EXHIBIT 1.1
EXECUTION COPY
CALGON CARBON CORPORATION
$65,000,000 5.00% Convertible Senior Notes due 2036
Purchase Agreement
August 14, 2006
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Calgon Carbon Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to X.X. Xxxxxx Securities Inc. (the "Initial Purchaser")
$65,000,000 principal amount of its 5.00% Convertible Senior Notes due 2036 (the
"Firm Securities") and, at the option of the Initial Purchaser, up to an
additional $10,000,000 principal amount of its 5.00% Convertible Senior Notes
due 2036 (the "Additional Securities" and, together with the Firm Securities,
the "Securities"). The Securities will be issued pursuant to an Indenture (the
"Indenture"), to be dated as of the Closing Date (as defined in Section 2(c)),
among the Company, the guarantors listed on Schedule 1 hereto (the "Guarantors")
and The Bank of New York, as trustee (the "Trustee"), and will be guaranteed on
an unsecured senior basis by each of the Guarantors (the "Guarantees").
The Securities will be convertible into fully paid, nonassessable shares of
common stock of the Company, par value $0.01 per share (the "Common Stock"), on
the terms, and subject to the conditions, set forth in the Indenture. As used
herein, "Conversion Shares" means the shares of Common Stock issuable upon
conversion of the Securities.
The 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. Holders of the Securities
(including the Initial Purchaser and their direct and indirect transferees) will
be entitled to the benefits of a Registration Rights Agreement, to be dated as
of the Closing Date, among the Company, the Guarantors and the Initial Purchaser
(the "Registration Rights Agreement"), pursuant to which the Company and the
Guarantors will agree to file with the Securities and Exchange Commission (the
"Commission") a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Registration Statement"), pursuant to which the Company and
the Guarantors will register the resale of the Securities, including the
Guarantees of the Guarantors, and the Conversion Shares under the Securities
Act, subject to the terms and conditions therein specified.
The Company hereby confirms its agreement with the Initial Purchaser
concerning the purchase and sale of the Securities, as follows:
1. Offering Memorandum. The Company and the Guarantors have prepared a
preliminary offering memorandum, dated August 14, 2006 (the "Preliminary
Offering Memorandum"), and will prepare an offering memorandum, dated the date
hereof (the "Final Offering Memorandum"), setting forth information concerning
the Company, the Securities, the Guarantees and the Conversion Shares. Copies of
the Preliminary Offering Memorandum have been, and copies of the Final Offering
Memorandum will be, delivered by the Company to the Initial Purchaser pursuant
to the terms of this Agreement. The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum, the other Time of
Sale Information (as defined below) and the Final Offering Memorandum in
connection with the offering and resale of the Securities, the Guarantees and
the Conversion Shares by the Initial Purchaser in the manner contemplated by
this Agreement.
Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Preliminary Offering Memorandum. References herein to the
Preliminary Offering Memorandum, the Time of Sale Information and the Final
Offering Memorandum shall be deemed to refer to and include any document
incorporated by reference therein.
At or prior to the time when sales of the Securities were first made or
confirmed by the Initial Purchaser (the "Time of Sale"), the following
information shall have been prepared (collectively, the "Time of Sale
Information"): the Preliminary Offering Memorandum, as supplemented and amended
by the written communications listed on Annex A hereto.
2. Purchase and Resale of the Securities by the Initial Purchaser. The
Company agrees to issue and sell the Firm Securities to the Initial Purchaser as
provided in this Agreement, and the Initial Purchaser, on the basis of the
representations, warranties and agreements set forth herein and subject to the
conditions set forth herein, agrees to purchase from the Company $65,000,000
principal amount of Firm Securities at a purchase price equal to 95.6% of the
principal amount thereof (the "Purchase Price").
In addition, on the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to sell to the Initial Purchaser the Additional Securities, and the Initial
Purchaser shall have the right to purchase in whole, or from time to time in
part, up to $10,000,000 principal amount of Additional Securities at the
Purchase Price plus accrued interest, if any, from the Closing Date (as defined
below) to the Additional Closing Date, solely to cover over-allotments, if any.
If you exercise such option, you shall so notify the Company in writing not
later than 30 days after the date of this Agreement, which notice shall specify
the principal amount of Additional Securities to be purchased by the Initial
Purchaser and the date on which such Additional Securities are to be purchased.
Such date may be
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the same as the Closing Date but not earlier than the Closing Date and not later
than ten business days after the date of such notice.
(a) The Company understands that the Initial Purchaser intends to offer the
Securities for resale pursuant to Rule 144A under the Securities Act ("Rule
144A") on the terms set forth in the Time of Sale Information and the Final
Offering Memorandum. The Initial Purchaser represents, warrants and agrees with
the Company and the Guarantors that:
(i) it is a qualified institutional buyer within the meaning of Rule
144A under the Securities Act (a "QIB") and an accredited investor within
the meaning of Rule 501(a) under the Securities Act;
(ii) it is purchasing the Securities and the Guarantees pursuant to an
exemption under the Securities Act;
(iii) it has not solicited offers for, or offered or sold, and will
not solicit offers for, or offer or sell, the Securities and the Guarantees
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
(iv) it has solicited offers and will solicit offers for the
Securities and the Guarantees only from, and has offered, sold and
delivered and will offer, sell and deliver the Securities and the
Guarantees only to persons whom it reasonably believes to be QIBs 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 QIB to whom notice has been
given that such sale is being made in reliance on Rule 144A.
The Company acknowledges and agrees that, subject to the terms and
conditions of this Agreement, the Initial Purchaser may offer and sell
Securities to or through any affiliate of the Initial Purchaser and that any
such affiliate may offer and sell Securities purchased by it to or through the
Initial Purchaser.
(b) Payment for the Firm Securities and the Guarantees shall be made by
wire transfer in immediately available funds to the account specified by the
Company to the Initial Purchaser at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx
LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m., New York City time,
on August 18, 2006, or at such other time or place on the same or such other
date, not later than the fifth business day after August 14, 2006, as the
Initial Purchaser and the Company may agree upon in writing.
(c) Payment for any Additional Securities shall be made on the date and at
the time and place specified by the Initial Purchaser in the written notice of
the Initial Purchaser's election to purchase such Additional Securities. The
time and date of such payment for the Firm Securities is referred to herein as
the "Closing Date" and the time
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and date for such payment for the Additional Securities, if other than the
Closing Date, is herein referred to as the "Additional Closing Date."
Certificates for the Firm Securities and Additional Securities shall be in
global form, registered in such names and in such denominations as you shall
request in writing not later than one full business day prior to the Closing
Date or the Additional Closing Date, as the case may be. The certificates
evidencing the Firm Securities and Additional Securities shall be delivered to
you on the Closing Date or the Additional Closing Date, as the case may be, for
the account of the Initial Purchaser, with any transfer taxes payable in
connection with the transfer of the Securities to the Initial Purchaser duly
paid by the Company, against payment of the Purchase Price therefor plus accrued
interest, if any, to the Additional Closing Date on the Additional Closing Date.
(d) The Company and the Guarantors acknowledge and agree that the Initial
Purchaser is acting solely in the capacity of an arm's length contractual
counterparty to the Company and the Guarantors with respect to the offering of
Securities, Guarantees and Conversion Shares contemplated hereby (including in
connection with determining the terms of the offering) and not as a financial
advisor or a fiduciary to, or an agent of, the Company, the Guarantors or any
other person. Additionally, the Initial Purchaser is not advising the Company,
the Guarantors or any other person as to any legal, tax, investment, accounting
or regulatory matters in any jurisdiction. The Company and the Guarantors shall
consult with their own advisors concerning such matters and shall be responsible
for making their own independent investigation and appraisal of the transactions
contemplated hereby, and the Initial Purchaser shall have no responsibility or
liability to the Company or the Guarantors with respect thereto. Any review by
the Initial Purchaser of the Company and the Guarantors and the transactions
contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Initial Purchaser and shall not be on
behalf of the Company or the Guarantors.
