Exhibit 1.1
VITAMIN SHOPPE INDUSTRIES INC.
The Guarantors listed on Schedule A
hereto
$165,000,000
Second Priority Senior Secured Floating Rate
Notes
Purchase Agreement
November 7, 2005
BEAR, STEARNS & CO. INC.
BNP PARIBAS SECURITIES CORP.
BANC OF AMERICA SECURITIES LLC
JEFFERIES & COMPANY, INC.
ROTHSCHILD INC.
EXECUTION VERSION
V ITAMIN S HOPPE I NDUSTRIES I NC
.
$165,000,000
S ECOND P RIORITY S ENIOR S ECURED F LOATING R ATE N OTES D UE
2012
PURCHASE AGREEMENT
November 7, 2005
New York, New York
BEAR, STEARNS & CO.
INC.
BNP PARIBAS SECURITIES
CORP.
BANC OF AMERICA SECURITIES
LLC
JEFFERIES & COMPANY,
INC.
ROTHSCHILD INC.
c/o Bear, Stearns & Co.
Inc.
383 Madison Avenue
New York, New York 10179
Ladies &
Gentlemen:
Vitamin Shoppe Industries Inc., a
New York corporation (the “ Company ”),
proposes to issue and sell to Bear, Stearns & Co. Inc.,
BNP Paribas Securities Corp., Banc of America Securities LLC,
Jefferies & Company, Inc. and Rothschild Inc. (each an
“ Initial Purchaser ” and collectively,
the “ Initial Purchasers ”) $165,000,000
in aggregate principal amount of Second Priority Senior Secured
Floating Rate Notes due 2012 (the “ Original
Notes ”), subject to the terms and conditions set
forth herein.
1. The Transactions. Subject
to the terms and conditions herein contained, the Company proposes
to issue and sell to the Initial Purchasers $165,000,000 in
aggregate principal amount of the Original Notes. The Original
Notes and the Exchange Notes (as defined below) are collectively
referred to herein as the “ Notes .” The
Notes will (i) have the terms and provisions that are
described in the Offering Memorandum (as defined below) under the
heading “Description of Notes” and such other terms as
are customary and (ii) be issued pursuant to an indenture (the
“ Indenture ”), to be dated as of the
Closing Date (as defined below), among the Company, the Guarantors
(as defined) and Wilmington Trust Company, as trustee (the “
Trustee ”).
The Initial Purchasers and other
holders (including the direct and indirect transferees of the
Original Notes) of the Original Notes will be entitled to the
benefits of the exchange and registration rights agreement, to be
dated as of the Closing Date (the “ Registration Rights
Agreement ”), between the Company and the Initial
Purchasers, in the form attached hereto as Exhibit A, for so long
as such Original Notes constitute “ Transfer Restricted
Securities ” (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the
Company will agree, among other things, (i) to file (A) a
registration statement (the “ Registration
Statement ”) on the appropriate form with the
Securities and Exchange
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Commission (the “ Commission
”) under the Securities Act of 1933, as amended (together
with the rules and regulations of the Commission promulgated
thereunder, the “ Act ”), registering the
sale of an issue of a series of notes (the “ Exchange
Notes ”) identical in all material respects to the
Original Notes (except that the Exchange Notes will not contain
terms with respect to transfer restrictions) to be offered in
exchange for the Original Notes (the “ Exchange
Offer ”) and (B) under certain circumstances
specified in the Registration Rights Agreement, a shelf
registration statement pursuant to Rule 415 under the Act (the
“ Shelf Registration Statement ”), and
(ii) to use its commercially reasonable best efforts to cause
any such Registration Statement to be declared
effective.
The sale of the Original Notes and
the Guarantees to the Initial Purchasers (the “
Offering ”) will be made without registration
under the Act, in reliance upon the exemption therefrom provided by
Section 4(2) of the Act.
In connection with the sale of the
Securities, the Company has prepared a preliminary offering
memorandum dated October 23, 2005 (the “
Preliminary Offering Memorandum ”), and a final
offering memorandum, dated the date hereof (the “
Offering Memorandum ”), each setting forth
information regarding the Issuers (as defined below), the
Securities, the terms of the Offering and the transactions
contemplated by the Offering Documents (as defined below), and any
material developments relating to the Company and the Guarantors
occurring after the date of the most recent financial statements
included therein. Any references herein to the Preliminary Offering
Memorandum or the Offering Memorandum shall be deemed to include,
in each case, all amendments and supplements thereto. 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.
