Exhibit 4.3
EXECUTION COPY
MSC-Medical Services
Company
MCP-MSC Acquisition,
Inc.
$150,000,000
Senior Secured Floating Rate Notes due
2011
PURCHASE AGREEMENT
dated June 15, 2005
Banc of America Securities
LLC
J.P. Morgan Securities
Inc.
PURCHASE AGREEMENT
June 15, 2005
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
As Initial Purchasers
c/o Banc of America Securities LLC
9 West 57 th Street
New York, New York 10019
Ladies and Gentlemen:
Introductory.
MSC-Medical Services Company, a
Florida corporation (the “Company”), proposes to issue
and sell to the several Initial Purchasers named in Schedule A
hereto (the “Initial Purchasers”), acting severally and
not jointly, the respective amounts set forth in such
Schedule A of $150,000,000 aggregate principal amount of the
Company’s Senior Secured Floating Rate Notes due 2011 (the
“Notes”). Banc of America Securities LLC and J.P.
Morgan Securities Inc. have agreed to act as the Initial Purchasers
in connection with the offering and sale of the Notes.
The Notes will be issued pursuant to
an indenture, to be dated on or about June 21, 2005 (the
“Indenture”), between the Company, MCP-MSC Acquisition,
Inc., the parent corporation of the Company, as guarantor (the
“Holdings”) and U.S. Bank National Association, as
trustee (the “Trustee”). Notes issued in book-entry
form will be issued in the name of Cede & Co., as nominee
of The Depository Trust Company (the “Depository”)
pursuant to a letter of representations, to be dated on or before
the Closing Date (as defined in Section 2) (the “DTC
Agreement”), among the Company, the Trustee and the
Depository.
The holders of the Notes will be
entitled to the benefits of a registration rights agreement, to be
dated on or about June 21, 2005 (the “Registration
Rights Agreement”), among the Company, Holdings and the
Initial Purchasers, substantially in the form of Exhibit C
hereto, pursuant to which the Company and Holdings will agree to
file on or prior to March 31, 2006 a registration statement
with the Securities and Exchange Commission (the
“Commission”) registering the Exchange Securities (as
defined below) under the Securities Act of 1933, as amended (the
“Securities Act”, which term, as used herein, includes
the rules and regulations of the Commission promulgated
thereunder).
The payment of principal of,
premium, interest and, Additional Interest (as defined in the
Registration Rights Purchase Agreement) if any, on the Notes and
the Exchange Notes (as defined below) will be fully and
unconditionally guaranteed on a senior secured basis by
(i) Holdings, the direct parent corporation of the Company,
and (ii) any domestic 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 their
respective successors and assigns (each guarantee described in
clause (i) or (ii) being a “Guarantee”). The
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”.
Pursuant to the security and pledge
documents to be dated as of the Closing Date (together, the
“Security Documents”) each among the Company, Holdings,
U.S. Bank National Association as collateral agent (the
“Collateral Agent”), and the other parties thereto, the
Securities are secured by a lien on substantially all of the
Company’s and Holdings’ existing and future tangible
and intangible property and assets, as well as 100% of the capital
stock of the Company and each domestic subsidiary of the Company
and Holdings and 65% of the capital stock of each direct foreign
subsidiary of the Company and Holdings, as so described in the
Security Documents, subject to the limitations specified therein
(the “Collateral”). Pursuant to an intercreditor
agreement among the Collateral Agent, the administrative agent
under the Revolving Credit Agreement (as defined below), the
Company and Holdings, the lien created by the Security Documents is
subordinated in rank to the lien on the Collateral created by the
security agreements entered into by the Company, Holdings and such
administrative agent to secure the Company’s and Holdings
obligations under the Revolving Credit Agreement.
The Securities are being issued and
sold in connection with the refinancing (the
“Refinancing”) of a portion of the Company’s
indebtedness incurred in connection with the acquisition of the
Company by investment funds affiliated with Monitor Clipper
Partners, LLC, certain institutional investors and members of the
Company’s management, which was completed on March 31,
2005.