(e) The Initial Purchaser agrees that, prior to or simultaneously with the
confirmation of sale by the Initial Purchaser to any purchaser of any of the
Securities purchased by the Initial Purchaser from the Company pursuant hereto,
the Initial Purchaser shall furnish to that purchaser a copy of the Final
Offering Memorandum. 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 Purchasers pursuant to Section 6(i) and (j), 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 its
compliance with its agreements contained in this Section 2, and the Initial
Purchaser hereby consents to such reliance.
3. Representations and Warranties of the Company and the Guarantors. The
Company and each of the Guarantors jointly and severally represent and warrant
to, and agree with, the Initial Purchaser that:
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(a) Preliminary Offering Memorandum, Time of Sale Information and Final
Offering Memorandum. The Preliminary Offering Memorandum, as of its date, did
not, the Time of Sale Information, at the Time of Sale, did not, and at the
Closing Date and as of any Additional Closing Date, as the case may be, will
not, and the Final Offering Memorandum, in the form first used by the Initial
Purchaser to confirm sales of the Securities and as of the Closing Date and as
of any Additional Closing Date, as the case may be, will not, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Company and the Guarantors
make no representation or warranty with respect to any information contained in
or omitted from the Preliminary Offering Memorandum, any Time of Sale
Information or the Final Offering Memorandum in reliance upon and in conformity
with written information relating to the Initial Purchaser furnished to the
Company or the Guarantors by the Initial Purchaser expressly for use in the
Preliminary Offering Memorandum, the Time of Sale Information or the Final
Offering Memorandum (the "Initial Purchaser's Information"), which information
is identified in Section 13.
(b) Additional Written Communications. Neither the Company nor the
Guarantors (including their agents and representatives, other than the Initial
Purchaser in its capacity as such) has made, used, prepared, authorized,
approved or referred to and will not prepare, make, use, authorize, approve or
refer to any written communication that constitutes an offer to sell or
solicitation of an offer to buy the Securities except for (i) the Preliminary
Offering Memorandum and the Final Offering Memorandum, (ii) the documents listed
on Annex A hereto, including a term sheet substantially in the form of Annex B
hereto, and (iii) other written communications used in accordance with Section
4(c).
(c) Incorporated Documents. Except with respect to Item 9.01(b) of the
Current Report on Form 8-K filed by the Company on February 24, 2006, the
documents incorporated by reference in the Time of Sale Information and the
Final Offering Memorandum, when they were filed with the Commission, conformed
in all material respects to the requirements of the Securities Exchange Act of
1934, as amended and the applicable rules and regulations of the Commission
thereunder (the "Exchange Act"), and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and incorporated
by reference in the Time of Sale Information and the Final Offering Memorandum,
when such documents are filed with the Commission, will conform in all material
respects to the requirements of the Exchange Act, and will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
(d) Financial Statements. The consolidated financial statements of the
Company and its subsidiaries and the related notes thereto included or
incorporated by reference in each of the Time of Sale Information and the Final
Offering Memorandum have been prepared in accordance with United States
generally accepted accounting
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principles applied on a consistent basis throughout the periods covered thereby
and present fairly, in all material respects, the consolidated financial
position of the Company and its subsidiaries as of the dates indicated and the
consolidated results of their operations and the consolidated changes in their
cash flows for the periods specified. The consolidated financial information
included or incorporated by reference in each of the Time of Sale Information
and the Final Offering Memorandum has been accurately presented and prepared, in
all material respects, on a basis consistent with the financial statements and
the books and records of the Company. The as adjusted financial information
contained in each of the Time of Sale Information and the Final Offering
Memorandum has been prepared on a basis consistent with the historical
consolidated financial statements included in or incorporated by reference in
each of the Time of the Sale Information and the Final Offering Memorandum
(except for the adjustments specified therein).
(e) No Material Adverse Change. Since the date of the most recent
consolidated financial statements of the Company and its subsidiaries included
or incorporated by reference in each of the Time of Sale Information and the
Final Offering Memorandum, (i) there has been no material adverse change, or any
development involving a prospective material adverse change, in or affecting the
business, properties, management, financial position, results of operations or
prospects of the Company and its subsidiaries taken as a whole; (ii) neither the
Company nor any of its subsidiaries has incurred any liability or obligation,
direct or contingent, that is material to the Company and its subsidiaries taken
as a whole; (iii) neither the Company nor any of its subsidiaries has entered
into any transaction or agreement that is material to the Company and its
subsidiaries taken as a whole; (iv) there has not been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries, or any
dividend or distribution of any kind declared, set aside for payment, paid or
made by the Company or any of its subsidiaries on any class of capital stock, or
any redemption in respect thereof; or (v) neither the Company nor any of its
subsidiaries has sustained 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 disturbance or dispute or from any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except in each case as otherwise disclosed in the Time of Sale Information and
the Final Offering Memorandum.
(f) Organization and Good Standing. The Company and each of its
subsidiaries have been duly incorporated or formed, as the case may be, and are
validly existing corporations or limited liability companies, as the case may
be, in good standing under the laws of their respective jurisdictions of
incorporation or formation, as the case may be, are duly qualified to do
business and are in good standing as foreign corporations or foreign limited
liability companies, as the case may be, 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 be so
qualified, in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the
business, properties, management, financial position, results of
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operations or prospects of the Company and its subsidiaries taken as a whole or
on the performance by the Company and the Guarantors of their obligations under
the Securities, the Guarantees and the Conversion Shares (a "Material Adverse
Effect"). The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Schedule 2 to this Agreement.
(g) Capitalization of the Company. The Company has an authorized
capitalization as set forth in each of the Time of Sale Information and the
Final Offering Memorandum under the heading "Capitalization"; all the
outstanding shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable; except as disclosed
in each of the Time of Sale Information and the Final Offering Memorandum, there
are no outstanding subscriptions, rights, warrants, calls or options to acquire,
or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale and issuance of, any shares of capital
stock or other equity interest in the Company; the holders of the outstanding
shares of capital stock of the Company are not entitled to any preemptive or
other rights to subscribe for the Securities or the shares of Common Stock
issuable upon conversion of the Securities; and the capital stock of the Company
conforms in all material respects to the description thereof contained in each
of the Time of Sale Information and the Final Offering Memorandum.
(h) Capitalization of the Company's Subsidiaries. All the outstanding
shares of capital stock or membership interests, as the case may be, of each
subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and, except as otherwise described in each of the
Time of Sale Information and the Final Offering Memorandum) are owned directly
or indirectly by the Company, free and clear of any lien, charge, encumbrance,
security interest, restriction on voting or transfer or any other claim of any
third party; and there are no outstanding subscriptions, rights, warrants, calls
or options to acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale and issuance of, any
shares of capital stock or other equity interest in any of the subsidiaries of
the Company.
(i) Full Power. The Company and each of the Guarantors have full right,
power and authority to execute and deliver this Agreement, the Securities (in
the case of the Company only), the Indenture (including the Guarantees set forth
therein) and the Registration Rights Agreement (collectively, the "Transaction
Documents"), and the Company and each of the Guarantors have full right, power
and authority to perform their respective obligations hereunder and thereunder;
and, as of the Closing Date, all corporate or limited liability company action
required to be taken for the due and proper authorization, execution, issuance
and delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby has been or will have been duly and validly
taken. The Company has the full right, power and authority to issue and deliver
the Conversion Shares.
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(j) The Indenture. The Indenture has been duly authorized by the Company
and each of the Guarantors and, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company and each of the Guarantors enforceable
against the Company and each of the Guarantors in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability (whether considered in a proceeding in equity or at law)
(collectively, the "Enforceability Exceptions"); and on the Closing Date, the
Indenture will conform in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission applicable to an indenture that is qualified
thereunder.
(k) The Securities and the Guarantees. The Securities have been duly
authorized by the Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture (assuming the Indenture is the valid and
legally binding obligation of the Trustee and assuming due authentication of the
Securities by the Trustee) and paid for as provided herein, will be duly and
validly issued and outstanding and will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with
their terms, subject to the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture; and the Guarantees have been duly authorized by
each of the Guarantors and, when the Securities have been duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for as
provided herein, will be valid and legally binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in accordance with their
terms, subject to the Enforceability Exceptions, and will be entitled to the
benefits of the Indenture. The Securities will be convertible into Common Stock
in accordance with their terms and the terms of the Indenture.