The Company understands that the
Initial Purchasers propose to make an offering of the Original
Notes (the “ Exempt Resales ”) only on
the terms and in the manner set forth in the Offering Memorandum,
as amended or supplemented, and Sections 4, 5 and 12 hereof as soon
as the Initial Purchasers deem advisable after this Agreement has
been executed and delivered, solely to (i) persons in the
United States whom the Initial Purchasers reasonably believe to be
qualified institutional buyers (“ QIBs ”)
as defined in Rule 144A under the Act, as such rule may be amended
from time to time (“ Rule 144A ”), in
transactions under Rule 144A, and (ii) in transactions under
Rule 144A and outside the United States to certain persons in
reliance on Regulation S (“ Regulation S
”) under the Act (each, a “ Reg S
Investor ”). The QIBs and the Reg S Investors are
collectively referred to herein as the “ Eligible
Purchasers .” The Initial Purchasers will offer the
Original Notes to such Eligible Purchasers initially at a price
equal to [100]% of the principal amount thereof. Such price may be
changed at any time without notice.
The payment of principal of, premium
and liquidated damages, if any, and interest on the Original Notes
and the Exchange Notes will be fully and unconditionally guaranteed
on a senior/subordinated basis, jointly and severally by
(i) the Company’s sole stockholder VS Holdings, Inc.
(the “ Parent ”), (ii) the
Company’s subsidiary listed on Schedule A hereto (the “
Subsidiary ”), and (iii) any subsidiary of
the Company formed or acquired after the Closing Date that executes
an additional guarantee in accordance with the terms of the
Indenture, and respective successors and assigns of the
subsidiaries of the Company referred to in (i), (ii) and
(iii) above (collectively, the “
Guarantors ”), pursuant to their guarantees
(the “ Guarantees ”).
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The Original Notes and the Guarantees attached
thereto are herein collectively referred to as the “
Securities ”; and the Exchange Notes and the
Guarantees attached thereto are herein collectively referred to as
the “ Exchange Securities .” The Company,
the Parent and the Subsidiary are herein collectively referred to
as the “ Issuers. ” This Agreement, the
Notes, the Guarantees, the Indenture and the Registration Rights
Agreement are hereinafter referred to collectively as the “
Offering Documents .” Capitalized terms used
herein and not otherwise defined shall have the meanings assigned
to such terms in the Indenture.
Concurrently with the closing of the
offering of the Notes, the Issuers will enter into a new senior
secured credit facility, to be dated as of November 15, 2005,
in an aggregate of up to $50,000,000 with Wachovia Bank, National
Association, (in its capacity as agent under the new senior secured
credit facility, the “ First Lien Collateral
Agent ”) and a syndicate of other financial
institutions (as the same may be amended, modified, supplemented or
restated from time to time, the “ Credit
Facility ”).
The Issuers have agreed to secure
the Notes and the Guarantees of the Securities by second priority
security interests granted to Wilmington Trust Company, as the
collateral agent (the “ Collateral Agent
”) for the benefit of the Trustee and the holders of the
Notes and any additional securities issued pursuant to the
Indenture on all of the personal property of the Issuers, whether
tangible or intangible (the “ Collatera
l”), subject to certain exceptions set forth in the Indenture
and the Security Agreement (as defined below). Such second priority
security interests will be evidenced by the security agreement to
be dated as of November 15, 2005, among the Issuers and the
Collateral Agent (the “ Security Agreement
”); the intercreditor agreement to be dated as of
November 15, 2005, among the Issuers, the Guarantors, the
Collateral Agent and the First Lien Collateral Agent (the “
Intercreditor Agreement ”); the collateral
agency agreement to be dated as of November 15, 2005, among
the Issuers, the Trustee and the Collateral Agent (the “
Collateral Agency Agreement ”); and any account
control agreements to which any of the Issuers are a party that are
in effect at the Closing Date (as defined below) (such agreements,
together with the Security Agreement, the Intercreditor Agreement
and the Collateral Agency Agreement, the “ Security
Documents ”).
2. Representations and Warranties
of the Company and the Guarantors . The Issuers, jointly and
severally, represent and warrant to the Initial Purchasers
that:
(a) The Preliminary Offering
Memorandum as of its date does not, and the Offering Memorandum, as
of its date and as of the Closing Date, does not and will not, and
any supplement or amendment to them will not, contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein not misleading,
except that the representations and warranties contained in this
paragraph shall not apply to statements in or omissions from the
Preliminary Offering Memorandum and the Offering Memorandum (or any
supplement or amendment thereto) made in reliance upon and in
conformity with information relating to the Initial Purchasers
furnished to the Company and the Guarantors in writing by the
Initial Purchasers expressly for use therein. The Offering
Memorandum and any amendment or supplement thereto complied or will
comply in all material respects with subsection (d)(4) of Rule
144A.
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(b) The Preliminary Offering
Memorandum and the Offering Memorandum have been or will be
prepared by the Company for use by the Initial Purchasers in
connection with the Offering. No order or decree preventing the use
of the Preliminary Offering Memorandum or the Offering Memorandum,
or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject
to the registration requirements of the Act, has been issued and no
proceeding for that purpose has commenced or is pending or, to the
knowledge of the Company, is contemplated.
