Exhibit 1.1
$25,000,000
VECTOR GROUP LTD.
5.0% Variable Interest
Senior Convertible Notes due 2011
PURCHASE AGREEMENT
March 30, 2005
JEFFERIES & COMPANY, INC.
11100 Santa Monica Boulevard, 10th Floor
Los Angeles, California 90025
Ladies and Gentlemen:
Vector Group Ltd.,
a Delaware corporation (the “ Issuer ”), hereby
agrees with you as follows:
1. Issuance of Notes . Subject to the terms and
conditions set forth in this Purchase Agreement (this “
Agreement ”), the Issuer proposes to issue and sell to
Jefferies & Company, Inc. (the “ Initial Purchaser
”) an aggregate of $25.0 million principal amount of its
5.0% Variable Interest Senior Convertible Notes due 2011 (the
“ Firm Notes ”), and to grant the Initial
Purchaser the option described below to purchase an additional
$5.0 million aggregate principal amount of the Issuer’s
5.0% Variable Interest Senior Convertible Notes due 2011 (the
“ Option Notes ” and, together with the Firm
Notes, the “ Notes ”). The Notes will be issued
pursuant to an Indenture (the “ Indenture ”)
dated as of the Closing Date (as defined below) between the Issuer
and Wells Fargo Bank, N.A., as trustee (the “ Trustee
”). The Notes will be convertible into shares of the
Issuer’s common stock, par value $0.10 per share (the “
Conversion Stock ” and, together with the Notes, the
“ Securities ”), in accordance with the terms of
the Notes and the Indenture. Capitalized terms used but not defined
herein shall have the meanings ascribed thereto in the
Indenture.
The
Notes will be offered and sold to the Initial Purchaser pursuant to
an exemption from the registration requirements under the
Securities Act of 1933, as amended (the “ Act
”). Upon original issuance thereof, and until such time as
the same is no longer required under applicable requirements of the
Act, the Notes shall bear the legends set forth in the Indenture.
The Issuer has prepared a Final Offering Circular, dated the date
hereof (the “ Final Offering Circular ”),
relating to the offer and sale of the Notes (the “
Offering ”). Any reference to the Final Offering
Circular means, as of any date or time referred to in this
Agreement, the Final Offering Circular, and any amendment or
supplement to such document, including exhibits and schedules
thereto, and shall be deemed to include the Issuer’s Annual
Report on Form 10-K for the fiscal year ended December 31,
2004 filed with the Securities and Exchange Commission (the “
SEC ”) on March 25, 2005 (including all exhibits
and schedules attached thereto) and the Issuer’s definitive
Proxy Statement for the 2004 Annual Meeting of Stockholders filed
with the SEC on April 21, 2004.
2. Terms of Offering . The Initial Purchaser
has advised the Issuer, and the Issuer understands, that the
Initial Purchaser will make offers (the “ Exempt
Resales ”) of the Notes purchased hereunder on the terms
set forth in the Final Offering Circular, as amended or
supplemented, solely to persons (the “ Subsequent
Purchasers ”) whom the Initial Purchaser
(i) reasonably believes to be “qualified institutional
buyers” as defined in Rule 144A under the Act (“
QIBs ”) or (ii) reasonably believes to be
non-U.S. persons in reliance upon Regulation S under the Act
(together with QIBs, the “ Eligible Purchasers
”).
Holders of the
Notes (including Subsequent Purchasers) will have the registration
rights set forth in the Registration Rights Agreement applicable to
the Notes (the “ Registration Rights Agreement
”) to be dated the Closing Date (as defined below) for so
long as such Notes constitute “ Transfer Restricted
Securities ” (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the
Issuer will agree, among other things, to file with the SEC under
the circumstances set forth therein, a shelf registration statement
relating to the Notes and the Conversion Stock pursuant to
Rule 415 under the Act (the “ Registration
Statement ”), and to use its reasonable best efforts to
cause such Registration Statement to be declared and remain
effective and usable for the periods specified in the Registration
Rights Agreement, subject to exceptions and qualifications set
forth therein.
