Exhibit 10.15
E XECUTION C OPY
Rainier Acquisition
Corp.
$150,000,000
9 1 / 4
% Senior Subordinated
Notes due 2013
PURCHASE AGREEMENT
dated August 5, 2005
Banc of America Securities
LLC
J.P. Morgan Securities
Inc.
ING Financial Markets
LLC
PURCHASE AGREEMENT
August 5, 2005
BANC OF AMERICA SECURITIES
LLC
J.P. MORGAN SECURITIES
INC.
ING FINANCIAL MARKETS LLC
As Initial Purchasers
c/o Banc of America Securities LLC
9 West 57th Street
New York, New York 10019
Ladies and Gentlemen:
Introductory.
Rainier Acquisition Corp., a
Delaware corporation (“Rainier”) and a wholly owned
subsidiary of LCI Holdco, LLC, a Delaware limited liability company
(“Holdings”), proposes to issue and sell to Banc of
America Securities LLC, J.P. Morgan Securities Inc. and ING
Financial Markets LLC (the “Initial Purchasers”),
acting severally and not jointly, the respective amounts set forth
in Schedule A attached hereto of $150,000,000 aggregate principal
amount of Rainier’s 9 1 / 4
% Senior Subordinated
Notes due 2013 (the “Notes”).
As described in the Offering
Memorandum (as defined below), the Notes are being sold as part of
the Transactions (as defined in the Offering Memorandum), which
include the acquisition of LifeCare Holdings, Inc., a Delaware
corporation (the “Company”). Concurrently with the
closing of the offering of the Notes, Rainier will be merged with
and into the Company (the “Merger”), and the Company
will continue as the surviving corporation and a subsidiary of
Holdings. As a result of the Merger, all of the obligations of
Rainier under this Agreement will, by operation of law, become
obligations of the Company.
The Notes will be issued pursuant to
an indenture, to be dated as of August 11, 2005 (the
“Indenture”), between Rainier and U.S. Bank National
Association, as trustee (the “Trustee”). Notes will be
issued only in book-entry form in the name of Cede & Co.,
as nominee of The Depository Trust Company (the
“Depositary”) pursuant to a letter of representations,
to be dated on or before the Closing Date (as defined in
Section 2 hereof) (the “DTC Agreement”), between
Rainier and the Depositary.
The holders of the Notes will be
entitled to the benefits of a registration rights agreement, to be
dated as of August 11, 2005 (the “Registration Rights
Agreement”), between the Company, the Guarantors (as defined
below) and the Initial Purchasers, pursuant to which the
Company and the Guarantors will agree to file
with the Securities and Exchange Commission (the
“Commission”), under the circumstances set forth
therein, (i) a registration statement 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) 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 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 commercially reasonable efforts
to cause such registration statements to be declared
effective.
The payment of principal of, premium
and Special Interest (as defined in the Indenture), if any, and
interest on the Notes and the Exchange Notes will be fully and
unconditionally guaranteed on a senior subordinated and unsecured
basis, jointly and severally by (i) all of the direct and
indirect subsidiaries of the Company as of the Closing Date that
execute the Supplemental Indenture (as defined below), which are
listed in Exhibit B attached hereto (collectively, the
“Guarantors”) and (ii) any direct or indirect
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,
pursuant to their guarantees (the “Guarantees”). The
Notes and the Guarantees are herein collectively referred to as the
“Securities”; and the Exchange Notes and the Guarantees
thereof are herein collectively referred to as the “Exchange
Securities.”
Rainier 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 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. Pursuant to the terms of the
Securities and the Indenture, investors who acquire Securities
shall be deemed to have agreed 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 under the
Securities Act (“Rule 144A”) or Regulation S under the
Securities Act (“Regulation S”)).