(c) Subsequent to the respective
dates as of which information is given in the Offering Memorandum
(or, if the Offering Memorandum is not in existence, the most
recent Preliminary Offering Memorandum), except as disclosed in the
Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering Memorandum), the
Company has not declared, paid or made any dividends or other
distributions of any kind on or in respect of its capital stock and
there has been no material adverse change or any development
involving a prospective material adverse change, in the capital
stock or the long-term debt, or material increase in the short-term
debt, of the Company or any Subsidiary from that set forth in the
Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering Memorandum),
whether or not arising from transactions in the ordinary course of
business, in or affecting (i) the business, condition
(financial or otherwise), results of operations,
stockholders’ equity, properties or prospects of the Company
and the Subsidiary, taken as a whole; (ii) the ability of the
Company to consummate the Offering or any of the other transactions
contemplated by the Offering Documents. Since the date of the
latest balance sheet included in the Offering Memorandum (or, if
the Offering Memorandum is not in existence, the most recent
Preliminary Offering Memorandum), neither the Company nor any
Subsidiary has incurred or undertaken any liability or obligation,
whether direct or indirect, liquidated or contingent, matured or
unmatured, or entered into any transaction, including any
acquisition or disposition of any business or asset, which is
material to the Company and the Subsidiary, taken as a whole,
except for liabilities, obligations and transactions which are
disclosed in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the most recent Preliminary
Offering Memorandum).
(d) Each of the Issuers has been
duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each
of the Company and the Subsidiary has all requisite power and
authority to carry on its business as it is currently being
conducted and as described in the Offering Memorandum (or, if the
Offering Memorandum is not in existence, the most recent
Preliminary Offering Memorandum), and to own, lease and operate its
respective properties. Each of the Issuers is duly qualified and
authorized to do business and is in good standing as a foreign
corporation in each jurisdiction in which the character or location
of its properties (owned, leased or licensed) or the nature or
conduct of its business requires such qualification, except to the
extent such failures to be so qualified or in good standing in the
aggregate could not reasonably be expected to have a material
adverse effect on (A) the properties, business, results of
operations, condition (financial or otherwise), stockholders’
equity, properties or prospects of the Company and the Subsidiary,
taken as a whole; (B) the long-term debt or capital stock of
the Issuers; (C) the issuance or marketability of the Notes or
(D) the validity of this Agreement or any other Offering
Document or the transactions described in the Offering Memorandum
under the caption “Use of Proceeds” (any such effect
being a “ Material Adverse Effect
”).
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(e) The Subsidiary listed on
Exhibit B is the only subsidiary of the Company within
the meaning of Rule 405 under the Act. Except for the Subsidiary,
the Company holds no ownership or other interest, nominal or
beneficial, direct or indirect, in any corporation, partnership,
joint venture or other business entity. All of the issued shares of
capital stock of or other ownership interests in the Subsidiary
have been duly and validly authorized and issued and are fully paid
and non-assessable and, except as disclosed in the Offering
Memorandum, are owned, directly or indirectly, by the Company, free
and clear of any lien, charge, mortgage, pledge, security interest,
claim, limitation on voting rights, equity, trust or other
encumbrance, preferential arrangement, defect or restriction of any
kind whatsoever (any “ Lien
”).
(f) Except as disclosed in the
Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering Memorandum),
neither the Company nor the Subsidiary has outstanding
subscriptions, rights, warrants, calls, commitments of sale or
options to acquire, or any preemptive rights or other rights to
subscribe for or to purchase, or any contracts or commitments to
issue or sell, or instruments convertible into or exchangeable for,
any capital stock or other equity interest in, the Company or the
Subsidiary (any “ Relevant Security ”).
The authorized, issued and outstanding capital stock of the Parent
is as set forth in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the most recent Preliminary
Offering Memorandum) under the caption “Capitalization”
and, after giving effect to the Offering, will be as set forth in
the column headed “As Adjusted” under the caption
“Capitalization.” All of the issued and outstanding
shares of capital stock of the Company are fully paid and
non-assessable and have been duly and validly authorized and
issued, in compliance with all applicable state, federal and
foreign securities laws and not in violation of or subject to any
preemptive or similar right that does or will entitle any person,
upon the issuance or sale of any security, to acquire from the
Company or the Subsidiary any Relevant Security.
(g) When the Original Notes and the
Guarantees thereof are issued and delivered pursuant to this
Agreement, no securities of the Company or the Subsidiary or any
Guarantor are (i) of the same class (within the meaning of
Rule 144A under the Act) as the Original Notes or Guarantee thereof
and (ii) listed on a national securities exchange registered
under Section 6 of the Securities Exchange Act of 1934, as
amended (together with the rules and regulations of the Commission
promulgated thereunder, the “ Exchange Act
”); or quoted in a United States automated inter-dealer
quotation system.
(h) Each of the Issuers has the
required corporate power and authority to execute, deliver and
perform its obligations under this Agreement and each of the other
Offering Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby, including, without
limitation, the corporate power and authority to issue, sell and
deliver the Notes and to issue and deliver the related Guarantees
as provided herein and therein.