(l) The Conversion Shares. The shares of Common Stock initially issuable
upon conversion of the Securities have been duly and validly authorized and are
free of preemptive rights and, when issued and delivered upon such conversion in
accordance with the terms of the Indenture, will be duly and validly authorized
and issued, fully paid and non-assessable and free and clear of all liens,
encumbrances, equities or claims; the Board of Directors of the Company has duly
and validly adopted resolutions reserving such shares of Common Stock for
issuance upon conversion.
(m) Purchase Agreement. This Agreement has been duly authorized, executed
and delivered by the Company and each of the Guarantors.
(n) Registration Rights Agreement. The Registration Rights Agreement has
been duly authorized by the Company and each of the Guarantors and, when duly
executed and delivered on the Closing Date in accordance with its terms by each
of the parties thereto, will constitute a valid and legally binding agreement of
the Company and each of the Guarantors enforceable against the Company and each
of the Guarantors in accordance with its terms, subject to the Enforceability
Exceptions, and except that
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rights to indemnity and contribution thereunder may be limited by applicable law
and public policy considerations.
(o) Descriptions of the Transaction Documents. Each Transaction Document
conforms in all material respects to the description thereof contained in each
of the Time of Sale Information and the Final Offering Memorandum.
(p) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) except as described in each of the Time of Sale
Information and the Final Offering Memorandum, in default, and no event has
occurred that, 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 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; or (iii) in violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental or regulatory
authority having jurisdiction over the Company or any of its subsidiaries or any
of their respective properties or assets, except, in the case of clauses (ii)
and (iii) above, for any such default or violation that would not, individually
or in the aggregate, have a Material Adverse Effect.
(q) No Conflicts. Provided that the Company concurrently applies the net
proceeds from the offering of the Securities, together with borrowings under the
Company's new revolving credit facility, as described in each of the Time of
Sale Information and the Final Offering Memorandum to fully repay the Company's
indebtedness under its existing revolving credit facility and thereby terminate
such existing revolving credit facility, the execution, delivery and performance
by the Company and each of the Guarantors of each of the Transaction Documents
to which each is a party, the issuance, authentication, sale and delivery of the
Securities and the Guarantees and the Common Stock upon conversion of the
Securities in accordance with the terms and conditions of the Indenture and
compliance by the Company and each of the Guarantors with the terms thereof and
the consummation of the transactions contemplated by the Transaction Documents,
including the use of proceeds therewith as described in the Time of Sale
Information and the Final Offering Memorandum, 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, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, 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, (ii) result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Company or any of its
subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order, decree, rule or regulation of any court or arbitrator or
governmental or regulatory authority or body having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties or
assets, except, in the case of
9
clauses (i) and (iii) above, for any such conflict, breach, violation or default
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(r) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company and each of the Guarantors of each of the Transaction Documents
to which each is a party, the issuance, authentication, sale and delivery of the
Securities and the Guarantees and the Common Stock issuable upon conversion of
the Securities in accordance with the terms and conditions of the Indenture and
compliance by the Company and each of the Guarantors with the terms thereof and
the consummation of the transactions contemplated by the Transaction Documents,
including the use of proceeds therewith as described in the Time of Sale
Information and the Final Offering Memorandum, except for such consents,
approvals, authorizations, orders and registrations or qualifications which
shall have been obtained or made prior to the Closing Date or as may be required
to be obtained or made under the Trust Indenture Act, the Securities Act and
applicable state securities laws as contemplated in the Registration Rights
Agreement.
(s) No Legal Impediment to Issuance. No action has been taken and no
statute, rule, regulation or order has been enacted, adopted or issued by any
governmental agency or body which prevents the issuance of the Securities, the
issuance of the Guarantees or the issuance of Common Stock issuable upon
conversion of the Securities in accordance with the terms and conditions of the
Indenture or suspends the sale of the Securities and Guarantees in any
jurisdiction; no injunction, restraining order or order of any nature by any
federal or state court of competent jurisdiction has been issued with respect to
the Company or any of its subsidiaries which would prevent or suspend the
issuance, authentication, sale or delivery of the Securities and Guarantees or
the use of the Time of Sale Information or the Final Offering Memorandum in any
jurisdiction; no action, suit or proceeding is pending against or, to the best
knowledge of the Company, threatened against or affecting the Company or any of
its subsidiaries before any court or arbitrator or any governmental agency, body
or official, domestic or foreign, which could reasonably be expected to
interfere with or adversely affect the issuance of the Securities or the
issuance of the Guarantees or in any manner reasonably draws into question the
validity or enforceability of any of the Transaction Documents or any action
taken or to be taken pursuant thereto; and the Company has complied with any and
all requests by any securities authority in any jurisdiction for additional
information to be included in the Time of Sale Information and the Final
Offering Memorandum.
(t) Legal Proceedings. Except as disclosed in each of the Time of Sale
Information and the Final Offering Memorandum, there are no legal, governmental
or regulatory investigations, actions, suits or proceedings pending to which the
Company or any of its subsidiaries is or may be a party or to which any property
or assets of the Company or any of its subsidiaries is or may be the subject
that, individually or in the aggregate, if determined adversely to the Company
or any of its subsidiaries, could reasonably be expected to have a Material
Adverse Effect; and no such investigations,
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actions, suits or proceedings are threatened or, to the best knowledge of the
Company and each of the Guarantors, contemplated by any governmental or
regulatory authority or by others.
(u) Independent Accountants. Deloitte & Touche LLP, who have audited
certain historical consolidated financial statements of the Company and its
subsidiaries, are independent registered public accountants with respect to the
Company and its subsidiaries within the applicable rules and regulations adopted
by the Commission and the Public Accounting Oversight Board (United States) and
as required by the Securities Act.
(v) Title to Real and Personal Property. The Company and its subsidiaries
have good and marketable title in fee simple to, or have valid rights to lease
or otherwise use, all items of real and personal property that are material to
the business respective businesses of the Company and its subsidiaries, in each
case, except with respect to secured debt described in each of the Time of Sale
information and the Final Offering Memorandum, free and clear of all liens,
encumbrances, claims and defects and imperfections of title except those that
(i) do not materially interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries or (ii) could not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(w) Title to Intellectual Property. Except as described in each of the Time
of Sale Information and the Final Offering Memorandum, (i) the Company and its
subsidiaries own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) presently employed by them in connection
with the respective businesses now operated by them; (ii) the use of such rights
in connection with their respective businesses will not conflict in any material
respect with any such rights of others; and (iii) the Company and its
subsidiaries have not received any notice of any claim of infringement of or
conflict with any such rights of others.
(x) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on the one hand,
and the directors, officers, stockholders or other affiliates of the Company or
any of its subsidiaries, on the other, that would be required by the Securities
Act to be described in a registration statement filed with the Commission and
that is not so described in each of the Time of Sale Information and the Final
Offering Memorandum.
(y) Investment Company Act. Neither the Company nor any of its subsidiaries
is, and after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in each of the Time of Sale
Information and the Final Offering Memorandum none of them will be, an
"investment company" or an entity "controlled" by an "investment company" within
the meaning of the Investment
11
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Investment Company Act").
(z) Taxes. The Company and its subsidiaries have paid all federal, state,
local and foreign taxes and filed all tax returns required to be paid or filed
through the date hereof, in each case other than those being contested in good
faith with adequate reserves provided; and except as otherwise disclosed in each
of the Time of Sale Information and the Final Offering Memorandum, there is no
tax deficiency that has been, or could reasonably be expected to be, asserted
against the Company or any of its subsidiaries or any of their respective
properties or assets which [has had] (nor do the Company or an of the Guarantors
have any knowledge of any tax deficiency which, if determined adversely to the
Company or an of its subsidiaries, could reasonably be expected to have) a
Material Adverse Effect.
(aa) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in each of the Time of Sale Information and
the Final Offering Memorandum, except where the failure to possess or make the
same would not, individually or in the aggregate, have a Material Adverse
Effect; and except as disclosed in each of the Time of Sale Information and the
Final Offering Memorandum, neither the Company nor any of its subsidiaries has
received notice of any revocation or modification of any such license,
certificate, permit or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the
ordinary course.