The
following documents are hereinafter collectively referred to as
“ Operative Documents ”: (i) this
Agreement, (ii) the Indenture, (iii) the Notes and
(iv) the Registration Rights Agreement.
3. Agreement to Sell and Purchase . On the
basis of the representations, warranties and covenants contained in
this Agreement, and subject to its terms and conditions, the Issuer
agrees to issue and sell to the Initial Purchaser, and the Initial
Purchaser agrees to purchase from the Issuer, the Firm Notes at a
purchase price equal to 103.5% of the principal amount thereof (the
“ Purchase Price ”).
In
addition, the Issuer grants an option to the Initial Purchaser to
purchase any or all of the Option Notes at the Purchase Price. The
option granted hereby may be exercised in whole or in part by the
Initial Purchaser at any time three or more days before the Closing
Date by giving written notice to the Issuer setting forth the
aggregate principal amount of Option Notes as to which the Initial
Purchaser is exercising the option; provided that the
purchase and sale of the Option Notes shall be closed concurrently
with the Firm Notes on the Closing Date if any Option Notes are to
be so purchased.
4. Delivery and Payment . Delivery of, and
payment of the Purchase Price for, the Firm Notes and the Option
Notes, if applicable (the “ Closing ”), shall be
made at 7:00 a.m., Pacific time, on April 13, 2005 (the
“ Closing Date ”), at the offices of Latham
& Watkins LLP, 633 W. Fifth Street, Suite 4000, Los
Angeles, California 90071, or such other time or place as the
Initial Purchaser and the Issuer shall designate.
One
or more of the Firm Notes and the Option Notes, if applicable, in
definitive global form, registered in the name of Cede & Co.,
as nominee of, and deposited with the Trustee as custodian for, The
Depository Trust Company (“ DTC ”), having an
aggregate principal amount corresponding to the aggregate principal
amount of the Firm Notes and the Option Notes, if
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applicable (collectively, the
“ Global Note ”), shall be delivered by the
Issuer to the Initial Purchaser (or as the Initial Purchaser
directs) in each case with any transfer taxes thereon duly paid by
the Issuer against payment by the Initial Purchaser of the Purchase
Price therefor by wire transfer in same day funds to the order of
the Issuer, provided that the Issuer shall give at least two
business days’ prior written notice of the information
required to effect such wire transfer. The Global Note shall be
made available to the Initial Purchaser for inspection not later
than 10:00 a.m., Pacific time, on the business day immediately
preceding the Closing Date.
5. Agreements of the Issuer . The Issuer hereby
agrees with the Initial Purchaser as follows:
(a) To advise
the Initial Purchaser promptly after obtaining knowledge (and, if
requested by the Initial Purchaser, confirm such advice in writing)
of (i) the issuance by any state securities commission of any
stop order suspending the qualification or exemption from
qualification of any Notes for offering or sale in any jurisdiction
designated by the Initial Purchaser pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities
commission or other federal or state regulatory authority for such
purpose or (ii) the happening of any event during the period
referred to in Section 5(c) hereof as a result of which the Final
Offering Circular, as then amended or supplemented, would include
an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
Issuer shall use its commercially reasonable efforts to prevent the
issuance of any stop order or order suspending the qualification or
exemption of any of Notes under any state securities or Blue Sky
laws, and if at any time any state securities commission or other
federal or state regulatory authority shall issue an order
suspending the qualification or exemption of any Notes under any
state securities or Blue Sky laws, the Issuer shall use its
commercially reasonable efforts to obtain the withdrawal or lifting
of such order at the earliest possible time.
(b) To
furnish the Initial Purchaser and those persons identified by the
Initial Purchaser to the Issuer as many copies of the Final
Offering Circular, and any amendments or supplements thereto, as
the Initial Purchaser may reasonably request during the time period
referred to in Section 5(c) hereof. Subject to the Initial
Purchaser’s compliance with its representations and
warranties and agreements set forth in Section 7 hereof, the
Issuer consents to the use of the Final Offering Circular, and any
amendments and supplements thereto required pursuant hereto, by the
Initial Purchaser in connection with Exempt Resales.