The Company understands that the
Initial Purchasers propose to make an offering of the Securities on
the terms and in the manner set forth herein and in the Offering
Memorandum (as defined below) and agrees that the Initial
Purchasers may resell, subject to the conditions set forth herein,
all or a portion of the Securities to purchasers (the
“Subsequent Purchasers”) at any time after the date of
this Agreement. The Securities are to be offered and sold to or
through the Initial Purchasers without being registered with the
Commission under the Securities Act, in reliance upon exemptions
therefrom. The terms of the Securities and the Indenture will
require that investors that acquire Securities expressly agree that
Securities may only be resold or otherwise transferred, after the
date hereof, if such Securities are registered for sale under the
Securities Act or if an exemption from the registration
requirements of the Securities Act is available (including the
exemptions afforded by Rule 144A
(“Rule 144A”) or Regulation S
(“Regulation S”) thereunder).
The Company has prepared and
delivered to each Initial Purchaser copies of a Preliminary
Offering Memorandum, dated June 3, 2005 (the
“Preliminary Offering Memorandum”), and has prepared
and will deliver to each Initial Purchaser, copies of
the
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Offering Memorandum, describing the terms of the
Securities, each for use by such Initial Purchaser in connection
with its solicitation of offers to purchase the Securities. As used
herein, the “Offering Memorandum” shall mean, with
respect to any date or time referred to in this Agreement, the
Company’s Offering Memorandum, dated June 15, 2005,
including amendments or supplements thereto and any exhibits
thereto, in the most recent form that has been prepared and
delivered by the Company to the Initial Purchasers in connection
with their solicitation of offers to purchase the Securities.
Further, any reference to the Preliminary Offering Memorandum or
the Offering Memorandum shall be deemed to refer to and include any
Additional Issuer Information (as defined in Section 3)
furnished by the Company pursuant to Section 3.
The Company and Holdings hereby
confirm their agreements with the Initial Purchasers as
follows:
S ECTION 1. Representations and Warranties .
The Company and Holdings, jointly and severally, hereby represent,
warrant and covenant to each Initial Purchaser as
follows:
(a) No Registration Required.
Subject to compliance by the Initial Purchasers with the
representations and warranties set forth in Section 2 hereof
and with the procedures set forth in Section 7 hereof, it is
not necessary in connection with the offer, sale and delivery of
the Securities to the Initial Purchasers and to each Subsequent
Purchaser in the manner contemplated by this Agreement and the
Offering Memorandum to register the Securities under the Securities
Act or, until such time as the Exchange Securities are issued
pursuant to an effective registration statement, to qualify the
Indenture under the Trust Indenture Act of 1939 (the “Trust
Indenture Act,” which term, as used herein, includes the
rules and regulations of the Commission promulgated
thereunder).
(b) No Integration of Offerings
or General Solicitation. Neither the Company nor Holdings has,
directly or indirectly, solicited any offer to buy or offered to
sell, and will not, directly or indirectly, solicit any offer to
buy or offer to sell, in the United States or to any United States
citizen or resident, any security which is or would be integrated
with the sale of the Securities in a manner that would require the
Securities to be registered under the Securities Act.
None of the Company, Holdings, their
respective affiliates (as such term is defined in Rule 501
under the Securities Act (each, an “Affiliate”) or any
person acting on any of their behalf (other than the Initial
Purchasers, as to whom neither the Company nor Holdings makes any
representation or warranty) has engaged or will engage, in
connection with the offering of the Securities, in any form of
general solicitation or general advertising within the meaning of
Rule 502 under the Securities Act.
With respect to those Securities
sold in reliance upon Regulation S, (i) none of the
Company, Holdings, their respective Affiliates or any person acting
on any of their behalf (other than the Initial Purchasers, as to
whom neither the Company nor Holdings makes any representation or
warranty) has engaged or will engage in any directed selling
efforts within the meaning of Regulation S and (ii) each
of the Company, Holdings, each of their respective Affiliates and
any person acting on any of their behalf (other than the Initial
Purchasers, as to whom neither the
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Company nor Holdings makes any representation or
warranty) has complied and will comply with the offering
restrictions set forth in Regulation S.