(bb) No Labor Disputes. No labor disturbance by or dispute with employees
of the Company or any of its subsidiaries exists or, to the best knowledge of
the Company and each of the Guarantors, is contemplated or threatened, and
neither the Company nor any Guarantor is aware of any existing or imminent labor
disturbance by, or dispute with, the employees of any of the Company's or any of
the Company's subsidiaries' principal suppliers, contractors or customers,
except where any such labor disturbance or dispute would not have a Material
Adverse Effect.
(cc) Compliance With Environmental Laws. (i) The Company and its
subsidiaries (x) are, and at all prior times were, in compliance with any and
all applicable federal, state, local and foreign laws, rules, regulations,
requirements, decisions and orders relating to the protection of human health or
safety, the environment, natural resources, hazardous or toxic substances or
wastes, pollutants or contaminants (collectively, "Environmental Laws"), (y)
have received and are in compliance with all permits, licenses, certificates or
other authorizations or approvals required of them under applicable
Environmental Laws to conduct their respective businesses, and (z) have not
received notice of any actual or potential liability under or relating to any
Environmental Laws, including for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants, and have no knowledge of any event or condition that would
reasonably
12
be expected to result in any such notice, and (ii) there are no costs or
liabilities associated with Environmental Laws of or relating to the Company or
its subsidiaries, except in the case of each of (x) and (y) above, for any such
failure to comply, or failure to receive required permits, licenses or
approvals, or cost or liability, as would not, individually or in the aggregate,
have a Material Adverse Effect; and (iii) except as disclosed in each of the
Time of Sale Information and the Final Offering Memorandum, (x) there are no
proceedings that are pending, or that are known by the Company to be
contemplated, against the Company or any of its subsidiaries under any
Environmental Laws in which a governmental entity is also a party, other than
such proceedings regarding which it is reasonably believed no monetary sanctions
of $100,000 or more will be imposed, (y) the Company and its subsidiaries are
not aware of any material issues regarding compliance with Environmental Laws,
or material liabilities or other material obligations under Environmental Laws
or concerning hazardous or toxic substances or wastes, pollutants or
contaminants, that could reasonably be expected to have a material effect on the
capital expenditures, earnings or competitive position of the Company and its
subsidiaries, and (z) none of the Company and its subsidiaries anticipates
material capital expenditures relating to any Environmental Laws.
(dd) Compliance With ERISA. (i) Each employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), for which the Company or any member of its "Controlled
Group" (defined as any organization which is a member of a controlled group of
corporations within the meaning of Section 414 of the Internal Revenue Code of
1986, as amended (the "Code")) would have any liability (each, a "Plan") has
been maintained, in all material respects, in compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Code; (ii) no prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any Plan excluding transactions effected pursuant to a
statutory or administrative exemption; (iii) except as disclosed in each of the
Time of Sale Information and the Final Offering Memorandum, for each Plan that
is subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, no "accumulated funding deficiency" as defined in Section 412 of the
Code, whether or not waived, has occurred or is reasonably expected to occur;
(iv) except as disclosed in each of the Time of Sale Information and the Final
Offering Memorandum, the fair market value of the assets of each Plan exceeds
the present value of all benefits accrued under such Plan (determined based on
those assumptions used to fund such Plan); (v) no "reportable event" (within the
meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to
occur; (vi) neither the Company nor any member of the Controlled Group has
incurred, nor reasonably expects to incur, any liability under Title IV of ERISA
(other than contributions to the Plan or premiums to the Pension Benefit
Guaranty Corporation in the ordinary course and without default) with respect to
the termination of, or withdrawal from, any pension plan for which the Company
or any member of the Controlled Group would have any liability in respect of a
Plan (including a "multiemployer plan," within the meaning of Section 4001(a)(3)
of ERISA); and (vii) and each such pension plan that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or by failure to act, which could cause the loss of such
qualification.
13
(ee) Disclosure Controls. The Company and its subsidiaries maintain a
system of "disclosure controls and procedures" (as defined in Rule 13a-15(e) of
the Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Commission's rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to the
Company's management as appropriate to allow timely decisions regarding required
disclosure. The Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by Rule
13a-15 of the Exchange Act. The Company's Chief Executive Officer and Chief
Financial Officer have determined, based on such evaluations, that the Company's
system of disclosure controls and procedures were effective as of March 31, 2006
and June 30, 2006.
(ff) Accounting Controls. The Company and its subsidiaries maintain systems
of "internal control over financial reporting" (as defined in Rule 13a-15(f) of
the Exchange Act) that comply with the requirements of the Exchange Act and have
been designed by, or under the supervision of, their respective principal
executive and principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. The
Company and its subsidiaries maintain internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (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 the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Except as disclosed in each of the Time of Sale Information and the Final
Offering Memorandum, there are no material weaknesses or significant
deficiencies in the Company's internal controls.
(gg) Insurance. The Company and its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, including
business interruption insurance, which insurance is in amounts and insures
against such losses and risks as the Company reasonably believes is adequate,
and consistent with industry practice, to protect the Company and its
subsidiaries and their respective businesses; and neither the Company nor any of
its subsidiaries has (i) received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii) any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.
(hh) No Unlawful Payments. Neither the Company nor any of its subsidiaries
nor, to the best knowledge of the Company and each of the Guarantors, any
director,
14
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(ii) Compliance with Money Laundering Laws. The operations of the Company
and its subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the "Money Laundering Laws")
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.
(jj) Compliance with OFAC. None of the Company, any of its subsidiaries or,
to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury ("OFAC"); and the Company will not directly or
indirectly use the proceeds of the offering of the Securities hereunder, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(kk) Solvency. On the Closing Date and immediately after giving effect to
the issuance of the Securities and the consummation of the other transactions
related thereto as described in each of the Time of Sale Information and the
Final Offering Memorandum, the Company and each of the Guarantors 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 or such Guarantor, as the case
may be, is not less than the total amount required to pay the probable
liabilities of the Company or such Guarantor, as the case may be, on its total
existing debts and other liabilities (including contingent liabilities, computed
at the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability) as they become absolute and matured; (ii) the
Company or such Guarantor, as the case may be, is able to realize upon its
assets and pay its debts and other liabilities (including such contingent
liabilities) as they mature and become due in the normal course of business;
(iii) assuming consummation of the issuance of the Securities as contemplated by
this Agreement, the Time of Sale Information and the Final Offering Memorandum,
the Company has not incurred, and does not propose to incur, debts that would be
beyond its ability to pay as such debts and other liabilities
15
mature; (iv) the Company or such Guarantor, as the case may be, is not engaged
in any business or transaction, and does not propose 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 or such Guarantor, as the case may be, is engaged;
and (v) the Company or such Guarantor, as the case may be, is not a defendant in
any civil action that would result in a judgment that the Company or such
Guarantor, as the case may be, is or would become unable to satisfy.
(ll) No Restrictions on Subsidiaries. Except as described in the Time of
Sale Information or the Final Offering Memorandum, no subsidiary of the Company
is currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary's properties or
assets to the Company or any other subsidiary of the Company.
(mm) No Broker's Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against any of them or the
Initial Purchaser for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Securities.
(nn) Rule 144A Eligibility. On the Closing Date, the Securities will not be
of the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in an automated
inter-dealer quotation system; and each of the Preliminary Offering Memorandum
and the Final Offering Memorandum, as of its respective date, contains all the
information that, if requested by a prospective purchaser of the Securities,
would be required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.
(oo) No Integration. Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D) has, directly or through any agent,
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(pp) No General Solicitation. None of the Company or any of its affiliates
or any other person acting on its or their behalf (other than the Initial
Purchaser, as to which no representation is made) has solicited offers for, or
offered or sold, the Securities and the Guarantees by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D.