(c) During
such period as in the reasonable opinion of counsel for the Initial
Purchaser a Final Offering Circular is required by law to be
delivered in connection with Exempt Resales by the Initial
Purchaser and in connection with market-making activities of the
Initial Purchaser permitted under the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder (the “ Exchange Act ”) for so long as
any Notes are outstanding (i) not to make any amendment or
supplement to the Final Offering Circular of which the Initial
Purchaser shall not previously have been advised or to which the
Initial Purchaser shall reasonably object after being so advised
and (ii) to prepare promptly upon the Initial
Purchaser’s reasonable request, any amendment or supplement
to the Final Offering Circular which may be necessary or advisable
in connection with such Exempt Resales or such market-making
activities.
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(d) If,
during the period referred to in Section 5(c) above, any event
shall occur or condition shall exist the result of which, in the
reasonable judgment of counsel to the Initial Purchaser, the Final
Offering Circular, as then amended or supplemented, would 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, or if, in the reasonable judgment of counsel to the
Initial Purchaser, it is necessary to amend or supplement the Final
Offering Circular to comply with any applicable law, forthwith to
notify the Initial Purchaser and to prepare an appropriate
amendment or supplement to the Final Offering Circular so that, as
so amended or supplemented, the Final Offering Circular will not
include any 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, or so that such Final Offering Circular will comply
with applicable law, and to furnish to the Initial Purchaser and
such other persons as the Initial Purchaser may designate such
number of copies thereof as the Initial Purchaser may reasonably
request.
(e) Prior to
the sale of all Notes pursuant to Exempt Resales as contemplated
hereby, to cooperate with the Initial Purchaser and counsel to the
Initial Purchaser in connection with the registration or
qualification of the Notes for offer and sale to the Initial
Purchaser and pursuant to Exempt Resales under the securities or
Blue Sky laws of such jurisdictions as the Initial Purchaser may
request and to continue such registration or qualification in
effect so long as required for Exempt Resales and to file such
consents to service of process or other documents as may be
necessary in order to effect such registration or qualification;
provided , however , that the Issuer shall not be
required in connection therewith to register or qualify as a
foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general
consent to service of process or taxation in any jurisdiction in
which it is not now so subject.
(f) To apply
the proceeds from the sale of the Notes as set forth under the
caption “Use of Proceeds” in the Final Offering
Circular.
(g) So long
as any Notes are outstanding, (i) to mail and make generally
available as soon as practicable after the end of each fiscal year
to the record holders of the Notes a financial report of the Issuer
on a consolidated basis, all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations,
a consolidated statement of cash flows and a consolidated statement
of shareholders’ equity as of the end of and for such fiscal
year, together with comparable information as of the end of and for
the preceding year, certified by the Issuer’s independent
public accountants and (ii) to make generally available as
soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders,
a consolidated balance sheet, a consolidated statement of
operations and a consolidated statement of cash flows (and similar
financial reports of all unconsolidated subsidiaries, if any) as of
the end of and for such period, and for the period from the
beginning of such year to the close of such quarterly period,
together with comparable information for the corresponding periods
of the preceding year. Notwithstanding the foregoing, the filing of
information required herein with the SEC on its EDGAR database
system within prescribed time periods (taking into account
allowable extensions) shall satisfy the requirements of this
Section 5(g).
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(h) So long
as the Notes are outstanding, to furnish to the Initial Purchaser
as soon as reasonably practicable, copies of all reports or other
communications (A) furnished by the Issuer to its security
holders, (B) furnished to or filed with the SEC or any
national securities exchange on which any class of securities of
the Issuer is listed or (C) delivered pursuant to the
Indenture and such other publicly available information concerning
the Issuer as the Initial Purchaser may reasonably request;
provided , however , that any such report,
communication or information available on the SEC’s EDGAR
database system need not be furnished pursuant to this
Section 5(h).
(i) So long
as any of the Notes remain outstanding and during any period in
which the Issuer is not subject to Section 13 or 15(d) of the
Exchange Act to make available to any holder of Notes in connection
with any sale thereof and any prospective purchaser of such Notes
from such holder, the information (“ Rule 144A
Information ”) required by Rule 144A(d)(4) under the
Act.