Rainier, with the assistance of the
Company, has prepared and delivered to each Initial Purchaser
copies of a Preliminary Offering Memorandum, dated July 26,
2005 (the “Preliminary Offering Memorandum”), and has
prepared and will deliver to each Initial Purchaser copies of the
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,
“Offering Memorandum” shall mean, with respect to any
date or time referred to in this Agreement, Rainier’s
Offering Memorandum, to be dated the date hereof, including
amendments or supplements thereto, in the most recent form that has
been prepared and delivered by Rainier to the Initial Purchasers in
connection with their solicitation of offers to purchase
Securities. Further, any reference to the Preliminary Offering
Memorandum or the Offering Memorandum shall be deemed to refer to
and include any Additional Issuer
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Information (as defined in Section 3
hereof) furnished by Rainier or the Company prior to the completion
of the distribution of the Securities.
Rainier hereby confirms its
agreements with the Initial Purchasers as follows:
SECTION 1. Representations
and Warranties .
Rainier hereby represents, warrants
and covenants 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(e)
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 offer or sale of 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 . None of Rainier, the Company, the
Guarantors or their respective affiliates (as such term is defined
in Rule 501(b) under the Securities Act) (each, an
“Affiliate”), or any person acting on its or any of
their behalf (other than the Initial Purchasers, as to whom Rainier
makes no representation or warranty) has, directly or indirectly,
solicited any offer to buy or offered to sell, or will, 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 Rainier, the Company,
the Guarantors or their respective Affiliates, or any person acting
on its or any of their behalf (other than the Initial Purchasers,
as to whom Rainier makes no 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 Rainier, the Company, the Guarantors or their respective
Affiliates or any person acting on its or any of their behalf
(other than the Initial Purchasers, as to whom Rainier makes no
representation or warranty) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S and
(ii) each of Rainier, the Company and the Guarantors or their
respective Affiliates and any person acting on its or any of their
behalf (other than the Initial Purchasers, as to whom Rainier makes
no 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 are 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.
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(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 Rainier 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 date, contains
all the information specified in, and meeting the requirements of,
Rule 144A. None of Rainier, the Company or any Guarantor has
distributed and none of them 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 or the Offering
Memorandum.
(e) The Purchase Agreement .
This Agreement has been duly authorized, executed and delivered by,
and is a valid and binding agreement of, Rainier, enforceable in
accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law 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.
(f) The Registration Rights
Agreement . At the Closing Date, the Registration Rights
Agreement will be duly authorized, executed and delivered by, and
will be a valid and binding agreement of, the Company and the
Guarantors, 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 under
the Registration Rights Agreement may be limited by applicable
law.
(g) The DTC Agreement . At
the Closing Date, the DTC Agreement will be duly authorized,
executed and delivered by Rainier.
(h) Authorization of the
Securities and the Exchange Securities . The Notes to be
purchased by the Initial Purchasers from Rainier are in the form
contemplated by the Indenture, 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 Rainier 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 Rainier, 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. On the Closing Date,
following consummation of the Merger, the Exchange Notes will 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, 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
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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.
(i) Authorization of the
Indenture . The Indenture has been duly authorized by Rainier
and, at the Closing Date, will have been duly executed and
delivered by Rainier and will constitute a valid and binding
agreement of Rainier, enforceable against Rainier 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.
(j) Authorization of the
Supplemental Indenture . On the Closing Date, following
consummation of the Merger, the supplemental indenture (the
“Supplemental Indenture”) to be entered into among the
Company, the Guarantors and the Trustee, pursuant to which the
Company will expressly assume Rainier’s obligations under the
Indenture and the Notes and the Guarantors will be added as
Guarantors under the Indenture, will have been duly authorized by
the Company and the Guarantors and, at the Closing Date, following
consummation of the Merger, will have been duly executed and
delivered by the Company and the Guarantors and will constitute a
valid and binding agreement of the Company and the Guarantors,
enforceable against the Company and the Guarantors 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.
(k) Authorization of the Joinder
Agreement . The joinder agreement, substantially in the form of
Exhibit C annexed hereto, to be entered into by the Company
and the Guarantors (the “Joinder Agreement”), will have
been, on the Closing Date following consummation of the Merger,
duly authorized by each of the Company and the Guarantors and will
have been duly executed and delivered by each of the Company and
the Guarantors and will constitute a valid and binding agreement of
each of the Company and the Guarantors, enforceable against each of
the Company and the Guarantors in accordance with its terms, except
as rights to indemnification thereunder may be limited by
applicable law and 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.
