CPM HOLDINGS, INC. 105/8% Senior Secured Notes due 2014 PURCHASE AGREEMENT
EXHIBIT 1.1
$200,000,000
105/8% Senior Secured Notes due 2014
August 11, 2009
XXXXXXXXX & COMPANY, INC.
As Representative of the
Initial Purchasers listed in
Schedule I hereto
c/x Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the
Initial Purchasers listed in
Schedule I hereto
c/x Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CPM Holdings, Inc., a Delaware corporation (the “Company”), and each of the Guarantors (as
hereinafter defined) hereby agree with you as follows:
1. Issuance of Notes. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the initial purchasers listed on Schedule
I hereto (the “Initial Purchasers”) $200,000,000 aggregate principal amount of its 105/8%
Senior Secured Notes due 2014 (the “Notes”). The Notes will be issued pursuant to an
indenture (the “Indenture”), to be dated as of August 18, 2009, by and among the Company,
the Guarantors and Wilmington Trust FSB, as trustee (the “Trustee”). Capitalized terms
used, but not defined herein, shall have the meanings set forth in the “Description of Notes”
section of the final offering memorandum, dated the date hereof (the “Final Offering
Memorandum”).
The Notes will be offered and sold to the Initial Purchasers pursuant to an exemption from the
registration requirements under the Securities Act of 1933, as amended (the “Securities
Act”). The Company has prepared a preliminary offering memorandum, dated July 30, 2009 (the
“Preliminary Offering Memorandum”), and a pricing term sheet attached hereto as
Schedule II (the “Pricing Supplement”), which includes pricing terms and other
information relating to the purchase and sale of the Notes by the Initial Purchasers (the
“Offering”). The term “Offering Memorandum” means, as of any date or time referred
to in this Purchase Agreement, dated August 11, 2009 (this “Agreement”), the most recent
offering memorandum (whether the Pricing Disclosure Package (as hereinafter defined) or the Final
Offering Memorandum, and any amendment or supplement to either such document), including exhibits
and schedules thereto. The Preliminary Offering Memorandum immediately prior to 10:30 a.m., New
York City time (the “Pricing Time”), taken together with the Pricing Supplement, are
collectively referred to herein as the “Pricing Disclosure Package.” Upon original
issuance thereof, and until such time as the same is no longer required under the applicable
requirements of the Securities Act, the Notes shall bear the legends set forth in the “Notice to
Investors” section of the Final Offering Memorandum.
On the Closing Date and concurrently with the consummation of this Offering, the Company, the
Guarantors and certain other Subsidiaries of the Company will enter into a new senior secured
credit
facility with the Bank of Montreal, which will provide for a senior secured revolving credit
facility in an amount of up to $30.0 million, subject to adjustment pursuant to a borrowing base
(as amended, supplemented, modified, extended or restated from time to time, the “Credit
Agreement”). In connection with the Credit Agreement, the Collateral Agent and First Priority
Agent shall enter into an Intercreditor Agreement, to be dated as of August 18, 2009 (the
“Intercreditor Agreement), in a form reasonably satisfactory to the Initial Purchasers.
The proceeds of the Notes will be used (a) to repay the Company’s existing indebtedness under
that certain credit agreement, dated as of August 16, 2007, among the Company, Crown Acquisition
Corp., CPM Acquisition Corp., the lenders party thereto and Credit Suisse, as administrative agent
and collateral agent (the “Existing Credit Facility”), (b) to pay related fees and expenses
in connection with the Transactions (as defined below) and (c) for general corporate purposes.
2. Terms of Offering. The Initial Purchasers have advised the Company,
and the Company understands, that the Initial Purchasers will make offers to sell (the “Exempt
Resales”) some or all of the Notes purchased by the Initial Purchasers hereunder on the terms
set forth in the Pricing Disclosure Package and the Final Offering Memorandum, as amended or
supplemented, solely to persons (the “Subsequent Purchasers”) whom the Initial Purchasers
reasonably believe to be (a) “qualified institutional buyers” as defined in Rule 144A under the
Securities Act (“QIBs”) (b) a limited number of institutional “accredited investors” as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act (“Accredited
Investors”) that make certain representations or warranties to the Initial Purchasers as set
forth in the Accredited Investor Letter attached as Annex A to the Offering Memorandum, or (c)
non-“U.S. persons” permitted to purchase the Notes in offshore transactions in reliance upon
Regulation S under the Securities Act (“Regulation S Persons”). As used herein, “U.S.
persons” has the meaning given to such term in Regulation S under the Securities Act.
Pursuant to the Indenture, each of the Company’s existing and future Domestic Subsidiaries
(other than Immaterial Subsidiaries) shall fully and unconditionally guarantee to each holder of
the Notes and the Trustee, on a senior secured basis, the payment and performance of the Company’s
Obligations under the Indenture and the Notes (each such subsidiary being referred to herein as a
“Guarantor” and each such guarantee being referred to herein as a “Guarantee”).
Pursuant to the terms of the Indenture, the Collateral Documents and the Intercreditor
Agreement, the Notes and the Guarantees will be secured by a second priority security interest in
substantially all of the Company’s and the Guarantors’ existing and future current assets
(principally cash, cash equivalents, accounts receivable and inventory) and certain related assets,
and by a first priority security interest in substantially all of the Company’s and the Guarantors’
other existing and future tangible and intangible assets, including a pledge of 65% of the capital
stock of first tier Foreign Subsidiaries, subject to Permitted Prior Liens and, in each case,
excluding Excluded Assets.
Holders of the Notes will have the registration rights set forth in the registration rights
agreement applicable to the Notes (the “Registration Rights Agreement”), to be executed on
and dated as of the Closing Date, in a form reasonably acceptable to the Initial Purchasers in
conformity in all material respects with the description of such registration rights contained in
the Pricing Disclosure Package and the Final Offering Memorandum. Pursuant to the Registration
Rights Agreement, the Company and the Guarantors will agree, among other things, to file with the
SEC (i) a registration statement under the Securities Act relating to the 105/8% Senior Secured Notes
due 2014 (the “Exchange Notes”), which shall be identical to the Notes (except that the
Exchange Notes shall have been registered pursuant to such registration statement and will not be
subject to restrictions on transfer or contain additional interest provisions) to be offered in
exchange for the Notes (such offer to exchange being referred to as the “Exchange Offer”),
and/or (ii) under certain circumstances, a shelf registration statement pursuant to Rule
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415 under the Securities Act (the “Shelf Registration Statement”) relating to the resale by
certain holders of the Notes. If required under the Registration Rights Agreement, the Company
will issue Exchange Notes to the Initial Purchasers. If the Company fails to satisfy its
obligations under the Registration Rights Agreement, it will be required to pay additional interest
to the holders of the Notes under certain circumstances in accordance with the terms of the
Registration Rights Agreement.
This Agreement, the Indenture, the Collateral Documents, the Registration Rights Agreement,
the Notes, the Exchange Notes, the Guarantees, the Exchange Guarantees (as defined below), the
Credit Agreement and the Intercreditor Agreement are collectively referred to herein as the
“Transaction Documents.” The Offering, the entry into the Credit Agreement and the
application of the proceeds therefrom as described in the Pricing Disclosure Package and the
Offering Memorandum and the issuance and sale of the Notes in accordance with this Agreement are
collectively referred to herein as the “Transactions”.
3. Purchase, Sale and Delivery. On the basis of the representations,
warranties, agreements and covenants contained herein and subject to the terms and conditions
herein set forth, the Company agrees to issue and sell to the several Initial Purchasers, and the
each of Initial Purchasers agrees, severally and not jointly, to purchase from the Company, the
respective principal amount of the Notes set forth opposite such Initial Purchaser’s name in
Schedule I hereto at a purchase price of 95.501% of the aggregate principal amount thereof.
Delivery to the Initial Purchasers of and payment for the Notes shall be made at a Closing (the
“Closing”) to be held at 10:00 a.m., New York time, on August 18, 2009 (the “Closing
Date”) at the New York offices of Proskauer Rose LLP.
The Company shall deliver to the Initial Purchasers one or more certificates representing the
Notes in global form, registered in such names and denominations as the Initial Purchasers may
request against payment by the Initial Purchasers of the purchase price therefor (net of expenses
of the Initial Purchasers that are reimbursable by the Company) by immediately available Federal
funds bank wire transfer to such bank account or accounts as the Company shall designate to the
Initial Purchasers at least two business days prior to the Closing Date. The certificates
representing the Notes in definitive form shall be made available to the Initial Purchasers for
inspection at the New York offices of Proskauer Rose LLP (or such other place as shall be
reasonably acceptable to the Initial Purchasers) not later than 10:00 a.m. one business day
immediately preceding the Closing Date. Notes to be represented by one or more definitive global
securities in book-entry form will be deposited on the Closing Date, by or on behalf of the
Company, with The Depository Trust Company (“DTC”) or its designated custodian, and
registered in the name of Cede & Co.
4. Representations and Warranties of the Company and the Guarantors.
The Company and the Guarantors jointly and severally represent and warrant to the each of the
Initial Purchasers that, as of the date hereof and as of the Closing Date:
(a) No Material Misstatement or Omission. (i) The Pricing Disclosure Package did
not as of the Pricing Time, and will not at the Closing Date, contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading and (ii) the Final Offering Memorandum, as of its date and at the
Closing Date, and any amendment or supplement thereto as of the date thereof, does not and
will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 4(a) do not apply to
statements or omissions made in reliance upon and in conformity with the Initial Purchaser
Information (as defined in Section 11). No injunction or order has been issued and
no
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proceeding is pending or threatened, that either (i) asserts that any of the
Transactions is subject to the registration requirements of the Securities Act or (ii) would
prevent or suspend the issuance or sale of any of the Notes or the use of the Pricing
Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto, in
any jurisdiction.
(b) Subsidiaries. Each corporation, partnership, limited liability company or
other entity in which the Company, directly or indirectly through any of its subsidiaries,
owns more than 50% of any class of equity securities or interests is listed on Schedule
III attached hereto (the “Subsidiaries”). Each Subsidiary that is a Foreign
Subsidiary has an asterisk (“*”) next to its name on such schedule and each Subsidiary that
is an Immaterial Subsidiary has two asterisks (“**”) next to its name on such schedule.