(j) The
Issuer will reserve and keep available at all times, free of
preemptive rights, a sufficient number of shares of its capital
stock for the purpose of enabling the Issuer to satisfy its
obligations to issue such capital stock as Conversion Stock upon
conversion of the Notes.
(k) The
Issuer will use commercially reasonable efforts to cause all shares
of Conversion Stock issuable upon conversion of the Notes to be
listed on The New York Stock Exchange or on such other national
securities exchange or automated quotation system on which the
Issuer’s capital stock may then be traded or listed so long
as such Conversion Stock remains registered under the Exchange
Act.
(l) The
Issuer will continue to maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Issuer, a registrar
for the Conversion Stock.
(m) Whether
or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the obligations of
the Issuer under this Agreement, including: (i) the fees,
disbursements and expenses of counsel to the Issuer and accountants
of the Issuer in connection with the sale and delivery of the Notes
to the Initial Purchaser and pursuant to Exempt Resales, and all
other fees or expenses of the Issuer incurred in connection with
the preparation, printing, filing and distribution of, the Final
Offering Circular and all amendments and supplements to any of the
foregoing (including financial statements) specified in Section
5(a) and 5(b) prior to or during the period specified in
Section 5(c), including the mailing and delivering of copies
thereof to the Initial Purchaser and persons designated by it in
the quantities specified herein, (ii) all costs and expenses
related to the transfer and delivery of the Notes to the Initial
Purchaser and pursuant to Exempt Resales, including any transfer or
other taxes payable thereon, (iii) all costs of printing or
producing this Agreement, the other Operative Documents and any
other agreements or documents in connection with the offering,
purchase, sale or delivery of the Notes, (iv) all expenses in
connection with the registration or qualification of the Notes for
offer and sale under the securities or Blue Sky laws of the several
states and all costs of printing or producing any preliminary and
supplemental Blue Sky memoranda in connection therewith (including
the filing fees and fees and disbursements of counsel for the
Initial Purchaser in connection with such registration or
qualification and memoranda relating thereto), (v) the
cost
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of printing certificates
representing the Notes, (vi) all expenses and listing fees in
connection with the application for quotation of the Notes on the
Private Offerings, Resales and Trading through Automated Linkages
(“ PORTAL ”) system of the NASD, Inc. (“
NASD ”), (vii) the listing fee of The New York
Stock Exchange or such other national securities exchange or
automated quotation system on which the Issuer’s capital
stock may be traded with respect to any Conversion Stock issued
upon conversion of the Notes, (viii) the fees and expenses of
the Trustee and the Trustee’s counsel in connection with the
Indenture and the Notes, (ix) the costs and charges of any
transfer agent, registrar or depositary (including DTC),
(x) any reasonable fees charged by rating agencies for the
rating of the Notes, (xi) all costs and expenses of the
Registration Statement, as set forth in the Registration Rights
Agreement and (xii) all other costs and expenses incident to
the performance of the obligations of the Issuer under this
Agreement and the other Operative Documents for which provision is
not otherwise made in this Section 5(m).
(n) To use
commercially reasonable efforts to effect the inclusion of the
Notes on PORTAL and to maintain the listing of the Notes on PORTAL
for so long as any Notes are outstanding.
(o) To obtain
the approval of DTC for “book-entry” transfer of the
Notes, and to comply with all of its agreements set forth in the
representation letters of the Issuer to DTC relating to the
approval of the Notes by DTC for “book-entry”
transfer.
(p) During
the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell,
grant any option to purchase or otherwise transfer or dispose of
any debt securities of the Issuer or any warrants, rights or
options to purchase or otherwise acquire debt securities of the
Issuer substantially similar to the Notes (other than the Notes),
without the prior written consent of the Initial
Purchaser.
(q) Not to,
and to ensure that no affiliate (as defined in Rule 501(b) of the
Act) of the Issuer will, sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any “security”
(as defined in the Act) that would be integrated with the sale of
the Notes in a manner that would require the registration under the
Act of the sale of the Notes to the Initial Purchaser or the
Subsequent Purchasers.
