EXHIBIT 10.18
PLIANT CORPORATION
$306,000,000
principal amount at maturity
11 1 / 8 % Senior Secured
Discount Notes due 2009
PURCHASE AGREEMENT
February 6, 2004
J. P. MORGAN SECURITIES INC.
CREDIT SUISSE FIRST BOSTON LLC
DEUTSCHE BANK SECURITIES INC.
c/o J.P. Morgan Securities Inc.
270 Park Avenue, 5th floor
New York, New York 10017
Ladies and Gentlemen:
Pliant Corporation, a Utah
corporation (the “ Company ”), proposes to issue
and sell $306,000,000 principal amount at maturity of its 11
1 / 8 % Senior Secured Discount Notes due
2009 (the “ Notes ”). The Notes will be
issued pursuant to an Indenture to be dated as of February 17,
2004 (the “ Indenture ”), among the Company,
Pliant Corporation International; Pliant Film Products of Mexico,
Inc.; Pliant Solutions Corporation; Pliant Packaging of Canada,
LLC; Uniplast Holdings Inc.; Uniplast U.S., Inc.; Turex, Inc.;
Pierson Industries, Inc.; Uniplast Midwest, Inc.; and Uniplast
Industries Co. (collectively, the “ Note Guarantors
”) and Wilmington Trust Company, a Delaware banking
corporation, as trustee (in such capacity, the “
Trustee ”), and will be guaranteed on a senior secured
basis by the Note Guarantors. The Company and the Note
Guarantors hereby confirm their agreement with J.P. Morgan
Securities Inc. (“ JPMorgan ”), Credit Suisse
First Boston LLC (“CSFB”) and Deutsche Bank Securities
Inc. (together with JPMorgan and CSFB, the “ Initial
Purchasers ”) concerning the purchase of the Notes from
the Company by the several Initial Purchasers.
The Notes will be offered and sold
to the Initial Purchasers without being registered under the
Securities Act of 1933, as amended (the “ Securities
Act ”), in reliance upon an exemption therefrom. The
Company has prepared a preliminary offering memorandum dated
January 27, 2004 (the “ Preliminary Offering
Memorandum ”), and will prepare an offering
memorandum dated the date hereof (the “
Offering Memorandum ”) setting forth information
concerning the Company and the Notes. Copies of the
Preliminary Offering Memorandum have been, and copies of the
Offering Memorandum will be, delivered by the Company to the
Initial Purchasers pursuant to the terms of this Agreement.
Any references herein to the Preliminary Offering Memorandum and
the Offering Memorandum shall be deemed to include all amendments
and supplements thereto, unless otherwise noted. The Company
hereby confirms that it has authorized the use of the Preliminary
Offering Memorandum and the Offering Memorandum in connection with
the offering and resale of the Notes by the Initial Purchasers in
accordance with Section 2.
Holders of the Notes (including the
Initial Purchasers, their direct and indirect transferees and the
Market-Maker (as defined in Annex A attached hereto)) will be
entitled to the benefits of an Exchange and Registration Rights
Agreement, substantially in the form attached hereto as Annex A
(the “ Registration Rights Agreement ”),
pursuant to which the Company will agree to file with the
Securities and Exchange Commission (the “ Commission
”) (i) a registration statement under the Securities Act (the
“ Exchange Offer Registration Statement ”)
registering an issue of senior secured notes of the Company (the
“ Exchange Notes ”), which are identical in all
material respects to the Notes (except that the Exchange Notes will
not contain terms with respect to transfer restrictions or
liquidated damages) and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the
Securities Act (the “ Shelf Registration Statement
”).
Pursuant to (i) the Amended and
Restated Intercreditor Agreement dated as of the Closing Date (as
hereinafter defined), among the Company, Deutsche Bank Trust
Company Americas (as Credit Agent under the credit agreement dated
as of the Closing Date among the Company, JPMorgan Chase Bank and
Credit Suisse First Boston, acting through its Cayman Islands
Branch and Deutsche Bank Trust Company Americas (the “
Credit Agreement ”)), the Trustee and the trustee with
respect to the Company’s 11 1 / 8 %
Senior Secured Notes due 2009 (the “ May 2003 Notes
”) (the “ Intercreditor Agreement ”),
(ii) the Pledge Agreement dated as of the Closing Date, among
the Company, the Subsidiary Pledgors party thereto and the
Collateral Agent (as defined herein) (the “ Pledge
Agreement ”), (iii) the Canadian Pledge Agreement
dated as of the Closing Date, among Uniplast Industries Co.