(i) The Original Notes have been
duly and validly authorized by the Company for issuance and sale to
the Initial Purchasers pursuant to this Agreement and, when
executed by the Company and authenticated by the Trustee in
accordance with the provisions of the Indenture and when delivered
to and paid for by the Initial Purchasers in accordance with the
terms hereof and thereof, will have been duly and validly executed,
issued and delivered and will constitute valid and legally binding
obligations of the Company, entitled to the benefits of
the
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Indenture and enforceable against
the Company in accordance with their terms, except that the
enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors’
rights generally, (ii) general principles of equity
(regardless of whether such enforcement is considered in a
proceeding at law or in equity) and (iii) except as rights to
indemnity and contribution hereunder may be limited by federal and
state securities laws ((i), (ii) and (iii) are referred
to herein collectively as the “ Enforceability
Exceptions ”). The Original Notes will conform in all
material respects to the descriptions thereof in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the
most recent Preliminary Offering Memorandum). At the Closing Date,
the Original Notes are in the form contemplated by the
Indenture.
(j) The Guarantees of the Original
Notes have been duly and validly authorized by each of the
Guarantors for issuance to the Initial Purchasers pursuant to this
Agreement and, when executed by the respective Guarantors in
accordance with the provisions of the Indenture and when delivered
to the Initial Purchasers in accordance with the terms hereof and
thereof, and when the Original Notes have been issued 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 hereof and thereof, will constitute valid
and legally binding obligations of each of the Guarantors,
enforceable against each of them in accordance with their terms and
entitled to the benefits of the Indenture, except that the
enforcement thereof may be limited by the Enforceability
Exceptions. The Guarantees of the Original Notes will conform in
all material respects to the descriptions thereof in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the
most recent Preliminary Offering Memorandum).
(k) The Exchange Notes have been
duly and validly authorized for issuance by the Company and, when
issued and executed by the Company and authenticated by the Trustee
in accordance with the terms of the Exchange Offer and the
Indenture, will constitute valid and legally binding obligations of
the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms,
except that the enforcement thereof may be limited by the
Enforceability Exceptions. Upon exchange of the Original Notes in
accordance with their terms and the Indenture the Exchange Notes
will be issued free of statutory and contractual preemptive rights,
will be duly and validly issued and fully paid and non-assessable,
have been issued in compliance with all applicable state, federal
and foreign securities laws, have not been issued in violation of
or subject to any preemptive or similar right that does or will
entitle any person to acquire any Relevant Security from the
Company or any Subsidiary upon issuance or sale of the Original
Notes or the Exchange Notes. The Exchange Notes conform in all
material respects to the descriptions thereof in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the
most recent Preliminary Offering Memorandum).
(l) The Guarantees of the Exchange
Notes have been duly and validly authorized by each of the
Guarantors and, when executed by the respective Guarantors and when
delivered in accordance with the provisions of the Indenture and
when the Exchange Notes have been issued and authenticated in
accordance with the terms of the Exchange Offer and the Indenture,
will constitute valid and legally binding obligations of each of
the Guarantors, enforceable against each of them in accordance with
their terms and entitled to the benefits of the Indenture, except
that the enforcement thereof may be limited by the Enforceability
Exceptions.
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The Guarantees of the Exchange Notes
conform in all material respects to the descriptions thereof in the
Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering
Memorandum)
(m) The Indenture has been duly and
validly authorized by the Issuers and meets the requirements for
qualification under the Trust Indenture Act of 1939, as amended
(the “ Trust Indenture Act ”), and the
rules and regulations of the Commission applicable to an indenture
so qualified, and, when duly executed and delivered by the Company
and each Guarantor (assuming the due authorization, execution and
delivery by the Trustee, will constitute a valid and legally
binding agreement of the Issuers, enforceable against each of them
in accordance with its terms, except that the enforcement thereof
may be limited by the Enforceability Exceptions. The Indenture
conforms in all material respects to the description thereof in the
Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering
Memorandum).
(n) The Registration Rights
Agreement has been duly and validly authorized by the Issuers and
when duly executed and delivered by the Issuers (assuming the due
authorization, execution and delivery by the Initial Purchasers),
will constitute a valid and legally binding obligation of the
Issuers, enforceable against each of them in accordance with its
terms except that the enforcement thereof may be limited by the
Enforceability Exceptions. The Registration Rights Agreement
conforms in all material respects to the description thereof in the
Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering
Memorandum).
(o) Each of the Security Documents
has been duly and validly authorized by the Issuers. When each of
the Security Documents have been duly executed and delivered, each
of the Security Documents will constitute a valid and binding
agreement of the Issuers, enforceable against the each of them in
accordance with their respective terms, except as enforcement
thereof may be limited by the Enforceability Exceptions. The
Security Documents conform in all material respects to the
descriptions thereof in the Offering Memorandum (or, if the
Offering Memorandum is not in existence, the most recent
Preliminary Offering Memorandum).