(r) To the
extent it may lawfully do so, not to voluntarily claim, and to
actively resist any attempts to claim, the benefit of any usury
laws against the holders of any Notes.
(s) The
Issuer shall not (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any
shares of its common stock, par value $0.10 per share (the “
Common Stock ”), or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers all or a portion
of the economic consequences associated with the ownership of any
of Common Stock (regardless of whether any of the transactions
described in clause (i) or (ii) is to be settled by the
delivery of Common Stock, or such other securities, in cash or
otherwise), except to the Initial Purchaser pursuant to this
Agreement, for a period of 90 days after the date hereof
without the prior written consent of the Initial Purchaser.
Notwithstanding the foregoing,
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during such period (A) the
Issuer may issue shares of equity securities pursuant to the
Issuer’s existing employee and director equity incentive
plans, and (B) the Issuer may issue shares of Common Stock
upon the conversion of the Notes or any other convertible
securities outstanding on the date hereof and the exercise of
options or warrants outstanding on the date hereof. The Issuer also
agrees not to file any registration statement with respect to any
shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock for a period of 90
days after the date hereof without the prior written consent of the
Initial Purchaser (other than any registration statement on Form
S-8 and except as provided in the Operative Documents). The
foregoing notwithstanding, nothing herein shall prohibit the Issuer
from amending or supplementing any registration statement that has
been filed prior to the date hereof pursuant to the Exchange Act.
The Issuer shall, concurrently with the Closing, deliver to the
Initial Purchaser an agreement executed by each of the directors
and executive officers of the Issuer to the effect that such person
will not, without the prior written consent of the Initial
Purchaser, during the period commencing on the date of the Final
Offering Circular and ending 30 days thereafter
(1) engage in any of the transactions described in the first
sentence of this paragraph or (2) make any request or demand
for the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for
Common Stock, such agreement to be substantially in the form
attached hereto as Exhibit A .
(t) To comply
with all of its agreements set forth in the Registration Rights
Agreement.
(u) To
validly execute and deliver the Indenture, the Notes and the
Registration Rights Agreement, such Operative Documents to conform
to the descriptions thereof contained in the Final Offering
Circular.
(v) Not to be
or become, at any time prior to the expiration of three years after
the Closing Date, an open-end investment company, unit investment
trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under
Section 10 of the Investment Company Act of 1940, as
amended.
(w) During
the period for two years after the Closing Date (or such shorter
period as may be provided for in Rule 144(k) under the Act, as the
same may be in effect from time to time), to not, and not permit
any of its “affiliates” (as defined in Rule 144
under the Act) to, resell any of the Notes which constitute
“restricted securities” under Rule 144 that have
been reacquired by any of them except pursuant to an effective
registration statement under the Act.
(x) The
Issuer shall pay all stamp, documentary and transfer taxes and
other duties, if any, which may be imposed by the United States or
any political subdivision thereof or taxing authority thereof or
therein with respect to the issuance of the Notes or the sale
thereof to the Initial Purchaser.
(y) To use
its commercially reasonable efforts to do and perform all things
required or necessary to be done and performed under this Agreement
thereby prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Notes.
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6. Representations and Warranties of the Issuer
. Certain of the provisions contained in this Agreement refer to
the “knowledge of the Issuer.” For purposes of this
Agreement “knowledge of the Issuer” and similar phrases
shall mean the actual knowledge of the individuals identified as
executive officers or directors of the Issuer in the Final Offering
Circular.
As
of the date hereof and as of the Closing Date, the Issuer
represents and warrants to, and agrees with, the Initial Purchaser
that:
(a)
Offering Circular . The Final Offering Circular, as of its
date, does not, and as of the Closing Date, will not, and any
supplement or amendment to it, as of the date of such amendment or
supplement, when read together with the Final Offering Circular
will not, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except
that the representations and warranties contained in this paragraph
(a) shall not apply to statements in or omissions from the
Final Offering Circular (or any supplement or amendment thereto)
made in reliance upon and in conformity with information relating
to the Initial Purchaser furnished to the Issuer in writing by or
on behalf of the Initial Purchaser expressly for use therein, it
being expressly understood that the only information so furnished
by or on behalf of the Initial Purchaser to the Issuer is set forth
in Section 8(b) hereof. No stop order preventing the use of the
Final Offering Circular, 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 Issuer, is
contemplated or threatened.