(qq) Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Initial Purchaser contained in Section
2(b), it is not necessary, in connection with the issuance and sale of the
Securities and
16
Guarantees to the Initial Purchaser and the offer, resale and delivery of the
Securities and Guarantees by the Initial Purchaser in the manner contemplated by
this Agreement, the Time of Sale Information and the Final Offering Memorandum,
to register the Securities and Guarantees under the Securities Act or to qualify
the Indenture under the Trust Indenture Act.
(rr) No Stabilization. Neither the Company nor any of the Guarantors has
taken, directly or indirectly, any action designed to or that could reasonably
be expected to cause or result in any stabilization or manipulation of the price
of the Securities.
(ss) Margin Rules. Neither the issuance, authentication, sale and delivery
of the Securities and the Guarantees nor the application of the proceeds thereof
by the Company as described in each of the Time of Sale Information and the
Final Offering Memorandum will violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
(tt) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in any of the Time of Sale Information or the Final Offering
Memorandum has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(uu) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included or incorporated by reference in each of the Time of
Sale Information and the Final Offering Memorandum is not based on or derived
from sources that are reliable and accurate in all material respects.
(vv) Xxxxxxxx-Xxxxx Act. There is and has been no failure on the part of
the Company or any of the Company's directors or officers, in their capacities
as such, to comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated in connection therewith (the "Xxxxxxxx-Xxxxx
Act"), including Section 402 related to loans and Sections 302 and 906 related
to certifications.
4. Further Agreements of the Company and the Guarantors. The Company and
each of the Guarantors jointly and severally agree with the Initial Purchaser
that:
(a) Delivery of Copies. The Company will deliver to the Initial Purchaser,
without charge, as many copies of the Preliminary Offering Memorandum, any other
Time of Sale Information and the Final Offering Memorandum (including all
amendments and supplements thereto) as the Initial Purchaser may reasonably
request.
(b) Offering Memorandum, Amendments or Supplements. Before finalizing the
Preliminary Offering Memorandum or making or distributing any amendment or
supplement to any of the Time of Sale Information or the Final Offering
Memorandum, the Company will furnish to the Initial Purchaser and counsel for
the Initial Purchaser a copy of the proposed Preliminary or Final Offering
Memorandum or such amendment or
17
supplement for review, and will not distribute any such proposed Preliminary or
Final Offering Memorandum, amendment or supplement to which the Initial
Purchaser reasonably objects.
(c) Additional Written Communications. 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 (an "Issuer Written Communication") (other than written
communications that are listed on Annex A hereto, the Preliminary Offering
Memorandum and the Final Offering Memorandum), 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.
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 is
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.
(d) Notice to the Initial Purchaser. The Company will advise the Initial
Purchaser promptly, and confirm such advice in writing, (ii) of the occurrence
of any event which makes any statement of a material fact made in any of the
Time of Sale Information or the Final Offering Memorandum (as then amended or
supplemented) untrue or which requires the making of any additions to or changes
in any of the Time of Sale Information or the Final Offering Memorandum (as then
amended or supplemented) in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; (ii) of the
issuance by any governmental or regulatory authority of any order preventing or
suspending the use of any of the Time of Sale Information or the Final Offering
Memorandum or the initiation or, to the best knowledge of the Company,
threatening of any proceeding for that purpose; and (iii) of the receipt by the
Company of any notice with respect to any suspension of the qualification of the
Securities, Guarantees and Conversion Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company will use its reasonable best efforts to prevent the
issuance of any such order preventing or suspending the use of any of the Time
of Sale Information or the Final Offering Memorandum or suspending any such
qualification of the Securities and, if any such order is issued, will obtain as
soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Time of Sale Information and the Final
Offering Memorandum. (1) If at any time prior to the Closing Date or the
Additional Closing Date, as the case may be, (i) any event shall occur or
condition shall exist as a
18
result of which any of the Time of Sale Information as then amended or
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
(ii) it is necessary to amend or supplement any of the Time of Sale Information
to comply with law, the Company will immediately notify the Initial Purchaser
thereof and forthwith prepare and, subject to paragraph (b) above, furnish to
the Initial Purchaser such amendments or supplements to any of the Time of Sale
Information (or any document to be filed with the Commission and incorporated by
reference therein) as may be necessary so that the statements in any of the Time
of Sale Information as so amended or supplemented (including, if applicable,
such document to be incorporated by reference therein) will not, in light of the
circumstances under which they were made, be misleading or so that the Time of
Sale Information will comply with law, and (2) if at any time prior to the
completion of the resale of the Securities and the Guarantees by the Initial
Purchaser (i) any event shall occur or condition shall exist as a result of
which the Final Offering Memorandum as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances existing when the Final Offering Memorandum is delivered to a
purchaser, not misleading or (ii) it is necessary to amend or supplement the
Final Offering Memorandum to comply with law, the Company will immediately
notify the Initial Purchaser thereof and forthwith prepare and, subject to
paragraph (b) above, furnish to the Initial Purchaser such amendments or
supplements to the Final Offering Memorandum (or any document to be filed with
the Commission and incorporated by reference therein) as may be necessary so
that the statements in the Final Offering Memorandum as so amended or
supplemented (including, if applicable, such document to be incorporated by
reference therein) will not, in the light of the circumstances existing when the
Final Offering Memorandum is delivered to a purchaser, be misleading or so that
the Final Offering Memorandum will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchaser shall reasonably request and will continue such qualifications
in effect so long as required for the offering and resale of the Securities;
provided that neither the Company nor any of the Guarantors shall be required to
(i) qualify as a foreign corporation or a limited liability company in any such
jurisdiction where it would not otherwise be required to so qualify, (ii) file
any general consent to service of process in any such jurisdiction or (iii)
subject itself to taxation in any such jurisdiction if it is not otherwise so
subject.
(g) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Securities as described in each of the Time of Sale Information and the
Final Offering Memorandum under the heading "Use of proceeds."
(h) Supplying Information. While the Securities and the Guarantees or the
Conversion Shares remain outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, the Company and each of the
Guarantors will, during any period in which the Company is not subject to and in
19
compliance with Section 13 or 15(d) of the Exchange Act, furnish to holders of
the Securities and Guarantees or Conversion Shares and prospective purchasers of
the Securities and Guarantees or Conversion Shares designated by such holders,
upon the request of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(i) PORTAL and DTC. The Company will 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. (the "NASD") relating to trading in the PORTAL Market and for the
Securities to be eligible for clearance and settlement through The Depository
Trust Company ("DTC").
(j) New York Stock Exchange. The Company will use its reasonable best
efforts to have the Conversion Shares listed on the New York Stock Exchange
("NYSE").
(k) No Resales by the Company. During the two-year period from the Closing
Date, the Company will not, and will not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the Securities,
Guarantees or Conversion Shares that have been acquired by any of them, except
for Securities, Guarantees or Conversion Shares purchased by the Company or any
of its affiliates and resold in a transaction registered under the Securities
Act.
(l) No Integration. Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D) will, directly or through any agent,
sell, offer for sale, solicit offers to buy or otherwise negotiate in respect
of, any security (as defined in the Securities Act), that 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.
(m) No General Solicitation. None of the Company or any of its affiliates
or any other person acting on its or their behalf (other than the Initial
Purchaser, as to which no covenant is given) will (i) solicit offers for, or
offer or sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act; or (ii) 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 and Guarantees and the Conversion Shares as contemplated by this
Agreement, any of the Time of Sale Information and the Final Offering
Memorandum.
(n) No Stabilization. Neither the Company nor any of the Guarantors will
take, directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities or the Common Stock and neither the Company nor any of its
affiliates has taken or will take,
20
directly or indirectly, any action prohibited by Regulation M under the Exchange
Act in connection with the offering of the Securities.
(o) Clear Market. Except as provided in Section 4(p), during the period
from the date hereof through and including the date that is 90 days after the
date hereof, the Company and each of the Guarantors will not, without the prior
written consent of the Initial Purchaser, offer, sell, contract to sell or
otherwise dispose of any debt securities issued or guaranteed by the Company or
any of the Guarantors and having a tenor of more than one year.
