Exhibit 10.1
EXECUTION VERSION
AEP INDUSTRIES INC.
(a Delaware corporation)
$175,000,000 7.875% Senior Notes due
2013
PURCHASE AGREEMENT
Dated: March 10, 2005
AEP INDUSTRIES INC.
(a Delaware corporation)
$175,000,000
7.875% Senior Notes due 2013
PURCHASE AGREEMENT
MERRILL LYNCH & CO.
Merrill Lynch, Pierce,
Fenner & Smith
Incorporated
Deutsche Bank Securities Inc.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce,
Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
AEP Industries Inc., a Delaware
corporation (the “Company”), confirms its agreement
with Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated (“Merrill Lynch”)
and Deutsche Bank Securities Inc. (collectively, the “Initial
Purchasers”, which term shall also include any initial
purchaser substituted as hereinafter provided in Section 11
hereof), for whom Merrill Lynch is acting as representative (in
such capacity, the “Representative”), with respect to
the issue and sale by the Company and the purchase by the Initial
Purchasers, acting severally and not jointly, of the respective
principal amounts set forth in Schedule A hereto of
$175,000,000 aggregate principal amount of the Company’s
7.875% Senior Notes due 2013 (the “Securities”).
The Securities are to be issued pursuant to an indenture dated as
of March 18, 2005 (the “Indenture”) between the
Company and The Bank of New York, as trustee (the
“Trustee”). Securities issued in book-entry form
will be issued to Cede & Co. as nominee of The Depository
Trust Company (“DTC”) pursuant to a letter agreement,
to be dated as of Closing Time (as defined in
Section 2(b) hereof) (the “DTC Agreement”),
among the Company, the Trustee and DTC.
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 agrees that the
Initial Purchasers may resell, subject to the conditions set forth
herein, all or a portion of the Securities to purchasers
(“Subsequent Purchasers”) at any time after this
Agreement has been executed and delivered. The Securities are
to be offered and sold through the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the
“1933 Act”, which term, as used herein, includes
the rules and regulations of the Commission promulgated
thereunder), in reliance upon exemptions therefrom. Pursuant
to the terms of the Securities and the Indenture, investors that
acquire Securities may only resell or otherwise transfer such
Securities if such Securities are hereafter registered under the
1933 Act or if an exemption from the registration requirements
of the 1933 Act is available (including the exemption afforded
by Rule 144A (“Rule 144A”) or
Regulation S (“Regulation S”) of the
rules and regulations promulgated under the 1933 Act by
the Securities and Exchange Commission (the
“Commission”)).
The holders of the Securities will
be entitled to the benefits of a registration rights agreement, to
be dated as of March 18, 2005 (the “Registration Rights
Agreement”), among the Company and the Initial
Purchasers, pursuant to which the Company will
agree to file with the Securities and Exchange Commission (the
“Commission”), under the circumstances set forth
therein, (i) a registration statement under the 1933 Act
relating to another series of debt securities of the Company with
terms substantially identical to the Securities (the
“Exchange Securities”) to be offered in exchange for
the Securities (the “Exchange Offer”) and (ii) to
the extent required by the Registration Rights Agreement, a shelf
registration statement pursuant to Rule 415 of the 1933 Act
relating to the resale by certain holders of the Securities, and in
each case, to use their best efforts to cause such registration
statements (any such registration statement, a “Registration
Statement”) to be declared effective.
The Company has prepared and
delivered to each Initial Purchaser copies of a preliminary
offering memorandum dated February 25, 2005 (the
“Preliminary Offering Memorandum”) and has prepared and
will deliver to each Initial Purchaser, on the date hereof or the
next succeeding day, copies of a final offering memorandum dated
March 10, 2005 (the “Final Offering Memorandum”),
each for use by such Initial Purchaser in connection with its
solicitation of purchases of, or offering of, the Securities.
