto and all documents deemed to be incorporated
by reference therein ("Incorporated Documents") that are filed with the
Securities and Exchange Commission (the "Commission") subsequent to the date of
such Preliminary Offering Circular, Time of Sale Information, Offering Circular,
amendment or supplement pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), unless otherwise noted. The Company hereby
confirms that it has authorized the use of the Preliminary Offering Circular,
the other Time of Sale Information and the Offering Circular in connection with
the offering and resale of the Securities and Underlying Securities by the
Initial Purchaser in accordance with Section 3.
At or prior to the time when this Agreement is executed by the
parties hereto (the "Applicable Time"), the following information shall have
been prepared (collectively, the "Time of Sale Information"): the Preliminary
Offering Circular, as supplemented and amended by the written communications
listed on Exhibit 1 hereto.
Holders of the Securities (including the Initial Purchaser and its
direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement"), pursuant to which the Company
will agree to file with the Commission a shelf registration statement pursuant
to Rule 415 under the Securities Act (the "Shelf Registration Statement").
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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with the Initial Purchaser that:
(a) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Time of Sale
Information or the Offering Circular conformed at the time of filing,
or will conform when so filed, with the Exchange Act and the
applicable rule and regulations of the Commission thereunder, and (ii)
the (x) Preliminary Offering Circular, as of its date, did not, (y)
the Time of Sale Information, as of the Applicable Time, did not, and
on the Closing Date (as defined below) will not, and (z) the Offering
Circular, as of its date, did not, and (as amended or supplemented in
accordance with Sections 4(c) and (d), as applicable) on the Closing
Date will not, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided
that the Company makes no representation or warranty as to information
contained in or omitted from the Time of Sale Information or the
Offering Circular in reliance upon and in conformity with written
information relating to the Initial Purchaser furnished to the Company
by or on behalf of the Initial Purchaser specifically for use therein,
which information the parties hereto agree is limited to the Initial
Purchaser Information (as defined in Section 16). The only information
that has been prepared for use in connection with the offering and
sale of the Securities and the Underlying Securities at or prior to
the Applicable Time is the Time of Sale Information.
(b) Each of the Time of Sale Information, as of the Applicable Time, and
the Offering Circular, as of its date, contains or incorporates by
reference all of the information that, if requested by a prospective
purchaser of the Securities or Underlying Securities, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act. The Company has not distributed
and will not distribute, prior to the later of the Closing Date and
the completion of the Initial Purchaser's distribution of the
Securities, any offering material in connection with the offering and
sale of the Securities other than the Time of Sale Information and the
Offering Circular.
(c) The Indenture is not required to be qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") and,
assuming the accuracy of the representations and warranties of the
Initial Purchaser contained in Section 3 and its compliance with the
agreements set forth therein, the issuance and sale of the Securities
to the Initial Purchaser and the offer, resale and delivery of the
Securities by the Initial Purchaser in the manner contemplated by this
Agreement and the Offering Circular, are exempt from the registration
requirements under the Securities Act.
(d) The Company and each of its subsidiaries (as defined in Section 14)
have been duly incorporated or otherwise organized, as the case may
be, and are validly existing in good standing under the laws of their
respective jurisdictions of incorporation or organization, as the case
may be, are duly qualified to do business and are in good standing as
foreign entities in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the
failure to so qualify or have such power or authority would not have,
singularly or in the aggregate, a material adverse effect on the
condition (financial or otherwise), results of operations, business,
operations or prospects of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"). The Company owns or controls,
directly or indirectly, only the following corporations, partnerships,
limited liability partnerships, limited liability companies,
associations or other entities: XxXxxx, GmbH, XxXxxx Pte. Ltd., XxXxxx
XX, XxXxxx Hong Kong, Ltd., XxXxxx Japan Corporation, XxXxxx
Lightspeed Corporation, XxXxxx Korea, Ltd., XxXxxx, Ltd., XxXxxx,
X.X., XxXxxx, S.A.R.L., XxXxxx, S.R.L., Computer Access Technology
Corporation and Catalyst Enterprises, Inc. Except for Catalyst
Enterprises, Inc., none of the Company's subsidiaries is either (i) a
"significant subsidiary" as defined in Regulation S-X or (ii) material
to the Company's business when taken as a whole.
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(e) The Company has full right, power and authority to execute and deliver
this Agreement, the Registration Rights Agreement, the Indenture and
the Securities (collectively, the "Transaction Documents") and to
perform its respective obligations hereunder and thereunder; and all
corporate action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction
Documents and the consummation of the transactions contemplated by
this Agreement and the Indenture have been duly and validly taken.
(f) The Indenture, when duly executed by the proper officers of the
Company and delivered by the Company, assuming due authorization,
execution and delivery thereof by the Trustee, will constitute a valid
and binding agreement of the Company, enforceable against the Company
in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing; the Registration Rights Agreement, when duly
executed by the proper officers of the Company and delivered by the
Company, assuming due authorization, execution and delivery thereof by
the Initial Purchaser, will constitute a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing and, except as
rights to indemnity and contribution thereunder may be limited by
Federal or state securities laws or principles of public policy; the
Securities, when duly executed, authenticated, issued and delivered as
provided in the Indenture and upon payment and delivery in accordance
with this Agreement, will be duly and validly issued and outstanding
and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and the Registration Rights
Agreement and enforceable in accordance with their terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing; the Underlying
Securities issuable upon conversion of the Securities have been duly
and validly authorized and reserved and, when issued upon conversion
of the Securities in accordance with the terms of the Securities and
the Indenture, will be validly issued, fully paid and non-assessable
and the issuance of the Underlying Securities will not be subject to
any preemptive or similar rights; and the Holders of the Registrable
Securities (as defined in the Registration Rights Agreement) will be
entitled to the benefits of Registration Rights Agreement in
accordance with its terms and, except as rights to indemnity and
contribution thereunder may be limited by Federal or state securities
laws or principles of public policy; and the Indenture, the
Registration Rights Agreement, and the Securities conform to the
descriptions thereof contained in the Time of Sale Information and the
Offering Circular.
(g) The Company has an authorized capitalization as set forth in the Time
of Sale Information and the Offering Circular, and all of the issued
shares of capital stock of the Company, have been duly and validly
authorized and issued, are fully paid and non-assessable, have been
issued in compliance with federal and state securities laws, and
conform to the description thereof contained in the Time of Sale
Information and the Offering Circular. None of the outstanding shares
of Common Stock was issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock
of the Company or any of its subsidiaries other than those accurately
described in the Time of Sale Information (other than subsequent
issuances, if any, pursuant to the Company's stock option or other
employee benefit plans listed in the Time of Sale Information) or in
the Company's filings under the Exchange Act, which have been
incorporated by reference in the Time of Sale Information.
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(h) All the outstanding shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and, except to the extent set forth in the Time of
Sale Information, are owned by the Company directly or indirectly
through one or more wholly-owned subsidiaries, or are subject to the
Company's right to direct their ownership, free and clear of any
claim, lien, encumbrance, security interest, restriction upon voting
or transfer or any other claim of any third party.
(i) The execution, delivery and performance of each of the Transaction
Documents by the Company and the consummation of the transactions
contemplated hereby and thereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default or accelerate or trigger any consequences under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries that are corporations, or other
similar organizational documents of the Company's subsidiaries that
are entities other than corporations, or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets.
(j) Except (i) for such consents, approvals, authorizations, registrations
or qualifications as may be required under applicable state securities
laws in connection with the purchase and distribution of the
Securities by the Initial Purchaser and (ii) as expressly required
pursuant to the Registration Rights Agreement, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution,
delivery and performance each of the Transaction Documents by the
Company and the consummation of the transactions contemplated hereby
and thereby.
(k) KPMG LLP, who have expressed their opinions on the audited financial
statements and related notes and schedules included or incorporated by
reference in the Time of Sale Information and the Offering Circular is
an independent registered public accounting firm with respect to the
Company and its subsidiaries within the meaning of Rule 101 of the
Code of Professional Conduct of the American Institute of Certified
Public Accountants and its interpretations and rulings thereunder as
required by the Securities Act and the Rules and Regulations.
(l) The financial statements, together with the related notes and
schedules, included or incorporated by reference in the Time of Sale
Information and the Offering Circular fairly present the financial
position and the results of operations and changes in financial
position of the Company and its consolidated subsidiaries at the
respective dates or for the respective periods therein specified. Such
financial statements and related notes and schedules have been
prepared in accordance with placecountry-regionUnited States generally
accepted accounting principles ("GAAP") applied on a consistent basis
except as disclosed therein. The financial statements, together with
the related notes and schedules, included or incorporated by reference
in the Time of Sale Information and the Offering Circular comply in
all material respects with the Securities Act and the Rules and
Regulations thereunder. No other financial statements or supporting
schedules or exhibits are required by the Securities Act or the Rules
and Regulations thereunder to be included, or incorporated by
reference in the Time of Sale Information or the Offering Circular.