(c) Eligibility for Resale Under
Rule 144A. The Securities, when issued, will be eligible
for resale pursuant to Rule 144A and will not be, at the
Closing Date, of the same class as securities listed on a national
securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”, which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder) or quoted in
a U.S. automated interdealer quotation system.
(d) The Offering Memorandum.
The Offering Memorandum does not, and at the Closing Date will not,
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided that this representation, warranty and
agreement shall not apply to statements in or omissions from the
Offering Memorandum made in reliance upon and in conformity with
information furnished to the Company in writing by any Initial
Purchaser through Banc of America Securities LLC expressly for use
in the Offering Memorandum. Each of the Preliminary Offering
Memorandum and the Offering Memorandum, as of its respective date,
contains all the information specified in, and meeting the
requirements of, Rule 144A(d)(4). Neither the Company nor
Holdings has distributed or will distribute, prior to the later of
the Closing Date and the completion of the Initial
Purchasers’ distribution of the Securities, any offering
material in connection with the offering and sale of the Securities
other than the Preliminary Offering Memorandum, the Offering
Memorandum or as otherwise agreed upon by the Initial
Purchasers.
(e) The Purchase Agreement.
This Agreement has been duly authorized, executed and delivered by
the Company and Holdings, and, assuming the due authorization,
execution and delivery thereof by the Initial Purchasers, is a
valid and binding agreement of, each of the Company and Holdings,
enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law or
considerations of public policy and except as the enforcement
hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles
and except as rights to indemnification under the Registration
Rights Agreement may be limited by applicable law or considerations
of public policy.
(f) The Registration Rights
Agreement. The Registration Rights Agreement has been duly
authorized and, at the Closing Date, will have been duly executed
and delivered by, and, assuming the due authorization, execution
and delivery by the Initial Purchasers, will be a valid and binding
agreement of, each of the Company and Holdings, enforceable in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies
of creditors or by general equitable principles and except as
rights to indemnification may be limited by applicable law or
considerations of public policy. Pursuant to the Registration
Rights Agreement, the Company will agree to file with the
Commission, under the circumstances set forth therein, (i) a
registration statement under the Securities Act relating to another
series of debt securities of the Company with terms substantially
identical to the Notes (the “Exchange Notes”) to be
offered in exchange for the Notes (the “Exchange
Offer”) and (ii) to the extent
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required by the Registration Rights Agreement, a
shelf registration statement pursuant to Rule 415 of the
Securities Act relating to the resale by certain holders of the
Notes, and in each case, to use its best efforts to cause such
registration statements to be declared effective.
(g) The DTC Agreement. At the
Closing Date, the DTC Agreement will have been duly authorized and
duly executed and delivered by, and, assuming due authorization,
execution and delivery thereof by the Depository, will be a valid
and binding agreement of, the Company, enforceable in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
(h) Authorization of the
Securities and the Exchange Securities. The Notes to be
purchased by the Initial Purchasers from the Company are in the
form contemplated by the Indenture and have been duly authorized
for issuance and sale pursuant to this Agreement and the Indenture
and, at the Closing Date, will have been duly executed by the
Company and, when authenticated in the manner provided for in the
Indenture and delivered against payment of the purchase price
therefor, will constitute valid and binding agreements of the
Company, enforceable in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general
equitable principles and will be entitled to the benefits of the
Indenture. The Exchange Notes have been duly and validly authorized
for issuance by the Company, and when issued and authenticated in
accordance with the terms of the Indenture, the Registration Rights
Agreement and the Exchange Offer (as defined in the Registration
Rights Agreement), will constitute valid and binding obligations of
the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or affecting enforcement of the rights and remedies of
creditors or by general principles of equity and will be entitled
to the benefits of the Indenture. The Guarantees of the Notes and
the Exchange Notes are in the respective forms contemplated by the
Indenture, have been duly authorized for issuance pursuant to the
Indenture and, at the Closing Date, will have been duly executed by
Holdings and, when the Notes have been authenticated in the manner
provided for in the Indenture and delivered against payment of the
purchase price therefor, will constitute valid and binding
agreements of Holdings, enforceable in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by
general equitable principles and will be entitled to the benefits
of the Indenture.