(“ Uniplast ”), the subsidiaries of Uniplast
party thereto and the Collateral Agent (the “ Canadian
Pledge Agreement ” and, together with the Pledge
Agreement, the “ Pledge Agreements ”),
(iv) the Security Agreement dated as of the Closing Date,
among the Company, the Grantors party thereto and the Collateral
Agent (the “ Security Agreement ”), (v) the
Canadian Security Agreement dated as of the Closing Date, among
Uniplast, the subsidiaries of Uniplast party thereto and the
Collateral Agent (the “ Canadian Security Agreement
” and, together with the Security Agreement, the “
Security Agreements ”) and (vi) a mortgage or
deed of trust with respect to each of the following
properties: (a) 299 Clukey Drive, Harrington, Delaware;
(b) 1330 Lebanon Road, Danville, Kentucky; (c) 10
Greenfield Road, South Deerfield, Massachusetts;
(d) 1 Edison Drive, McAlester, Oklahoma; (e) 851
Garrett Parkway, Lewisburg, Tennessee; (f) 230 Enterprise
Drive, Newport News, Virginia; (g) 8039 South 192nd Street,
Kent, Washington; and (h) 1701 First Avenue, Chippewa
Falls, Wisconsin (collectively, the “ Mortgages
” and together with the Intercreditor Agreement, the Pledge
Agreements and the Security Agreements, the “ Security
Documents ”), each to be delivered to Wilmington Trust
Company, a Delaware banking corporation, as collateral agent (in
such capacity, the “ Collateral Agent ”), the
Notes and the
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guarantees of the Note Guarantors relating to
the Notes (the “ Guarantees ”) will be, on the
Closing Date or within a commercially reasonable period of time
thereafter, secured by a first-priority security interest in the
2004 Notes First Lien Collateral (as defined in the Intercreditor
Agreement ) and a second-priority security interest in the Senior
Lender First Lien Collateral (as defined in the Intercreditor
Agreement), as applicable, for the benefit of the Trustee, the
Collateral Agent and each holder of the Notes and the successors
and assigns of the foregoing (collectively, the “
Secured Parties ”). Pursuant to the
Credit Agreement and the security documents relating thereto, the
Lenders (as defined in the Credit Agreement) will, as of the
Closing Date, hold a first-priority security interest in the Senior
Lender First Lien Collateral and a second-priority security
interest in the 2004 Notes First Lien Collateral. Pursuant to
the indenture governing the May 2003 Notes and the security
documents relating thereto, the holders of the May 2003 Notes hold
a second-priority security interest in the Common Collateral (as
defined in the Intercreditor Agreement).
Capitalized terms used but not
defined herein shall have the meanings given to such terms in the
Offering Memorandum.
1.
Representations, Warranties and Agreements of the Company and
the Note Guarantors . The Company and each of the Note
Guarantors represent and warrant to, and agree with, the several
Initial Purchasers on and as of the date hereof and the Closing
Date (as defined in Section 3) that:
(a) Each
of the Preliminary Offering Memorandum and the Offering Memorandum,
as of its respective date, did not, and on the Closing Date the
Offering Memorandum will not, contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company and the Note
Guarantors make no representation or warranty as to information
contained in or omitted from the Preliminary Offering Memorandum or
the Offering Memorandum in reliance upon and in conformity with
written information relating to the Initial Purchasers furnished to
the Company by or on behalf of any Initial Purchaser specifically
for use therein (the “ Initial Purchasers’
Information ”).
(b)
Assuming (i) that the Notes are issued, sold and delivered
under the circumstances contemplated by the Offering Memorandum and
this Agreement, (ii) the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 2
and their compliance with the agreements set forth therein and with
the transfer procedures and restrictions described in the Offering
Memorandum, (iii) that each purchaser within the United States
that buys Notes from the Initial Purchasers is a qualified
institutional buyer as defined in Rule 144A under the Securities
Act, (iv) the accuracy of the representations and warranties
made in accordance with this Agreement and the Offering Memorandum
by purchasers to whom the Initial Purchasers initially resell the
Notes and (v) the receipt by purchasers to whom the Initial
Purchasers initially resell the Notes of a copy of the Offering
Memorandum furnished as contemplated by Section 2(e) hereof,
it is not necessary, in connection with the issuance and sale of
the Notes to the Initial Purchasers and the offer, resale and
delivery of the Notes by the Initial Purchasers in the manner
contemplated by this Agreement and the Offering
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Memorandum, to
register the Notes under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the
“ Trust Indenture Act ”).