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(m) Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements included or
incorporated by reference in the Time of Sale Information, any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Time of Sale
Information; and, since such date, otherwise than as set forth or
contemplated in the Time of Sale Information, there has not been any
change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
business, operations, general affairs, management, prospects,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries taken as a whole.
(n) Except as set forth in the Time of Sale Information, there is no legal
or governmental proceeding pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which is required to
be described in the Time of Sale Information or the Offering Circular
and is not described therein, or which, singularly or in the
aggregate, if determined adversely to the Company or any of its
subsidiaries, might have a Material Adverse Effect or would prevent or
adversely affect the ability of the Company to perform its obligations
under the Transaction Documents; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(o) Neither the Company nor any of its subsidiaries (i) is in violation of
its charter, by-laws or other organizational documents, (ii) is in
default in any respect, and no event has occurred which, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or (iii) is in
violation in any respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may
be subject except, in the case of clauses (ii) and (iii) above, any
defaults, events or violations which, singularly or in the aggregate,
would not have a Material Adverse Effect.
(p) The Company and each of its subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate state, federal or
foreign regulatory agencies or bodies which are necessary for the
ownership of their respective properties or the conduct of their
respective businesses as described in the Time of Sale Information and
the Offering Circular except where any failures to possess or make the
same, singularly or in the aggregate, would not have a Material
Adverse Effect; and the Company has not received notification of any
revocation or modification of any such license, authorization or
permit and has no reason to believe that any such license,
certificate, authorization or permit will not be renewed.
(q) Neither the Company nor any of its subsidiaries is or, after giving
effect to the offering of the Securities and the application of the
proceeds thereof as described in the Time of Sale Information and the
Offering Circular, will become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended and the
rules and regulations of the Commission thereunder.
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(r) Neither the Company nor any of its officers, directors or affiliates
has taken or will take, directly or indirectly, any action designed or
intended to stabilize or manipulate the price of any security of the
Company, or which caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(s) The Company and its subsidiaries own or possess the valid right to use
all (i) valid and enforceable patents, patent applications,
trademarks, trademark registrations, service marks, service xxxx
registrations, Internet domain name registrations, copyrights,
copyright registrations, licenses, trade secret rights ("Intellectual
Property Rights") and (ii) inventions, software, works of authorships,
trade marks, service marks, trade names, databases, formulae, know
how, Internet domain names and other intellectual property (including
trade secrets and other unpatented and/or unpatentable proprietary
confidential information, systems, or procedures) (collectively,
"Intellectual Property Assets") necessary to conduct their respective
businesses as described in the Time of Sale Information and the
Offering Circular of which the Company or its subsidiaries are aware.
The Company and its subsidiaries have not received any opinion from
their legal counsel concluding that any activities of their respective
businesses infringe, misappropriate, or otherwise violate, valid and
enforceable Intellectual Property Rights of any other person, and have
not received written notice of any challenge, which is to their
knowledge still pending, by any other person to the rights of the
Company and its subsidiaries with respect to any Intellectual Property
Rights or Intellectual Property Assets owned or used by the Company or
its subsidiaries. To the knowledge of the Company, the Company and its
subsidiaries' respective businesses as now conducted do not give rise
to any infringement of, any misappropriation of, or other violation
of, any valid and enforceable Intellectual Property Rights of any
other person. Each of the Company and its subsidiaries has taken
reasonable steps to maintain the confidentiality of, and otherwise
protect and enforce its rights in, all proprietary information that
the Company or its subsidiary holds, or purports to hold, as a trade
secret or proprietary confidential information. The Company has duly
filed or caused to be filed with the U.S. Patent and Trademark Office
(the "PTO") and applicable foreign and international patent
authorities all patent applications described in the Time of Sale
Information and the Offering Circular and owned by the Company (the
"Patent Applications"). In connection with the filing of the Patent
Applications at the PTO and in other patent offices around the world,
the Company has conducted such investigations of the published
literature and patent references as it has deemed appropriate relating
to the inventions claimed in the Patent Applications and, to the best
of the Company's knowledge, the Company has complied with the PTO's
duty of candor and good faith (including the duty to disclose
information known to be material to patentability) regarding
prosecution of the Patent Applications and made no misrepresentation
in violation of that duty in the Patent Applications. Except as set
forth in the Time of Sale Information, the Company is not aware of any
facts material to a determination of patentability regarding the
Patent Applications not called to the attention of the PTO that would
preclude the grant of a patent for the Patent Applications, is not
aware of any other facts material to the Patent Applications not
called to the attention of the PTO per the duty of candor and good
faith, and has secured with appropriate legal instruments title to all
Patent Applications and other Intellectual Property Rights owned by
the Company and its subsidiaries. To the knowledge of the Company, no
third party is engaging in any activity that infringes,
misappropriates, or violates the Intellectual Property Rights owned,
or purported to be owned, by the Company or its subsidiaries, except
as described in the Time of Sale Information and except for such
activities that, singularly or in the aggregate, would not have a
Material Adverse Effect.
(t) The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise
use, all items of real or personal property which are material to the
business of the Company and its subsidiaries taken as a whole, in each
case free and clear of all liens, encumbrances, claims and defects
that may result in a Material Adverse Effect.
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(u) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is
imminent which might be expected to have a Material Adverse Effect.
The Company is not aware that any key employee or significant group of
employees of the Company or any subsidiary plans to terminate
employment with the Company or any such subsidiary.
(v) No "prohibited transaction" (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended from
time to time (the "Code")) or "accumulated funding deficiency" (as
defined in Section 302 of ERISA) or any of the events set forth in
Section 4043(c) of ERISA (other than events with respect to which the
30-day notice requirement under Section 4043 of ERISA has been waived)
has occurred with respect to any employee benefit plan of the Company
or any of its subsidiaries which could have a Material Adverse Effect;
each employee benefit plan is in compliance in all material respects
with applicable law, including ERISA and the Code; the Company has not
incurred and does not expect to incur liability under Title IV of
ERISA with respect to the termination of, or withdrawal from, any
"pension plan"; and each "pension plan" (as defined in ERISA) for
which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which could cause the loss of such qualification.
(w) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or
caused by the Company or any of its subsidiaries (or, to the best of
the Company's knowledge, any other entity for whose acts or omissions
the Company or any of its subsidiaries is or may be liable) upon any
of the property now or previously owned or leased by the Company or
any of its subsidiaries, or upon any other property, in violation of
any statute or any ordinance, rule, regulation, order, judgment,
decree or permit or which would, under any statute or any ordinance,
rule (including rule of common law), regulation, order, judgment,
decree or permit, give rise to any liability, except for any violation
or liability which would not have, singularly or in the aggregate with
all such violations and liabilities, a Material Adverse Effect or not
otherwise be required to be disclosed under the Securities Act; there
has been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property
of any toxic or other wastes or other hazardous substances with
respect to which the Company or any of its subsidiaries have
knowledge, except for any such disposal, discharge, emission, or other
release of any kind which would not have, singularly or in the
aggregate with all such discharges and other releases, a Material
Adverse Effect or not otherwise be required to be disclosed under the
Securities Act.
(x) The Company and its subsidiaries each (i) have filed all federal,
state, local and foreign tax returns that are required to be filed,
and all such returns are true, correct, and complete, (ii) have paid
all federal, state, local and foreign taxes for which it is liable,
and (iii) do not have any tax deficiency or claims outstanding,
assessed or, to the best of the Company's knowledge, proposed against
it which could reasonably be expected to have a Material Adverse
Effect.
(y) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as they reasonably
deem adequate for the conduct of their respective businesses and the
value of their respective properties and as is customary for companies
engaged in similar businesses in similar industries.
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(z) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that: (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(aa) The minute books of the Company and each of its subsidiaries relating
to meetings held and actions taken by the board of directors
(including each board committee) and stockholders of the Company and
each of its subsidiaries from January 1, 2003 through the date of the
latest meeting and action have been made available to the Initial
Purchaser and counsel for the Initial Purchaser, and such books (i)
contain a complete summary in all material respects of all meetings
and actions of the board of directors (including each board committee)
and stockholders of the Company and each of its subsidiaries during
such time period, and (ii) accurately in all material respects reflect
all transactions referred to in such minutes.
(bb) There is no lease, contract, agreement or document required to be
described in the Time of Sale Information and in the Offering Circular
which is not described therein as required; and all descriptions of
any such leases, contracts, agreements or documents contained in the
Time of Sale Information and the Offering Circular are accurate and
complete descriptions of such documents in all material respects.
Other than as described in the Time of Sale Information, no such
lease, contract or agreement has been suspended or terminated for
convenience or default by the Company or any of the other parties
thereto, and the Company has not received notice or any other
knowledge of any such pending or threatened suspension or termination,
except for such pending or threatened suspensions or terminations that
would not reasonably be expected to, singularly or in the aggregate,
have a Material Adverse Effect.
(cc) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is
required to be described in the Time of Sale Information and the
Offering Circular and which is not so described.