“Offering Memorandum” means, with respect to any date
or time referred to in this Agreement, the most recent offering
memorandum (whether the Preliminary Offering Memorandum or the
Final Offering Memorandum, or any amendment or supplement to either
such document), including exhibits thereto and the Annual Report of
the Company on Form 10-K for the fiscal year ended
October 31, 2004 filed with the Commission (the
“Form 10-K”) incorporated therein by reference,
which has been prepared and delivered by the Company to the Initial
Purchasers in connection with their solicitation of purchases of,
or offering of, the Securities. Any statement contained in
the Form 10-K will be deemed to be modified or superseded in
the Offering Memorandum to the extent that a subsequent statement
contained in the Offering Memorandum modifies or supersedes such
statement. Any such statement in the Form 10-K so modified or
superseded by the Offering Memorandum will not be deemed, except as
so modified or superseded, to constitute a part of the Offering
Memorandum.
All references in this Agreement to
financial statements and schedules and other information which is
“contained,” “included” or
“stated” in the Offering Memorandum (or other
references of like import) shall be deemed to mean and include all
such information, financial statements and schedules included in
the Form 10-K which is incorporated by reference in the
Offering Memorandum, except to the extent such information has been
modified or superseded as provided above.
In connection with the offering of
the Securities by the Company, the Company has commenced a tender
offer to purchase for cash any and all of the $200.0 million
aggregate principal amount outstanding of the Company’s
9.875% Senior Subordinated Notes due 2007 (the “Subordinated
Notes”) and a solicitation of consents (the
“Consents”) from the holders of the Subordinated Notes
to amend the indenture among the Company and The Bank of New York,
as trustee, dated as of November 19, 1997 (the
“Subordinated Notes Indenture”) relating to the
Subordinated Notes pursuant to its Offer and Purchase and Consent
Solicitation Statement dated February 17, 2005 (the
“Tender Offer and Consent Solicitation”). As
described in the Offering Memorandum, the proceeds from the
offering of the Securities received by the Company, along with
borrowings under the Company’s Loan and Security Agreement,
as amended, dated November 20, 2001 (the “Senior Credit
Facility”) with Wachovia Bank, National Association, as
successor by merger to Congress Financial Corporation, as agent,
are to be used to repurchase the Subordinated Notes tendered in the
Tender Offer and Consent Solicitation and to repay related fees and
expenses.
SECTION 1.
Representations and Warranties by
the Company .
(a) Representations and
Warranties . The Company represents and warrants to each
Initial Purchaser as of the date hereof and as of Closing Time
referred to in Section 2(b) hereof, and agrees with each
Initial Purchaser, as follows:
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(i)
Offering
Memorandum . The Offering
Memorandum does not, and at Closing Time 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
written information furnished to the Company by any Initial
Purchaser through Merrill Lynch expressly for use in the Offering
Memorandum.
(ii)
Incorporated
Document . The Offering
Memorandum as delivered from time to time shall incorporate by
reference the Form 10-K. The Form 10-K at the time
it was filed with the Commission complied in all material respects
with the requirements of the Securities Exchange Act of 1934, as
amended (the “1934 Act”) and the rules and
regulations of the Commission thereunder (the “1934 Act
Regulations”), and, when read together with the other
information in the Offering Memorandum, at the time the Offering
Memorandum was issued and at Closing Time, did not and will not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading.
(iii)
Independent
Accountants . KPMG LLP, who has
expressed its opinion with respect to the financial statements
(including the related notes thereto) and supporting schedules
included in the Offering Memorandum are independent registered
public accountants with respect to the Company and its subsidiaries
within the meaning of Regulation S-X under the
1933 Act.
(iv)
Financial
Statements . The consolidated
financial statements, together with the related schedules and
notes, included in the Offering Memorandum present fairly the
financial position of the Company and its consolidated subsidiaries
at the dates indicated and the statement of operations,
stockholders’ equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles (“GAAP”) applied on a consistent
basis throughout the periods involved. The supporting
schedules, if any, included in the Offering Memorandum present
fairly in accordance with GAAP the information required to be
stated therein. The selected financial data and the summary
financial information included in the Offering Memorandum present
fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements
included in the Form 10-K which is incorporated by reference
in the Offering Memorandum.