(c) The
Company and each of its subsidiaries have been duly incorporated
and are validly existing as corporations or limited liability
companies in good standing under the laws of their respective
jurisdictions of incorporation, formation or organization, are duly
qualified to do business and are in good standing as foreign
corporations or limited liability companies in each jurisdiction in
which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification,
and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they
are engaged, except where the failure to so qualify or have such
power or authority would not, singularly or in the aggregate, have
a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole (a “
Material Adverse Effect ”).
(d) As of
the Closing Date, the Company will have an authorized
capitalization as set forth in the Offering Memorandum under the
heading “Capitalization”, and all of the outstanding
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable.
All of the outstanding shares of capital stock of each subsidiary
of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and, except for director
qualifying shares, are owned directly or indirectly by the Company,
free and clear of any lien, charge, encumbrance, security interest,
restriction upon voting or transfer or any other claim of any third
party (collectively, “ Liens ”), except for
those expressly permitted by or created pursuant to the Credit
Agreement and the security documents relating thereto, the
indenture governing the May 2003 Notes and the security documents
relating thereto, the Indenture or the Security Documents
(collectively, “ Permitted Liens ”).
(e) The
Company and each of the Note Guarantors each had, has or as of the
Closing Date will have, full right, power and authority to execute
and deliver this Agreement, the Indenture, the Registration Rights
Agreement, each Security Document to which it is a party and the
Notes (in the case of the Company only) (collectively, the “
Transaction Documents ”) and to perform their
respective obligations hereunder and thereunder; and all requisite
action required to be taken for the due and proper authorization,
execution and delivery of each of the Transaction Documents to
which it is a party and the consummation of the transactions
contemplated thereby have been, or as of the Closing Date will be,
duly and validly taken.
(f) This
Agreement has been duly authorized, executed and delivered by the
Company and each of the Note Guarantors and constitutes a valid and
legally binding agreement of the Company and each of the Note
Guarantors, enforceable against the Company and each of the Note
Guarantors in accordance with its terms, except to the extent that
(i) such enforceability may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting creditors’ rights generally and
(B) general equitable principles (whether considered in a
proceeding in equity or at law) and (ii) the validity or
enforceability of rights to
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indemnification
and contribution hereunder may be limited by federal or state
securities laws or regulations or the public policy underlying such
laws or regulations.
(g) The
Registration Rights Agreement has been, or as of the Closing Date
will be, duly authorized by the Company and each of the Note
Guarantors and, when duly executed and delivered in accordance with
its terms by each of the parties thereto, will constitute a valid
and legally binding agreement of the Company and each of the Note
Guarantors enforceable against the Company and each of the Note
Guarantors in accordance with its terms, except to the extent that
(i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors’ rights
generally and by general equitable principles (whether considered
in a proceeding in equity or at law) and (ii) the validity or
enforceability of rights to indemnification and contribution
thereunder may be limited by Federal or state securities laws or
regulations or the public policy underlying such laws or
regulations.
(h) The
Indenture has been, or as of the Closing Date will be, duly
authorized by the Company and each of the Note Guarantors and, when
duly executed and delivered in accordance with its terms by each of
the parties thereto, will constitute a valid and legally binding
agreement of the Company and each of the Note Guarantors
enforceable against the Company and each of the Note Guarantors in
accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors’ rights generally and by general
equitable principles (whether considered in a proceeding in equity
or at law). On the Closing Date, the Indenture will conform
in all material respects to the requirements of the Trust Indenture
Act and the rules and regulations of the Commission applicable to
an indenture which is qualified thereunder.
(i) The
Notes and the Guarantees thereof by the Note Guarantors have been,
or as of the Closing Date will be, duly authorized by the Company
and each of the Note Guarantors, as the case may be, and, when the
Notes have been duly executed, authenticated, issued and delivered
as provided in the Indenture and paid for as provided herein, will
be duly and validly issued and outstanding and will constitute
valid and legally binding obligations of the Company, as issuer,
entitled to the benefits of the Indenture, including
Article 11 thereof with respect to the Guarantees of the Notes
by the Note Guarantors, and enforceable against the Company, as
issuer, and each of the Note Guarantors, as guarantors, in
accordance with their terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors’ rights generally and by general
equitable principles (whether considered in a proceeding in equity
or at law).