(i) Authorization of the
Indenture. The Indenture has been duly authorized by each of
the Company and Holdings and, at the Closing Date, will have been
duly executed and delivered by each of the Company and Holdings
and, assuming due authorization, execution and delivery by the
Trustee, will constitute a valid and binding agreement of each of
the Company and Holdings, enforceable against each of the Company
and Holdings in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general
equitable principles.
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(j) Description of the Securities
and the Indenture. The Notes, the Exchange Notes, the
Guarantees of the Notes and the Exchange Notes and the Indenture
conform or will, on the Closing Date, conform in all material
respects to the respective statements relating thereto contained in
the Offering Memorandum.
(k) Authorization of the Security
Documents and Intercreditor Agreement . Each of the Security
Documents has been duly authorized by each of the Company and
Holdings and, at the Closing Date, each of the Security Documents
will have been duly executed and delivered by each of the Company
and Holdings and will constitute a valid and binding agreement of
each of the Company and Holdings, enforceable against each of the
Company and Holdings in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
the rights and remedies of creditors or by general equitable
principles. The Intercreditor Agreement has been duly authorized by
the Company and Holdings and, at the Closing Date, the
Intercreditor Agreement will have been duly executed and delivered
by the Company and Holdings and will constitute a valid and binding
agreement of each of the Company and Holdings, enforceable against
each of the Company and Holdings in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to
or affecting the rights and remedies of creditors or by general
equitable principles.
(l) Security Documents . At
the Closing Date, the Security Documents will create a valid and
enforceable security interest in the Collateral in favor of the
Collateral Agent for the benefit of the Trustee and the holders of
the Securities, among others, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies
of creditors or by general equitable principles.
(m) Collateral . Except as
disclosed in the Offering Memorandum, the Company and Holdings own
the Collateral, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, equity, claim or other defect
(collectively, “Liens”).
(n) Perfection of the Security
Interests in the Collateral . As of the Closing Date, all
filings and other actions necessary to perfect and protect the
security interest in the Collateral created under the Security
Documents will have been duly made or taken and will be in full
force and effect, and the Security Documents, together with such
filings and other actions, will create in favor of the Collateral
Agent for the benefit of the Trustee and the holders of the
Securities a perfected security interest in the Collateral (other
than, with respect to the perfection of collateral that requires
perfection by “control” as such term is defined in the
Uniform Commercial Code of the State of New York, which Collateral
shall only be perfected upon the Collateral Agent obtaining control
thereof) securing the obligations of the Company and Holdings under
the Securities and the Indenture.
(o) No Material Adverse
Change. Except as otherwise disclosed in the Offering
Memorandum, subsequent to the respective dates as of which
information is given in the Offering Memorandum: (i) there has
been no material adverse change, or any development that would
reasonably be expected to result in a material adverse change, in
the condition, financial or otherwise, or in the earnings,
business, operations or prospects, whether or not arising
from
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transactions in the ordinary course of business,
of the Company and Holdings, considered as one entity (any such
change being referred to hereinafter as a “Material Adverse
Change”); (ii) the Company and Holdings, considered as
one entity, have not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of
business nor entered into any material transaction or agreement not
in the ordinary course of business; and (iii) there has been
no dividend or distribution of any kind declared, paid or made by
the Company or Holdings on any class of capital stock or repurchase
or redemption by the Company or Holdings of any class of capital
stock.
(p) Independent Accountants.
To the knowledge of the Company and Holdings, Ernst &
Young LLP, who have expressed their opinion with respect to the
financial statements (which term as used in this Agreement includes
the related notes thereto) included in the Offering Memorandum are
independent public or certified public accountants within the
meaning of Regulation S-X under the Securities Act and the
Exchange Act.