(dd) No person or entity has the right to require registration of shares of
Common Stock or other securities of the Company because of the filing
or effectiveness of the Shelf Registration Statement or otherwise,
except for persons and entities who have expressly waived such right
or who have been given timely and proper notice and have failed to
exercise such right within the time or times required under the terms
and conditions of such right.
(ee) Except as would not have a material impact on the Company, the
exercise price of each option issued under the Company's stock option
or other employee benefit plans has been no less than the fair market
value of a share of Common Stock as determined on the date of grant of
such option. All grants of options were validly issued and properly
approved by the board of directors of the Company (or a duly
authorized committee or subcommittee thereof) in material compliance
with all applicable laws and regulations and recorded in the Company's
financial statements in accordance with GAAP and, to the Company's
knowledge, no such grants involved "back dating," "forward dating" or
similar practice with respect to the effective date of grant.
(ff) On and immediately after the Closing Date, the Company (after giving
effect to the issuance of the Securities and to the other transactions
related thereto as described in the Time of Sale Information and in
the Offering Circular) will be Solvent. As used in this paragraph, the
term "Solvent" means, with respect to a particular date, that on such
date (i) the present fair market value (or present fair saleable
value) of the assets of the Company is not less than the total amount
8
required to pay the probable liabilities of the Company on its total
existing debts and liabilities (including contingent liabilities) as
they become absolute and matured, (ii) the Company is able to realize
upon its assets and pay its debts and other liabilities, contingent
obligations and commitments as they mature and become due in the
normal course of business, (iii) assuming the sale of the Securities
as contemplated by this Agreement, the Time of Sale Information and
the Offering Circular, the Company is not incurring debts or
liabilities beyond its ability to pay as such debts and liabilities
mature and (iv) the Company is not engaged in any business or
transaction, and is not about to engage in any business or
transaction, for which its property would constitute unreasonably
small capital after giving due consideration to the prevailing
practice in the industry in which the Company is engaged. In computing
the amount of such contingent liabilities at any time, it is intended
that such liabilities will be computed at the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
(gg) Neither the Company nor any of its subsidiaries own any "margin
securities" as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"),
and none of the proceeds of the sale of the Securities will be used,
directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Federal Reserve Board.
(hh) Except as specifically provided by this Agreement, neither the Company
nor any of its subsidiaries is a party to any contract, agreement or
understanding with any person that would give rise to a valid claim
against the Company or the Initial Purchaser for a brokerage
commission, finder's fee or like payment in connection with the
offering and sale of the Securities.
(ii) No forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act) contained in the
Time of Sale Information and the Offering Circular has been made or
reaffirmed without a reasonable basis or has been disclosed other than
in good faith.
(jj) The Company has not received any notice from the Nasdaq Global Market
regarding the delisting of the Common Stock from the Nasdaq Global
Market.
(kk) The Securities satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act.
(ll) Neither the Company nor any of its affiliates has, directly or through
any agent (other than the Initial Purchaser and its Affiliates, as to
whom no representation is made), (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
such term is defined in the Securities Act), which is or will be
integrated with the sale of the Securities in a manner that would
require registration of the Securities under the Securities Act, or
(ii) engaged, in connection with the offering of the Securities, in
any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act.
(mm) The Company meets all of the requirements for use of Form S-3 for
registering securities under the Securities Act.
(nn) The Company has established and maintains "disclosure controls and
procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the
Exchange Act); the Company's "disclosure controls and procedures" are
reasonably designed to ensure that all information (both financial and
non-financial) required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded,
9
processed, summarized and reported within the time periods specified
in the Rules and Regulations, and that all such information is
accumulated and communicated to the Company's management as
appropriate to allow timely decisions regarding required disclosure
and to make the certifications of the Chief Executive Officer and
Chief Financial Officer of the Company required under the Exchange Act
with respect to such reports.
(oo) Since the date of the filing of the Company's Annual Report on Form
10-K for the year ended June 30, 2006, the Company's auditors and the
audit committee of the board of directors of the Company (or persons
fulfilling the equivalent function) have not been advised of (i) any
significant deficiencies or material weaknesses in the design or
operation of internal controls which are reasonably likely to
adversely affect the Company's ability to record, process, summarize
and report financial data; or (ii) any fraud, whether or not material,
that involves management or other employees who have a significant
role in the Company's internal controls.
(pp) The Company is in compliance in all material respects with all
applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 and all rules
and regulations promulgated thereunder or implementing the provisions
thereof (the "Xxxxxxxx-Xxxxx Act") that are currently in effect with
respect to the Company and is actively taking steps to ensure that it
will be in compliance in all material respects with other applicable
provisions of the Xxxxxxxx-Xxxxx Act not currently in effect with
respect to the Company upon and at all times after the effectiveness
of such provisions.
(qq) The Company is in compliance in all material respects with all
applicable corporate governance and continued listing requirements set
forth in the Nasdaq Marketplace Rules that are currently in effect
with respect to the Company and is actively taking steps to ensure
that it will be in compliance in all material respects with other
applicable corporate governance requirements set forth in the Nasdaq
Marketplace Rules not currently in effect with respect to the Company
upon and at all times after the effectiveness of such requirements.
(rr) Neither the Company nor any of its subsidiaries nor, to the best of
the Company's knowledge, any employee or agent of the Company or any
subsidiary, has made any contribution or other payment to any official
of, or candidate for, any federal, state or foreign office in
violation of any law (including the Foreign Corrupt Practices Act of
1977, as amended) or of the character required to be disclosed in the
Time of Sale Information or the Offering Circular.
(ss) There are no transactions, arrangements or other relationships between
and/or among the Company, any of its affiliates (as such term is
defined in Rule 405 of the Securities Act, an "Affiliate") and any
unconsolidated entity, including, but not limited to, any structure
finance, special purpose or limited purpose entity that could
reasonably be expected to materially affect the Company's liquidity or
the availability of or requirements for its capital resources required
to be described in the Time of Sale Information and the Offering
Circular which have not been described as required.
(tt) There are no outstanding loans, advances (except normal advances for
business expense in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or members of their immediate
families, except as disclosed in the Time of Sale Information and the
Offering Circular.
3. PURCHASE CITYPLACESALE AND DELIVERY OF OFFERED SECURITIES.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and
10
conditions herein set forth, the Company agrees to issue and
sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company, at a purchase price of 96.5% of the
principal amount thereof (the "Purchase Price"), plus accrued
interest, if any, to the Closing Date, $60,000,000 aggregate
principal amount of Firm Securities. The Company shall not be
obligated to deliver any of the Firm Securities except upon payment
for all the Firm Securities to be purchased as provided herein.
Delivery of and payment for the Firm Securities shall be made at the
offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxx Xxxx, Xxxxxxxxxx 00000, or at such other
place as shall be agreed upon by the Initial Purchaser and the
Company, at 10:00 A.M., New York City time, on October 12, 2006, or at
such other date or time as shall be agreed upon by the Initial
Purchaser and the Company (such date and time being referred to herein
as the "First Closing Date").
The Initial Purchaser may purchase at the Purchase Price, plus accrued
interest, if any, from the Closing Date to the Option Closing Date (as
defined below), from the Company up to all of the Optional Securities
for the purpose of covering over-allotments, if any, in connection
with the distribution and resale of Firm Securities. The option
granted hereby may be exercised in whole or in part, and from time to
time, at any time or times by written notice from the Initial
Purchaser of each such election to exercise this option not later than
5:00 P.M., New York City time on November 8, 2006 (each, an
"Exercise Notice"). Each Exercise Notice shall specify the principal
amount of Optional Securities to be purchased and the date on which
such Option Securities are to be purchased (each, an "Option Closing
Date"), provided, however, that in no event shall any Option Closing
Date be later than November 11, 2006. (The Option Closing Dates and
the First Closing Date are herein collectively referred to as the
"Closing Dates.") Each Option Closing Date must be at least two
business days after the Exercise Notice is given, unless a shorter
time is approved by the Company. No Optional Securities shall be sold
and delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right of the Initial
Purchaser to purchase the Option Securities available to the Initial
Purchaser or any portion thereof may be surrendered and terminated at
any time upon notice by the Initial Purchaser to the Company.
Delivery of and payment for the Optional Securities shall be made at
the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxx, Xxxxxxxxxx 00000, or at such
other place as shall be agreed upon by the Initial Purchaser and the
Company, at 10:00 A.M., New York City time, on the Option Closing
Date.
The Securities to be purchased by the Initial Purchaser hereunder and
sold to "qualified institutional buyers" as defined in Rule 144A under
the Securities Act ("Qualified Institutional Buyers") shall be
represented by one or more global securities (the "Global Securities")
in book-entry form which will be deposited by or on behalf of the
Company with the Trustee, as custodian for The Depository Trust
Company ("DTC"). The Global Securities will be registered in the name
of Cede & Co. as nominee for DTC, and in the other cases, in such
names and in such denominations as the Initial Purchaser shall request
no later than on full business day prior to the applicable Closing
Date. On each Closing Date, the Company shall deliver or cause to be
delivered the Securities to the Initial Purchaser against payment to
or upon the order of the Company of the purchase price by wire
transfer payable in federal (same day) funds by causing The Depository
Trust Company to credit the Securities to the account of the Initial
Purchaser at The Depository Trust Company. The Company shall make the
certificates representing the Securities available for inspection by
the Initial Purchaser at least twenty-four hours prior to the Closing
Date. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the
obligation of the Initial Purchaser hereunder.