(l) Description of the
Securities, the Indenture and the Supplemental Indenture . The
Securities, the Indenture and the Supplemental Indenture will
conform in all material respects to the respective statements
relating thereto contained in the Offering Memorandum.
(m) No Material Adverse
Change . Except as otherwise disclosed in the Offering
Memorandum, subsequent to the date of the Offering Memorandum:
(i) there has been no material adverse change, or any
development that could reasonably be expected to result in a
material adverse change, in the financial condition or in the
earnings, business or operations, whether or not arising from
transactions in the ordinary course of business, of Rainier, or of
the Company and its subsidiaries, considered as one entity;
(ii) there has been no development that would reasonably be
likely to result in a material delay in the consummation of the
Merger (any such change or development referred to in clauses
(i) and (ii) above is called a “Material
Adverse
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Change”); and (iii) neither Rainier
nor the Company and its subsidiaries considered as one entity has
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, except in each case in connection with the
Transactions.
(n) Independent Accountants .
To the best of Rainier’s knowledge, KPMG LLP, which expressed
its 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. To the best of Rainier’s
knowledge, as of the date hereof and as of the Closing Date, the
independence of such accountants has not been impaired, and any
non-audit services provided by such accountants to the Company or
any of its subsidiaries have been approved by the Company’s
board of directors.
(o) Preparation of the Financial
Statements . 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, in all material
respects, with the applicable requirements of the Securities Act,
other than the failure to include in such financial statements
earnings per share data and pro-forma information. 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. The financial data set forth in the Offering
Memorandum under the captions “Summary–Summary
Consolidated Financial and Other Data” and “Selected
Consolidated Financial and Other Data” fairly present, in all
material respects, the information set forth therein on the basis
stated therein.
(p) Incorporation and Good
Standing of Rainier, the Company and its Subsidiaries . Each of
Rainier, the Company and the Company’s subsidiaries has been
duly organized and is validly existing as a corporation, limited
partnership or limited liability company, as the case may be, in
good standing under the laws of the jurisdiction of its
organization and has the power to own, lease and operate its
properties and to conduct its business as described in the Offering
Memorandum and to enter into and perform the obligations under each
of this Agreement, the Registration Rights Agreement, the DTC
Agreement, the Securities, the Exchange Securities, the Joinder
Agreement, the Indenture and the Supplemental Indenture to which it
is a party. Each of Rainier, the Company and each subsidiary is
duly qualified as a foreign corporation, limited partnership or
limited liability company, as the case may be, 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 each of the Company’s subsidiaries has been duly
authorized and validly issued, is fully paid and nonassessable and,
upon consummation of the Transactions, will be owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim
other than under the Senior Credit Facility (as defined below). The
Company does not own or control, directly or indirectly,
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any corporation, association or other entity
other than the Guarantors and LifeCare Funding Company, LLC (which
will be dissolved on the Closing Date).
(q) Capitalization and Other
Capital Stock Matters . All of the outstanding shares of
capital stock of Rainier and the Company have been duly authorized
and validly issued, are fully paid and nonassessable and have been
issued in compliance with federal and state securities laws. None
of the outstanding shares of capital stock of Rainier or the
Company were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or
purchase securities of Rainier or the Company. Following the
consummation of the Merger, all of the outstanding capital stock of
the Company will be owned by Holdings, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim,
except pursuant to the Senior Credit Facility, and there will be no
authorized or outstanding options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or
debt securities convertible into or exchangeable or exercisable
for, any capital stock of Rainier or the Company or any of its
subsidiaries other than those described in the Offering
Memorandum.
As of the date hereof, all of the
issued and outstanding capital stock of Rainier is owned directly
by Holdings, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim.
(r) Non-Contravention of Existing
Instruments; No Further Authorizations or Approvals Required .