(q) Preparation of the Financial
Statements. Except as otherwise disclosed in the Offering
Memorandum, the financial statements, together with the related
schedules and notes, included in the Offering Memorandum present
fairly in all material respects the consolidated financial position
of the Company and its subsidiaries as of and at the dates
indicated and the results of their operations and cash flows for
the periods specified. The financial statements included in the
Offering Memorandum comply as to form with the requirements of the
Securities Act that would be applicable if the Securities were
being issued and sold in a public offering. Except as otherwise
disclosed in the Offering Memorandum, such financial statements
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto. Except as otherwise disclosed in the Offering Memorandum,
the historical financial data set forth in the Offering Memorandum
under the caption “Offering Memorandum Summary –
Summary Historical and Pro Forma Financial and Operating
Data” and the financial data set forth in “Selected
Historical Financial Data” fairly present in all material
respects the information set forth therein on a basis consistent
with that of the audited financial statements contained in the
Offering Memorandum. Except as otherwise disclosed in the Offering
Memorandum, the pro forma consolidated financial information of the
Company and the related notes thereto included under the captions
“Offering Memorandum Summary – Summary Historical and
Pro Forma Financial and Operating Data” and “Unaudited
Pro Forma Consolidated Financial Data” and elsewhere in the
Offering Memorandum present fairly in all material respects the
information contained therein have been prepared in accordance with
the Commission’s rules and guidelines with respect to pro
forma financial statements and have been properly presented on the
bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and
circumstances referred to therein. In addition, the quarterly and
annual revenue figures used for purposes of supporting the
statements in the offering memorandum regarding the Company’s
quarterly and annual revenue growth have been derived from
quarterly or annual financial statements, and, with respect to
periods beginning after June 7, 2002, such annual and
quarterly financial statements have been prepared in conformity
with generally accepted accounting principles applied on a
consistent basis throughout such periods, except as may be
expressly stated in the related notes (if any) thereto.
Notwithstanding the foregoing paragraph, it
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is expressly noted that certain financial data
contained in the Offering Memorandum, as disclosed therein, are not
audited financial data.
(r) Incorporation and Good
Standing of Holdings and the Company. Each of Holdings and the
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its incorporation and has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Offering Memorandum and each of Holdings and the
Company has the power and authority to enter into and perform their
respective obligations under each of this Agreement, the
Registration Rights Agreement, the Security Documents, the
Intercreditor Agreement, the DTC Agreement, the Notes, the Exchange
Notes, the Guarantee of the Notes and the Exchange Notes, and the
Indenture. Each of Holdings and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Change. All of the issued
and outstanding capital stock of the Company has been duly
authorized and validly issued, is fully paid and nonassessable and
is owned directly by Holdings free and clear of any Liens other
than Liens as are described in the Offering Memorandum. Holdings
does not own or control, directly or indirectly, any corporation,
association or other entity other than the Company and the Company
has no subsidiaries.
(s) Capitalization and Other
Capital Stock Matters. At March 31, 2005, on a
consolidated basis, after giving pro forma effect to (i) the
issuance and sale of the Securities pursuant hereto and
(ii) the application of the net proceeds from the sale of the
securities in the manner described under the caption “Use of
Proceeds” in the Offering Memorandum, the Company would have
had the capitalization as set forth in the Offering Memorandum
under the caption “Capitalization”.
(t) Non-Contravention of Existing
Instruments; No Further Authorizations or Approvals Required.
Neither Holdings nor the Company is in violation of its charter or
by-laws or is in default (or, with the giving of notice or lapse of
time, would be in default) (“Default”) under any
indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument to which either Holdings or
the Company is a party or by which it or any of them may be bound,
or to which any of the property or assets of Holdings or the
Company is subject (each, an “Existing Instrument”),
except for such Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change. The execution,
delivery and performance of this Agreement, the Registration Rights
Agreement, the DTC Agreement, the Indenture, the Intercreditor
Agreement and any other agreements or documents relating to any of
the foregoing by each of the Company and Holdings (each to the
extent a party thereto), and the issuance and delivery of the
Securities or the Exchange Securities, and consummation of the
transactions contemplated hereby and thereby and by the Offering
Memorandum (i) have been duly authorized by all necessary
corporate action by the Company and Holdings (each to the extent a
party thereto) and will not result in any violation of the
provisions of the charter or by-laws of Holdings or the Company,
(ii) will not conflict with or constitute a breach of, or
Default or a Debt Repayment Triggering Event (as defined below)
under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of Holdings or
the
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Company pursuant to, or require the consent of
any other party to, any Existing Instrument, except for such
conflicts, breaches, Defaults, liens, charges or encumbrances as
would not, individually or in the aggregate, result in a Material
Adverse Change and (iii) (assuming the accuracy of the
representations, warranties and agreements of the Initial
Purchasers contained herein) will not result in any violation of
any law, administrative regulation or administrative or court
decree applicable to Holdings or the Company. No consent, approval,
authorization or other order of, or registration or filing with,
any court or other governmental or regulatory authority or agency,
is required for the Company’s or Holdings’ execution,
delivery and performance of this Agreement, the Registration Rights
Agreement, the DTC Agreement, the Indenture, the Intercreditor
Agreement or any other agreements or documents relating to any of
the foregoing, or the issuance and delivery of the Securities or
the Exchange Securities, or consummation of the transactions
contemplated hereby and thereby and by the Offering Memorandum,
except such as have been obtained or made by the Company or
Holdings and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and except such as may
be required by federal and state securities laws with respect to
the Company’s and Holdings’ obligations under the
Registration Rights Agreement. As used herein, a “Debt
Repayment Triggering Event” means any event or condition
which gives, or with the giving of notice or lapse of time would
give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by Holdings or the
Company.