(v)
No Material
Adverse Change in Business . Since the respective
dates as of which information is given in the Offering Memorandum,
except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business (a
“Material Adverse Effect”), (B) there have been no
transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vi)
Good Standing
of the Company . The Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware 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 to
enter into and perform its obligations under this
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Agreement, the
Indenture, the Securities, the Exchange Securities, the
Registration Rights Agreement and the DTC Agreement; and the
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii)
Good Standing
of Subsidiaries . The Company does not
own or control, directly or indirectly, any corporation,
association, partnership or other entity other than the
subsidiaries listed in Schedule C to this Agreement (each such
corporation, association, partnership or other entity, a
“Subsidiary”). Each Subsidiary has been duly
organized and is validly existing as an entity in good standing
under the laws of the jurisdiction of its organization, has the
requisite power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering
Memorandum and 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
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed
in the Offering Memorandum (including under the caption
“Description of Other Indebtedness”), all of the issued
and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and
is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; and none of the outstanding shares of
capital stock of each Subsidiary was issued in violation of any
preemptive or similar rights of any securityholder of such
Subsidiary.
(viii)
Capitalization
. The
authorized, issued and outstanding capital stock of the Company is
as set forth in the financial statements, including the schedules
and notes, included or incorporated in the Offering Memorandum
(except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements, employee benefit
plans referred to in the Offering Memorandum or pursuant to the
exercise of convertible securities or options referred to in the
Offering Memorandum). At October 31, 2004, on a
consolidated basis, after giving pro forma effect to the
issuance and sale of the Securities pursuant hereto, the
Company’s additional borrowings under the Senior Credit
Facility and the application of the net proceeds from the sale of
the Securities and the Company’s additional borrowings under
the Senior Credit Facility in the manner described under the
caption “Use of Proceeds” in the Offering Memorandum,
the Company would have the capitalization as set forth under the
“As Adjusted” column of the table in the Offering
Memorandum under the caption “Capitalization”.
The shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock
of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(ix)
Authorization
of Agreement . This Agreement has
been duly authorized, executed and delivered by the Company, and is
a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors’ rights generally and except as enforcement thereof
is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law).
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(x)
Authorization
of the Indenture . The Indenture has
been duly authorized by the Company and, when executed and
delivered by the Company and the Trustee, will constitute a valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors’ rights generally and except as enforcement thereof
is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law).
(xi)
Authorization
of the Securities and the Exchange Securities
.
(A) The Securities have been duly authorized and, at Closing
Time (as defined in Section 2(b) hereof), will have been
duly executed by the Company and, when authenticated, issued and
delivered in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor as provided in this
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 (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors’ rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the
form contemplated by, and entitled to the benefits of, the
Indenture; and (B) the Exchange Securities 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 (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors’ rights generally and except as enforcement thereof
is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and
will be in the form contemplated by, and entitled to the benefits
of, the Indenture.
(xii)
Description of
the Securities, the Indenture and the Registration Rights
Agreement . The Securities, the
Exchange Securities, the Indenture and the Registration Rights
Agreement will conform in all material respects to the respective
statements relating thereto contained in the Offering Memorandum
and will be in substantially the respective forms last delivered to
the Initial Purchasers prior to the date of this
Agreement.