(c) Due Organization and Formation; Good Standing; Foreign Qualifications. Each
of the Company and its Subsidiaries (i) has been duly organized or formed, as the case may
be, is validly existing and, is in good standing under the laws of its jurisdiction of
organization, (ii) has all requisite corporate or limited liability company power and
authority, as applicable, to carry on its business and to own, lease and operate its
properties and assets as currently being operated, and (iii) is duly qualified or licensed
to do business and is in good standing as a foreign corporation or limited liability
company, as the case may be, authorized to do business in each jurisdiction in which the
nature of such businesses or the ownership or leasing of such properties requires such
qualification, except, in each case, where such failure would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on (A) the properties,
business, operations, earnings, assets, liabilities or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, (B) the ability of the Company or the
Guarantors to perform their obligations in all material respects under any of the
Transaction Documents, (C) the enforceability of any of the Collateral Documents or the
attachment, perfection or priority of any of the security interests intended to be created
under the Transaction Documents, (D) the validity or enforceability of any of the
Transaction Documents, or (E) the consummation of any of the Transactions (each, a
“Material Adverse Effect”).
(d) Capitalization and Other Stock Matters. All of the issued and outstanding
shares of capital stock of the Company and the Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable, and were not issued in violation of, and
are not subject to, any preemptive or similar rights. The table in the “Capitalization”
section of the Offering Memorandum (including the footnotes thereto) sets forth, as of its
date, (i) the actual cash and cash equivalents and capitalization of the Company and (ii)
the as adjusted cash and cash equivalents and capitalization of the Company after giving
effect to the Transactions. Except as set forth in the table in the “Capitalization”
section of the Offering Memorandum, the section of the Offering Memorandum titled “Certain
Relationships and Related Party Transactions” and the Pricing Supplement, immediately
following the Closing neither the Company nor any of the Subsidiaries will have any
liabilities, absolute or accrued, contingent or otherwise, other than (A) liabilities that
are reflected in the Financial Statements (as hereinafter defined) or which are not required
to be reflected therein pursuant to GAAP or (B) liabilities incurred subsequent to the date
thereof in the ordinary course of business, consistent with past practice, or in connection
with the Transactions. All of the outstanding shares of capital stock or other
equity interests of each of the Subsidiaries that are owned by the Company are owned,
directly or indirectly, by the Company free and clear of all liens, security interests,
mortgages, pledges, charges, equities, claims or restrictions on transferability or
encumbrances of any kind (collectively, “Liens), except as set forth in the Offering
Memorandum and other than (i) those imposed by the Securities Act and the securities or
“Blue Sky” laws of certain domestic or foreign jurisdictions, (ii) Liens arising under the
Existing Credit Facility, which will be released or extinguished as of the Closing
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Date, and (iii) Liens constituting Permitted Liens. Except as disclosed in the
Offering Memorandum, there are no outstanding (A) options, warrants, subscriptions, calls or
other rights for unaffiliated third parties to purchase from the Company or any of the
Subsidiaries, (B) agreements, contracts, arrangements (other than that certain Amended Joint
Venture Contract between Crown Acquisition Corp. (as transferee of Crown Holdings, Inc.) and
Wuhan Jinma Food Industry Technology Co., Ltd.) or other obligations of the Company or any
of the Subsidiaries to issue to, or to repurchase or otherwise acquire from, any
unaffiliated third parties or (C) other rights of unaffiliated third parties to convert any
obligation into or exchange any securities for, in the case of each of clauses (A) through
(C), any shares of capital stock of or other ownership or equity interests in the Company or
any of the Subsidiaries.
(e) Organizational Authority. The Company and each of the Guarantors has all
requisite corporate or limited liability company power and authority, as applicable, to
execute, deliver and perform their respective obligations under the Transaction Documents to
which they are a party and to consummate the Transactions. All necessary corporate or
limited liability company action, as the case may be, has been taken by the Company and each
of the Guarantors to authorize the making, execution, delivery, performance and
consummation, as the case may be, of the Transaction Documents.
(f) Authorization and Due Execution of this Agreement. This Agreement has been
duly authorized, executed and delivered by the Company and each Guarantor.
(g) Authorization, Due Execution and Enforceability of the Indenture. The
Indenture has been duly and validly authorized by the Company and the Guarantors and, on the
Closing Date, when the Notes are delivered and paid for by the Initial Purchasers and
authenticated by the Trustee pursuant to the Indenture, will have been validly executed and
delivered by the Company and each Guarantor. The Indenture, when executed and delivered by
the Company and the Guarantors and assuming due authorization, execution and delivery by the
Trustee, will constitute a valid and binding obligation of the each of Company and the
Guarantors, enforceable against each of the Company and the Guarantors in accordance with
its terms, except as the enforceability thereof may be (i) limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer, fraudulent conveyance and other
laws now or hereafter in effect relating to creditors’ rights generally and (ii) subject to
general principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law) (collectively, the “Enforceability Exceptions”). 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 “TIA”), and the rules and
regulations of the United States Securities and Exchange Commission (the
“Commission”) applicable to an indenture which is qualified thereunder.
(h) Authorization, Due Execution and Enforceability of the Notes.
The Notes, when issued, will be in the form contemplated by the Indenture. The Notes
have been duly authorized and, on the Closing Date, will have been validly executed and
delivered by the Company. When the Notes have been issued, executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Notes will be entitled to the
benefits of the Indenture and will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the enforceability
thereof may be limited by the Enforceability Exceptions.
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The Exchange Notes, when issued, will be in the form contemplated by the Indenture.
The Exchange Notes have been duly authorized by the Company. When the Exchange Notes are
issued, executed and authenticated in accordance with the terms of the Exchange Offer and
the Indenture, the Exchange Notes will be entitled to the benefits of the Indenture and will
be the valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof may be limited by the
Enforceability Exceptions.
(i) Authorization, Due Execution and Enforceability of the Guarantees.
The Guarantors have all the requisite corporate or limited liability company power, as
the case may be, to issue the Guarantees. The Guarantees have been duly and validly
authorized by the Guarantors and, when duly executed and delivered by each of the Guarantors
in accordance with the terms of the Indenture and upon the due execution, authentication and
delivery of the Notes in accordance with the Indenture, will constitute valid and binding
obligations of each of the Guarantors, enforceable against each of the Guarantors in
accordance with their terms, except as the enforceability thereof may be limited by the
Enforceability Exceptions.
The Guarantors have all the requisite corporate or limited liability company power, as
the case may be, to issue the unconditional guarantee of the Company’s obligations under the
Exchange Notes, including the due and punctual payment of principal, premium, interest and
Special Interest, if any, on the Exchange Notes (the “Exchange Guarantees”). The
Exchange Guarantees have been duly and validly authorized by the Guarantors and, when duly
executed and delivered by the Guarantors in accordance with the terms of the Indenture and
the Exchange Offer and upon the due execution and authentication of the Exchange Notes in
accordance with the Indenture and the Registration Rights Agreement, will constitute valid
and binding obligations of the Guarantors, enforceable against the Guarantors in accordance
with their terms, except as the enforceability thereof may be limited by the Enforceability
Exceptions.
(j) Authorization, Due Execution and Enforceability of the Other Transaction
Documents. At the Closing Date, each of the Registration Rights Agreement, the Collateral
Documents, the Intercreditor Agreement and the Credit Agreement will have been duly and
validly authorized by the Company and each of the Subsidiaries who are party thereto. Each
of the Registration Rights Agreement, the Collateral Documents, the Intercreditor Agreement
and the Credit Agreement, when executed by the Company and the Subsidiaries party thereto
and assuming the due authorization, execution and delivery thereof by each of the other
parties thereto, will constitute a legal, valid and binding obligation of the Company and
such Subsidiaries, enforceable against the Company and such Subsidiaries in accordance with
its terms, except as the enforceability thereof may be limited by the Enforceability
Exceptions.
(k) No Violations. Neither the Company nor any of its Subsidiaries is (i) in
violation of its certificate of incorporation, by-laws or similar organizational documents
(the “Charter Documents”), (ii) in violation of any federal, state, local or foreign
statute, law (including, without limitation, common law) or ordinance, or any judgment,
decree, rule, regulation or order of any federal, state, local and other governmental
authority, governmental or regulatory agency or body, court, arbitrator or self-regulatory
organization, domestic or foreign (each, a “Governmental Authority”) applicable to
any of them or any of their respective properties or assets (collectively, “Applicable
Law”), or (iii) in breach of the terms or provisions of or in default under any bond,
debenture, note or other evidence of indebtedness, indenture, mortgage, deed of trust, lease
or any other agreement or instrument to which any of them is a party or by which any of them
or their respective property or assets are or may be bound (collectively,
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“Applicable Agreements”), except in the case of clause (ii) and (iii), for such
violations, breaches or defaults that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. All Applicable Agreements are in
full force and effect and are legal, valid and binding obligations of the Company or any
Subsidiary party thereto, as the case may be, with only such exceptions as would not
reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect
and except as the enforceability thereof may be limited by the Enforceability Exceptions.
No event has occurred that, with the passage of time or otherwise, would constitute (a) a
violation of the (i) Charter Documents or (ii) Applicable Laws, (b) a breach of or default
under any Applicable Agreement, or (c) result in the imposition of any penalty or the
acceleration of any indebtedness, except with respect to (a)(ii), (b) and (c) above, that
would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(l) No Conflict. Neither the execution, delivery or performance of the
Transaction Documents nor the consummation of any transactions contemplated therein will
violate or constitute a breach of or a default (with the passage of time or otherwise)
under, require the consent of any person (other than consents already obtained and in full
force and effect or that will have been obtained prior to the consummation of the
Transactions and consents described under Section 4(o)) under, result in the
imposition of a Lien on any properties or assets of the Company or any of its Subsidiaries
(except for Liens pursuant to the Credit Agreement (and related security documents and
agreements) and the Collateral Documents), or result in an acceleration of indebtedness
under or pursuant to (i) the Charter Documents, (ii) any Applicable Agreement, or (iii) any
Applicable Law, other than, in the case of clauses (ii) and (iii), as would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Immediately after consummation of the Offering and the Transactions, no Default or Event of
Default under the Notes, the Indenture or the Credit Agreement will exist.