(j) Each
of the Security Documents has been, or as of the Closing Date will
be, duly authorized, executed and delivered by the Company and each
of the Note Guarantors (to the extent a party thereto).
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(k) On and
as of the Closing Date or within a commercially reasonable time
thereafter:
(i) Each
Security Document, when executed and delivered in accordance with
its terms by each of the parties thereto, will constitute a valid
and legally binding obligation of the grantor party thereto,
enforceable against such grantor in accordance with its terms,
except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting
creditors’ rights generally and by general equitable
principles (whether considered in a proceeding in equity or at
law).
(ii) Upon
delivery to the Credit Agent of the certificates or instruments
representing or evidencing the Pledged Securities (as defined in
the Pledge Agreements) or other Common Collateral in accordance
with the Pledge Agreements (or in the case of certificates or
instruments representing or evidencing Common Collateral which are
then in the possession of the Credit Agent, upon the execution and
delivery of the Intercreditor Agreement) and, in the case of Common
Collateral not constituting certificated securities or instruments,
the filing of Uniform Commercial Code (“UCC”) financing
statements in the appropriate filing office, the Collateral Agent
will obtain a valid and perfected second-priority lien upon and
security interest in all right, title and interest of the
applicable pledgor in such Pledged Securities as security for the
payment and performance of the Obligations (as defined in the
Indenture);
(iii) Upon
filing by the Collateral Agent of (x) (A) financing statements, (B)
any filings required with the United States Patent and Trademark
Office and (C) any filings required with the United States
Copyright Office and (y) such similar filings as those listed in
the preceding clause (x) as required under Canadian law to perfect
the first priority or second priority security interest, as
applicable, in the Common Collateral located in Canada, the
security interests granted pursuant to the Security Agreements will
constitute valid, perfected, first-priority security interests with
respect to the 2004 Notes First Lien Collateral secured thereby,
and second-priority security interests with respect to the Senior
Lender First Lien Collateral secured thereby, in each case, as
described therein for the ratable benefit of the Secured
Parties.
(iv) The
Mortgages will be effective to grant a legal and valid mortgage
lien on all of the mortgagor’s right, title and interest in
each of the mortgaged properties thereunder. When the
Mortgages are duly recorded in the proper recorders’ offices
or appropriate public records and the mortgage recording fees and
taxes in respect thereof are paid and compliance is otherwise had
with the formal requirements of state or local law applicable to
the recording of real estate mortgages generally, each such
Mortgage shall constitute a validly perfected and enforceable
first-priority security interest in the related mortgaged property,
for the ratable benefit of the Secured Parties, subject only to the
encumbrances and exceptions to title expressly set forth therein
and except to the extent that such
6
enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
affecting creditors’ rights generally and by general
equitable principles (whether considered in a proceeding in equity
or at law).
(v) (A)
Neither the Company nor any of the Note Guarantors hold any
Accounts (as defined in the Security Agreements) with respect to
which the Collateral Agent does not hold a perfected,
second-priority security interest, other than any such Accounts, if
any, in which the Lenders do not or will not hold a first-priority
security interest.
(B) Neither the
Company nor any of the Note Guarantors maintains any Inventory (as
defined in the Security Agreements) with respect to which the
Collateral Agent does not possess a perfected, second-priority
security interest, other than any such Inventory, if any, in which
the Lenders do not or will not hold a first-priority security
interest.
(vi)
Except where the failure to do so would not have a Material Adverse
Effect, each of the Company and the Note Guarantors has filed with
the United States Patent and Trademark Office for registration or
recordation, as applicable, (A) a completed application for the
registration of each trademark and patent owned by it which is
material to the business of the Company or such Note Guarantor and
(B) an appropriate assignment to the Company or any of the Note
Guarantors of the interest acquired by it in any trademark and
patent.
(vii) The
mortgaged properties under the Mortgages comply in all material
respects with all applicable setback requirements, zoning codes,
ordinances, laws and regulations, except where non-compliance would
not, individually or in the aggregate, have a Material Adverse
Effect.
(viii)
There are no pending or, to the knowledge of the Company,
threatened condemnation proceedings, lawsuits, or administrative
actions relating to the mortgaged properties under the Mortgages
which would have, individually or in the aggregate, a Material
Adverse Effect.