(xiii)
The
Registration Rights Agreement and the DTC Agreement
. At the
Closing Time (as defined in Section 2(b) hereof), each of
the Registration Rights Agreement and the DTC Agreement will be
duly authorized, executed and delivered by, and 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 (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors’ rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xiv)
Absence of
Defaults and Conflicts . Neither the Company
nor any Subsidiary is in violation of its charter or by-laws or in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any
Subsidiary is a party or by which or any of them may be bound, or
to which any
5
of the property
or assets of the Company or any Subsidiary is subject
(collectively, “Agreements and Instruments”) except for
such defaults that would not result in a Material Adverse Effect;
and the issuance and delivery of the Securities and the Exchange
Securities, and the execution, delivery and performance of this
Agreement, the Indenture, the Registration Rights Agreement, the
DTC Agreement and any other agreement or instrument entered into or
issued or to be entered into or issued by the Company in connection
with the transactions contemplated hereby or thereby or in the
Offering Memorandum and compliance by the Company with its
obligations thereunder, and the consummation of the transactions
contemplated herein or therein and in the Offering Memorandum
(including the issuance and sale of the Securities and the use of
the proceeds from the sale of the Securities and the borrowings
under the Senior Credit Facility as described in the Offering
Memorandum under the caption “Use of Proceeds”) have
been duly authorized by all necessary corporate action and do not
and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result
in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any Subsidiary
pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or Repayment Events or liens,
charges or encumbrances that, singly or in the aggregate, would not
result in a Material Adverse Effect, nor will such action result in
any violation of the provisions of the charter or by-laws of the
Company or any Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their
assets, properties or operations. As used herein, a
“Repayment Event” means any event or condition which
gives 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 the Company or any
Subsidiary.
(xv)
Absence of
Labor Dispute . No labor dispute with
the employees of the Company or any Subsidiary exists or, to the
knowledge of the Company, is imminent, and the Company is not aware
of any existing or imminent labor disturbance by the employees of
any of its or any Subsidiary’s principal suppliers,
manufacturers, customers or contractors, which, in either case,
would result in a Material Adverse Effect.
(xvi)
Absence of
Proceedings . Except as otherwise
disclosed in the Offering Memorandum, there is no action, suit,
proceeding, inquiry or investigation before or brought by any court
or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened, against or
affecting the Company or any Subsidiary which might result in a
Material Adverse Effect, or which might materially and adversely
affect the properties or assets of the Company or any Subsidiary or
the consummation of the transactions contemplated by this Agreement
or the performance by the Company of its obligations
hereunder. The aggregate of all pending legal or governmental
proceedings to which the Company or any Subsidiary is a party or of
which any of their respective property or assets is the subject
which are not described in the Offering Memorandum, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse
Effect.
(xvii)
Absence of
Manipulation . Neither the Company
nor any person that the Company directly, or indirectly through one
or more intermediaries, controls (each such person, an
“Affiliate”) has taken, nor will the Company or any
Affiliate take, directly or indirectly, any action which is
designed to or which has constituted or which would be 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.
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(xviii)
Possession of
Intellectual Property . The Company and the
Subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, “Intellectual
Property”) necessary to carry on the business now operated by
them, and neither the Company nor any Subsidiary has received any
notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest
of the Company or any Subsidiary therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xix)
Absence of
Further Requirements . No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required in connection with the offering,
issuance or sale of the Securities or the Exchange Securities
hereunder or for the due execution, delivery or performance of this
Agreement, the Indenture, the Registration Rights Agreement or the
DTC Agreement by the Company, or the consummation of the
transactions contemplated thereunder and by the Offering
Memorandum, except such as have been already obtained.
(xx)
Compliance
with Laws . Each of the Company
and the Subsidiaries is in compliance in all material respects with
all international, foreign, federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any governmental
authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders,
directed duties, requests, licenses, authorizations and permits of,
and agreements with, any governmental authority, in each case
whether or not having the force of law, except where the failure to
so comply would not, singly or in the aggregate, result in a
Material Adverse Effect.
(xxi)
Possession of
Licenses and Permits . The Company and the
Subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, “Governmental
Licenses”) issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure so to
possess would not, singly or in the aggregate, result in a Material
Adverse Effect; the Company and the Subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses,
except where the failure so to comply would not, singly or in the
aggregate, result in a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect,
except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, result in a Material
Adverse Effect; and neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xxii)
Title to
Property . The Company and the
Subsidiaries have good and marketable title to all real property
owned by the Company and the Subsidiaries and good title to all
other properties owned by them, in each case free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions
or encumbrances of any kind, except such as (A) are described
in the Offering Memorandum or (B) do not, singly or in the
aggregate, materially affect
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the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company or any Subsidiary; and all of
the leases and subleases material to the business of the Company
and the Subsidiaries, considered as one enterprise, and under which
the Company or any Subsidiary holds properties described in the
Offering Memorandum, are in full force and effect, and neither the
Company nor any Subsidiary has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of
the Company or any Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the
Company or any Subsidiary to the continued possession of the leased
or subleased premises under any such lease or sublease.