(m) Accurate Description. To the extent described in the Pricing Disclosure
Package and the Final Offering Memorandum, when executed and delivered, the Transaction
Documents will conform in all material respects to the descriptions thereof in the Pricing
Disclosure Package and the Final Offering Memorandum.
(n) No Third Party Consents. No consent, approval, authorization or order of any
Governmental Authority, or third party is required for the issuance and sale by the Company
of the Notes to the Initial Purchasers, the issuance of the Guarantee by the Guarantors, or
the consummation by the Company and the Guarantors of the other transactions contemplated by
the Transaction Documents, except (i) such as have been obtained or will be obtained prior
to the consummation of the Transactions, (ii) such as may be required under state securities
or “Blue Sky” laws in connection with the purchase and resale of the Notes by the Initial
Purchasers, and (iii) the order of the SEC declaring the Exchange Offer registration
statement or the Shelf Registration Statement effective.
(o) No Material Actions or Proceedings. There is no action, claim, suit, demand,
hearing, notice of violation or deficiency, or proceeding, domestic or foreign
(collectively, “Proceedings”), pending or, to the knowledge of the Company or any of
the Subsidiaries, threatened before any court, governmental agency or arbitrator to which
any the Company or any Guarantor or any of their respective directors or officers is a party
in their capacity as such or of which any property of the Company or any Guarantor is the
subject, that, (i) if determined adversely, would reasonably be expected to, individually or
in the aggregate, have a Material Adverse Effect or (ii) seeks to restrain, enjoin, prevent
the consummation of, or otherwise challenge any of the Transaction Documents or any of the
transactions contemplated thereby.
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(p) All Necessary Permits. The Company and the Subsidiaries possess all
licenses, permits, certificates, consents, orders, approvals and other authorizations from,
and has made all declarations and filings with, all Governmental Authorities presently
required or necessary to own or lease, as the case may be, and to operate their respective
properties and to carry on their respective businesses as now conducted (“Permits”),
except where the failure to obtain such Permits would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each of the Company and its
Subsidiaries has fulfilled and performed all of its obligations with respect to such
Permits, except for any such failure to fulfill or perform that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. No event has
occurred which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the rights of the holder
of any such Permit, except where such revocation, termination or material impairment would
not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. None of the Company or its Subsidiaries has received any notice of any proceeding
relating to revocation or modification of any such Permit, except where such revocation or
modification would not, individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect.
(q) Title to Properties. Except as would not reasonably be expected to have a
Material Adverse Effect, each of the Company and its Subsidiaries has good and marketable
title to all real property owned by it, good title to all personal property owned by it and
good and valid title to all leasehold estates in real and personal property being leased by
it and, as of the Closing Date (after giving effect to the release or extinguishment of the
Liens arising under the Existing Credit Facility), such real property, personal property and
leasehold estates in real and personal property will be free and clear of all Liens (other
than Permitted Liens).
(r) Tax Law Compliance. Except as would not reasonably be expected to have a
Material Adverse Effect, all Tax returns required to be filed by the Company and each of the
Subsidiaries have been timely filed (or valid extensions have been granted in respect
thereto) and all such returns are true, complete, and correct in all material respects. All
material Taxes that are due and payable by the Company and any of its Subsidiaries have been
paid when due and payable other than those (i) currently payable without penalty or interest
or (ii) being contested in good faith and by appropriate proceedings and for which adequate
reserves have been established in accordance with generally accepted accounting principles
of the United States, consistently applied (“GAAP”). To the knowledge of the Company
there are no actual or proposed material Tax assessments due and payable against the Company
or any of the Subsidiaries that would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The accruals and reserves on the books and
records of the Company and its Subsidiaries in respect of any material Tax liability for any
period not finally determined are adequate to meet any assessments of Tax for any such
period. For purposes of this Agreement, the term “Tax” and “Taxes” shall mean all federal,
state, local and foreign taxes, and other assessments of a similar nature (whether imposed
directly or through withholding), including any interest, additions to tax, or penalties
applicable thereto.
(s) Intellectual Property Rights. Each of the Company and its Subsidiaries owns,
or has a valid and enforceable license or other right to use, all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks, logos, designs, domain names and trade names (collectively,
“Intellectual Property”) necessary for the conduct of its business as is currently
operated and, as of the Closing Date, such Intellectual Property owned by the Company or its
Subsidiaries will be free and clear of all Liens
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other than Permitted Liens. No claims or notices of any potential claim have been
asserted by any person challenging the use of any such Intellectual Property by the Company
or any of the Subsidiaries or questioning the validity, effectiveness or enforceability of
the Intellectual Property or any license or agreement related thereto, other than any claims
that, if successful, would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect. To the knowledge of the Company, the use of such
Intellectual Property by the Company or its Subsidiaries will not violate, misappropriate or
infringe on the Intellectual Property rights of any other person in any material respect.
(t) Accounting Systems. The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) material transactions are
executed in accordance with management’s general or specific authorization, (ii) material
transactions are recorded as necessary to permit preparation of financial statements in
conformity with GAAP, 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 material differences.
(u) Preparation of the Financial Statements. The audited and unaudited
consolidated financial statements and related notes of the Company and its Subsidiaries
contained in the Pricing Disclosure Package and the Final Offering Memorandum (the
“Financial Statements”) fairly present (subject, in the case of the unaudited
consolidated financial statements, to normal year-end adjustments) the financial position,
results of operations, cash flows and, in the case of the audited consolidated financial
statements, changes in stockholders’ equity of the Company and its consolidated
Subsidiaries, as of the respective dates and for the respective periods to which they apply
and have been prepared in accordance with GAAP consistently applied throughout the periods
involved (except as otherwise expressly disclosed in the notes thereto). The non-GAAP
financial measures set forth in the Final Offering Memorandum comply with Regulation G and
Item 10(e) of Regulation S-K. The financial data (other than pro forma or as adjusted data)
set forth under “Summary Historical and Pro Forma Consolidated Financial Information” and
“Selected Historical Consolidated Financial Information” included in the Pricing Disclosure
Package and Final Offering Memorandum has been prepared on a basis consistent with that of
the Financial Statements and present fairly the financial position and results of operations
of the Company and its consolidated Subsidiaries as of the respective dates and for the
respective periods indicated. The unaudited pro forma and as adjusted financial information
contained in the Pricing Disclosure Package and Final Offering Memorandum have been prepared
in accordance with the requirements of Regulation S-X and give effect to assumptions used in
the preparation thereof on a reasonable basis and in good faith. All other financial,
statistical and market and industry-related data included in the Pricing Disclosure Package
and the Final Offering Memorandum are based on or derived from sources that the Company
reasonably believes to be reliable and accurate in all material respects.
(v) No Material Adverse Change. Subsequent to the respective dates as of which
information is given in the Pricing Disclosure Package and the Final Offering Memorandum,
except as disclosed therein, (i) neither the Company nor any of its Subsidiaries has
incurred any liabilities, direct or contingent, that are material, individually or in the
aggregate, to the Company, or has entered into any material transactions not in the ordinary
course of business, (ii) there has not been any material decrease in the capital stock or
any material increase in long-term indebtedness or any material increase in short-term
indebtedness of the Company or any of its Subsidiaries, or any payment of or declaration to
pay any dividends or any other distribution with respect to the Company or any of its
Subsidiaries, and (iii) there has not been any material
9
adverse change in the properties, business, operations, earnings, assets, liabilities
or financial condition of the Company and the Subsidiaries in the aggregate. To the
knowledge of the Company, there is no event that is reasonably likely to occur, which if it
were to occur, would, individually or in the aggregate, have a Material Adverse Effect,
except for such events that have been disclosed in the Pricing Disclosure Package and the
Final Offering Memorandum.
(w) Rating Agencies. Other than the issuance of the ratings of the Company and
the Notes on July 30, 2009, no “nationally recognized statistical rating organization” (as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act) (i) has
imposed (or has informed the Company that it is considering imposing) any condition
(financial or otherwise) on the Company retaining any rating assigned to the Company or any
of its Subsidiaries or to any securities of the Company or any of the Subsidiaries, or (ii)
has indicated to the Company that it is considering (A) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not indicate the direction of
the possible change in, any rating so assigned, or (B) any change in the outlook for any
rating of the Company or any of the Subsidiaries or any securities of the Company or any of
the Subsidiaries.
(x) Use of Proceeds; Going Concern of the Company. All indebtedness represented
by the Notes is being incurred for the purposes set forth in the Pricing Disclosure Package
and Final Offering Memorandum as indicated in the “Use of Proceeds” section of the Pricing
Disclosure Package and Final Offering Memorandum. On the Closing Date, after giving pro
forma effect to the Offering and the use of proceeds therefrom as indicated in the “Use of
Proceeds” section of the Pricing Disclosure Package and Final Offering Memorandum, the
Company and the Guarantors (i) will be Solvent, (ii) will have sufficient capital for
carrying on its business as presently conducted and (iii) will be able to pay its debts as
they mature. 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 and each Guarantor is not less than the total
amount required to pay the liabilities of the Company and each Guarantor on its total
existing debts and liabilities (including contingent liabilities) as they become absolute
and matured; (ii) the Company and each Guarantor is able to pay its debts and other
liabilities, contingent obligations and commitments as they mature and become due in the
normal course of business; (iii) assuming consummation of the Offering and issuance of the
Notes and Guarantees as contemplated by this Agreement and the Pricing Disclosure Package
and Final Offering Memorandum, neither the Company nor any Guarantor is incurring debts or
liabilities beyond its ability to pay as such debts and liabilities mature; and (iv) neither
the Company nor any Guarantor is 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 any Guarantor is engaged.
(y) No Market Manipulation. The Company has not and, to its knowledge, no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or
to result in, or that has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Notes, (ii) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, any of the Notes, or (iii) except as disclosed in
the Pricing Disclosure Package and the Final Offering Memorandum, paid or agreed to pay to
any person any compensation for soliciting another to purchase any other securities of the
Company; provided, that no representation is made in this subsection with respect to
the actions of the Initial Purchasers.
10
(z) Securities Act; Trust Indenture Act. Without limiting any provision herein,
no registration under the Securities Act and no qualification of the Indenture under the TIA
is required for the sale of the Notes to the Initial Purchasers as contemplated by this
Agreement or for the Exempt Resales, assuming (i) that the purchasers in the Exempt Resales
are QIBs, Accredited Investors or Regulation S Persons and (ii) the accuracy of each of the
Initial Purchaser’s representations and warranties contained in this Agreement.