(l) Each
of the Security Documents, the Indenture, the Credit Agreement, the
Notes, the Guarantees and the Registration Rights Agreement
conforms in all material respects to the description thereof
contained in the Offering Memorandum (to the extent described
therein).
(m) The
execution, delivery and performance by the Company and each of the
Note Guarantors of each of the Transaction Documents to which such
entity is a party, the issuance, authentication, sale and delivery
of the Notes and compliance by the Company and each of the Note
Guarantors with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents will not
(i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or,
except for Permitted Liens, result in the creation or
imposition of any Lien
7
upon any property
or assets of the Company or any of its subsidiaries pursuant to,
any material indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject (assuming
compliance by the Initial Purchasers with their representations,
warranties and agreements set forth in Section 2 hereof),
except for such conflict, breach or violation which would not,
singularly or in the aggregate, have a Material Adverse Effect,
(ii) result in any violation of the provisions of the charter
or by-laws of the Company or any of its subsidiaries or
(iii) result in any violation of any statute or any judgment,
order, decree, rule or regulation of any court or arbitrator or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties or assets
(assuming compliance by the Initial Purchasers with their
representations, warranties and agreements set forth in
Section 2 hereof), except for such violation which would not,
singularly or in the aggregate, have a Material Adverse Effect; and
(assuming compliance by the Initial Purchasers with their
representations, warranties and agreements set forth in
Section 2 hereof) no consent, approval, authorization or order
of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment,
order, decree, rule or regulation is required for the execution,
delivery and performance by the Company and each of the Note
Guarantors of each of the Transaction Documents to which each is a
party, the issuance, authentication, sale and delivery of the Notes
and compliance by the Company and each of the Note Guarantors with
the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, filings, registrations or
qualifications (i) which shall have been obtained or made on or
prior to the Closing Date, (ii) in the case of performance or
compliance with the Registration Rights Agreement, such as may be
required to be obtained or made under the Securities Act,
applicable state securities laws and the Trust Indenture Act,
(iii) as may be required under state or foreign securities and
blue sky laws and the rules and regulations of the National
Association of Securities Dealers, Inc. and (iv) as may be
required for such filings or recordings necessary to perfect the
security interests created by the Security Documents.
(n) To the
best knowledge of the Company (i) Arthur Andersen LLP, at the time
they were the Company’s accountants, were independent
certified public accountants with respect to the Company and its
subsidiaries within the meaning of Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants (“ AICPA ”) and its interpretations
and rulings thereunder (“ Independent Accountants
”), and (ii) Ernst & Young LLP are Independent
Accountants. The historical financial statements (including
the related notes) contained in the Offering Memorandum comply in
all material respects with the requirements applicable to a
registration statement on Form S-4 under the Securities Act (except
that certain supporting schedules are omitted); such financial
statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
covered thereby and fairly present the financial position of the
entities purported to be covered thereby at the respective dates
indicated and the results of their operations and their cash flows
for the respective periods indicated; and the financial information
contained in the Offering Memorandum under the headings
“Summary—Summary financial data”,
8
“Capitalization”,
“Selected financial data”, “Management’s
discussion and analysis of financial condition and results of
operations” and “Management—Executive
compensation” are derived from the accounting records of the
Company and its subsidiaries and accurately present in all material
respects the information purported to be shown thereby. The
other historical financial information and data concerning the
Company and its subsidiaries included in the Offering Memorandum
are accurately presented in all material respects.
(o) Other
than as disclosed in the Offering Memorandum, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, (A)
singularly or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, could reasonably be expected to
have a Material Adverse Effect or (B) question the validity or
enforceability of any of the Transaction Documents or any action
taken or to be taken pursuant thereto; and to the best knowledge of
the Company and each of the Note Guarantors, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others.
(p) To the
best knowledge of the Company and each of the Note Guarantors,
(A) no action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental
agency or body which prevents the issuance of the Notes or suspends
the sale of the Notes in any jurisdiction; and (B) no
injunction, restraining order or order of any nature by any
federal, state or foreign court of competent jurisdiction has been
issued with respect to the Company or any of its subsidiaries which
would prevent or suspend the issuance or sale of the Notes or the
use of the Preliminary Offering Memorandum or the Offering
Memorandum in any jurisdiction; no action, suit or proceeding is
pending against or, to the best knowledge of the Company and each
of the Note Guarantors, threatened against or affecting the Company
or any of its subsidiaries before any court or arbitrator or any
governmental agency, body or official, domestic or foreign, which
could reasonably be expected to interfere with or adversely affect
the issuance of the Notes or in any manner draw into question the
validity or enforceability of any of the Transaction Documents or
any action taken or to be taken pursuant thereto; and the Company
has complied with any and all requests by any securities authority
in any jurisdiction for additional information to be included in
the Preliminary Offering Memorandum and the Offering
Memorandum.