(u) No Material Actions or
Proceedings. Except as otherwise disclosed in the Offering
Memorandum, there are no legal or governmental actions, suits or
proceedings pending or, to the Company’s or Holdings’
knowledge, threatened (i) against or affecting Holdings or the
Company, (ii) which have as the subject thereof any property
owned or leased by, Holdings or the Company, where in any such case
there is a reasonable possibility that such action, suit or
proceeding might be determined adversely to Holdings or the Company
and any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material
Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. Except as otherwise
disclosed in the Offering Memorandum, no material labor dispute
with the employees of Holdings or the Company, or with the
employees of any principal supplier of Holdings or the Company,
exists or, to the Company’s or Holdings’ knowledge, is
threatened or imminent.
(v) Intellectual Property
Rights. Each of Holdings and the Company owns or possesses
sufficient trademarks, trade names, patent rights, copyrights,
licenses, approvals, trade secrets and other similar rights
(collectively, “Intellectual Property Rights”)
reasonably necessary to conduct their businesses as now conducted;
and the expected expiration of any of such Intellectual Property
Rights would not result in a Material Adverse Change. Neither
Holdings nor the Company has received any written notice of
infringement or conflict with asserted Intellectual Property Rights
of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse
Change.
(w) All Necessary Permits,
Etc. Except as otherwise disclosed in the Offering Memorandum
or as would not reasonably be expected to result in a Material
Adverse Change, each of Holdings and the Company possesses such
valid and current certificates, authorizations or permits issued by
the appropriate state, federal or foreign regulatory agencies or
bodies
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necessary to conduct its business. Neither
Holdings nor the Company has received any written notice of
proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse
Change.
(x) Title to Properties.
Except as otherwise disclosed in the Offering Memorandum, each of
Holdings and the Company has good and marketable title to all the
properties and assets reflected as owned in the financial
statements referred to in Section 1 above (or elsewhere in the
Offering Memorandum), in each case free and clear of any Liens
except Liens as described in the Offering Memorandum and Liens such
as do not materially and adversely affect the value of such
property and do not materially interfere with the use made or
proposed to be made of such property by Holdings and the Company,
taken as a whole. The real property, improvements, equipment and
personal property held under lease by Holdings or the Company are
held under valid and enforceable leases, with such exceptions as
are not material and do not materially interfere with the use made
or proposed to be made of such real property, improvements,
equipment or personal property by Holdings or the
Company.
(y) Tax Law Compliance.
Except as otherwise disclosed in the Offering Memorandum, Holdings
and the Company have each filed all necessary federal, state and
foreign income and franchise tax returns and have each paid all
taxes required to be paid by any of them and, if due and payable,
any related or similar assessment, fine or penalty levied against
any of them, except where failure to do so would not result in a
Material Adverse Change. Holdings and the Company have each made
adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1 above in respect of all
federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of Holdings or the Company
has not been finally determined, except where failure to do so
would result in a Material Adverse Change.