(aa) Rule 144A. The Notes are eligible for resale pursuant to Rule 144A under
the Securities Act and no other securities of the Company are of the same class (within the
meaning of Rule 144A under the Securities Act) as the Notes and listed on a national
securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as
amended, including the rules and regulations promulgated thereunder (the “Exchange
Act”), or quoted in a U.S. automated inter-dealer quotation system. No securities of
the Company of the same class as the Notes have been offered, issued or sold by the Company
or any of its Affiliates within the six-month period immediately prior to the date hereof.
(bb) Compliance with Regulation D and Regulation S. Neither of the Company nor
any of its Affiliates or other person acting on behalf of the Company has offered or sold
the Notes by means of any general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act or, with respect to Notes sold outside the United
States to Regulation S Persons, by means of any directed selling efforts within the meaning
of Rule 902 under the Securities Act, and the Company, any affiliate of the Company and any
person acting on behalf of the Company have complied with and will implement the “offering
restrictions” within the meaning of such Rule 902; provided, that no representation
is made in this subsection with respect to the actions of the Initial Purchasers.
(cc) Benefit Plans. With respect to each employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)), and each other employee benefit plan, program, policy or arrangement
(collectively, “Benefit Plans”), maintained, sponsored or contributed to by the
Company, the Subsidiaries or any entity that would be deemed a “single employer” with the
Company or any Subsidiary under Section 414(b), (c), (m) or (o) of the Internal Revenue Code
of 1986, as amended (the “Code”) or Section 4001 of ERISA (each, an “ERISA
Affiliate”): (i) each Benefit Plan complies in form and has been maintained, operated
and administered in accordance with its terms and Applicable Law, including without
limitation, ERISA and the Code, except where non-compliance would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; and (ii) no
“prohibited transaction,” within the meaning of Section 4975 of the Code and Section 406 of
ERISA, has occurred or is reasonably expected to occur with respect to the Benefit Plans
that would reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect. None of the Company, any Subsidiary or any ERISA Affiliate contributes to,
is required to contribute to, or otherwise participated in or participates in or in any way,
directly or indirectly, has any liability with respect to any plan subject to Section 412 of
the Code, Section 302 of ERISA or Title IV of ERISA, including, without limitation, any
“multiemployer plan” (within the meaning of Sections 3(37) or 4001(a)(3) of ERISA or Section
414(f) of the Code) or any single employer pension plan (within the meaning of Section
4001(a)(15) of ERISA) which is subject to Sections 4063, 4064 and 4069 of ERISA.
(dd) Labor Matters. Other than as disclosed in the Pricing Disclosure Package
and the Final Offering Memorandum, (i) neither the Company nor any of its Subsidiaries is
party to or bound by any collective bargaining agreement with any labor organization; (ii)
none of the employees of the Company or any of its Subsidiaries is represented by a labor
union, and, to the
11
knowledge of the Company, no union organizing activities are taking place that could
reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect;
(iii) to the Company’s knowledge, no union organizing or decertification efforts are
underway or threatened against the Company or any of its Subsidiaries; (iv) no labor strike,
work stoppage, slowdown, or other material labor dispute is pending against the Company or
any of its Subsidiaries, or, to the knowledge of the Company, threatened against the Company
or any of its Subsidiaries; (v) there is no worker’s compensation liability, experience or
matter that could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect; (vi) to the knowledge of the Company, there is no threatened or
pending liability against the Company or any of its Subsidiaries pursuant to the Worker
Adjustment Retraining and Notification Act of 1988, as amended (“WARN”), or any
similar state or local law that could reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect; and (vii) there is no employment-related charge,
complaint, grievance, investigation, unfair labor practice claim, or inquiry of any kind,
pending against the Company or any of its Subsidiaries that could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(ee) Federal Reserve Regulations. None of the transactions contemplated in the
Transaction Documents or the application of the proceeds from the sale of the Notes will
violate or result in a violation of Section 7 of the Exchange Act, (including, without
limitation, Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System).
(ff) Investment Company Act. Neither the Company nor any of its Subsidiaries is
an open-end investment company, unit investment trust or face-amount certificate company
that is or is required to be registered under Section 8 of the United States Investment
Company Act of 1940, as amended, including the rules and regulations promulgated thereunder
(the “Investment Company Act”). Neither the Company nor any of its Subsidiaries,
after giving effect to the Offering and sale of the Notes and the application of the
proceeds thereof as described in the Pricing Disclosure Package and the Final Offering
Memorandum, will be an “investment company” as defined in the Investment Company Act.
(gg) Brokers. Other than as disclosed in the Pricing Disclosure Package and the
Final Offering Memorandum, the Company has not engaged any broker, finder, commission agent
or other person (other than the Initial Purchasers) in connection with the Offering or any
of the transactions contemplated in the Transaction Documents (other than the Credit
Agreement), and the Company is not under any obligation to pay any broker’s fee or
commission in connection with such transactions, except for commissions and fees to the
Initial Purchasers.
(hh) Environmental Matters. The Company and each of its Subsidiaries (i) is in
compliance with any and all applicable foreign, federal, state and local laws and
regulations relating to health and safety (as it applies to exposure to hazardous
substances), or pollution or the protection of the environment or the handling, storage,
generation, discharge, treatment or disposal of or the release into the environment of
hazardous or toxic substances, hazardous wastes, pollutants or contaminants (collectively
and individually, “Environmental Laws”), (ii) has received and is in compliance with
all permits, licenses or other approvals required of them under applicable Environmental
Laws (“Environmental Permits”) to conduct its respective businesses and (iii) has
not received written notice of a claim, and does not have knowledge of, any threatened or
pending claim for damages to natural resources relating to or arising from, or the
investigation or remediation of, any release or disposal of hazardous or toxic substances,
hazardous wastes, pollutants or contaminants, in each case, except where such non-compliance
with Environmental Laws, such failure to receive and comply with required Environmental
12
Permits, or such claim would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business. Neither the Company nor any of its Subsidiaries has been named
as a “potentially responsible party” under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or any similar Environmental Laws
requiring them to investigate or remediate any pollutants or contaminants, except where such
requirement would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(ii) Encumbrances and Restrictions. Except as provided (i) in the Transaction
Documents, (ii) the security documents and agreements related to the Credit Agreement, (iii)
by Applicable Law and (iv) in the organizational or other governing documents of any Foreign
Subsidiary, as of the Closing Date, there will be no encumbrances or restrictions on the
ability of any Subsidiary of the Company (x) to pay dividends or make other distributions on
such Subsidiary’s capital stock or to pay any indebtedness to the Company or any other
Subsidiary of the Company, (y) to make loans or advances or pay any indebtedness to, or
investments in, the Company or any other Subsidiary of the Company or (z) to transfer any of
its property or assets to the Company or any other Subsidiary of the Company (other than
pursuant to the Existing Credit Facility or Permitted Liens or provisions that restrict any
such transfer).
(jj) Valid Security Interest; Collateral Documents. Upon (i) execution and
delivery of the Collateral Documents by the Company and the Guarantors and the Collateral
Agent (as defined therein) and compliance by the Company and the Guarantors with their
respective obligations thereunder and (ii) the filing or recording of the Collateral
Documents or appropriate Uniform Commercial Code Form UCC-1 financing statements (the
“Financing Statements”) with the appropriate filing records, registry or other
public office, together with the payment of the requisite filing or recordation fees related
thereto, the security interest of the Collateral Agent in the Collateral (as defined in the
Collateral Documents) will be a valid and enforceable perfected security interest (other
than (i) in respect of equipment subject to certificate of title laws, (ii) any deposit
account and securities accounts not required to be subject to a control agreement pursuant
to the terms of the Transaction Documents and (iii) prior to the date they are required to
be made, or otherwise delivered to the Collateral Agent for filing or recordation, pursuant
to the terms of the Transaction Documents, other filings, recordings or other actions
necessary to perfect liens granted to the Collateral Agent), which security interests will
be superior to and prior to the rights of all third persons other than holders of Permitted
Liens, in each case, to the extent that a security interest in such Collateral may be
perfected by the execution and delivery of such Collateral Documents and the filing of a
Financing Statement. All notice filings to be made pursuant to the Collateral Documents
(including without limitation all financing statements) are, or as of the Closing Date will
be, in proper form to be filed in order to perfect a security interest in the Collateral
described therein, with the priority required thereunder. The description of the Collateral
set forth in the Pricing Disclosure Package and the Final Offering Memorandum under the
caption “Description of Notes — Security” is accurate and complete in all material
respects.
(kk) Future Liens. As of the Closing Date, except with respect to Permitted
Liens, there will be no currently effective financing statement, security agreement or other
document filed or recorded with any filing records, registry or other public office that
purports to cover, affect or give notice of any present or possible future Lien on, or
security interest in, any assets or property of the Company or any Guarantor, except for
Permitted Liens.
(ll) Certificates. Each certificate signed by any officer of the Company or any
of its Subsidiaries delivered to the Initial Purchasers shall be deemed a representation and
warranty by
13
the Company or any such Subsidiary thereof (and not individually by such officer) to
the Initial Purchasers with respect to the matters covered thereby.
(mm) Insurance. Each of the Company and its Subsidiaries are insured by
reputable insurers against such losses and risks and in such amounts as the management of
the Company and its Subsidiaries reasonably deems prudent and customary in the businesses in
which they are engaged and locations in which they operate.
(nn) Rule 144A Information. Each of the Pricing Disclosure Package and the Final
Offering Memorandum contain all the information specified in, and meeting the requirements
of, Rule 144A(d)(4) under the Securities Act.
(oo) Stamp or Transfer Taxes. There are no stamp or other issuance or transfer
taxes or duties or other similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement on the issuance or sale by the Company of the
Notes.
(pp) Independent Accounting Firm. To the Company’s knowledge,
PricewaterhouseCoopers LLP, who has certified certain financial statements contained in the
Pricing Disclosure Package and the Final Offering Memorandum, is an independent registered
public accounting firm with respect to the Company and its Subsidiaries within the
applicable rules and regulations adopted by the SEC and the Public Accounting Oversight
Board (United States) and as required by the Securities Act.