11
(b) The Initial Purchaser has advised the Company that it proposes to
offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Circular. The Initial
Purchaser, represents and warrants to, and agrees with, the Company
that (i) it is purchasing the Securities pursuant to a private sale
exempt from registration under the Securities Act, (ii) it has not
solicited offers for, or offered or sold, and will not 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 under the Securities Act ("Regulation D") or in any
manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (iii) it has solicited and will solicit
offers for the Securities only from, and has offered or sold and will
offer, sell or deliver the Securities, as part of its initial
offering, only to persons whom it reasonably believes to be Qualified
Institutional Buyers, or if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been
given that such sale or delivery is being made in reliance on Rule
144A and in each case, in transactions in accordance with Rule 144A.
The Initial Purchaser has advised the Company that it will offer the
Securities at a price initially equal to at least 95% of the principal
amount thereof, plus accrued interest, if any, from the date of
issuance of the Securities. Such price may be changed by the Initial
Purchaser at any time thereafter without notice. In addition to the
foregoing, the Initial Purchaser acknowledges and agrees that the
Company and, for purposes of the opinions to be delivered to the
Initial Purchaser pursuant to Sections 6(d) and (e), counsel for the
Company and for the Initial Purchaser, respectively, may rely upon the
accuracy of the representations and warranties of the Initial
Purchaser and their compliance with their agreements contained in this
Section 3, and the Initial Purchaser hereby consents to such reliance.
(c) The Company acknowledges and agrees that the Initial Purchaser may
sell Securities to any of its Affiliate and that any such Affiliate
may sell Securities purchased by it to the Initial Purchaser.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with
the Initial Purchaser:
(a) To notify the Initial Purchaser promptly and, if requested, confirm
such notification in writing, of the happening of any event which
makes any statement of a material fact made in the Offering Circular
untrue or which requires the making of any additions to or changes in
the Offering Circular (as amended or supplemented from time to time)
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; to advise
the Initial Purchaser promptly after obtaining knowledge of any order
preventing or suspending the use of the Time of Sale Information or
the Offering Circular, of any suspension of the qualification of the
Securities for offering or sale in any jurisdiction and of the
initiation or threatening of any proceeding for any such purpose; and
to use its best efforts to prevent the issuance of any such order
preventing or suspending the use of the Time of Sale Information or
the Offering Circular or suspending any such qualification and, if any
such suspension is issued, to obtain the lifting thereof at the
earliest possible time.
(b) To furnish promptly to the Initial Purchaser and counsel for the
Initial Purchaser, without charge, as many copies of the Preliminary
Offering Circular, other Time of Sale Information and the Offering
Circular (and any amendments or supplements thereto) and any document
incorporated by reference in the Time of Sale Information or the
Offering Circular as may be reasonably requested.
(c) Prior to making any amendment or supplement to the Offering Circular,
to promptly furnish a copy thereof to the Initial Purchaser and
counsel for the Initial Purchaser and not to effect any such amendment
or supplement to which the Initial Purchaser shall reasonably object
by notice to the Company after a reasonable period to review. The
Company will not amend or supplement the Time of Sale Information
after the Applicable Time.
12
(d) If, at any time prior to completion of the resale of the Securities by
the Initial Purchaser, any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for the
Initial Purchaser or counsel for the Company, to amend or supplement
the Offering Circular in order that the Offering Circular will not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances existing at the time it is delivered to
a purchaser, not misleading, or if it is necessary to amend or
supplement the Offering Circular to comply with applicable law, to
promptly prepare such amendment or supplement as may be necessary to
correct such untrue statement or omission or so that the Offering
Circular, as so amended or supplemented, will comply with applicable
law.
(e) For so long as the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities
Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request
of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in
compliance with Section 13 or 15(d) of the Exchange Act (the foregoing
agreement being for the benefit of the holders from time to time of
the Securities and prospective purchasers of the Securities designated
by such holders).
(f) To promptly take from time to time such actions as the Initial
Purchaser may reasonably request to qualify Securities for offering
and sale under the securities or Blue Sky laws of such jurisdiction as
the Initial Purchaser may designate; and to continue such
qualifications in effect for so long as required for the distribution
of the Securities; provided that the Company shall not be obligated to
qualify as foreign corporations in any jurisdiction in which it is not
now so qualified, or to file a general consent to service of process
in any jurisdiction.
(g) Until the earlier of five years after the Closing Date or the first
date at which the Securities are no longer outstanding, to deliver to
the Initial Purchaser, (i) as soon as they are available, copies of
all reports or other communications furnished to stockholders which
are not available on XXXXX and (ii) as soon as they are available,
copies of any reports and financial statements furnished or filed with
the Commission pursuant to the Exchange Act or any national securities
exchange or automatic quotation system on which the Securities or any
class of securities of the Company are listed or quoted which are not
available on XXXXX.
(h) During the period beginning on and including the date of this
Agreement through and including the date that is the 90th day after
this Agreement (the "Lock-Up Period"), without the prior written
consent of the Initial Purchaser, not to directly or indirectly offer,
sell, assign, transfer, pledge, contract to sell, or otherwise dispose
of, or announce the intention to otherwise dispose of, any shares of
Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock, and will not file a registration
statement under the Securities Act in connection with any transaction
by the Company or any person that is prohibited pursuant to the
foregoing, other than (i) the Company's sale of the Securities
hereunder, (ii) the issuance of shares pursuant to the Company's
employee benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights, (iii) the filing of
the Shelf Registration Statement pursuant to the Registration Rights
Agreement, (iv) the filing of any registration statement on Form S-8
to register shares of Common Stock reserved for issuance under the
Company's equity compensation plans; provided, that in the case of
this clause (iv), the holders of such shares of Common Stock agree in
writing not to directly or indirectly offer, sell, assign, transfer,
13
pledge, contract to sell, or otherwise dispose of, or announce the
intention to otherwise dispose of, such shares of Common Stock,
without the prior written consent of the Initial Purchaser, during the
Lock-Up Period, (v) the conversion or exchange of convertible or
exchangeable securities or the exercise of warrants or options, in
each case outstanding on the date of this Agreement; and (vi) the
filing of a universal shelf registration statement (but not the filing
of any prospectus relating to a specific take-down thereunder) to
register the Company's Common Stock, preferred stock, debt securities,
warrants and units, provided that such universal shelf registration
statement is filed on or after the 31st day following the date of this
Agreement and after the date of the filing of the Shelf Registration
Statement. The Company will cause each officer and director listed in
Annex B to furnish to each Initial Purchaser, prior to the Closing
Date, a letter, substantially in the form of Annex C hereto, pursuant
to which each such person shall agree not to directly or indirectly
offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, or announce the intention to otherwise dispose of, any
shares of Common Stock or securities convertible into or exercisable
or exchangeable for Common Stock during the Lock-Up Period, without
the prior written consent of the Initial Purchaser. The Company hereby
agrees that (i) if it issues an earnings release or material news or a
material event relating to the Company occurs during the last
seventeen (17) days of the Lock-Up Period, or (ii) if prior to the
expiration of the Lock-Up Period, the Company announces that it will
release earning results during the sixteen (16)-day period beginning
on the last day of the Lock-Up Period, the Lock-Up Period shall be
extended and the restrictions imposed by this paragraph (h) shall
continue to apply until the expiration of the eighteen (18)-day period
beginning on the issuance of the earnings release or the occurrence of
the material news or material event.
(i) To assist the Initial Purchaser in arranging for the Securities to be
designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers,
Inc. ("NASD") relating to trading in the PORTAL Market and for the
Securities to be eligible for clearance and settlement through DTC.
(j) Not to, and to cause its Affiliates not to, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any
security (as such term is defined in the Securities Act) which could
be integrated with the sale of the Securities in a manner which would
require registration under the Securities Act of the sale of the
Securities to the Initial Purchaser or of the subsequent sale to
Qualified Institutional Buyers.
(k) Except following the effectiveness of the Shelf Registration
Statement, not to, and to cause its Affiliates not to, and not to
authorize or knowingly permit any person acting on their behalf to,
solicit any offer to buy or offer to sell the Securities by means of
any form of general solicitation or general advertising within the
meaning of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; and not to
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section
4(2) of the Securities Act to cease to be applicable to the offering
and sale of the Securities as contemplated by this Agreement and the
Offering Circular.
(l) During the period from the Closing Date until two years after the
Closing Date, without the prior written consent of the Initial
Purchaser, not to, and not permit any of its Affiliates to, resell any
of the Securities that have been reacquired by them, except for
Securities purchased by the Company or any of its affiliates and
resold in a transaction registered under the Securities Act.