(q)
Neither the Company nor any of its subsidiaries, is (i) in
violation of its charter or by-laws (or similar organizational
document), (ii) in default, and no event has occurred which,
with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant
or condition contained in any material indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to
which it is a party or by which it is bound or to which any of its
property or assets is subject, other than any defaults under the
Company’s existing credit facilities as to which the Company
has obtained a temporary waiver as described in the Offering
Memorandum or (iii) in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject, except in the case
of
9
clauses (ii) and
(iii), for any such default or violation which would not,
singularly or in the aggregate, have a Material Adverse
Effect.
(r) The
Company and each of its subsidiaries possess, and are in compliance
with, all material licenses, certificates, authorizations and
permits issued by, and have made all declarations and filings with,
the appropriate federal, state or foreign regulatory agencies or
bodies which are necessary or desirable for the ownership of their
respective properties or the conduct of their respective businesses
as described in the Offering Memorandum, except where the failure
to possess or comply or make the same would not, singularly or in
the aggregate, have a Material Adverse Effect, and neither the
Company nor any of its subsidiaries has received notification of
any revocation or modification of any such license, certificate,
authorization or permit or has any reason to believe that any such
license, certificate, authorization or permit will not be renewed
in the ordinary course.
(s) Each
of the Company and each of its subsidiaries has timely filed or
caused to be filed all federal, state, local and foreign income and
franchise tax returns and reports required to have been filed and
has paid or caused to be paid all taxes required to have been paid
by it, except (i) any taxes that are being contested in good
faith by appropriate proceedings and for which the Company or such
subsidiary, as applicable, has set aside on its books adequate
reserves or (ii) to the extent that the failure to do so could
not reasonably be expected to result in a Material Adverse
Effect.
(t)
Neither the Company nor any of its subsidiaries is (i) an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended (the “
Investment Company Act ”), and the rules and
regulations of the Commission thereunder or (ii) a “holding
company” or a “subsidiary company” of a holding
company or an “affiliate” thereof within the meaning of
the Public Utility Holding Company Act of 1935, as
amended.
(u) The
Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted
only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
(v) The
Company and each of its subsidiaries maintains insurance covering
their respective properties, operations, personnel and businesses
against loss or damage of the kinds customarily insured against by
entities engaged in the same or similar businesses as the Company
and its subsidiaries, and such insurance is of such type and in
such amounts in accordance with customary industry
practice.
(w) The
Company and each of its subsidiaries own or possess adequate rights
to use all material patents, patent applications, trademarks,
service marks, trade names,
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trademark
registrations, service mark registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective
businesses; and the conduct of their respective businesses will not
conflict with, and the Company and its subsidiaries have not
received any notice of any claim of conflict with, any such rights
of others, except for such conflicts which would not, singularly or
in the aggregate, have a Material Adverse Effect.
(x) The
Company and each of its subsidiaries have good and marketable title
in fee simple to, or have valid rights to lease or otherwise use,
all items of real and personal property which are material to the
business of the Company and its subsidiaries taken as a whole, in
each case free and clear of all Liens except (A) Permitted
Liens and (B) such as (i) do not materially interfere with the
use made and proposed to be made of such property by the Company
and its subsidiaries or (ii) could not reasonably be expected to
have a Material Adverse Effect.
(y) No
labor disturbance by or dispute with the employees generally of the
Company or any of its subsidiaries exists or, to the best knowledge
of the Company and its subsidiaries, is contemplated or
threatened.
(z) The
statistical and market-related data included in the Offering
Memorandum are based on or derived from sources, including
management estimates, that the Company believes to be
reliable.
(aa) No
“prohibited transaction” (as defined in
Section 406 of the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published
interpretations thereunder (“ ERISA ”), or
Section 4975 of the Internal Revenue Code of 1986, as amended
(the “ Code ”)) or “accumulated funding
deficiency” (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(b) of ERISA (other
than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with
respect to any employee benefit plan of the Company or any of its
subsidiaries which could reasonably be expected to have a Material
Adverse Effect; each such employee benefit plan is in compliance in
all material respects with applicable law, including ERISA and the
Code; the Company and each of its subsidiaries have not incurred
and do not expect to incur material liability under Title IV of
ERISA with respect to the termination of, or withdrawal from, any
pension plan for which the Company or any of its subsidiaries would
have any liability; and each such pension plan that is intended to
be qualified under Section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by
action or by failure to act, which could reasonably be expected to
cause the loss of such qualification.