(qq) FCPA. Neither the Company nor, to the knowledge of the Company, any
director, officer, agent, employee or Subsidiary of the Company is aware of or has taken any
action, directly or indirectly, that would result in a violation by such persons of the U.S.
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder
(the “FCPA”), including, without limitation, making use of the mails or any means or
instrumentality of U.S. interstate commerce corruptly in furtherance of an offer, payment,
promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign
official” (as such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the FCPA; and the
Company and its Subsidiaries have conducted their businesses in compliance with the FCPA and
have instituted and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.
5. Covenants of the Company and the Guarantors. Each of the Company
and the Guarantors jointly and severally agrees with each of the Initial Purchasers that:
(a) At any time prior to the date of the completion of the resale of the Notes by
the Initial Purchasers, to (i) advise the Initial Purchasers as promptly as practicable
after obtaining knowledge (and, if requested by the Initial Purchasers, confirm such advice
in writing) of (A) the issuance by any state securities commission of any stop order
suspending the qualification or exemption from qualification of any of the Notes for offer
or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any
state securities commission or other regulatory authority, or (B) the happening of any event
that makes any statement of a material fact made in the Pricing Disclosure Package or the
Final Offering Memorandum untrue or that requires the making of any additions to or changes
in the Pricing Disclosure Package or the Final Offering Memorandum in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, (ii) use its reasonable best efforts to prevent the
14
issuance of any stop order or order suspending the qualification or exemption from
qualification of any of the Notes under any state securities or Blue Sky laws, and (iii) if,
at any time, any state securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification of any of the Notes under
any such laws, use its reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
(b) To (i) furnish the Initial Purchasers, without charge, as many copies of the
Pricing Disclosure Package and the Final Offering Memorandum, and any amendments or
supplements thereto, as the Initial Purchasers may reasonably request, and (ii) promptly
prepare, upon the Initial Purchasers’ reasonable request, any amendment or supplement to the
Offering Memorandum that the Initial Purchasers, upon advice of legal counsel, determines is
necessary in connection with Exempt Resales (and the Company and the Guarantors hereby
consent to the use of the Pricing Disclosure Package and the Final Offering Memorandum, and
any amendments and supplements thereto, by the Initial Purchasers in connection with Exempt
Resales).
(c) Not to amend or supplement the Pricing Disclosure Package or the Final
Offering Memorandum prior to the Closing Date, or at any time prior to the completion of the
resale by the Initial Purchasers of all the Notes purchased by the Initial Purchasers,
unless the Initial Purchasers shall previously have been advised thereof and shall have
provided its written consent thereto, which consent shall not be unreasonably withheld or
delayed.
(d) So long as the Initial Purchasers shall hold any of the Notes, (i) if any
event shall occur as a result of which, in the reasonable judgment of the Company or the
Initial Purchasers, it becomes necessary or advisable to amend or supplement the Pricing
Disclosure Package or the Final Offering Memorandum in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or if it is
necessary to amend or supplement the Pricing Disclosure Package or the Final Offering
Memorandum to comply with Applicable Law, to prepare, at the expense of the Company, an
appropriate amendment or supplement to the Pricing Disclosure Package and the Final Offering
Memorandum (in form and substance reasonably satisfactory to the Initial Purchasers) so that
(A) as so amended or supplemented, the Pricing Disclosure Package and the Final Offering
Memorandum will not include an untrue statement of 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, and (B) the Pricing Disclosure Package and the
Final Offering Memorandum will comply with Applicable Law and (ii) if in the reasonable
judgment of the Company it becomes necessary or advisable to amend or supplement the Pricing
Disclosure Package or the Final Offering Memorandum so that the Pricing Disclosure Package
and the Final Offering Memorandum will contain all of the information specified in, and meet
the requirements of, Rule 144A(d)(4) of the Securities Act, to prepare an appropriate
amendment or supplement to the Pricing Disclosure Package or the Final Offering Memorandum
(in form and substance reasonably satisfactory to the Initial Purchasers) so that the
Pricing Disclosure Package or the Final Offering Memorandum, as so amended or supplemented,
will contain the information specified in, and meet the requirements of, such Rule.
(e) To cooperate with the Initial Purchasers and the Initial Purchasers’ counsel
in connection with the qualification of the Notes under the securities or Blue Sky laws of
such jurisdictions as the Initial Purchasers may request and continue such qualification in
effect so long as reasonably required for Exempt Resales; provided, that, the Company and
its Subsidiaries will not be required to (i) qualify to do business in any jurisdiction that
the Company or such Subsidiary is not now so qualified, (ii) take any action that would
subject the Company or such
15
Subsidiary to service of process in any jurisdiction in which the Company or such
Subsidiary is not now so subject, or (iii) subject the Company or such Subsidiary to
taxation in excess of a nominal dollar amount in any such jurisdiction where the Company or
such Subsidiary are not now so subject.
(f) Whether or not any of the Transactions are consummated or this Agreement is
terminated, to pay (i) all costs, expenses, fees and taxes incident to and in connection
with: (A) the preparation, printing and distribution of the Pricing Disclosure Package and
the Final Offering Memorandum and all amendments and supplements thereto (including, without
limitation, financial statements and exhibits), and all other agreements, memoranda,
correspondence and other documents prepared and delivered in connection herewith, (B) the
negotiation, printing, processing and distribution (including, without limitation, word
processing and duplication costs) and delivery of, each of the Transaction Documents, (C)
the preparation, issuance and delivery of the Notes, (D) the qualification of the Notes for
offer and sale under the securities or Blue Sky laws of the several states (including,
without limitation, the reasonable and documented fees and disbursements of one counsel to
the Initial Purchasers relating to such registration or qualification), (E) furnishing such
copies of the Pricing Disclosure Package and the Final Offering Memorandum, and all
amendments and supplements thereto, as may reasonably be requested for use by the Initial
Purchasers, and (F) the performance of the obligations of the Company and the Guarantors
obligations under the Registration Rights Agreement, including but not limited to the
Exchange Offer and any Shelf Registration Statement (ii) all fees and expenses of the
counsel, accountants and any other experts or advisors retained by the Company, (iii) all
expenses and listing fees in connection with the application for quotation of the Notes on
the Private Offerings, Resales and Trading Automated Linkages market (“PORTAL”),
(iv) all fees and expenses (including fees and expenses of counsel) of the Company in
connection with approval of the Notes by DTC for “book-entry” transfer, (v) all fees charged
by rating agencies in connection with the rating of the Notes, (vi) all fees and expenses
(including reasonable fees and expenses of counsel) of the Trustee and all collateral
agents, (vii) all costs and expenses in connection with the creation and perfection of the
security interests under the Security Agreement (including without limitation, filing and
recording fees, search fees, taxes and costs of title policies) and (viii) solely to the
extent provided in that certain letter agreement, dated August 11, 2009, between the Company
and Xxxxxxxxx & Company, Inc., all fees, disbursements and out-of-pocket expenses incurred
by the Initial Purchasers in connection with its services to be rendered hereunder
including, without limitation, the fees and expenses of Proskauer Rose LLP, travel and
lodging expenses, word processing charges, messenger and duplicating services, facsimile
expenses, costs and expenses relating to investor presentations on any “road show”
undertaken in connection with marketing the Notes and other customary expenditures. If the
sale of the Notes provided for herein is not consummated because any condition to the to the
obligations of the Initial Purchasers set forth in Section 7 is not satisfied,
because this Agreement is terminated pursuant to Section 9 or because of any
failure, refusal or inability on the part of the Company to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder (other than in
each case solely by reason of a default by the Initial Purchasers on its obligations
hereunder after all conditions hereunder have been satisfied in accordance herewith), the
Company agrees, solely to the extent provided in that certain letter agreement, dated August
11, 2009, between the Company and Jefferies & Company, Inc., to promptly reimburse the
Initial Purchasers for all fees, disbursements and out-of-pocket expenses (including the
fees and expenses of Proskauer Rose LLP), travel and lodging expenses, word processing
charges, messenger and duplicating services, facsimile expenses and other reasonable and
customary expenditures) that shall have been incurred by the Initial Purchasers in
connection with the proposed purchase and sale of the Notes.
16
(g) To use the proceeds of the Offering in the manner described in the Pricing
Disclosure Package and the Final Offering Memorandum under the caption “Use of Proceeds.”
(h) Not to, and to ensure that no affiliate (as defined in Rule 501(b) of the
Securities Act) of the Company will, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any “security” (as defined in the Securities Act) that
would be integrated with the sale of the Notes in a manner that would require the
registration under the Securities Act of the sale to the Initial Purchasers or to the
Subsequent Purchasers of the Notes.
(i) For so long as any of the Notes remain “restricted securities” within the
meaning of the Securities Act, during any period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act, to make available, upon request, to any owner of
the Notes in connection with any sale thereof and any prospective Subsequent Purchasers of
such Notes from such owner, the information required by Rule 144A(d)(4) under the Securities
Act.
(j) To comply with the representation letter of the Company to DTC relating to
the approval of the Notes by DTC for “book entry” transfer.
(k) To use its commercially reasonable efforts to effect the inclusion of the
Notes in PORTAL Market.
(l) Except in connection with the Exchange Offer or the filing of the Shelf
Registration Statement, to not, and to not authorize or permit any person acting on its
behalf to, (i) distribute any offering material in connection with the offer and sale of the
Notes other than the Pricing Disclosure Package and the Final Offering Memorandum and any
amendments and supplements to the Final Offering Memorandum prepared in compliance with this
Agreement, or (ii) solicit any offer to buy or offer to sell the Notes by means of any form
of general solicitation or general advertising (including, without limitation, as such terms
are used in Regulation D under the Securities Act) or in any manner involving a “public
offering” within the meaning of Section 4(2) of the Securities Act.
(m) During the one-year period after the Closing Date (or such shorter period as
may be provided for in Rule 144 under the Securities Act, as the same may be in effect from
time to time), to not, and to not permit any current or future Subsidiaries of either the
Company or any other affiliates (as defined in Rule 144A under the Securities Act)
controlled by the Company to, resell any of the Notes which constitute “restricted
securities” under Rule 144 that have been reacquired by the Company, any current or future
Subsidiaries or any other “affiliates” (as defined in Rule 144A under the Securities Act)
controlled by the Company, except pursuant to an effective registration statement under the
Securities Act.