(m) Prior to the Closing Date, to furnish to the Initial Purchaser, as
soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company for any periods
subsequent to the periods covered by the financial statements
appearing in the Offering Circular.
14
(n) Prior to the Closing Date, the Company will not issue any press
release or other communication directly or indirectly or hold any
press conference with respect to the Company, its condition, financial
or otherwise, or earnings, business affairs or business prospects
(except for routine oral marketing communications in the ordinary
course of business and consistent with the past practices of the
Company and of which the Initial Purchaser are notified), without the
prior written consent of the Initial Purchaser, unless in the judgment
of the Company and its counsel, and after notification to the Initial
Purchaser, such press release or communication is required by law.
(o) In connection with the offering of the Securities, until the Initial
Purchaser shall have notified the Company of the completion of the
resale of the Securities, the Company will not, and will cause its
affiliated purchasers (as defined in Regulation M under the Exchange
Act) not to, either alone or with one or more other persons, bid for
or purchase, for any account in which it or any of its affiliated
purchasers has a beneficial interest, any Securities, or attempt to
induce any person to purchase any Securities; and the Company will not
and will cause its affiliated purchasers not to, make bids or purchase
for the purpose of creating actual, or apparent, active trading in or
of raising the price of the Securities.
(p) Before using, authorizing, approving or referring to any written
communication (as defined in the Securities Act) that constitutes an
offer to sell or a solicitation of an offer to buy the Securities
(other than the Time of Sale Information and the Offering Circular),
the Company will furnish to the Initial Purchaser and counsel for the
Initial Purchaser a copy of such written communication for review and
will not use, authorize, approve or refer to any such written
communication to which the Initial Purchaser reasonably objects.
(q) Not to take any action prior to the Closing Date which would require
the offering to be amended or supplemented pursuant to Section 4(d).
(r) To comply in all material respects with all applicable provisions of
the Xxxxxxxx-Xxxxx Act and the Nasdaq Global Market listing standards
in effect from time to time.
(s) To apply the net proceeds from the sale of the Securities as set forth
in the Time of Sale Information and the Offering Circular under the
heading "Use of Proceeds."
(t) That the Company will not, for so long as the Securities are
outstanding, be or become, or be or become owned by, an open-end
investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act, and will not be or become, or be or become
owned by, a closed-end investment company required to be registered,
but not registered thereunder.
(u) In connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel
available upon reasonable request by the Initial Purchaser.
(v) To not take any action prior to the execution and delivery of the
Indenture which, if taken after such execution and delivery, would
have violated any of the covenants contained in the Indenture.
5. PAYMENT OF EXPENSES. The Company agrees with the Initial Purchaser
to pay (a) the costs incident to the authorization, issuance, sale, preparation
and delivery of the Securities and any stamp or transfer taxes payable in that
connection; (b) the costs incident to the preparation, printing and distribution
of the Preliminary Offering Circular, any other Time of Sale Information, the
Offering Circular and any amendments, supplements and exhibits thereto, and the
costs of printing, reproducing and distributing the applicable Transaction
15
Documents by mail or other means of communications; (c) all expenses incurred in
connection with the application for quotation of the securities on The PORTAL
Market and the approval of the securities for book-entry transfer by the
Depository Trust Company; (d) any applicable listing or other fees; (e) the fees
and expenses of qualifying the Securities under the securities laws of the
several jurisdictions as provided in Section 4(f) and of preparing, printing and
distributing Blue Sky Memoranda and Legal Investment Surveys (including related
fees and expenses of counsel to the Initial Purchaser); (f) all fees and
expenses of the Trustee or any agent thereof; (g) any fees charged by securities
rating services for rating the Securities; and (h) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement (including, without limitation, the fees and expenses of the Company's
counsel and the Company's independent accountants); provided that, except as
otherwise provided in this Section 5 and in Section 9, the Initial Purchaser
shall pay their own costs and expenses, including the fees and expenses of their
counsel, any transfer taxes on the Securities which they may sell.
6. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The respective
obligations of the Initial Purchaser hereunder are subject to the accuracy, in
all material respects, when made and on the Closing Date, of the representations
and warranties of the Company contained herein, to the accuracy, in all material
respects, of the statements of the Company made in any certificates pursuant to
the provisions hereof, to the performance, in all material respects, by the
Company of its obligations hereunder to be performed on or prior to the Closing
Date (except that any such representation, warranty, statement or obligation, as
the case may be, which is qualified by materiality or Material Adverse Effect
shall be accurate or shall be performed, as the case may be, in all respects),
and to each of the following additional terms and conditions:
(a) The Offering Circular (and any amendments or supplements thereto)
shall have been printed and copies distributed to the Initial
Purchaser as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial
Purchaser may agree; and no stop order suspending the sale of the
Securities in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(b) The Initial Purchaser shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Offering Circular or
any amendment or supplement thereto contains an untrue statement of a
fact which, in the opinion of counsel for the Initial Purchaser, is
material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents,
the Time of Sale Information, the Offering Circular and the legal
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
counsel for the Initial Purchaser, and the Company shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) (i) Fish & Xxxxxxxxxx PC shall have furnished to the Initial Purchaser
such counsel's written opinion, as counsel to the Company, addressed
to the Initial Purchaser and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchaser, to the
effect set forth in Annex D and (ii) Xxxxxxx Xxxxxxxx & Xxxx LLP shall
have furnished to the Initial Purchaser such counsel's written
opinion, as patent counsel to the Company, addressed to the Initial
Purchaser and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchaser, to the effect set forth in
Annex E.
(e) The Initial Purchaser shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, special counsel to the Initial Purchaser, dated
the Closing Date, with respect to such matters as the Initial
Purchaser may reasonably require, and the Company shall have furnished
to each such counsel such documents as they request for enabling them
to pass upon such matters.
16
(f) At the time of the execution of this Agreement, the Initial Purchaser
shall have received from KPMG LLP letters, addressed to the Initial
Purchaser and dated the date of this Agreement, in form and substance
satisfactory to the Initial Purchaser (i) confirming that they are
independent certified public accountants with respect to the Company
and its subsidiaries within the meaning of the applicable rules and
regulations adopted by the SEC, (ii) stating that, in their opinion,
the consolidated financial statements of the Company and its
subsidiaries audited by them and incorporated by reference in the Time
of Sale Information and the Offering Circular comply as to form in all
material respects with the applicable sections of Regulation S-X and
(iii) stating the conclusions and findings of such firm with respect
to the financial statements and certain financial information
contained in the Preliminary Offering Circular, the other Time of Sale
Information (if any) and the Offering Circular.
(g) On the Closing Date, the Initial Purchaser shall have received a
letter (the "bring-down letter") from KPMG LLP, addressed to the
Initial Purchaser and dated the Closing Date, in form and substance
satisfactory to the Initial Purchaser confirming, as of the date of
the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Offering Circular as of a date
not more than three business days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by its letters
delivered to the Initial Purchaser concurrently with the execution of
this Agreement relating to the Preliminary Offering Circular, the
other Time of Sale Information (if any) and the Offering Circular
pursuant to Section 6(f).
(h) The Company shall have furnished to the Initial Purchaser a
certificate, dated the Closing Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating
that (i) such officers have carefully examined each of the Time of
Sale Information and the Offering Circular and, in their opinion,
neither the Time of Sale Information, as of the Applicable Time, and
the Offering Circular, as of its date, included any untrue statement
of a material fact and did not omit to state a material fact required
to be stated therein or necessary to make the statements therein in
the light of the circumstances under which they were made, not
misleading, (ii) to their knowledge after reasonable investigation and
examination of the Offering Circular, since the Applicable Time, no
event has occurred which should have been set forth in a supplement or
amendment to the Offering Circular, (iii) to their knowledge after
reasonable investigation and examination of the Offering Circular, as
of the Closing Date, the representations and warranties of the Company
in this Agreement are true and correct in all material respects, and
the Company has complied in all material respects with all agreements
and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date (except that any such
representation, warranty, agreement or condition, as the case may be,
which is qualified by materiality or Material Adverse Effect shall be
true and correct, shall be complied with or shall be satisfied, as the
case may be, in all respects), and (iv) subsequent to the date of the
most recent financial statements included in the Time of Sale
Information, there has been no material adverse change in the
financial position or results of operation of the Company and its
subsidiaries, or any change, or any development including a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole, except as set forth in
the Time of Sale Information.
(i) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Time of Sale Information (i) any loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Time of Sale Information,
(ii) since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any of its
17
subsidiaries or any change, or any development involving a prospective
change, in or affecting the business, general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries taken as a whole, otherwise than as
set forth or contemplated in the Time of Sale Information, the effect
of which, in any such case described in clause (i) or (ii) above, is,
in the judgment of the Initial Purchaser, so material and adverse as
to make it impracticable or inadvisable to proceed with the sale or
delivery of the Securities on the terms and in the manner contemplated
in the Time of Sale Information.