(bb) There
has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release of any
kind of toxic or other wastes or hazardous or regulated substances
by, due to or caused by the Company or any of its subsidiaries (or,
to the best knowledge of the Company and its subsidiaries, any
other entity (including any predecessor) for whose acts or
omissions the Company or any of its subsidiaries is or could
reasonably be expected to be liable) upon any of the property
now
11
or previously
owned or leased by the Company or any of its subsidiaries, or upon
any other property, in violation of any statute or any ordinance,
rule, regulation, order, judgment, decree or permit or which would,
under any statute or any ordinance, rule (including rule of common
law), regulation, order, judgment, decree or permit, give rise to
any liability, except for any violation or liability that could not
reasonably be expected to have, singularly or in the aggregate with
all such violations and liabilities, a Material Adverse Effect; and
there has been no disposal, discharge, emission or other release of
any kind onto such property or into the environment surrounding
such property of any toxic or other wastes or other hazardous
substances with respect to which the Company or any of the Note
Guarantors has knowledge, except for any such disposal, discharge,
emission or other release of any kind which could not reasonably be
expected to have, singularly or in the aggregate with all such
discharges and other releases, a Material Adverse
Effect.
(cc)
Neither the Company nor, to the best knowledge of the Company and
each of the Note Guarantors, any director, officer, agent, employee
or other person associated with or acting on behalf of the Company
or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977; or (iv) made any bribe, unlawful rebate, payoff, influence
payment, kickback or other unlawful payment.
(dd) On
and immediately after the Closing Date, the Company (after giving
effect to the issuance of the Notes and the application of the net
proceeds thereof as described in the Offering Memorandum) will be
Solvent. As used in this paragraph, the term
“Solvent” means, with respect to a particular date,
that on such date (i) the present fair market value (or present
fair saleable value) of the assets of the Company is not less than
the total amount required to pay the probable liabilities of the
Company on its total existing debts and liabilities (including
contingent liabilities) as they become absolute and matured, (ii)
the Company is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and commitments as
they mature and become due in the normal course of business, (iii)
assuming the sale of the Notes as contemplated by this Agreement
and the Offering Memorandum, the Company is not incurring debts or
liabilities beyond its ability to pay as such debts and liabilities
mature and (iv) the Company is not engaged in any business or
transaction, and is not about to engage in any business or
transaction, for which its property would constitute unreasonably
small capital after giving due consideration to the prevailing
practice in the industry in which the Company is engaged. In
computing the amount of such contingent liabilities at any time, it
is intended that such liabilities will be computed at the amount
that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
(ee)
Neither the Company nor any of its subsidiaries owns any
“margin securities” as that term is defined in
Regulation U of the Board of Governors of the Federal Reserve
System (the “ Federal Reserve Board ”), and none
of the proceeds of the
12
sale of the Notes
will be used, directly or indirectly, for the purpose of purchasing
or carrying any margin security, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might
cause any of the Notes to be considered a “purpose
credit” within the meanings of Regulation T, U or X of the
Federal Reserve Board.
(ff)
Except for this Agreement, neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding
with any person that would give rise to a valid claim against the
Company or the Initial Purchasers for a brokerage commission,
finder’s fee or like payment in connection with the offering
and sale of the Notes.
(gg) The
Notes satisfy the eligibility requirements of Rule 144A(d)(3) under
the Securities Act.
(hh)
Neither the Company nor any of its affiliates ( provided
that no representation is made with respect to the Initial
Purchasers) has, directly or through any agent, sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect
of, any security (as such term is defined in the Securities Act),
which is or will be integrated with the sale of the Notes in a
manner that would require registration of the Notes under the
Securities Act.
(ii) None
of the Company or any of its affiliates or any other person acting
on its or their behalf ( provided that no representation is
made with respect to the Initial Purchasers or any person to which
the Initial Purchasers sell Notes pursuant to Section 2(e))
has engaged, in connection with the offering of the Notes, in any
form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act.
(jj) There
are no securities of the Company registered under
Section 12
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