(n) To pay all stamp, documentary and transfer taxes and other duties, if any,
which may be imposed by the United States or any political subdivision thereof or taxing
authority thereof or therein with respect to the issuance of the Notes or the sale thereof
to the Initial Purchasers.
(o) To use its commercially reasonable efforts to complete on or prior to the
Closing Date all filings and other similar actions required in connection with the
perfection of the security interests as and to the extent contemplated by the Collateral
Documents.
6. Representations and Warranties of the Initial Purchasers. Each Initial
Purchaser, severally and not jointly, represents and warrants that:
17
(a) it is a QIB and it will offer the Notes for resale only upon the terms and
conditions set forth in this Agreement and in the Pricing Disclosure Package and the Final
Offering Memorandum.
(b) it is not acquiring the Notes with a view to any distribution thereof that
would violate the Securities Act or the securities laws of any state of the United States or
any other applicable jurisdiction. In connection with the Exempt Resales, it will solicit
offers to buy the Notes only from, and will offer and sell the Notes only to, (A) persons
reasonably believed by such Initial Purchaser to be QIBs, (B) persons reasonably believed by
such Initial Purchaser to be Accredited Investors or (C) non-U.S. persons reasonably
believed by such Initial Purchaser to be Regulation S Persons; provided, however, that in
purchasing such Notes, such persons are deemed to have represented and agreed as provided
under the caption “Notice to Investors” contained in the Pricing Disclosure Package and the
Final Offering Memorandum.
(c) no form of general solicitation or general advertising in violation of the
Securities Act has been or will be used nor will any offers in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act or, with respect to Notes
to be sold in reliance on Regulation S under the Securities Act, by means of any directed
selling efforts be made by such Initial Purchaser or any of its representatives in
connection with the offer and sale of any of the Notes.
7. Conditions. The obligations of the Initial Purchasers to purchase
the Notes under this Agreement are subject to the performance by each of the Company and each of
the Guarantors of their respective covenants and obligations hereunder and the satisfaction of each
of the following conditions:
(a) All of the representations and warranties of the Company and the Subsidiaries
contained in this Agreement and in each of the Transaction Documents shall be true and
correct as of the date hereof and at the Closing Date, except to the extent that the failure
of such representations and warranties (without giving effect to any “material,”
“materiality,” “Material Adverse Effect” or any similar terms, qualifications or limitations
to such representations and warranties) to be true or correct individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect. On or prior
to the Closing Date, the Company and each other party to the Transaction Documents (other
than the Initial Purchasers) shall have performed or complied with all of the agreements and
satisfied all conditions on their respective parts to be performed, complied with or
satisfied pursuant to the Transaction Documents (other than conditions to be satisfied by
such other parties, which the failure to so satisfy would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect).
(b) No injunction, restraining order or order of any nature by a Governmental
Authority shall have been issued as of the Closing Date that would prevent or materially
interfere with the consummation of the Offering or any of the transactions contemplated
under the Transaction Documents. No stop order suspending the qualification or exemption
from qualification of any of the Notes in any jurisdiction shall have been issued and no
Proceeding for that purpose shall have been commenced or, to the knowledge of the Company,
be pending or contemplated as of the Closing Date.
(c) No action shall have been taken and no Applicable Law shall have been
enacted, adopted or issued that would, as of the Closing Date, prevent the consummation of
the Offering or any of the transactions contemplated under the Transaction Documents. No
Proceeding shall be pending or, to the knowledge of the Company, threatened other than
Proceedings that (A) if adversely determined would not, individually or in the aggregate,
adversely affect the issuance or
18
marketability of the Notes, and (B) would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(d) Subsequent to the respective dates as of which data and information is given
in the Pricing Disclosure Package and the Final Offering Memorandum, there shall not have
been any event that would have a Material Adverse Effect.
(e) The Notes shall (i) have been designated PORTAL securities in accordance with
the rules and regulations adopted by the Financial Industry Regulatory Authority relating to
trading in the PORTAL market, and (ii) be eligible for clearance and settlement through DTC.
(f) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given of any
potential or intended downgrading, suspension or withdrawal of, or of any review (or of any
potential or intended review) for a possible change that does not indicate the direction of
the possible change in, any rating of the Company or any securities of the Company
(including, without limitation, the placing of any of the foregoing ratings on credit watch
with negative or developing implications or under review with an uncertain direction) by any
“nationally recognized statistical rating organization” as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended change, in the outlook for
any rating of the Company or any securities of the Company by any such rating organization
and (iii) no such rating organization shall have given notice that it has assigned (or is
considering assigning) a lower rating to the Notes than that on which the Notes were
marketed.
(g) The Initial Purchasers shall have received on the Closing Date:
(i) certificates dated the Closing Date, signed by (1) the Chief
Executive Officer of the Company and (2) the Chief Financial Officer of the Company, on
behalf of the Company, to the effect that (a) the representations and warranties set forth
in Section 4 hereof and in each of the Transaction Documents are true and correct in
all respects, except to the extent that the failure of such representations and warranties
(without giving effect to any “material,” “materiality,” “Material Adverse Effect” or any
similar terms, qualifications or limitations to such representations and warranties) to be
true or correct individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect, with the same force and effect as though expressly made at and as
of the Closing Date, (b) the Company has performed and complied with all agreements and
satisfied all conditions in all material respects on its part to be performed or satisfied
at or prior to the Closing Date, (c) at the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Pricing Disclosure Package and the Final
Offering Memorandum (exclusive of any amendment or supplement thereto after the date
hereof), no event or events have occurred, no information has become known nor does any
condition exist that, individually or in the aggregate, would reasonably be expected to have
a Material Adverse Effect, (d) since the date of the most recent financial statements in the
Pricing Disclosure Package and the Final Offering Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), other than as described in the Pricing Disclosure
Package and the Final Offering Memorandum or contemplated hereby, neither the Company nor
any Subsidiary of the Company has incurred any liabilities or obligations, direct or
contingent, not in the ordinary course of business, that are material to the Company and the
Subsidiaries, taken as a whole, or entered into any transactions not in the ordinary course
of business that are material to the business, financial condition or results of operations
of the Company and the Subsidiaries, taken as a whole, and there has not been any change in
the capital stock or long-
19
term indebtedness of the Company or any Subsidiary of the Company that is material to
the business, financial condition or results of operations of the Company and the
Subsidiaries, taken as a whole, and (e) the sale of the Notes has not been enjoined
(temporarily or permanently).
(ii) a certificate, dated the Closing Date, executed by the Secretary of
the Company and each Guarantor, certifying such matters as the Initial Purchasers may
reasonably request covering such matters as are customarily covered in such certificates.
(iii) a perfection certificate, dated the Closing Date, executed by an
officer of the Company and each of the Guarantors substantially in the form previously
provided to counsel of Company.
(iv) a certificate of solvency, dated the Closing Date, executed by the
principal financial or accounting officer of the Company substantially in the form
previously approved by the Initial Purchasers or its counsel.
(v) the opinion of Xxxxx Xxxxx LLP, counsel to the Company, dated the
Closing Date and addressed to the Initial Purchasers, in a form reasonably satisfactory to
the Initial Purchasers covering such matters as are customarily covered in such opinions.
(vi) the opinion of Xxxxx Xxxxx Heuer & Xxxxx, P.C., local Michigan
counsel to the Company, dated the Closing Date and addressed to the Initial Purchasers, in a
form reasonably satisfactory to the Initial Purchasers.
(vii) the opinion of Xxxxxx & Xxxxxxxxx LLP, local Indiana counsel to the
Company, dated the Closing Date and addressed to the Initial Purchasers, in a form
reasonably satisfactory to the Initial Purchasers.
(viii) the opinion of Xxxxx, Brown, Koehn, Shors & Xxxxxxx, P.C., local
Iowa counsel to the Company, dated the Closing Date and addressed to the Initial Purchasers,
in a form reasonably satisfactory to the Initial Purchasers.
(ix) the opinion of Xxxxxxxxx & Xxxxxx P.L.L.P., local Minnesota counsel
to the Company, dated the Closing Date and addressed to the Initial Purchasers, in a form
reasonably satisfactory to the Initial Purchasers.
(x) the opinion of Proskauer Rose LLP, counsel to the Initial Purchasers,
dated the Closing Date, in form satisfactory to the Initial Purchasers covering such matters
as are customarily covered in such opinions.
(xi) a copy of a payoff letter or other evidence of repayment in form
and substance reasonably satisfactory to the Initial Purchasers from the administrative
agent under the Existing Credit Facility, releasing the Company and the Guarantors from all
obligations under the Existing Credit Facility and any guarantees thereunder, which letter
shall become effective immediately following the application of the net proceeds of the
Offering as set forth under the “Use of Proceeds” section in the Pricing Disclosure Package
and Final Offering Memorandum.
(h) The Initial Purchasers shall have received on the date hereof and on the
Closing Date a certificate from the Chief Financial Officer of the Company, dated as of the
date hereof and thereof, substantially in the form of Exhibit A attached hereto.
20
(i) The Initial Purchasers shall have received (A) a customary comfort letter
from PricewaterhouseCoopers LLP, independent auditors, with respect to the Company, dated as
of the date hereof, in form and substance satisfactory to the Initial Purchasers and its
counsel, with respect to the financial statements and certain financial information
contained in the Pricing Disclosure Package and the Final Offering Memorandum and (B) a
customary bring-down comfort letter from PricewaterhouseCoopers LLP, dated the Closing Date,
in form and substance satisfactory to the Initial Purchasers and its counsel, to the effect
that PricewaterhouseCoopers LLP reaffirms the statements made in its letter furnished
pursuant to clause (A) with respect to the financial statements and certain financial
information contained in the Pricing Disclosure Package and the Final Offering Memorandum.
(j) Each of the Transaction Documents shall have been executed and delivered by
all parties thereto, and the Initial Purchasers shall have received a fully executed
original of each of the Transaction Documents.
(k) The terms of each Transaction Document shall conform in all material respects
to the description thereof in the Pricing Disclosure Package and the Final Offering
Memorandum.