(j) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Securities or the Underlying Securities or
materially and adversely affect or be likely to materially and
adversely affect the business or operations of the Company; and no
injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been
issued as of the Closing Date which would prevent the issuance or sale
of the Securities or the Underlying Securities or materially and
adversely affect or be likely to materially and adversely affect the
business or operations of the Company.
(k) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under
surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of any of the
Company's debt securities.
(l) Subsequent to the execution and delivery of this Agreement there shall
not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the Nasdaq Stock Market or
the American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or materially
limited, or minimum or maximum prices or maximum range for prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or market or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities or
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, (iii) the
United States shall have become engaged in hostilities, or the subject
of an act of terrorism, or there shall have been an outbreak of or an
escalation in hostilities involving the United States, or there shall
have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of the
Initial Purchaser, impracticable or inadvisable to proceed with the
sale or delivery of the Securities on the terms and in the manner
contemplated in the Time of Sale Information and the Offering
Circular.
(m) The Initial Purchaser shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of the Company.
(n) The Indenture shall have been duly executed and delivered by the
Company and the Trustee, and the Securities shall have been duly
executed and delivered by the Company and duly authenticated by the
Trustee.
(o) The Securities shall have been approved by the NASD for trading in the
PORTAL Market.
18
(p) No consent, approval, authorization or order of, or filing,
notification or registration with, Nasdaq shall be required for the
listing and trading of the Underlying Securities on the Nasdaq which
has not been filed or submitted, copies of which shall have been
provided to counsel for the Initial Purchaser.
(w) The waiver and consent relating to the offer, sale and issuance of the
Securities received by the Company from the lenders under its credit
facility shall not have been modified and shall be in full force and
effect.
(q) The Securities shall be eligible for clearance and settlement through
the DTC.
(r) The Initial Purchaser shall have received the written agreements,
substantially in the form of Annex C hereto, of the officers and
directors of the Company listed in Annex B to this Agreement.
(s) All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance
reasonably satisfactory to counsel for the Initial Purchaser.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall indemnify
and hold harmless the Initial Purchaser, its officers, employees,
representatives and agents and each person, if any, who controls the Initial
Purchaser within the meaning of the Securities Act (collectively the "Initial
Purchaser Indemnified Parties" and, each an "Initial Purchaser Indemnified
Party") against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which that Initial Purchaser Indemnified Party may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the Time
of Sale Information or the Offering Circular or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state in any Time of Sale
Information or the Offering Circular or in any amendment or supplement thereto a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading and shall reimburse each Initial Purchaser Indemnified Party promptly
upon demand for any legal or other expenses reasonably incurred by that Initial
Purchaser Indemnified Party in connection with investigating or preparing to
defend or defending against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from the Time of Sale Information or the Offering
Circular or any such amendment or supplement made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Initial Purchaser specifically for use therein, which information the
parties hereto agree is limited to the Initial Purchaser's Information (as
defined in Section 16). This indemnity agreement is not exclusive and will be in
addition to any liability which the Company might otherwise have and shall not
limit any rights or remedies which may otherwise be available at law or in
equity to each Initial Purchaser Indemnified Party.
(b) The Initial Purchaser shall indemnify and hold harmless the Company
and its respective officers, employees, representatives, agents,
directors and each person, if any, who controls the Company within the
meaning of the Securities Act (collectively the "Company Indemnified
Parties" and each a "Company Indemnified Party") against any loss,
claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company Indemnified Parties may become subject,
under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Time of Sale Information or the Offering Circular or
in any amendment or supplement thereto or (ii) the omission or alleged
omission to state therein a material fact required to be stated
19
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, but in
each case only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchaser specifically for use
therein, and shall reimburse the Company Indemnified Parties for any
legal or other expenses reasonably incurred by such parties in
connection with investigating or preparing to defend or defending
against or appearing as third party witness in connection with any
such loss, claim, damage, liability or action as such expenses are
incurred; provided that the parties hereto hereby agree that such
written information provided by the Initial Purchaser consists solely
of the Initial Purchaser Information (as defined in Section 16). This
indemnity agreement is not exclusive and will be in addition to any
liability which the Initial Purchaser might otherwise have and shall
not limit any rights or remedies which may otherwise be available at
law or in equity to the Company Indemnified Parties.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party
in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 7
except to the extent it has been materially prejudiced by such
failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 7.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 7 for
any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that any indemnified party
shall have the right to employ separate counsel in any such action and
to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless
(i) the employment thereof shall have been specifically authorized by
the indemnifying party in writing, (ii) such indemnified party shall
have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to
those available to the indemnifying party and in the reasonable
judgment of such counsel it is advisable for such indemnified party to
employ separate counsel or (iii) the indemnifying party shall have
failed to assume the defense of such action and employ counsel
reasonably satisfactory to the indemnified party, in which case, if
such indemnified party notifies the indemnifying party in writing that
it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not,
in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties, which firm
shall be designated in writing by the Initial Purchaser, if the
indemnified parties under this Section 7 consist of any Initial
Purchaser Indemnified Party, or by the Company if the indemnified
parties under this Section 7 consist of any Company Indemnified
Parties. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 7(a) and (b), shall use all
reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. Subject to the provisions of
Section 7(d) below, no indemnifying party shall be liable for any
settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled
with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
20
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by this Section 7
effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the
request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior
to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance
with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section
7(a) or 7(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Initial Purchaser on
the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Initial
Purchaser on the other with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Initial Purchaser on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities purchased under this
Agreement (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Initial Purchaser with respect to the Securities purchased under this
Agreement. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the
one hand or the Initial Purchaser on the other, the intent of the
parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission;
provided that the parties hereto agree that the written information
furnished to the Company by or on behalf of the Initial Purchaser for
use in any Preliminary Offering Circular, other Time of Sale
Information or the Offering Circular consists solely of the Initial
Purchaser Information (as defined in Section 16). The Company and the
Initial Purchaser agree that it would not be just and equitable if
contributions pursuant to this Section 7(e) were to be determined by
pro rata allocation or by any other method of allocation which does
not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 7(e) shall be deemed to include, for
purposes of this Section 7(e), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of
this Section 7(e), the Initial Purchaser shall not be required to
contribute any amount in excess of the amount by which the total price
at which the Securities underwritten by it and distributed as
contemplated by this Agreement exceeds the amount of any damages which
the Initial Purchaser has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
8. TERMINATION. The obligations of the Initial Purchaser hereunder may
be terminated by the Initial Purchaser, in its absolute discretion by notice
given to and received by the Company prior to delivery of and payment for the
Securities if, prior to that time, any of the events described in Sections 6(i),
6(k) or 6(l) have occurred or if the Initial Purchaser shall decline to purchase
the Securities for any reason permitted under this Agreement.
21
9. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. If (a) this
Agreement shall have been terminated pursuant to Section 8, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchaser for
any reason permitted under this Agreement, or (c) the Initial Purchaser shall
decline to purchase the Securities for any reason permitted under this
Agreement, then the Company shall reimburse the Initial Purchaser for the
reasonable fees and expenses of the Initial Purchaser's counsel and for such
other out-of-pocket expenses as shall have been reasonably incurred by the
Initial Purchaser in connection with this Agreement and the proposed purchase of
the Securities, and upon demand the Company shall pay the full amount thereof to
the Initial Purchaser.
10. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This
Agreement shall inure to the benefit of and be binding upon the Initial
Purchaser, the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained in
this Agreement shall also be for the benefit of the Initial Purchaser
Indemnified Parties, and the indemnities of the Initial Purchaser shall also be
for the benefit of the Company Indemnified Parties.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the Initial Purchaser, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Initial Purchaser, the Company or any person controlling any of them and
shall survive delivery of and payment for the Securities.
13. NOTICES. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent by mail, telex
or facsimile transmission to Xxxxx and Company, LLC, 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxx, Head
of Equity Capital Markets (Fax: (000) 000-0000), with a copy to Xxxxx
and Company, LLC, Attention: Legal Department - General Counsel (fax:
(000) 000-0000);
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to XxXxxx Corporation, 000 Xxxxxxxx Xxxxx Xxxx,
Xxxxxxxx Xxxxx, Xxx Xxxx 00000, Attention: Xxxx X'Xxxxxx (Fax: (845)
425-8967).
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a)
"business day" means any day on which the Nasdaq is open for trading and (b)
"subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. INITIAL PURCHASER INFORMATION. The parties hereto acknowledge and
agree that, for all purposes of this Agreement, the Initial Purchaser
Information consists solely of the following information in the Time of Sale
Information and the Offering Circular: the statements concerning the Initial
Purchaser contained in (i) the first sentence of fourth paragraph under the
heading "Plan of Distribution" (which sentence begins "We have been advised that
the initial purchaser. . .") and (ii) the first sentence of the tenth paragraph
under the heading "Plan of Distribution" (which sentence begins "In order to
facilitate this offering. . .").