(z) Neither the Company nor
Holdings Is an “Investment Company”. The Company
and Holdings have been advised of the rules and requirements under
the Investment Company Act of 1940, as amended (the
“Investment Company Act”). Neither the Company nor
Holdings is, and after receipt of payment for the Securities will
be, an “investment company” within the meaning of
Investment Company Act and each of the Company and Holdings will
conduct its business in a manner so that it will not become subject
to the Investment Company Act.
(aa) Insurance. Each of
Holdings and the Company is insured by recognized, financially
sound institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed
adequate and customary for their businesses. Neither the Company
nor Holdings has any reason to believe that Holdings or the Company
will not be able (i) to renew its existing insurance coverage
as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost
that would not result in a Material Adverse Change. Neither
Holdings nor the Company has been denied any insurance coverage
which it has sought or for which it has applied.
(bb) No Price Stabilization or
Manipulation. Neither the Company nor Holdings has taken or
will take, directly or indirectly, any action designed to or that
would be reasonably
10
expected to cause or result in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(cc) Solvency . Each of
Holdings and the Company is, and immediately after the Closing Date
will be, Solvent. As used herein, the term “Solvent”
means, with respect to Holdings or the Company on a particular
date, that on such date (i) the fair market value of the
assets of Holdings (on a consolidated basis) or the Company, as the
case may be, is greater than the total amount of its stated
liabilities (including identified contingent liabilities),
(ii) the present fair salable value of the assets of Holdings
(on a consolidated basis) or the Company, as the case may be, is
greater than the amount that will be required to pay the probable
liabilities on the debts of Holdings or the Company, as the case
may be, as they become absolute and mature, (iii) the Company
or Holdings, as the case may be, is able to realize upon its assets
and pay its debts and other liabilities, including contingent
obligations, as they mature and (iv) neither the Company nor
Holdings, as the case may be, has unreasonably small capital with
which to carry on its business as it is currently
conducted.
(dd) No Unlawful Contributions or
Other Payments. Neither Holdings nor the Company nor, to the
best of Holdings’ or the Company’s knowledge, any
employee of Holdings or the Company, has made any contribution or
other payment to any official of, or candidate for, any federal,
state or foreign office in violation of any law or of the character
necessary to be disclosed in the Offering Memorandum in order to
make the statements therein not misleading.
(ee) Company’s Accounting
System. Each of Holdings and the Company maintains a system of
internal controls over financial reporting sufficient to provide
reasonable assurances that: (i) transactions are executed in
accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles as applied in the United
States and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.
(ff) Compliance with
Environmental Laws. Except as would not, individually or in the
aggregate, result in a Material Adverse Change: (i) neither of
Holdings nor the Company is in violation of any federal, state,
local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including without limitation,
laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum and petroleum
products (collectively, “Materials of Environmental
Concern”), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern
(collectively, “Environmental Laws”), which violation
includes, but is not limited to, noncompliance with any permits or
other governmental authorizations required for the operation of the
business of Holdings or the Company under applicable Environmental
Laws, nor has Holdings or the Company received any written
communication, whether from a governmental authority, citizens
group, employee or otherwise, that alleges that Holdings or the
Company is in violation of any Environmental Law;
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(ii) there is no claim, action or cause of
action filed with a court or governmental authority, no
investigation with respect to which Holdings or the Company has
received written notice, and no written notice by any person or
entity alleging potential liability for investigatory costs,
cleanup costs, governmental responses costs, natural resources
damages, property damages, personal injuries, attorneys’ fees
or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by
Holdings or the Company, now or in the past (collectively,
“Environmental Claims”), pending or, to the best of
Holdings’ or the Company’s knowledge, threatened
against Holdings or the Company or any person or entity whose
liability for any Environmental Claim Holdings or the Company has
retained or assumed either contractually or by operation of law;
and (iii) to the best of Holdings’ or the
Company’s knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge,
presence or disposal of any Material of Environmental Concern, that
reasonably could result in a violation of any Environmental Law or
form the basis of a potential Environmental Claim against Holdings
or the Company or against any person or entity whose liability for
any Environmental Claim Holdings or the Company has retained or
assumed either contractually or by operation of law.
(gg) ERISA
Complianc