(l) The Collateral Agent shall have received (with a copy for the Initial
Purchasers) on the Closing Date:
(i) appropriately completed copies of Uniform Commercial Code financing
statements naming the Company and each Guarantor as a debtor and the Collateral Agent as the
secured party, or other similar instruments or documents to be filed under the UCC of all
jurisdictions as may be necessary or, in the reasonable opinion of the Collateral Agent and
its counsel, desirable to perfect the security interests of the Collateral Agent pursuant to
the Security Agreement;
(ii) appropriately completed copies of Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens (other than Permitted Liens)
of any Person in any collateral described in any Security Agreement previously granted by
any Person;
(iii) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified by a party
acceptable to the Collateral Agent, dated a date reasonably near to the Closing Date,
listing all effective financing statements which name the Company or any Guarantor (under
its present name and any previous names) as the debtor, together with copies of such
financing statements (none of which shall cover any collateral described in any Collateral
Documents, other than such financing statements that evidence Permitted Liens);
(iv) such other approvals, opinions, or documents as the Collateral Agent
may reasonably request in form and substance reasonably satisfactory to the Collateral
Agent; and
(v) the Collateral Agent and its counsel shall be satisfied that (A) the
Lien granted to the Collateral Agent, for the benefit of the Secured Parties in the
collateral described above is of the priority described in the Pricing Disclosure Package
and the Final Offering Memorandum; and (B) no Lien exists on any of the collateral described
above other than the Lien created in favor of the Collateral Agent, for the benefit of the
Secured Parties, pursuant to a Collateral Documents, in each case subject to the Permitted
Liens.
(m) All Uniform Commercial Code financing statements or other similar financing
statements and Uniform Commercial Code Form UCC-3 termination statements required
21
pursuant to clause (l)(i) and (l)(ii) above shall have been delivered to CT Corporation
System or another similar filing service company acceptable to the Collateral Agent.
8. Indemnification and Contribution.
(a) The Company and each of the Guarantors shall, jointly and severally, indemnify and hold
harmless the each Initial Purchaser and its directors, officers and affiliates, and each person, if
any, who controls, within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
any Initial Purchaser (collectively, the “Purchaser Indemnified Persons”) against any
losses, claims, damages, liabilities, costs or expenses (collectively, “Losses”) of any
kind to which the Purchaser Indemnified Persons may become subject under the Securities Act, the
Exchange Act or otherwise, to the fullest extent lawful, insofar as any such Losses (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Offering Memorandum or any amendment or supplement
thereto, or (ii) the omission or alleged omission to state, in the Offering Memorandum or any
amendment or supplement thereto, a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading, and subject to the provisions hereof, will reimburse, as incurred, the Purchaser
Indemnified Persons for any legal or other expenses reasonably incurred by the Purchaser
Indemnified Persons in connection with investigating, defending against or appearing as a
third-party witness in connection with any such Loss in respect thereof; provided, that
the Company and the Guarantors shall not be liable under the indemnity provided in this Section
8(a) to any Purchaser Indemnified Party for any Losses that are based on an untrue statement or
omission or alleged untrue statement or omission or alleged omission made in reliance on, and in
conformity with, the Initial Purchaser Information (as defined in Section 11). The Company
and the Guarantors shall not be liable under this Section 8 for any settlement of any claim
or action effected without their prior written consent, which shall not be unreasonably withheld.
(b) Each Initial Purchaser severally agrees to indemnify and hold harmless each of the
Company and the Guarantors and their respective directors, officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any Losses which the Company or any such director, officer or controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as such Losses (or actions in respect
thereof) have resulted solely from any untrue statement or alleged untrue statement of any material
fact contained in the Offering Memorandum, or any amendment or supplement thereto, or from the
omission or alleged omission to state, in the Offering Memorandum, or any amendment or supplement
thereto, a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case to the extent (but only to
the extent) that such untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with the Initial Purchaser Information; and, subject to
the limitation set forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses incurred by the Company, each of the Guarantors or any such director, officer or
controlling person in connection with any such Loss or action in respect thereof.
(c) If any proceeding shall be brought or asserted against any person entitled to
indemnification hereunder (an “Indemnified Party”), such Indemnified Party shall give
prompt written notice to the party or parties from which such indemnification is sought (the
“Indemnifying Parties” and each, an “Indemnifying Party”); provided, that
the failure to so notify the Indemnifying Parties shall not relieve any of the Indemnifying Parties
from any obligation or liability except to the extent (but only to the extent) that such
Indemnifying Party has been prejudiced materially by such failure. In case any such action is
brought against any Indemnified Party, and it notifies the Indemnifying Party of the commencement
thereof, the Indemnifying Party will be entitled to participate therein and, to the extent
22
that it may determine, jointly with any other Indemnifying Party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such Indemnified Party; provided, however,
that if (i) the use of counsel chosen by the Indemnifying Party to represent the Indemnified Party
would present such counsel with a conflict of interest, (ii) the defendants in any such action
include both the Indemnified Party and the Indemnifying Party, and the Indemnified Party shall have
been advised by counsel in writing that there may be one or more legal defenses available to it
and/or other Indemnified Parties that are different from or additional to those available to the
Indemnifying Party, or (iii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time
after receipt by the Indemnifying Party of notice of the institution of such action, then, in each
such case, the Indemnifying Party shall not have the right to direct the defense of such action on
behalf of such Indemnified Party or Parties and such Indemnified Party or Parties shall have the
right to select separate counsel to defend such action on behalf of such Indemnified Party or
Parties at the expense of the Indemnifying Party. After notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense thereof and approval by such Indemnified
Party of counsel appointed to defend such action, the Indemnifying Party will not be liable to such
Indemnified Party under this Section 8 for any legal or other expenses, other than
reasonable costs of investigation, subsequently incurred by such Indemnified Party in connection
with the defense thereof, unless (i) the Indemnified Party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the Indemnifying Party shall not be liable for the expenses of
more than one separate counsel (in addition to one local counsel in any applicable jurisdiction) in
any one action or separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated by the Initial Purchasers in the case
of paragraph (a) of this Section 8 or the Company in the case of paragraph (b) of this
Section 8, representing the Indemnified Party under such paragraph (a) or paragraph (b), as
the case may be, who are parties to such action or actions) or (ii) the Indemnifying Party has
authorized in writing the employment of counsel for the Indemnified Party at the expense of the
Indemnifying Party. After such notice from the Indemnifying Party to such Indemnified Party, the
Indemnifying Party will not be liable for the costs and expenses of any settlement of such action
effected by such Indemnified Party without the prior written consent of the Indemnifying Party
(which consent shall not be unreasonably withheld), unless such Indemnified Party waived in writing
its rights under this Section 8, in which case the Indemnified Party may effect such a
settlement without such consent. None of the Indemnifying Parties shall, without the prior written
consent of the Indemnified Party (which consent shall not be unreasonably withheld), consent to
entry of any judgment in or enter into any settlement of any pending or threatened Proceeding in
respect of which indemnification or contribution may be sought hereunder (whether or not any
Indemnified Party is a party thereto) unless such judgment or settlement includes, as an
unconditional term thereof, the giving by the claimant or plaintiff to each Indemnified Party of a
release, in form and substance reasonably satisfactory to the Indemnified Party, from all Losses
that may arise from such Proceeding or the subject matter thereof (whether or not any Indemnified
Party is a party thereto).
(d) If the indemnification provided for in this Section 8 is unavailable to an
Indemnified Party or is insufficient to hold such Indemnified Party harmless for any Losses in
respect of which this Section 8 would otherwise apply by its terms (other than by reason of
exceptions provided in this Section 8), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company, on the one hand, and the Initial Purchasers on the
other hand, from the Offering or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company, on the one
hand, and the Initial Purchasers, on the other hand, in connection with the actions, statements or
omissions that resulted in such Losses (or actions in respect thereof), as well as any other
relevant equitable considerations. The
23
relative benefits received by the Company, on the one hand, and the Initial Purchasers, on the
other hand, shall be deemed to be in the same proportion as the total proceeds from the Offering
(before deducting expenses) received by the Company, on the one hand, to the total discounts and
commissions received by the Initial Purchasers, on the other hand. The relative fault of the
Company, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether any untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Initial Purchasers, on the other hand, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the circumstances. The amount paid
or payable by an Indemnified Party as a result of any Losses shall be deemed to include any legal
or other fees or expenses incurred by such party in connection with any Proceeding, to the extent
such party would have been indemnified for such fees or expenses if the indemnification provided
for in this Section 8 was available to such party.
Each party hereto agrees that it would not be just and equitable if contribution pursuant to
this Section 8(d) were determined by pro rata or per capita allocation or by any other
method of allocation that does not take into account the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provisions of this Section 8, the
Initial Purchasers shall not be obligated to make contributions hereunder that in the aggregate
exceed the total discounts, commissions and other compensation received by such Initial Purchasers
under this Agreement, less the aggregate amount of any damages that such Initial Purchasers have
otherwise been required to pay by reason of the untrue or alleged untrue statements or the
omissions or alleged omissions to state a material fact. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes
of the immediately preceding paragraph, each person, if any, who controls the Initial Purchasers
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Initial Purchasers, and each director of the Company and the
Guarantors, each officer of the Company and the Guarantors and each person, if any, who controls
either of the Company or the Guarantors within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, shall have the same rights to contribution as the Company and the Guarantors.
(e) The indemnification and contribution obligations contained in this Section 8 are
in addition to any liability that any of the Indemnifying Parties may otherwise have to the
Indemnified Parties, and do not limit in any way rights or remedies which may otherwise be
available at law or in equity.