(xxiii)
Environmental
Laws . Except as described
in the Offering Memorandum and except such matters as would not,
singly or in the aggregate, result in a Material Adverse Effect,
(A) neither the Company nor any Subsidiary is in violation of
any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, 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 the
release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products, asbestos-containing materials or
mold (collectively, “Hazardous Materials”) or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials
(collectively, “Environmental Laws”), (B) the
Company and the Subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are
each in compliance with their requirements, (C) there are no
pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating
to any Environmental Law against the Company or any Subsidiary and
(D) there are no events or circumstances that would reasonably
be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party
or governmental body or agency, against or affecting the Company or
any Subsidiary relating to Hazardous Materials or Environmental
Laws.
(xxiv)
ERISA
Compliance . The Company and any
“employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively,
“ERISA”)) established or maintained by the Company or
its “ERISA Affiliates” (as defined below) are in
compliance in all material respects with ERISA. “ERISA
Affiliate” means, with respect to the Company, any member of
any group of organizations described in Section 414, of the
Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the “Code”) of
which the Company 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 or any of its
ERISA Affiliates. No “employee benefit plan”
established or maintained by the Company or any of its ERISA
Affiliates, if such “employee benefit plan” were
terminated, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA). None of the
Company nor any of its ERISA Affiliates has incurred or reasonably
expects to incur (i) any liability under Title IV of
ERISA with respect to the termination of, or withdrawal from, any
“employee benefit plan”; or (ii) any liability
under Sections 412, 4971 or 4975 of the Code; or
(iii) any material liability under Section 490B of the
Code. Each “employee benefit plan” established or
maintained by the Company or any of its ERISA Affiliates that is
intended to be qualified under Section 401 of the Code is so
qualified
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and nothing has
occurred, whether by action or failure to act, which would cause
the loss of such qualification.
(xxiv)
Investment
Company Act . The Company is not
required, and upon the issuance and sale of the offered Securities
as herein contemplated and the application of the net proceeds
therefrom as described in the Offering Memorandum will not be
required, to register as an “investment company” under
the Investment Company Act of 1940, as amended (the “1940
Act”).
(xxv)
Similar
Offerings . Neither the Company
nor any of its Affiliates, has, directly or indirectly, solicited
any offer to buy, sold or offered to sell or otherwise negotiated
in respect of, or will solicit any offer to buy, sell or offer to
sell or otherwise negotiate in respect of, 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 offered Securities to be registered under
the 1933 Act.
(xxvi)
Rule 144A
Eligibility . The Securities are
eligible for resale pursuant to Rule 144A and will not be, at
Closing Time, of the same class as securities listed on a national
securities exchange registered under Section 6 of the
1934 Act, or quoted in a U.S. automated interdealer quotation
system.
(xxvii)
No General
Solicitation . None of the Company,
its Affiliates or any person acting on its or any of their behalf
(other than the Initial Purchasers, as to whom the Company makes no
representation) has engaged or will engage, in connection with the
offering of the offered Securities, in any form of general
solicitation or general advertising within the meaning of
Rule 502(c) under the 1933 Act.
(xxviii)
No
Registration Required . Subject to
compliance by the Initial Purchasers with the representations and
warranties set forth in Section 2 and the procedures set forth
in Section 6 hereof, it is not necessary in connection with
the offer, sale and delivery of the offered 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 1933 Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the
“1939 Act”).