(p) When each of the Security
Documents has been duly executed and delivered, the Security
Documents will be effective to grant and create, in favor of the
Collateral Agent, for the benefit of each present and future holder
of the Securities, a valid and enforceable security interest in the
Collateral described therein and proceeds and products thereof; and
(i) when financing statements and other filings in appropriate
form are filed in the offices as specified in the Security
Agreement and (ii) upon the taking of possession or control by
the Collateral Agent of any such Collateral with respect to which a
security interest may be perfected only by possession or control,
the security interest created by the Security Agreement, together
with the Collateral Agency Agreement, shall constitute a fully
perfected security interest on, and security interest in all right,
title and interest of the grantors thereunder in such Collateral
(other than such Collateral in which a security interest cannot be
perfected under the UCC (as defined below) as in effect at the
relevant time in the relevant jurisdiction), in each case subject
to no Liens (as defined in the Indenture) other than Permitted
Liens (as defined in the Indenture) (and subject as to priority, to
no Liens other than Permitted Prior Liens (as defined in the
Indenture)).
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(q) At the Closing Date, the
representations and warranties contained in the Security Documents
will be true and correct in all material respects as if made as of
the Closing Date.
(r) Each of the Issuers is a
“registered organization” (as defined in Article 9 of
the Uniform Commercial Code (the “UCC”) as in effect in
the state of New York and the states in which each of the Issuers
is organized) under the law of the jurisdiction in which it is
organized, and at the Closing Date the Issuers will have made
provision for the prompt perfection of all security interests
granted under the Security Agreement in Collateral consisting of
personal property or fixtures to the extent such security interests
may be perfected by filing pursuant to the filing of financing
statements in connection with the execution of the Security
Agreement.
(s) As of the Closing Date each of
the Issuers will own or otherwise have the rights it purports to
have in the Collateral securing the Notes free and clear of all
Liens (other than Permitted Liens (as defined in the Indenture)),
and no financing statements in respect of Collateral securing the
Securities will be on file in favor of any person other than those
in respect of Permitted Liens and those for which duly authorized
termination statements are delivered to the Collateral Agent or the
First Lien Collateral Agent at the Closing Date.
(t) This Agreement has been duly and
validly authorized, executed and delivered by each
Issuer.
(u) None of the Issuers is
(i) in violation of its certificate of incorporation or
bylaws, or other organizational documents, (ii) in default,
and no event has occurred which, with notice or lapse of time or
both or otherwise, would constitute a default under, or result in
the creation or imposition of any Lien upon, any of its property or
assets pursuant to, any bond, debenture, note, indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties or assets is subject, or (iii) in violation in any
material respect of any law, rule, regulation, ordinance,
directive, judgment, decree or order of any judicial, regulatory or
other legal or governmental agency or body (including, without
limitation, environmental laws, statutes, ordinances, rules,
regulations, judgments or court decrees), foreign or domestic,
except (in the case clauses (ii) and (iii) above)
violations or defaults that could not (individually or in the
aggregate) reasonably be expected to have a Material Adverse Effect
and except (in the case of clause (ii) alone) for any Lien
disclosed in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the most recent Preliminary
Offering Memorandum).
(v) None of (i) the execution,
delivery, and performance by the Company and each Guarantor of this
Agreement and consummation of the transactions contemplated by the
Offering Documents or the Security Documents to which each of them,
respectively, is a party, (ii) the issuance and sale of the
Original Notes, the issuance of the Exchange Notes, and the
issuance of the Guarantees, or (iii) the consummation by the
Company of the transactions described in the Offering Memorandum
(or, if the Offering Memorandum is not in existence, the most
recent Preliminary Offering Memorandum) under the caption
“Use of Proceeds,” (A) violates or will violate,
conflicts with or will conflict with, requires or will require
consent under, or results or will result in a breach of any of the
terms and provisions of, or constitutes or
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will constitute a default (or an
event which with notice or lapse of time, or both, would constitute
a default) under, or results or will result in the creation or
imposition of any Lien other than a Permitted Lien (as defined in
the Indenture) upon any properties or assets of the Company or any
Subsidiary, or an acceleration of any indebtedness of the Company
or any Subsidiary pursuant to (1) any provision of the
certificate of incorporation or other organizational document of
the Company or the Subsidiary, (2) any bond, debenture, note,
indenture, mortgage, deed of trust, loan agreement or other
agreement, instrument, franchise, license or permit to which any
Issuer is a party or by which the Company or the Subsidiary or
their respective properties, operations or assets is or may be
bound, (3) or any statute, law, ordinance, rule or regulation
applicable to any Issuer or any of their properties or assets, or
(4) any directive, judgment, decree or order of any judicial,
regulatory or other legal or governmental agency or body, domestic
or foreign, except (in the case of clauses (2), (3) and
(4) above) as could not reasonably be expected to have a
Material Adverse Effect.