None of Rainier, the Company nor any of its subsidiaries is in
violation of its charter or bylaws, limited partnership agreement
or limited liability company agreement, as the case may be, 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, license or other instrument to which any such entity is a
party or by which it or any of them may be bound, or to which any
of the property or assets of any such entity is subject (each, an
“Existing Instrument”), except for such violations or
Defaults as are described in the Offering Memorandum or would not,
individually or in the aggregate, be reasonably likely to result in
a Material Adverse Change. The execution, delivery and performance
by each of Rainier, the Company and the Guarantors of its
obligations under this Agreement, the Registration Rights
Agreement, the DTC Agreement, the Joinder Agreement, the Indenture
and the Supplemental Indenture, to the extent it is a party
thereto, and the issuance and delivery of the Securities or the
Exchange Securities, (i) will not result in any violation of
the provisions of the charter or bylaws, limited partnership
agreement or limited liability company agreement, as the case may
be, of Rainier, the Company or any of the Company’s
subsidiaries, (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
Rainier, the Company or any of the Company’s subsidiaries
pursuant to, or require the consent of any other party to, any
Existing Instrument, and (iii) will not result in any
violation of any law, administrative regulation or administrative
or court decree applicable to Rainier, the Company or any of the
Company’s subsidiaries, except, in the case of clauses
(ii) and (iii), for such conflicts, breaches, Defaults, liens,
charges, encumbrances or violations as are described in the
Offering Memorandum or would not, individually or in the aggregate,
be reasonably likely to result in a Material Adverse Change. 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 either Rainier’s, the
Company’s or any
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Guarantors’ execution, delivery and
performance of this Agreement, the Registration Rights Agreement,
the DTC Agreement, the Joinder Agreement, the Indenture or the
Supplemental Indenture, to the extent it is a party thereto, 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 Rainier, the Company and the Guarantors and are in full
force and effect under the Securities Act, applicable securities
laws of the several states of the United States or provinces of
Canada and except such as may be required by the securities laws of
the several states of the United States or provinces of Canada with
respect to Rainier’s or the Company’s obligations under
the Registration Rights Agreement and except as described in the
Offering Memorandum or as would not be reasonably likely to result
in a Material Adverse Change. 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 Rainier, the Company or any of
the Company’s subsidiaries.
(s) No Material Actions or
Proceedings . Except as otherwise disclosed in the Offering
Memorandum or as would not be reasonably likely to result in a
Material Adverse Change, there are no legal or governmental
actions, suits or proceedings pending or, to the best of
Rainier’s knowledge, threatened (i) against or affecting
Rainier, the Company or any of its subsidiaries or (ii) which
has as the subject thereof any property owned or leased by,
Rainier, the Company or any of its subsidiaries.
(t) Intellectual Property
Rights . The Company and its subsidiaries own or possess
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 expiration or loss of any of such Intellectual Property
Rights would not be reasonably likely to result in a Material
Adverse Change. To the best of Rainier’s knowledge, neither
the Company nor any of its subsidiaries has received any notice of
infringement or conflict with asserted Intellectual Property Rights
of others, which infringement or conflict, if the subject of an
unfavorable decision, would be reasonably likely to result in a
Material Adverse Change.
(u) Title to Properties .
Except as otherwise disclosed in the Offering Memorandum, the
Company and each of its subsidiaries owns or leases all such
properties and assets as are necessary to the operation of their
business as currently conducted.
(v) Tax Law Compliance . The
Company and its consolidated subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and
have 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 as described in the Offering
Memorandum or as would not be reasonably likely to result in a
Material Adverse Change.
(w) Company Not an
“Investment Company” . As of the date hereof,
neither Rainier nor the Company is, and upon consummation of the
Transactions, none of Rainier, the Company nor the Guarantors will
be, an “investment company” within the meaning of the
rules
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and requirements under the Investment Company
Act of 1940, as amended (the “Investment Company Act,”
which term, as used herein, includes the rules and regulations of
the Commission promulgated thereunder).
(x) Insurance . Except as
described in the Offering Memorandum or as would not be reasonably
likely to result in a Material Adverse Change, each of the Company
and its subsidiaries are 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 including, without
limitation, policies covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage,
destruction, acts of vandalism and earthquakes. The Company has no
reason to believe that it or any subsidiary 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 (or as conducted upon and after
consummation of the Transactions, as the case may be) and at a cost
that would not result in a Material Adverse Change.
(y) No Price Stabilization or
Manipulation . None of Rainier, the Company, any Guarantor or
any of their respective affiliates has taken or will take, directly
or indirectly, any action designed to or that might be reasonably
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 in violation of federal securities
laws.