(p) Lock-Up. The Company will not for a period of 90 days following the
date of this Agreement, without the prior written consent of the Initial
Purchaser, offer, sell, contract to sell, pledge or otherwise dispose of (or
enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or any
affiliate of the Company), directly or indirectly, or file (or participate in
the filing of) a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act and the
rules and regulations of the Commission promulgated thereunder with respect to,
any shares of capital stock of the Company or any securities convertible or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction; provided, however, that (i) the
Company may sell the Securities pursuant to this Agreement and may issue the
Common Stock issuable upon the conversion of the Securities in accordance with
the terms and conditions of the Indenture; (ii) the Company may file
registration statements in respect of the Securities, the Guarantees and the
Conversion Shares; (iii) the Company may grant or issue any stock options,
restricted stock or other awards under, and may issue and sell Common Stock upon
the exercise of options granted under, any employee benefit plan or agreement of
the Company in effect on the date of this Agreement, and the preceding
restriction shall not apply with respect to the vesting of or removal or lapse
of restrictions on restricted stock or other awards under any employee benefit
plan or agreement of the Company in effect on the date of this Agreement; and
(iv) the Company may file registration statements on Form S-8 relating to the
offering of securities pursuant to the terms of employee benefit plans or
agreements in effect on the date of this Agreement.
(q) Conversion Shares. The Company will reserve and keep available at all
times, free of preemptive rights, the maximum number of Conversion Shares.
(r) Conversion Price. Between the date hereof and the Closing Date, the
Company will not do or authorize any act or thing that would result in an
adjustment of the conversion price or conversion rate of the Securities.
(s) No Action. The Company will not take any action prior to the Closing
Date which would require any of the Time of Sale Information or the Final
Offering Memorandum to be amended or supplemented pursuant to Section 4(e).
21
5. Certain Agreements of the Initial Purchaser. The Initial Purchaser
hereby represents and agrees that it has not and will not use, authorize use of,
refer to, or participate in the planning for use of, any written communication
that constitutes an offer to sell or the solicitation of an offer to buy the
Securities or the Conversion Shares other than (i) the Time of Sale Information
and the Final Offering Memorandum, (ii) a written communication that contains no
"issuer information" (as defined in Rule 433(h)(2) under the Securities Act)
that was not included (including through incorporation by reference) in the Time
of Sale Information or the Final Offering Memorandum, (iii) any written
communication listed on Annex A or prepared pursuant to Section 4(c) above, (iv)
any written communication prepared by the Initial Purchaser and approved by the
Company in advance in writing or (v) any written communication relating to or
that contains the terms of the Securities or the Conversion Shares and/or other
information that was included or incorporated by reference in the Time of Sale
Information or the Final Offering Memorandum.
6. Conditions of Initial Purchaser's Obligations. The obligation of the
Initial Purchaser to purchase the Firm Securities on the Closing Date or the
Additional Securities on the Additional Closing Date, as the case may be, as
provided herein is subject to the performance by the Company and each of the
Guarantors of their respective covenants and other obligations hereunder and to
the following additional conditions:
(a) Representations and Warranties. The representations and warranties of
the Company and the Guarantors contained herein shall be true and correct on the
date hereof and on and as of the Closing Date; and the statements of the
Company, the Guarantors and their respective officers made in any certificates
delivered pursuant to this Agreement shall be true and correct on and as of the
Closing Date or the Additional Closing Date, as the case may be.
(b) The Time of Sale Information and Final Offering Memorandum. The Time of
Sale Information and the Final Offering Memorandum (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. If any event shall have occurred that requires the Company under Section
4(e) to prepare an amendment or supplement to any of the Time of Sale
Information and the Final Offering Memorandum, such amendment or supplement
shall have been prepared, the Initial Purchaser shall have been given a
reasonable opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchaser reasonably in advance of the Closing Date or
the Additional Closing Date, as the case may be.
(c) Ongoing Compliance of the Time of Sale Information and Final Offering
Memorandum. The Initial Purchaser shall not have discovered and disclosed to the
Company (1) on or prior to the Closing Date that any of the Time of Sale
Information contains an untrue statement of 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 necessary to make the
statements therein not misleading and (2) on or
22
prior to the Closing Date that the Final Offering Memorandum (and any amendments
or supplements thereto) contains an untrue statement of 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 necessary to make
the statements therein not misleading.
(d) Required Corporate Actions. All corporate or limited liability company
proceedings and other legal matters incident to the authorization, form and
validity of each of the Transaction Documents, the Time of Sale Information and
the Final Offering Memorandum (and any amendments or supplements thereto), and
all other legal matters relating to the Transaction Documents and the
transactions contemplated thereby, shall be satisfactory in all material
respects to the Initial Purchaser, and the Company and each of the Guarantors
shall have furnished to the Initial Purchaser all documents and information that
it or its counsel may reasonably request to enable them to pass upon such
matters.
(e) No Downgrade. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded the
Securities or any other debt securities or preferred stock issued or guaranteed
by the Company or any of its subsidiaries by any "nationally recognized
statistical rating organization," as such term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act; and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, or has changed its outlook with respect to, its rating of the Securities
or of any other debt securities or preferred stock issued or guaranteed by the
Company or any of its subsidiaries (other than an announcement with positive
implications of a possible upgrading).
(f) No Material Adverse Change. Subsequent to the execution and delivery of
this Agreement or, if earlier, the dates as of which information is given in any
of the Time of Sale Information or the Final Offering Memorandum (exclusive of
any amendment or supplement thereto), there shall not have been any development
involving a prospective change, in or affecting the business, properties,
management, financial position, results of operations or prospects of the
Company and its subsidiaries taken as a whole or any change in the capital stock
or long-term debt, the effect of which, in any such case, is, in the judgment of
the Initial Purchaser, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities and
Guarantees on the Closing Date or the Additional Closing Date, as the case may
be, on the terms and in the manner contemplated by this Agreement, the Time of
Sale Information and the Final Offering Memorandum (exclusive of any amendment
or supplement thereto).
(g) Officers' Certificates. The Initial Purchaser shall have received on
and as of the Closing Date or the Additional Closing Date, as the case may be, a
certificate of the Company's chief executive officer and chief financial officer
and two executive officers of each Guarantor who have specific knowledge of such
Guarantor's financial matters and are satisfactory to the Initial Purchaser
stating that (i) such officers have carefully reviewed the Time of Sale
Information and the Final Offering Memorandum; (ii)
23
to the best knowledge of such officers, the Time of Sale Information, at the
time of sale and at the Closing Date, did not, and the Final Offering
Memorandum, as of its date and at the Closing Date, did not include any untrue
statement of a material fact and did not omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, and since the date of each of the Time of Sale
Information and the Final Offering Memorandum, no event has occurred which
should have been set forth in a supplement or amendment to any of the Time of
Sale Information and the Final Offering Memorandum so that the Time of Sale
Information and the Final Offering Memorandum (as so amended or supplemented)
would not include any untrue statement of a material fact and would not omit to
state a material fact necessary to make the statements therein, under the light
of the circumstances under which they were made, not misleading; (iii) as of the
Closing Date or the Additional Closing Date, as the case may be, the
representations and warranties of the Company and each of the Guarantors, as
applicable, in this Agreement are true and correct, the Company and each of the
Guarantors, as applicable, have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied hereunder at or prior to
the Closing Date or the Additional Closing Date, as the case may be, and (iv)
subsequent to the date of the most recent financial statements of the Company
included or incorporated by reference in each of the Time of Sale Information
and the Final Offering Memorandum (exclusive of amendments or supplements
thereto after the date hereof), there has been no material adverse change, or
any material development, including a prospective material adverse change, in or
affecting the business, properties, management, financial position, results of
operations or prospects of the Company and its subsidiaries taken as a whole,
except as disclosed in any of the Time of Sale Information or the Final Offering
Memorandum (exclusive of amendments or supplements thereto after the date
hereof).
(h) Comfort Letters. On the date of this Agreement and on the Closing Date
or the Additional Closing Date, as the case may be, Deloitte & Touche LLP shall
have furnished to the Initial Purchaser, at the request of the Company, letters,
dated the respective dates of delivery thereof and addressed to the Initial
Purchaser, in form and substance reasonably satisfactory to the Initial
Purchaser, containing statements and information of the type customarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained or incorporated
by reference in each of the Time of Sale Information and the Final Offering
Memorandum; provided that the letter delivered on the Closing Date or the
Additional Closing Date, as the case may be, shall use a "cut-off" date no more
than three business days prior to such Closing Date or such Additional Closing
Date, as the case may be.