(w) Each of the Issuers has all
necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses, filings and permits of,
with and from all judicial, regulatory and other legal or
governmental agencies, bodies or administrative agencies, and all
third parties, foreign and domestic (collectively, the “
Consents ”), to own, lease and operate its
properties and conduct its business as it is now being conducted
and as disclosed in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the most recent Preliminary
Offering Memorandum), and each such Consent is valid and in full
force and effect, and none of the Issuers has received notice of
any investigation or proceedings which results in or, if decided
adversely to any Issuer, could reasonably be expected to result in,
the revocation of, or imposition of a materially burdensome
restriction on, any Consent. Each of the Company and the
Subsidiaries is in compliance with all applicable laws, rules,
regulations, ordinances, directives, judgments, decrees and orders,
foreign and domestic, except where failure to be in compliance
could not reasonably be expected to have a Material Adverse Effect.
No Consent contains a materially burdensome restriction not
adequately disclosed in the Offering Memorandum (or, if the
Offering Memorandum is not in existence, the most recent
Preliminary Offering Memorandum).
(x) No Consent of, with or from a
judicial, regulatory or other legal or governmental agency or body
or any third party, foreign or domestic, other than with respect to
state or foreign securities or blue sky laws or the by-laws and
rules of the National Association of Securities Dealers, Inc. is
required for (i) the execution, delivery and performance by
each of the Company and the Guarantors of this Agreement or
consummation of the Offering, the Exchange Offer and the other
transactions contemplated by the Offering Documents to which each
of them, respectively, is a party or (ii) the issuance, sale
and delivery of the Original Notes (and the issuance of the
Exchange Notes in connection with the Exchange Offer), and the
issuance of the Guarantees, except such Consents as have been or
will be obtained and made on or prior to the Closing Date (or, in
the case of the Registration Rights Agreement, will be obtained and
made under the Act, the Trust Indenture Act, and state securities
or blue sky laws and regulations), that the Commission must declare
the Registration Statement effective pursuant to the Registration
Rights Agreement and except to the extent that the failure to
obtain such Consent could not be reasonably expected to have a
Material Adverse Effect.
9
(y) Except as disclosed in the
Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering Memorandum), there
is (i) no judicial, regulatory, arbitral or other legal or
governmental proceeding or other litigation or arbitration before
or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, pending to which any of the Issuers
are or may be a party or of which the business, property,
operations or assets of the Company or the Subsidiary is or may be
subject, (ii) no statute, rule, regulation or order that has
been enacted, adopted or issued by any governmental agency or that
has been proposed by any governmental body, and (iii) no
injunction, restraining order or order of any nature by a federal
or state court or foreign court of competent jurisdiction to which
any of the Issuers are or may be subject or to which the business,
property, operations or assets of the Company or the Subsidiary is
or may be subject, that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; to the
best of the Company’s knowledge, no such proceeding,
litigation or arbitration is threatened or contemplated; and the
defense of all such proceedings, litigation and arbitration against
or involving any of the Issuers could not reasonably be expected to
have a Material Adverse Effect.
(z) There exists as of the date
hereof (after giving effect to the transactions contemplated by
each of the Offering Documents) no event or condition that would
constitute a default or an event of default (in each case as
defined in each of the Offering Documents) under any of the
Offering Documents that would result in a Material Adverse Effect
or materially adversely affect the ability of the Company to
consummate the Offering and the other transactions contemplated by
the Offering Documents, including, without limitation, the Exchange
Offer.
(aa) No action has been taken that
prevents the issuance of the Notes or the Guarantees or prevents or
suspends the use of the Offering Memorandum; to the Company’s
knowledge, no injunction, restraining order or order of any nature
by a federal or state court of competent jurisdiction has been
issued that prevents the issuance of the Notes or the Guarantees or
prevents or suspends the sale of the Original Notes or the
Guarantees in any jurisdiction referred to in Section 2(e)
hereof; and every request of any securities authority or agency of
any jurisdiction for additional information has been complied with
in all material respects.
(bb) There is (i) no
significant unfair labor practice complaint pending against the
Issuers nor, to the knowledge of the Issuers, threatened against
any of them, before the National Labor Relations Board, any state
or local labor relations board or any foreign labor relations
board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining
agreement is so pending against the Issuers or, to the knowledge of
the Issuers, threatened against any of them, (ii) no
significant strike, labor dispute, slowdown, or stoppage pending
against the Issuers nor, to the knowledge of the Issuers,
threatened against any of them, (iii) no labor disturbance by
the employees of the Issuers or, to the knowledge of the Issuers,
no such disturbance is imminent and none of the Issuers is aware of
any existing or imminent labor disturbances by the employees of any
of their respective, principal suppliers, manufacturers, customers
or contractors that, in any such case (individually or in the
aggregate), could reasonably be expected to have a Material Adverse
Effect, and (iv) no union representation question existing (to
the knowledge of the Issuers) with respect to the employees of the
Issuers. To the knowledge of the Issuers, no collective bargaining
organizing activities are taking place with respect to the Issuers.