(b)
Organization and Qualification . The Issuer and its “
Subsidiaries ” (which for purposes of this Agreement
means any entity in which the Issuer, directly or indirectly, owns
capital stock or holds an equity or similar interest that exceeds
50% of the aggregate outstanding equity or similar interests of
such entity) are entities duly organized and validly existing in
good standing under the laws of the jurisdiction in which they are
formed, and have the requisite power and authorization to own their
material properties and to carry on their business as now being
conducted in all material respects. Each of the Issuer and its
Subsidiaries is duly qualified as a foreign entity to do business
and is in good standing in every jurisdiction in which its
ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the
failure to be so qualified or be in good standing would not
reasonably be expected to have a Material Adverse Effect. As used
in this Agreement, “ Material Adverse Effect ”
means any material adverse effect on the business, assets, results
of operations, or condition (financial or otherwise) of the Issuer
and its Subsidiaries, taken as a whole, or on the transactions
contemplated hereby and the other Operative Documents taken as a
whole or by the agreements and instruments to be entered into in
connection herewith or therewith, or on the authority or ability of
the Issuer to perform its obligations under the Operative
Documents. The Issuer has no Subsidiaries except as set forth on
Schedule I .
(c)
Authorization; Enforcement; Validity . The Issuer has the
requisite corporate power and authority to enter into and perform
its obligations under each of the Operative Documents and to issue
the Notes in accordance with the terms hereof and thereof.
The
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execution and delivery of the
Operative Documents by the Issuer and the consummation by the
Issuer of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Notes, the
reservation for issuance and the issuance of the Conversion Stock
issuable upon conversion of the Notes, have been duly authorized by
the Issuer’s Board of Directors and (other than the filing
with the SEC of one or more Registration Statements as may be
required by federal and state securities laws with respect to the
Issuer’s obligations under the Registration Rights Agreement
and such filings as may be required by The New York Stock Exchange
Inc. (the “ Principal Market ”) with respect to
the transactions contemplated hereby) no further consent or
authorization is required by the Issuer, its Board of Directors or
its stockholders. This Agreement has been duly executed and
delivered by the Issuer and is, and upon execution and delivery of
the Operative Documents by the Issuer, each of the Operative
Documents will be, a legal, valid and binding obligations of the
Issuer, enforceable against the Issuer in accordance with their
respective terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies. As of the date of issuance of
any Option Notes, such Option Notes shall have been duly executed
and delivered by the Issuer, and shall constitute the legal, valid
and binding obligations of the Issuer, enforceable against the
Issuer in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditor’s rights and
remedies.
(d)
Issuance of Notes . The Notes are duly authorized and upon
issuance, shall be free from all taxes, liens and charges with
respect to the issue thereof. As of the Closing, a number of shares
of Common Stock shall have been duly authorized and reserved for
issuance, free of pre-emptive rights, and sufficient for the
purpose of enabling the Issuer to satisfy all obligations to issue
the Conversion Stock upon conversion of all of the Notes (including
the Option Notes). Upon conversion in accordance with the
Indenture, the Conversion Stock will be validly issued, fully paid
and nonassessable and free from all preemptive or similar rights,
taxes, liens and charges with respect to the issue thereof, with
the holders being entitled to all rights accorded to a holder of
Common Stock.
(e)
No Conflicts . The execution, delivery and performance of
the Operative Documents by the Issuer and the consummation by the
Issuer of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Notes and
reservation for issuance and issuance of the Conversion Stock) will
not (i) result in a violation of the Certificate of
Incorporation (as defined in Section 6(t)) or the Bylaws (as
defined in Section 6(t)), (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Issuer or any of
its Subsidiaries is a party, or (iii) (so long as the Issuer
obtains all consents, authorizations and orders and makes all
filings and registrations specified in Section 6(f) below) result
in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations
and the rules and regulations of the Principal Market) applicable
to the Issuer or any of its Subsidiaries or by which any property
or asset of the Issuer or any of its Subsidiaries is
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bound or affected, except, in the
case of clauses (ii) and (iii), such conflicts, defaults,
rights, or violations that would not reasonably be expected to have
a Material Adverse Effect.