(i) Opinion of Counsel for the Company and each of the Guarantors.
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP, counsel for the Company and each of
the Guarantors, shall have furnished to the Initial Purchaser, at the request of
the Company, their written opinion, dated the Closing Date or the Additional
Closing Date, as the case may be, and addressed to the Initial Purchaser, in
form and substance reasonably satisfactory to the Initial Purchaser, to the
effect set forth in Annex C hereto.
24
(j) Opinion and Statement of Counsel for the Initial Purchaser. The Initial
Purchaser shall have received on and as of the Closing Date an opinion and
statement of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Initial Purchaser,
with respect to such matters as the Initial Purchaser may reasonably request,
and such counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(k) Opinion of U.K. Counsel for the Initial Purchaser. The Initial
Purchaser shall have received on and as of the Closing Date an opinion of DLA
Xxxxx Xxxxxxx Xxxx Xxxx UK LLP, U.K. counsel for the Initial Purchaser, with
respect to such matters as the Initial Purchaser may reasonably request, and
such counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(l) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date or the Additional Closing Date, as the case may be,
prevent the issuance or sale of the Securities or the issuance or sale of the
Guarantees or the issuance of the Conversion Shares; and no injunction or order
of any federal, state or foreign court shall have been issued that would, as of
the Closing Date or the Additional Closing Date, as the case may be, prevent the
issuance or sale of the Securities or the issuance or sale of the Guarantees or
the issuance of the Conversion Shares.
(m) No Rule 144A Invalidation. There shall not have occurred any
invalidation of Rule 144A under the Securities Act by any court or withdrawal or
proposed withdrawal of any rule or regulation under the Securities Act or the
Exchange Act by the Commission or any amendment or proposed amendment thereof by
the Commission which in the judgment of the Initial Purchaser would materially
impair the ability of the Initial Purchaser to purchase, hold or effect resales
of the Securities and Guarantees contemplated hereby.
(n) Good Standing. The Initial Purchaser shall have received on and as of
the Closing Date or the Additional Closing Date, as the case may be,
satisfactory evidence of the good standing of the Company and its subsidiaries
listed on Schedule 3 in their respective jurisdictions of incorporation or
formation and their good standing as foreign entities in such other
jurisdictions as the Initial Purchaser may reasonably request, in each case in
writing or any standard form of telecommunication from the appropriate
governmental authorities of such jurisdictions.
(o) Indenture and Securities. The Indenture shall have been duly executed
and delivered by the Company, each of the Guarantors and the Trustee, and the
Securities shall have been duly executed and delivered by the Company and duly
authenticated by the Trustee.
25
(p) Registration Rights Agreement. The Initial Purchaser shall have
received a counterpart of the Registration Rights Agreement that shall have been
duly executed and delivered by the Company and each of the Guarantors.
(q) PORTAL and DTC. The Securities shall have been approved by the NASD for
trading in the PORTAL Market and shall be eligible for clearance and settlement
through DTC.
(r) Listing. The Common Stock issuable upon conversion of the Securities
shall have been listed on the New York Stock Exchange subject to notice of
issuance.
(s) Termination of Existing Credit Facility and Entry into New Revolving
Credit Facility. Concurrently with the sale of the Securities and Guarantees by
the Company and the Guarantors to the Initial Purchaser, (i) the Company shall
have fully repaid the Company's indebtedness under its existing revolving credit
facility with the net proceeds of the offering contemplated hereby, together
with borrowings under its new revolving credit facility, as described in each of
the Time of Sale Information and the Final Offering Memorandum and terminated
such existing revolving credit facility such that the Securities and Guarantees
may be issued pursuant to the Indenture and sold and delivered pursuant to this
Agreement without resulting in an event of default under such existing revolving
credit facility and (ii) the Company shall have entered into the new revolving
credit agreement as described in each of the Time of Sale Information and the
Final Offering Memorandum.
(t) Market Events. Subsequent to the execution and delivery of this
Agreement, there shall have not occurred any of the following: (i) trading
generally shall have been suspended or materially limited on or by any of the
NYSE, the American Stock Exchange, any of the NASDAQ Global Select Market, the
Nasdaq Global Market and the Nasdaq Capital Market or the over-the-counter
market; (ii) trading of any securities issued or guaranteed by the Company or
any of the Guarantors shall have been suspended on any exchange or any
over-the-counter market; (iii) a general moratorium on commercial banking
activities shall have been declared by federal or New York State authorities or
there shall have occurred a material disruption of securities clearance or
settlement systems; (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis, either
within or outside the United States, that, in the judgment of the Initial
Purchaser, is material and adverse and makes it impracticable or inadvisable to
proceed with the offering, sale or delivery of the Securities and Guarantees on
the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Final Offering Memorandum; or
(u) Additional Documents. On or prior to the Closing Date or the Additional
Closing Date, as the case may be, the Company and the Guarantors shall have
furnished to the Initial Purchaser such further certificates and documents as
the Initial Purchaser may reasonably request.
26
(v) Lock-up Agreements. The Company shall have furnished to the Initial
Purchaser on the date hereof letters substantially in the form of Exhibit A
hereof from each of the executive officers and directors of the Company
addressed to the Initial Purchaser.
All opinions, letters, certificates and evidence 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) Indemnification of the Initial Purchaser. The Company and each of the
Guarantors jointly and severally agree to indemnify and hold harmless the
Initial Purchaser, its affiliates, directors and officers and each person, if
any, who controls the Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint
or several, that arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or any of the other Time of Sale Information, any Issuer
Written Communication, the Final Offering Memorandum (or any amendment or
supplement thereto) or in any information provided by the Company or any
Guarantor pursuant to Section 4(e), any omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
each case except insofar as such losses, claims, damages or liabilities arise
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any Initial
Purchaser's Information.
(b) Indemnification of the Company and the Guarantors. The Initial
Purchaser agrees to indemnify and hold harmless the Company, each of the
Guarantors, each of their respective affiliates, directors and officers and each
person, if any, who controls the Company or any of the Guarantors within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the indemnity set forth in paragraph (a) above, but only with
respect to any losses, claims, damages or liabilities that arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any Initial Purchaser's
Information.
(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not
27
relieve it from any liability that it may have under this Section 7 except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided, further, that the
failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this
Section 7. If any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person (who shall not, without the consent of the Indemnified
Person, be counsel to the Indemnifying Person) to represent the Indemnified
Person and any others entitled to indemnification pursuant to this Section 7
that the Indemnifying Person may designate in such proceeding and shall pay the
fees and expenses of such counsel related to such proceeding, as incurred. In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Initial
Purchaser, its affiliates, directors and officers and any control persons of the
Initial Purchaser shall be designated in writing by the Initial Purchaser and
any such separate firm for the Company, the Guarantors, their respective
directors and officers and any control persons of the Company and the Guarantors
shall be designated in writing by the Company. The Indemnifying Person shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested that an Indemnifying Person reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by this
paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the Indemnifying Person of such
request and (ii) the Indemnifying Person shall not have reimbursed the
Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the written consent of the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnification could have been sought hereunder by such
28
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchaser on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and the
Guarantors on the one hand and the Initial Purchaser on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantors on the one hand and
the Initial Purchaser on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the
Company from the sale of the Securities and the total discounts and commissions
received by the Initial Purchaser in connection therewith, as provided in this
Agreement, bear to the aggregate offering price of the Securities. The relative
fault of the Company and the Guarantors on the one hand and the Initial
Purchaser on the other 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 the Company and
each of the Guarantors or information supplied by the Company or any Guarantor
or Initial Purchaser's Information supplied by the Initial Purchaser and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) Limitation on Liability. The Company, the Guarantors and the Initial
Purchaser agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro rata allocation or by any other method
of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall the Initial Purchaser be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by the Initial Purchaser with respect to the offering of the Securities
exceeds the amount of any damages that the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
29
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.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are
not exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.