9. Termination. The Initial Purchasers may terminate this Agreement at
any time prior to the Closing Date by written notice to the Company if any of the following has
occurred:
(a) since the date hereof, any Material Adverse Effect or development involving
or expected to result in a prospective Material Adverse Effect that could, in the reasonable
judgment of the Initial Purchasers, be expected to (i) make it impracticable or inadvisable
to proceed with the offering or delivery of the Notes on the terms and in the manner
contemplated in the Pricing Disclosure Package and the Final Offering Memorandum, or (ii)
materially impair the investment quality of any of the Notes;
(b) the failure of the Company or the Guarantors to satisfy the conditions
contained in Section 7(a) hereof on or prior to the Closing Date;
(c) any outbreak or escalation of hostilities, or declaration of war by the
United States or other national or international calamity or crisis, including acts of
terrorism, or material adverse change or disruption in economic conditions in, or in the
financial markets of, the United
24
States (it being understood that any such change or disruption shall be relative to
such conditions and markets as in effect on the date hereof), if the effect of such
outbreak, escalation, calamity, crisis, act or material adverse change in the economic
conditions in, or in the financial markets of, the United States could be reasonably
expected to make it, in the Initial Purchasers’ sole judgment, impracticable or inadvisable
to market or proceed with the offering or delivery of the Notes on the terms and in the
manner contemplated in the Pricing Disclosure Package and the Final Offering Memorandum or
to enforce contracts for the sale of any of the Notes;
(d) the suspension or limitation of trading generally in securities on the New
York Stock Exchange or The NASDAQ Global Market shall have occurred or any setting of
limitations on prices for securities on any such exchange shall have occurred;
(e) the enactment, publication, decree or other promulgation after the date
hereof of any Applicable Law that in the Initial Purchasers’ counsel’s reasonable opinion
materially and adversely affects, or could be reasonably expected to materially and
adversely affect, the properties, business, prospects, operations, earnings, assets,
liabilities or condition (financial or otherwise) of the Company and its Subsidiaries, taken
as a whole;
(f) other than the issuance of the ratings of the Company and the Notes on July
30, 2009, any securities of the Company shall have been downgraded or placed on any “watch
list” for possible downgrading by any “nationally recognized statistical rating
organization,” as such term is defined for purposes of Rule 436(g)(2) under the Securities
Act; or
(g) the representation and warranty contained in the first sentence of
Section 4(a) of this Agreement is incorrect in any way; or
(h) the declaration of a banking moratorium by any Governmental Authority; or the
taking of any action by any Governmental Authority after the date hereof in respect of its
monetary or fiscal affairs that in Initial Purchasers’ opinion could reasonably be expected
to have a material adverse effect on the financial markets in the United States or
elsewhere.
10. Survival of Representations and Indemnities. The respective
representations and warranties, covenants, indemnities and contribution and expense reimbursement
provisions and other agreements of the Company, the Guarantors and the Initial Purchasers set forth
in or made pursuant to this Agreement shall remain operative and in full force and effect, and will
survive, regardless of (i) any investigation, or statement as to the results thereof, made by or on
behalf of the Company, the Guarantors or the Initial Purchasers, (ii) acceptance of the Notes, and
payment for them hereunder, and (iii) any termination of this Agreement. Notwithstanding any
termination of this Agreement, the Company shall remain liable for all expenses to the extent
provided in Sections 5(f) and 8.
11. Information Supplied by the Initial Purchasers. The name of the
Initial Purchasers set forth on the front cover, back cover and under the heading “Plan of
Distribution” of the Offering Memorandum, the statements set forth on the cover page with respect
to price and the statements set forth in (a) the first sentence of the third paragraph and (b) the
fourth paragraph and (c) the first, second, third and fourth sentences of the seventh paragraph
under the heading “Plan of Distribution” in the Pricing Disclosure Package and the Final Offering
Memorandum (to the extent such statements relate to the Initial Purchasers) (the “Initial
Purchaser Information) constitute the only information furnished by the Initial Purchasers to
the Company or the Guarantors for the purposes of Sections 4(a) and 8 hereof.
12. No Fiduciary Relationship. The Company and the Guarantors hereby
acknowledge that the Initial Purchasers are acting solely as initial purchasers in connection with
the purchase and sale of the
25
Notes. The Company further acknowledges that the Initial Purchasers are acting pursuant to a
contractual relationship created solely by this Agreement entered into on an arm’s length basis,
and in no event do the parties intend that the Initial Purchasers act or be responsible as a
fiduciary to the Company, the Guarantors or their respective management, stockholders or creditors
or any other person in connection with any activity that the Initial Purchasers may undertake or
have undertaken in furtherance of the purchase and sale of the Notes, either before or after the
date hereof. The Initial Purchasers hereby expressly disclaim any fiduciary or similar
obligations, either in connection with the transactions contemplated by this Agreement or any
matters leading up to such transactions, and the Company and the Guarantors hereby confirm their
understanding and agreement to that effect. The parties hereto agree that they are each responsible
for making their own independent judgments with respect to any such transactions and that any
opinions or views expressed by the Initial Purchasers to the Company or the Guarantors regarding
such transactions, including, but not limited to, any opinions or views with respect to the price
or market for the Notes, do not constitute advice or recommendations to the Company or the
Guarantors. The Company and the Guarantors hereby waive and release, to the fullest extent
permitted by law, any claims that either of the Company may have against the Initial Purchasers
with respect to any breach or alleged breach of any fiduciary or similar duty to the Company or the
Guarantors in connection with the transactions contemplated by this Agreement or any matters
leading up to such transactions.
13. Defaulting Initial Purchaser. If, on the Closing Date, any one of
the Initial Purchasers shall fail or refuse to purchase Notes that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of Notes which such defaulting
Initial Purchaser agreed but failed or refused to purchase is not more than one tenth of the
aggregate principal amount of Notes to be purchased on such date, the other Initial Purchaser shall
be obligated severally in the proportions that the principal amount of Notes set forth opposite
their respective names in Schedule I hereto bears to the aggregate principal amount of
Notes set forth opposite the names of all such non defaulting Initial Purchaser to purchase the
Notes which such defaulting Initial Purchaser agreed but failed or refused to purchase on such
date. If, on the Closing Date any Initial Purchaser shall fail or refuse to purchase Notes which it
or they have agreed to purchase hereunder on such date and the aggregate principal amount of Notes
with respect to which such default occurs is more than one tenth of the aggregate principal amount
of Notes to be purchased on such date, and arrangements satisfactory to the non defaulting Initial
Purchaser and the Company for the purchase of such Notes are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of the non defaulting Initial
Purchaser or of the Company or any Guarantor. Any action taken under this paragraph shall not
relieve any defaulting Initial Purchaser from liability in respect of any default of such Initial
Purchaser under this Agreement.
14. Miscellaneous.
(a) Notices. Notices given pursuant to any provision of this Agreement shall be
addressed as follows:
| (i) | if to the Company, to: | ||
| CPM Holdings, Inc. 0000 Xxxxxxx Xxxxxx Xxxxxxxx, XX 00000 Attention: Xxx Xxxxxxx |
|||
| with a copy to: | |||
| Xxxxx Xxxxx LLP 0000 Xxxxxxxx |
00
| Xxx Xxxx, XX 00000 Attention: Xxxx Xxxxx |
|||
| (ii) | if to the Initial Purchasers, to: | ||
| Jefferies & Company, Inc. 000 Xxxxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention: General Counsel |
|||
| with a copy to: | |||
| Proskauer Rose LLP 0000 Xxxxxxxx Xxx Xxxx, XX 00000 Attention: Xxx Xxxxxxxxxxx |
or in any case to such other address as the person to be notified may have requested in writing.
(b) Successors and Assigns. This Agreement has been and is made solely for the
benefit of and shall be binding upon the Company and the Guarantors, the Initial Purchasers
and, to the extent provided in Section 8 hereof, the controlling persons, officers,
directors, partners, employees, and affiliates referred to in Section 8, and their
respective heirs, executors, administrators, successors and assigns, all as and to the
extent provided in this Agreement, and no other person shall acquire or have any right under
or by virtue of this Agreement. The term “successors and assigns” shall not include a
purchaser of any of the Notes from the Initial Purchasers merely because of such purchase.
Notwithstanding the foregoing, it is expressly understood and agreed that each purchaser who
purchases Notes from the Initial Purchasers is intended to be a beneficiary of the covenants
of the Company and the Guarantors contained in the Registration Rights Agreement to the same
extent as if the Notes were sold and those covenants were made directly to such purchaser by
the Company and the Guarantors, and each such purchaser shall have the right to take action
against the Company and the Guarantors to enforce, and obtain damages for any breach of,
those covenants.
(c) GOVERNING LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE
TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY
THEREIN, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(d) VENUE. EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY (I) SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY; AND (II) WAIVES (A) THEIR RIGHT TO A
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL
OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO AND FOR ANY COUNTERCLAIM RELATED TO ANY OF THE
FOREGOING
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AND (B) ANY OBJECTION WHICH THEY MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE
OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(e) Counterparts. This Agreement may be signed in various counterparts, which
together shall constitute one and the same instrument.
(f) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(g) Partial Unenforceability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(h) Amendment. This Agreement may be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may be given, provided that the
same are in writing and signed by all of the signatories hereto.
(i) Authority of the Initial Purchasers. Any action by the Initial Purchasers
hereunder may be taken by Xxxxxxxxx & Company, Inc. on behalf of the Initial Purchasers, and
any such action taken by Xxxxxxxxx & Company, Inc. shall be binding upon each of the Initial
Purchasers.
[Signature pages follow.]
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Please confirm that the foregoing correctly sets forth the agreement among the Company, the
Guarantors and the Initial Purchasers.
Very truly yours,
THE COMPANY
CPM HOLDINGS, INC., a Delaware corporation
By: |
/s/ Xxxxxxx Ostrich | |||
| Title: Chief Financial Officer |
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GUARANTORS
CPM ACQUISITION CORP., a Delaware corporation
By: |
/s/ Xxxxxxx Ostrich | |||
| Title: Secretary |
CROWN ACQUISITION CORP., a Delaware corporation
By: |
/s/ Xxxxxxx Ostrich | |||
| Title: Secretary |
CPM WOLVERINE XXXXXXX, LLC, a Delaware limited liability company
By: |
/s/ Xxxxxxx Ostrich | |||
| Title: Manager |
CROWN IRON WORKS COMPANY, a Delaware corporation
By: |
/s/ Xxxxxxx Ostrich | |||
| Title: Secretary |
CROWN BIOFUELS, LLC, a Minnesota limited liability company
By: |
/s/ Xxxxxxx Ostrich | |||
| Title: Secretary |
CPM SA LLC, a Delaware limited liability company
By: |
/s/ Xxxxxxx Ostrich | |||
| Title: Authorized Signatory |
30
Accepted and Agreed to:
XXXXXXXXX & COMPANY, INC.
For itself and on behalf of the several
Initial Purchasers listed in Schedule I hereto
Initial Purchasers listed in Schedule I hereto
By: |
/s/ Xxxxxx X. Xxxxxxxxx | |||
| Title: Managing Director |
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