None of the Issuers has violated (i) any
10
federal, state or local law or
foreign law relating to discrimination in hiring, promotion or pay
of employees, (ii) any applicable wage or hour laws, or
(iii) any provision of the Employee Retirement Income Security
Act of 1974, as amended, including the rules, regulations and
published interpretations thereunder (“ ERISA
”), except those violations that could not reasonably be
expected to have a Material Adverse Effect.
(cc) No “prohibited
transaction” (as defined in either Section 406 of ERISA
or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the “ Code
”)), “accumulated funding deficiency” (as defined
in Section 302 of ERISA) or other event of the kind described
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 for which the Issuers have any liability that would,
in the aggregate, reasonably be expected to have a Material Adverse
Effect; except as would not reasonably be expected to have a
Material Adverse Effect, each employee benefit plan for which the
Issuers have any liability is in material compliance with
applicable law, including (without limitation) ERISA and the Code;
the Company has not incurred and does not expect to incur liability
under Title IV of ERISA with respect to the termination of, or
withdrawal from any “pension plan,” except as would not
reasonably be expected to have a Material Adverse Effect, and each
employee benefit plan for which the Company would have any
liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure
to act, which could cause the loss of such qualification. The
execution and delivery of this Agreement, the other Offering
Documents and the sale of the Securities to be purchased by
Eligible Purchasers will not involve any prohibited transaction
within the meaning of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986. The
representation made by the Company and the Guarantors in the
preceding sentence is made in reliance upon and subject to the
accuracy of, and compliance with, the representations and covenants
made or deemed made by Eligible Purchasers as set forth in the
Offering Memorandum under the caption “Notice to
Investors.”
(dd) There has been no storage,
generation, transportation, handling, treatment, disposal,
discharge, emission or other release of any kind of toxic or other
wastes or other hazardous substances by, due to, or caused by the
Company or the Subsidiary (or, to the Company’s knowledge,
any other entity for whose acts or omissions the Company is or may
be liable) upon any other property now or previously owned or
leased by the Company or the Subsidiary, or upon any other
property, which would be a violation of or give rise to any
liability under any applicable law, rule, regulation, order,
judgment, decree or permit relating to the protection of human
health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants (“ Environmental
Law ”), except for violations and liabilities which,
in the aggregate, could not be reasonably expected to have a
Material Adverse Effect. 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 the Subsidiary has knowledge. Neither the Company nor
the Subsidiary has agreed to assume, undertake or provide
indemnification for any liability of any other person under any
Environmental Law, including any obligation for cleanup or remedial
action, except for violations and liabilities which, in the
aggregate, could not be reasonably expected to have a Material
Adverse Effect. There is no pending or, to best knowledge of the
Company and the Subsidiary, threatened administrative,
11
regulatory or judicial action, claim
or notice of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company
or the Subsidiary except for actions, claims or notices of
noncompliance or violation, investigation or proceedings which, in
the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
(ee) There is no alleged liability,
or to the knowledge of the Company and the Guarantors, potential
liability (including, without limitation, alleged or potential
liability or investigatory costs, cleanup costs, governmental
response costs, natural resource damages, property damages,
personal injuries or penalties) of the Company or the Subsidiary
arising out of, based on or resulting from (i) the presence or
release into the environment of any Hazardous Material (as defined)
at any location, whether or not owned by the Company or the
Subsidiary, as the case may be, or (ii) any violation or
alleged violation of any Environmental Law, other than as disclosed
in the Offering Memorandum (or, if the Offering Memorandum is not
in existence, the most recent Preliminary Offering Memorandum)
except for any liabilities which, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. The term
“ Hazardous Material ” means (i) any
“hazardous substance” as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, (ii) any “hazardous waste” as defined by
the Resource Conservation and Recovery Act, as amended,
(iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl, and (v) any pollutant or contaminant
or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any other law
relating to protection of human health or the environment or
imposing liability or standards of conduct concerning any such
chemical material, waste or substance.
(ff) The Company and the Subsidiary
have such permits, licenses, franchises and authorizations of
governmental or regulatory authorities (“
permits ”), including, without limitation,
under any applicable Environmental Laws, as are necessary to own,
lease and operate its respective properties and to conduct its
businesses, except where the failure to have such permits could not
reasonably be expected to have a Material Adverse Effect, and the
Company the Subsidiary have fulfilled and performed all of their
obligations with respect to such permits and 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.