8. Termination. The obligations of the Initial Purchaser hereunder may be
terminated by the Initial Purchaser, in the absolute discretion of the Initial
Purchaser, by notice given to the Company prior to the delivery of and payment
for the Securities and Guarantees if, prior to that time, any of the events
described in Section 6(e), 6(f), 6(l), 6(m) and 6(t) shall have occurred.
9. Payment of Expenses. (a) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company and
each of the Guarantors jointly and severally agree to pay or cause to be paid
all costs and expenses incident to the performance of their obligations
hereunder, including without limitation, (i) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities,
Guarantees or Conversion Shares and any taxes payable in that connection; (ii)
the costs incident to (x) the preparation and printing of the Preliminary
Offering Memorandum, any Issuer Written Communication, any Time of Sale
Information and the Final Offering Memorandum (including all exhibits,
amendments and supplements thereto) and the distribution thereof and (y) the
preparation and filing under the Securities Act of the Registration Statement;
(iii) the costs of reproducing and distributing each of the Transaction
Documents; (iv) the fees and expenses of the Company's and the Guarantors'
counsel and independent accountants; (v) the fees and expenses incurred in
connection with the registration or qualification and determination of
eligibility for investment of the Securities, the Guarantees or the Conversion
Shares under the laws of such jurisdictions as the Initial Purchaser may
designate and the preparation, printing and distribution of a Blue Sky
Memorandum (including the related fees and expenses of counsel for the Initial
Purchaser); (vi) the cost of preparing stock certificates; (vii) the costs and
charges of any transfer agent and any registrar; (viii) any fees charged by
rating agencies for rating the Securities; (ix) the fees and expenses of the
Trustee and any paying agent (including related fees and expenses of any counsel
to such parties); (x) all expenses and application fees incurred in connection
with the application for the inclusion of the Securities on the PORTAL Market
and the approval of the Securities for book-entry transfer by DTC; (xi) all
expenses incurred by the Company in connection with any "road show" presentation
to potential investors; and (xii) all expenses and application fees related to
the listing of the Conversion Shares on the NYSE.
(b) If (i) this Agreement is terminated pursuant to Section 8 (other than
due to the events described in Section 6(l) and 6(m)), (ii) the Company for any
reason fails to tender the Securities for delivery to the Initial Purchaser or
(iii) the Initial Purchaser declines to purchase the Securities for any reason
permitted under this Agreement, the Company and each of the Guarantors jointly
and severally agrees to reimburse the Initial Purchaser for all out-of-pocket
costs and expenses (including the fees and
30
expenses of their counsel) reasonably incurred by the Initial Purchaser in
connection with this Agreement and the proposed purchase and resale of the
Securities and Guarantees contemplated hereby.
10. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and any controlling persons referred to herein, and the affiliates,
officers and directors of the Initial Purchaser referred to in Section 7 hereof.
Nothing in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein. No purchaser of Securities from the
Initial Purchaser shall be deemed to be a successor merely by reason of such
purchase.
11. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, each of the
Guarantors and the Initial Purchaser contained in this Agreement or made by or
on behalf of the Company, each of the Guarantors or the Initial Purchaser
pursuant to this Agreement or any certificate delivered pursuant hereto shall
survive the delivery of and payment for the Securities and shall remain in full
force and effect, regardless of any termination of this Agreement or any
investigation made by or on behalf of the Company, the Guarantors or the Initial
Purchaser.
12. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term "affiliate" has the meaning set forth in
Rule 405 under the Securities Act; (b) the term "business day" means any day
other than a day on which banks are permitted or required to be closed in New
York City; (c) the term "subsidiary" has the meaning set forth in Rule 405 under
the Securities Act; and (d) the term "written communication" has the meaning set
forth in Rule 405 under the Securities Act.
13. Initial Purchaser's Information. The parties hereto acknowledge and
agree that, for all purposes of this Agreement, the Initial Purchaser's
Information consists solely of the following information in the Time of Sale
Information or the Final Offering Memorandum: the ninth paragraph, the fifth and
sixth sentences of the tenth paragraph, the twelfth paragraph and the thirteenth
paragraph under the heading "Plan of Distribution" in the Final Offering
Memorandum.
14. Miscellaneous. (a) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted and confirmed by any standard form of telecommunication.
Notices to the Initial Purchaser shall be given to the Initial Purchaser c/o
X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax:
(000) 000-0000); Attention: Equity Syndicate Desk. Notices to the Company shall
be given to it at Calgon Carbon Corporation, X.X. Xxx 000, Xxxxxxxxxx, XX
00000-0000 (fax: (000) 000-0000); Attention: General Counsel.
31
(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of New York.
(c) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(d) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
(e) Headings. The headings herein are included for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
32
If the foregoing is in accordance with your understanding, please indicate
your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
CALGON CARBON CORPORATION
By /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
CALGON CARBON INVESTMENTS, INC.
By /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Vice President and Secretary
BSC COLUMBUS, LLC
By /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Manager
CCC COLUMBUS, LLC
By /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Manager
Accepted: August 14, 2006
X.X. XXXXXX SECURITIES INC.
By Xxxxxxx Xxxxxxxxxxx
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Authorized Signatory
[Certain Schedules have been omitted and will be provided upon request]
33
Schedule 1
Guarantors
1. Calgon Carbon Investments, Inc.
2. BSC Columbus, LLC
3. CCC Columbus, LLC
Exhibit A
FORM OF LOCK-UP AGREEMENT
August [__], 2006
X.X. XXXXXX SECURITIES INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Calgon Carbon Corporation
Ladies and Gentlemen:
The undersigned understands that you propose to enter into a Purchase
Agreement (the "Purchase Agreement") with Calgon Carbon Corporation, a Delaware
corporation (the "Company"), and the guarantors listed on Schedule 1 to the
Purchase Agreement, providing for the offering (the "Offering") by X.X. Xxxxxx
Securities Inc. (the "Initial Purchaser"), of the Company's Senior Convertible
Notes due 2036 (the "Securities"). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Purchase Agreement.
In consideration of the Initial Purchaser's agreement to purchase the
Securities, and for other good and valuable consideration receipt of which is
hereby acknowledged, the undersigned hereby agrees that, without the prior
written consent of the Initial Purchaser, the undersigned will not, during the
period ending 90 days after the date of the Final Offering Memorandum, offer,
sell, contract to sell, pledge or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the undersigned), directly or
indirectly, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder with respect to, any shares of capital stock of the Company or any
securities convertible or exercisable or exchangeable for such capital stock
(including without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and securities which may
be issued upon exercise of a stock option or warrant), or publicly announce an
intention to effect any such transaction.
In addition, the undersigned agrees that, without the prior written consent
of the Initial Purchaser, it will not, during the period ending 90 days after
the date of the Final Offering Memorandum, make any demand for or exercise any
right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
Notwithstanding the foregoing, the Initial Purchaser has agreed that the
undersigned may transfer shares of Common Stock (1) as a bona fide gift,
provided that the donee agrees to be bound by the lock-up restrictions, (2) to
any trust, family partnership or similar entity for the direct or indirect
benefit of the executive officer or director, provided that such trust, family
partnership or similar entity agrees to be bound by the lock-up restrictions,
(3) to effect a cashless exercise of options to purchase Common Stock that are
outstanding on the date of the Purchase Agreement or issued after such date
under the Company's existing stock plans, (4) pursuant to any contract,
instruction or plan complying with Rule 10b5-1 under the Securities Exchange Act
of 1934, as amended, that has been entered into by the undersigned prior to the
date hereof or (5) up to 5% of the shares of Common Stock held by the
undersigned on the date of the Purchase Agreement.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Purchase Agreement does not become
effective, or if the Purchase Agreement (other than the provisions thereof which
survive termination) shall terminate or be terminated prior to payment for and
delivery of the Common Stock to be sold thereunder, the undersigned shall be
released from all obligations under this Letter Agreement. The undersigned
understands that the Initial Purchaser is entering into the Purchase Agreement
and proceeding with the Offering in reliance upon this Letter Agreement.
This Letter Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Very truly yours,
By:
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Name:
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Title:
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