(z) Solvency . Immediately
after giving effect to the Transactions and the application of the
proceeds from the sale of the Notes, the Company and each of the
Guarantors will be Solvent. As used herein, the term
“Solvent” means, with respect to any person on a
particular date, that on such date (i) the fair market value
of the assets of such person is greater than the total amount of
liabilities (including contingent liabilities) of such person,
(ii) the present fair salable value of the assets of such
person is greater than the amount that will be required to pay the
probable liabilities of such person on its debts as they become
absolute and matured, (iii) such person is able to realize
upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (iv) such person
does not have unreasonably small capital.
(aa) Company’s Accounting
System . The Company and its subsidiaries maintain a system of
internal controls over financial reporting and accounting that are
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 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.
(bb) Compliance with
Environmental Laws . Except as described in the Offering
Memorandum or as would not, individually or in the aggregate, be
reasonably likely to result in a Material Adverse Change:
(i) neither the Company nor any of its subsidiaries is in
violation of
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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,
without limitation, noncompliance with any permits or other
governmental authorizations required for the operation of the
business of the Company or its subsidiaries under applicable
Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received
any written communication, whether from a governmental authority,
citizens group, employee or otherwise, that alleges that the
Company or any of its subsidiaries is in violation of any
Environmental Law; (ii) there is no claim, action or cause of
action filed with a court or governmental authority, no
investigation with respect to which the Company or its subsidiaries
have 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
the Company or any of its subsidiaries, now or in the past
(collectively, “Environmental Claims”), pending or, to
the best of Rainier’s or the Company’s knowledge,
threatened against the Company or any of its subsidiaries or any
person or entity whose liability for any Environmental Claim the
Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law; and (iii) to the best of
Rainier’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
would result in a violation of any Environmental Law or form the
basis of a potential Environmental Claim against the Company or any
of its subsidiaries or against any person or entity whose liability
for any Environmental Claim the Company or any of its subsidiaries
has retained or assumed either contractually or by operation of
law.
(cc) ERISA Compliance . The
Company and its subsidiaries and any “employee benefit
plan” (as defined under the Employee Retirement Income
Security Act of 1974 (as amended, “ERISA,” which term,
as used herein, includes the regulations and published
interpretations thereunder) established or maintained by the
Company, its subsidiaries or their “ERISA Affiliates”
(as defined below) are in compliance with ERISA except as described
in the Offering Memorandum or as would not be reasonably likely to
result in a Material Adverse Change. “ERISA Affiliate”
means, with respect to the Company or a subsidiary, any member of
any group of organizations described in Section 414 of the
Internal Revenue Code of 1986 (as amended, the “Code,”
which term, as used herein, includes the regulations and published
interpretations thereunder) of which the Company or such subsidiary
is a member. No “reportable event” (as defined under
ERISA) has occurred or is reasonably expected to occur with respect
to any “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA
Affiliates except as described in the Offering Memorandum or as
would not be reasonably likely to result in a Material Adverse
Change. No “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their
ERISA
10
Affiliates, if such “employee benefit
plan” were terminated, would have any “amount of
unfunded benefit liabilities” (as defined under ERISA).
Except as described in the Offering Memorandum or as would not be
reasonably likely to result in a Material Adverse Change, neither
the Company, its subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any liability under
(i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “employee benefit plan” or
(ii) Section 412, 4971, 4975 or 4980B of the Code. Each
“employee benefit plan” established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates that
is intended to be qualified under Section 401 of the Code is
so qualified and nothing has occurred, whether by action or failure
to act, which would cause the loss of such qualification except as
described in the Offering Memorandum or as would not be reasonably
likely to result in a Material Adverse Change.
(dd) Compliance with Labor
Laws . Except as described in the Offering Memorandum or as
would not be reasonably likely to, individually or in the
aggregate, result in a Material Adverse Change, (i) there is
(A) no unfair labor practice complaint pending or, to the best
of Rainier’s or the Company’s knowledge, threatened
against the Company or any of its subsidiaries before the National
Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements pending,
or to the best of Rainier’s or the Company’s
knowled