(gg) The Company and the Subsidiary
own or lease all such properties as are necessary to the conduct of
its business as presently operated as described in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the
Preliminary Offering Memorandum). The Company and the Subsidiary
have (i) good and marketable title to all real property and
good and marketable title to all personal property owned by them,
in each case free and clear of all Liens except for Permitted Liens
and except such as are described in the Offering Memorandum (or, if
the Offering Memorandum is not in existence, the most recent
Preliminary Offering Memorandum) or such as do not (individually or
in the aggregate) materially affect the value of such property or
interfere with the use made or proposed to be made of such property
by the Company and the Subsidiaries) and (ii) peaceful and
undisturbed possession of any real property and buildings held
under lease or sublease by the Company and the Subsidiaries and
such leased or subleased real property and buildings are held by
them under valid, subsisting and enforceable leases and no default
exists thereunder, with such exceptions as are not material
to,
12
and do not interfere with, the use
made and proposed to be made of such property and buildings by the
Company and the Subsidiaries. Neither the Company nor the
Subsidiary has received any notice of any claim adverse to its
ownership of any real or personal property or of any claim against
the continued possession of any real property, whether owned or
held under lease or sublease by the Company or any Subsidiary,
except as would not reasonably be expected to have a Material
Adverse Effect.
(hh) The Company and the Subsidiary
(i) own, possess or could obtain on commercially reasonable
terms adequate right to use all patents, patent applications,
patent rights, licenses, formulae, customer lists, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information,
software, systems or procedures), trademarks, service marks, trade
names, trademark registrations, service mark registrations,
computer programs, technical data and information, and know-how and
other intellectual property (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures, the “ Intellectual
Property ”) necessary for the conduct of the business
as presently being conducted and as described in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the
Preliminary Offering Memorandum) and (ii) have not received
any notice of any claim that the conduct of the business conflicts
with any such right of others, except as disclosed in the Offering
Memorandum and except as would not be reasonably expected to have a
Material Adverse Effect.
(ii) Each of the Company and the
Subsidiary has accurately prepared and timely filed all tax returns
required to be filed by it and has paid or made provision for the
payment of all taxes, assessments, governmental or other similar
charges shown there to be due, including without limitation, all
sales and use taxes and all taxes that the Company or any
Subsidiary is obligated to withhold from amounts owing to
employees, creditors and third parties, with respect to the periods
covered by such tax returns (whether or not such amounts are shown
as due on any tax return), except where the failure to file or pay
would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. No deficiency assessment with respect to a
proposed adjustment of the Company’s or the
Subsidiary’s federal, state, local or foreign taxes is
pending or, to the knowledge of the Company and the Guarantors,
threatened, except for such deficiencies that would not, in the
aggregate, reasonably be expected to have a Material Adverse
Effect. There are no material proposed additional tax assessments
against the Company or the Subsidiary, or the assets or property of
the Company or the Subsidiary. The accruals and reserves on the
books and records of the Company and the Subsidiary in respect of
tax liabilities reasonably expected for any taxable period not
finally determined are reasonably adequate to meet any assessments
and related liabilities for any such period and, since
December 31, 2004, the Company and the Subsidiary have not
incurred any liability for taxes other than in the ordinary course
of its business. There is no material tax Lien, whether imposed by
any federal, state, foreign or other taxing authority, outstanding
against the assets, properties or business of the Company or the
Subsidiary.
(jj) The Company and the Subsidiary
maintain a system of internal accounting and other controls
sufficient to provide reasonable assurances 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 in all
material
13
respects with generally accepted
accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and
(iv) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any material differences.
(kk) The Company and the Subsidiary
maintain insurance in such amounts and covering such risks as the
Company reasonably considers adequate for the conduct of its
business and the value of its properties and as the Company
believes to be reasonable for companies engaged in similar
businesses in similar industries, all of which insurance is in full
force and effect, except where the failure to maintain such
insurance could not reasonably be expected to have a Material
Adverse Effect. There are no material claims by the Company or the
Subsidiary under any such policy or instrument as to which any
insurance company is denying liability or defending under a
reservation of rights clause. Except as disclosed in the Offering
Memorandum, the Company reasonably believes that it will be able to
renew its existing insurance as and when such coverage expires or
will be able to obtain replacement insurance adequate for the
conduct of the business and the value of its properties at a cost
that could not reasonably be expected to have a Material Adverse
Effect. Except as disclosed in the Offering Memorandum (or, if the
Offering Memorandum is not in existence, the Preliminary Offering
Memorandum), there are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for
the benefit of any of the officers or directors of the Company.
Except as disclosed in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the Preliminary Offering
Memorandum) the Company has not, directly or indirectly, including
through the Subsidiary, extended or maintained credit, arranged for
the extension of credit, or renewed an extension of credit, in the
form of a personal loan to or for any director or executive officer
of the Company.
(ll) The Company and the Subsidiary
are not now and, after sale of the Original Notes, as contemplated
hereunder and application of the net proceeds of such sale as
described in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the Preliminary Offering
Memorandum) under the caption “Use of Proceeds,” will
not be, an “investment company” or a company
“controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended (the “ Investment Company Act
”).
(mm) Except as described in the
Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering Memorandum), no
holder of any Relevant Security has any rights to require
registration of any Relevant Security by reason of the execution by
the Company or any of the Guarantors of this Agreement or any other
Offering Document to which it is a party or the consummation by the
Company or any of the Guarantors of the transactions contemplated
hereby and thereby, or as part or on account of, or otherwise in
connection with the Offering and any of the other transa