22
17. ABSENCE OF FIDUCIARY RELATIONSHIP. The Company acknowledges and
agrees that:
(a) the Initial Purchaser's responsibility to the Company is solely
contractual in nature, and the Initial Purchaser has been retained
solely to act as initial purchaser in connection with the sale of the
Securities and no fiduciary, advisory or agency relationship between
the Company and the Initial Purchaser has been created in respect of
any of the transactions contemplated by this Agreement, irrespective
of whether the Initial Purchaser has advised or is advising the
Company on other matters;
(b) the price of the Security set forth in this Agreement was established
by the Company following discussion and arms-length negotiations with
the Initial Purchaser, and the Company is capable of evaluating and
understanding, and understands and accepts, the terms, risks and
conditions of the transaction contemplated by this Agreement;
(c) it has been advised that the Initial Purchaser and its affiliates are
engaged in a broad range of transactions which may involve interest
that differ from those of the Company and that the Initial Purchaser
has no obligation to disclose such interests and transaction to the
Company by virtue of any fiduciary, advisory or agency relationship;
and
(d) it waives, to the fullest extent permitted by law, any claims it any
have against the Initial Purchaser for breach of fiduciary duty or
alleged breach of fiduciary duty and agrees that the Initial Purchaser
shall have no liability (whether direct or indirect) to the Company in
respect of such a fiduciary duty claim or to any person asserting a
fiduciary duty claim on behalf of or in right of the Company,
including stockholders, employees or creditors of the Company.
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.
19. GENERAL. 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. In this Agreement, the masculine, feminine and neuter
genders and the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will
not affect the construction or interpretation of this Agreement. This Agreement
may be amended or modified, and the observance of any term of this Agreement may
be waived, only by a writing signed by the Company and the Initial Purchaser.
23
If the foregoing is in accordance with your understanding of the
agreement by and between the Company and the Initial Purchaser, kindly indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
XXXXXX CORPORATION
By: /s/ Xxxx X'Xxxxxx
-----------------------------------------
Name: Xxxx X'Xxxxxx
Title: Vice President of Finance and
Chief Financial Officer
Accepted as of
the date first above written:
XXXXX AND COMPANY, LLC
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director and Head of Equity Capital Markets
24
EXHIBIT 1
Additional Time of Sale Information
1. Pricing Term Sheet, dated October 5, 2006, as attached hereto.
25
ANNEX A
Form of Registration Rights Agreement
26
ANNEX B
List of Signatories to Lock-Up
Xxxxxx X. Xxxxxxxx
R. Xxxxx Xxxxxxxx
Xxxx X. X'Xxxxxx
Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. XxXxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, Xx.
ANNEX C
Form of Lock-Up Agreement
[Date]
XXXXX AND COMPANY, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: XxXxxx Corporation
Ladies and Gentlemen:
Dear Sirs:
This Agreement is being delivered to you in connection with the
proposed Purchase Agreement (the "Purchase Agreement") between XxXxxx
Corporation, a Delaware corporation (the "Company") and Xxxxx and Company, LLC
("Cowen"), and the other parties thereto (if any), relating to the proposed
offering by the Company of up to $60,000,000 principal amount of its Convertible
Senior Notes Due 2026 (the "Securities"), such Securities to be convertible into
shares of Company common stock, $0.01 par value (the "Common Stock").
In order to induce you to enter into the Purchase Agreement, and in
light of the benefits that the offering of the Securities will confer upon the
undersigned in its capacity as a securityholder and/or an officer, director or
employee of the Company, and for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the undersigned agrees with
Cowen that, during the period beginning on and including the date of the
Purchase Agreement through and including the date that is the 90th day after the
date of the Purchase Agreement (the "Lock-Up Period"), the undersigned will not,
without the prior written consent of Cowen, directly or indirectly,
(i) offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of, or announce the intention to otherwise dispose of, any
shares of Common Stock (including, without limitation, Common Stock which may be
deemed to be beneficially owned by the undersigned in accordance with the rules
and regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares, the "Beneficially Owned
Shares")) or securities convertible into or exercisable or exchangeable in
Common Stock, (ii) enter into any swap, hedge or similar agreement or
arrangement that transfers in whole or in part, the economic risk of ownership
of the Beneficially Owned Shares or securities convertible into or exercisable
or exchangeable in Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or (iii) engage in any short selling of the Common
Stock.
If (i) the Company issues an earnings release or material news or a
material event relating to the Company occurs during the last 17 days of the
Lock-Up Period, or (ii) prior to the expiration of the Lock-Up Period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-Up Period, the Lock-Up Period shall be
extended and the restrictions imposed by this Agreement shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
The restrictions set forth in the immediately preceding paragraph shall
not apply to:
(1) if the undersigned is a natural person, any transfers made
by the undersigned (a) as a bona fide gift to any member of the
immediate family (as defined below) of the undersigned or to a trust
the beneficiaries of which are exclusively the undersigned or members
of the undersigned's immediate family, (b) by will or intestate
succession upon the death of the undersigned or (c) as a bona fide gift
to a charity or educational institution,
(2) if the undersigned is a corporation, partnership, limited
liability company or other business entity, any transfers to any
shareholder, partner or member of, or owner of a similar equity
interest in, the undersigned, as the case may be, if, in any such case,
such transfer is not for value, and
(3) if the undersigned is a corporation, partnership, limited
liability company or other business entity, any transfer made by the
undersigned (a) in connection with the sale or other bona fide transfer
in a single transaction of all or substantially all of the
undersigned's capital stock, partnership interests, membership
interests or other similar equity interests, as the case may be, or all
or substantially all of the undersigned's assets, in any such case not
undertaken for the purpose of avoiding the restrictions imposed by this
agreement or (b) to another corporation, partnership, limited liability
company or other business entity so long as the transferee is an
affiliate (as defined below) of the undersigned and such transfer is
not for value;
provided, however, that in the case of any transfer described in clause (1), (2)
or (3) above, it shall be a condition to the transfer that (A) the transferee
executes and delivers to Cowen, acting on behalf of the Underwriters, not later
than one business day prior to such transfer, a written agreement, in
substantially the form of this agreement (it being understood that any
references to "immediate family" in the agreement executed by such transferee
shall expressly refer only to the immediate family of the undersigned and not to
the immediate family of the transferee) and otherwise satisfactory in form and
substance to Cowen, and (B) if the undersigned is required to file a report
under Section 16(a) of the Securities Exchange Act of 1934, as amended,
reporting a reduction in beneficial ownership of shares of Common Stock or
Beneficially Owned Shares or any securities convertible into or exercisable or
exchangeable for Common Stock or Beneficially Owned Shares during the Lock-Up
Period (as the same may be extended as described above), the undersigned shall
include a statement in such report to the effect that, in the case of any
transfer pursuant to clause (1) above, such transfer is being made as a gift or
by will or intestate succession or, in the case of any transfer pursuant to
clause (2) above, such transfer is being made to a shareholder, partner or
member of, or owner of a similar equity interest in, the undersigned and is not
a transfer for value or, in the case of any transfer pursuant to clause (3)
above, such transfer is being made either (a) in connection with the sale or
other bona fide transfer in a single transaction of all or substantially all of
the undersigned's capital stock, partnership interests, membership interests or
other similar equity interests, as the case may be, or all or substantially all
of the undersigned's assets or (b) to another corporation, partnership, limited
liability company or other business entity that is an affiliate of the
undersigned and such transfer is not for value. For purposes of this paragraph,
"immediate family" shall mean a spouse, child, grandchild or other lineal
descendant (including by adoption), father, mother, brother or sister of the
undersigned; and "affiliate" shall have the meaning set forth in Rule 405 under
the Securities Act of 1933, as amended.
The undersigned further agrees that (i) it will not, during the Lock-Up
Period (as the same may be extended as described above), make any demand or
request for or exercise any right with respect to the registration under the
Securities Act of 1933, as amended, of any shares of Common Stock or other
Beneficially Owned Shares or any securities convertible into or exercisable or
exchangeable for Common Stock or other Beneficially Owned Shares, and (ii) the
Company may, with respect to any Common Stock or other Beneficially Owned Shares
or any securities convertible into or exercisable or exchangeable for Common
Stock or other Beneficially Owned Shares owned or held (of record or
beneficially) by the undersigned, cause the transfer agent or other registrar to
enter stop transfer instructions and implement stop transfer procedures with
respect to such securities during the Lock-Up Period (as the same may be
extended as described above). In addition, the undersigned hereby waives, from
the date hereof until the expiration of the 90 day period following the date of
the Purchase Agreement and any extension of such period pursuant to the terms
hereof, any and all rights, if any, to request or demand registration pursuant
to the Securities Act of 1933, as amended, of any shares of Common Stock that
are registered in the name of the undersigned or that are Beneficially Owned
Shares.
2
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this agreement and that this agreement
has been duly authorized (if the undersigned is not a natural person), executed
and delivered by the undersigned and is a valid and binding agreement of the
undersigned. This agreement and all authority herein conferred are irrevocable
and shall survive the death or incapacity of the undersigned (if a natural
person) and shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
The undersigned acknowledges and agrees that whether or not any
offering of Securities actually occurs depends on a number of factors, including
market conditions.