(f)
Consents . The Issuer is not required to obtain any consent,
authorization or order of, or make any filing or registration with,
any court, governmental agency or any regulatory or self-regulatory
agency or any other Person in order for it to execute, deliver or
perform any of its obligations under or contemplated by the
Operative Documents, in each case in accordance with the terms
hereof or thereof, other than as may be required by federal and
state securities laws and the rules and regulations of the
Principal Market with respect to the Issuer’s obligations
under the Registration Rights Agreement. All consents,
authorizations, orders, filings and registrations which the Issuer
is required to obtain or make pursuant to the preceding sentence
have been obtained or made on or prior to the Closing
Date.
(g) No
General Solicitation . Neither of the Issuer nor any of its
respective affiliates or other person acting on behalf of the
Issuer has offered or sold the Notes by means of any general
solicitation or general advertising within the meaning of Rule
502(c) under the Act or, with respect to Notes sold outside the
United States to non-U.S. persons (as defined in Rule 902
under the Act), by means of any directed selling efforts within the
meaning of Rule 902 under the Act, and the Issuer, any
affiliate of the Issuer and any person acting on behalf of the
Issuer have complied with and will implement the “offering
restrictions” within the meaning of such Rule 902;
provided that no representation is made in this subsection
with respect to the actions of the Initial Purchaser.
(h) No
Broker’s Fees . The Issuer has not engaged any broker,
finder, commission agent or other person (other than the Initial
Purchaser) in connection with the Offering or any of the
transactions contemplated in the Operative Documents, and the
Issuer is not under any obligation to pay any broker’s fee or
commission in connection with such transactions (other than
commissions or fees to the Initial Purchaser).
(i) Trust
Indenture Act . On the Closing Date, the Indenture will conform
in all material respects to the requirements of the Trust Indenture
Act of 1939, as amended (the “ TIA ”), and the
rules and regulations of the SEC applicable to an indenture which
is required to be qualified thereunder.
(j)
Application of Takeover Protections; Rights Agreement . The
Issuer and its Board of Directors have taken all necessary action,
if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar
anti-takeover provision under the Certificate of Incorporation or
the laws of the State of Delaware which is or could become
applicable as a result of the transactions contemplated by this
Agreement, including, without limitation, the Issuer’s
issuance of the Notes and the Conversion Stock. The Issuer has not
adopted a stockholder rights plan or similar arrangement relating
to accumulations of beneficial ownership of Common Stock or a
change in control of the Issuer.
(k)
SEC Documents; Financial Statements . During the two
(2) years prior to the date hereof, the Issuer has filed all
reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting
requirements of the Exchange Act (all of
10
the foregoing filed prior to the
date hereof and all exhibits included therein and financial
statements, notes and schedules thereto and documents incorporated
by reference therein being hereinafter referred to as the “
SEC Documents ”). As of their respective dates, the
SEC Documents, as they may have been subsequently amended by
filings made by the Issuer with the SEC prior to the date hereof,
complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents. As of their respective
dates, the financial statements of the Issuer included in the SEC
Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted
accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case
of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the
Issuer as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit
adjustments).
(l)
Absence of Certain Changes . Except as disclosed in the
Final Offering Circular, since December 31, 2004,
(i) there has been no change or development that has had a
Material Adverse Effect, (ii) the Issuer has not declared or
paid any dividends, (iii) neither the Issuer nor any of its
Subsidiaries has sold any assets, individually or in the aggregate,
in excess of $1,000,000 outside of the ordinary course of business
or (iv) neither the Issuer nor any of its Subsidiaries has
made any capital expenditures, individually or in the aggregate, in
excess of $5,000,000. Neither the Issuer nor any of its
Subsidiaries has taken any steps to seek protection pursuant to any
bankruptcy law nor does the Issuer have knowledge that either its
or its Subsidiaries respective creditors intend to initiate
involuntary bankruptcy proceedings or kno
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