Very truly yours,
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(Name of Stockholder - Please Print)
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(Signature)
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(Name of Signatory if Stockholder is an entity - Please Print)
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(Title of Signatory if Stockholder is an entity - Please Print)
Address: ---------------------------------------
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3
ANNEX D
FORM OF FISH & XXXXXXXXXX, PC OPINION
(i) The Company and each of its U.S. Subsidiaries have been duly
incorporated or organized, as the case may be, and are validly
existing as business entities in good standing [language should mirror
good standing certificates received from the states; provided that
such counsel may rely solely on such certificate with regards to due
incorporation] under the laws of their respective jurisdictions of
incorporation or organization, and, based on such counsel's review of
good standing certificates (or the applicable jurisdiction's
functional equivalent thereof) for each jurisdiction identified to
such counsel by the Company as ones in which such respective entity is
actively conducting business, are duly qualified to do business and
are in good standing as foreign business entities in each such
jurisdiction, and have the requisite corporate or other entity power
and authority to own or hold their respective properties and to
conduct the respective business in which such entities are engaged,
except where the failure to so qualify or have such power or authority
would not have, singularly or in the aggregate, a Material Adverse
Effect.
(ii) The Company has an authorized capitalization as set forth in the Time
of Sale Information and the Offering Circular, and the issued shares
of capital stock of the Company conform to the description thereof
contained in the Time of Sale Information and the Offering Circular.
(iii) This Agreement has been duly authorized, executed and delivered by
the Company.
(iv) The Indenture has been duly authorized, executed and delivered by the
Company and assuming due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding obligation of
the Company enforceable against the Company in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law);
the Indenture conforms in all material respects to the requirements of
the Trust Indenture Act and the applicable rules and regulations
thereunder; the Securities have been duly authorized, executed and
issued by the Company and assuming due authentication thereof by the
Trustee and upon payment and delivery in accordance with this
Agreement, will constitute valid and legally binding obligations of
the Company enforceable against the Company in accordance with their
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law)
and entitled to the benefits of the Indenture; the Underlying
Securities initially issuable upon conversion of the Securities have
been duly authorized and reserved for issuance and, when issued and
delivered in accordance with the terms of the Indenture, will be
validly issued, fully paid and non-assessable; the issuance of the
Underlying Securities in accordance to the Indenture will not be
subject to any preemptive right or, to the best of our knowledge, any
similar right that entitles any person to acquire any shares from the
Company upon issuance thereof, under the charter or bylaws of the
Company, the Delaware General Corporation Law or any of the Material
Agreements.
(v) The Company has full right, power and authority to execute and deliver
each of the Transaction Documents and to perform its obligations
thereunder; and all corporate action required to be taken for the due
and proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken.
(vi) The Registration Rights Agreement has been duly authorized, executed
and delivered by the Company and the Registration Rights Agreement
constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except
to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and except to the extent that the
indemnification provisions thereof may be unenforceable.
(vii) The statements made in the Time of Sale Information and the Offering
Circular under the caption "Description of the Notes," "Certain
Indebtedness" and "Description of Capital Stock," insofar as they
purport to constitute summaries of certain terms of documents referred
to therein, constitute accurate summaries of the terms of such
documents in all material respects.
(viii) The issue and sale of the Securities by the Company and the
compliance by the Company with all of the provisions of each of the
Transaction Documents will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the properties or assets of
the Company or any of its subsidiaries is subject which are listed on
a schedule to the opinion and that have been identified to such
counsel as all the agreements and instruments that are material to the
business or financial condition of the Company, (ii) result in any
violation of the charter, by-laws or other organizational documents of
the Company or of any of its subsidiaries or (iii) result in any
violation of any federal, New York, Delaware General Corporation Law
or California statute or regulation of a non-judicial governmental
agency or body or any order or ruling known to such counsel of any
court having jurisdiction over the Company or any of its subsidiaries
or any of their properties or assets, except in the case of clauses
(i) and (iii) for such breaches, violations or defaults which would
not, singularly or in the aggregate, have a Material Adverse Effect.
(ix) Except (i) for such consents, approvals, authorizations,
registrations or qualifications as may be required under applicable
state securities laws in connection with the purchase and distribution
of the Securities by the Initial Purchaser and (ii) as expressly
required pursuant to the Transaction Documents, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(x) The statements in the Time of Sale Information and the Offering
Circular under the heading "United States Federal Income Tax
Consequences" constitutes a fair and accurate summary of the material
United States federal income tax consequences of the purchase,
ownership, conversion or other disposition of the Securities and of
the Common Stock received upon conversion of the Securities for
investors who purchase the Securities pursuant to the Time of Sale
Information and the Offering Circular.
(xi) The description in the Time of Sale Information and the Offering
Circular of statutes, legal or governmental proceedings and Material
Agreements are accurate in all material respects.
2
(xii) To such counsel's knowledge, neither the Company nor any of its U.S.
Subsidiaries (i) is in violation of its charter or by-laws or other
applicable organizational documents, (ii) is in default, and no event
has occurred, which, with notice or lapse of time or both, would
constitute a default, in the due performance or observance of any
term, covenant or condition contained in any agreement or instrument
to which it is a party or by which it is bound or to which any of its
properties or assets are subject or (iii) is in violation of any law,
ordinance, governmental rule, regulation or court order or decree to
which it or its property or assets may be subject or has failed to
obtain any license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business except, in the case of
clauses (ii) and (iii), for those defaults, violations or failures
which, either individually or in the aggregate, would not have a
Material Adverse Effect.
(xiii) To such counsel's knowledge and other than as set forth in the Time
of Sale Information and the Offering Circular, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or asset of the
Company or any of its subsidiaries is the subject which, singularly or
in the aggregate, if determined adversely to the Company or any of its
subsidiaries, might have a Material Adverse Effect or would prevent or
adversely affect the ability of the Company to perform its obligations
under this Agreement; and, to the best of such counsel's knowledge, no
such proceedings are threatened by governmental authorities or
threatened by others.
(xiv) Assuming the accuracy of the representations, warranties and
agreements of the Company and of the Initial Purchaser contained in
this Agreement, no registration of the Securities under the Securities
Act or qualification of the Indenture under the Trust Indenture Act is
required in connection with the issuance and sale of the Securities by
the Company and the offer, resale and delivery of the Securities by
the Initial Purchaser in the manner contemplated by this Agreement,
the Time of Sale Information and the Offering Circular.
(xv) Neither the Company nor any of its subsidiaries is an "investment
company" within the meaning of the Investment Company Act and the
rules and regulations of the Commission thereunder.
(xvi) The Incorporated Documents (other than the financial statements or
other financial data, as to which such counsel need express no
opinion), when it was filed with the Commission, complied as to form
in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder.
Such counsel shall also have furnished to the Initial Purchaser a written
statement, addressed to the Initial Purchaser and dated the Closing Date,
in form and substance satisfactory to the Initial Purchaser, to the effect
that (x) such counsel has acted as counsel to the Company in connection
with the preparation of the Time of Sale Information and the Offering
Circular and (y) based on such counsel's examination of the Time of Sale
Information and the Offering Circular and such counsel's investigations
made in connection with the preparation of the Time of Sale Information
and the Offering Circular and "conferences with certain officers and
employees of and with auditors for and counsel to the Company", that
nothing has come to the attention of such counsel that leads such counsel
to believe that the Time of Sale Information, as of the Applicable Time,
and the Offering Circular or any amendment or supplement thereto, as of
the date thereof and as of the Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; it being
understood that such counsel need express no opinion as to the financial
statements or other financial data contained in the Time of Sale
Information and the Offering Circular.
The foregoing opinions and statements may also be qualified by statements to the
effect that such counsel has not independently verified the accuracy,
completeness or fairness of the statements contained in the Time of Sale
Information and the Offering Circular and takes no responsibility therefor
except to the extent set forth in the opinion described in clauses (vii), (x)
and (xi) above.
3
ANNEX E
FORM OF XXXXXXX XXXXXXXX & XXXX LLP OPINION
To the best of such counsel's knowledge, the Company owns valid and
enforceable rights in all patents, patent applications, trademarks, trademark
registrations, service marks, service xxxx registrations, trade names, domain
names, domain name registrations, copyrights, licenses, inventions, trade
secrets and rights required for the operation of its business (collectively, the
"Intellectual Property"). To the best of such counsel's knowledge, and other
than described in the Time of Sale Information and the Offering Circular (A)
there are no third parties who have had any rights in the Intellectual Property
that could preclude the Company from conducting its business as currently
conducted or as presently contemplated to be conducted as described in the Time
of Sale Information and the Offering Circular, (B) there are no pending or
threatening actions, suits, proceedings, investigations or claims by others
challenging the rights of any third party licensor, and (C) the Company has not
and, to the extent any Intellectual Property is licensed to the Company, no
third party licensor has, infringed, or received any notice of infringement of
or conflict with, any rights of others with respect to the Intellectual
Property.