(xxix)
No Directed
Selling Efforts . With respect to those
offered Securities sold in reliance on Regulation S,
(A) none of the Company, its Affiliates or any person acting
on its or their behalf (other than the Initial Purchasers, as to
whom the Company makes no representation) has engaged or will
engage in any directed selling efforts within the meaning of
Regulation S and (B) each of the Company and its
Affiliates and any person acting on its or their behalf (other than
the Initial Purchasers, as to whom the Company makes no
representation) has complied and will comply with the offering
restrictions requirement of Regulation S and, in connection
therewith, the Offering Memorandum will contain the disclosure
required by Rule 902 of the 1933 Act.
(xxx)
Compliance
with Sections 402, 302 and 906 of the Sarbanes-Oxley Act
. There is
and has been no failure on the part of the Company or any of the
Company’s directors or officers, in their capacities as such,
to comply in all material respects with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley
Act”), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
9
(xxxi)
Payment of
Taxes . The Company and the
Subsidiaries have filed all federal, state, local and foreign
income and franchise tax returns required to be filed through the
date hereof or has requested extensions thereof except in any case
in which the failure so to file would not have a Material Adverse
Effect and except as set forth in or contemplated in the Offering
Memorandum, and has paid all taxes required to be paid by it, to
the extent that any such tax is due and payable, except for any
such assessment that is currently being contested in good faith or
as would not have a Material Adverse Effect and except as set forth
in or contemplated in the Offering Memorandum. The charges,
accruals and reserves on the books of the Company in respect of any
income and corporation tax liability for any years not finally
determined are adequate to meet any assessments or re-assessments
for additional income tax for any years not finally determined,
except to the extent of any inadequacy that would not result in a
Material Adverse Effect.
(xxxii)
Internal
Accounting Control . The Company and the
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with
management’s general or specific authorization,
(B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets, (C) access to assets is permitted only in accordance
with management’s general or specific authorization and
(D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xxxiii)
No Unlawful
Contributions or Other Payments . Neither the Company
nor any of Subsidiary nor, to the best of the Company’s
knowledge, any employee or agent of the Company or any Subsidiary,
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.
(xxxiv)
Insurance
. The Company
and the Subsidiaries carry or are entitled to the benefits of
insurance, with reputable insurers of recognized financial
responsibility, in such amounts and covering such risks as are
reasonable in the businesses in which they are engaged, and all
such insurance is in full force and effect.
(xxxv)
Absence of
Registration Rights . There are no persons with
registration rights or other similar rights to have any securities
(other than the Securities) of the Company registered pursuant to
the Registration Statement.
(xxxvi)
Solvency
. The Company
is, and immediately after the Closing Time (as defined in
Section 2(b) hereof) will be, Solvent. As used
herein, the term “Solvent” means, with respect to the
Company on a particular date, that on such date (A) the fair
market value of the assets of the Company is greater than the total
amount of liabilities (including contingent liabilities) of the
Company, (B) the present fair salable value of the assets of
the Company is greater than the amount that will be required to pay
the probable liabilities of the Company on its debts as they become
absolute and matured, (C) the Company is able to realize upon
its assets and pay its debts and other liabilities, including
contingent obligations, as they mature, and (D) the Company
does not have unreasonably small capital.
(xxxvii)
No
Distribution of Unauthorized Materials . The Company has not
distributed and, prior to the later to occur of (i) the
Closing Time (as defined in Section 2(b) hereof) and
(ii) completion of the distribution of the Securities, will
not distribute any offering material in
10
connection with
the offering and sale of the Securities other than the Offering
Memorandum or other materials, if any, approved by the
Representative.
(xxxviii)
Stabilization
. Neither Company
nor any of its officers, directors or controlling persons has
taken, directly or indirectly, any action designed to cause or to
result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of the Securities.
(xxxix)
Supply of
Merchandise . No supplier of merchandise
to the Company or any Subsidiary has ceased shipments of
merchandise to the Company or any Subsidiary, other than in the
normal and ordinary course of business consistent with past
practices, which cessation would not result in a Material Adverse
Effect.
(xl)
Senior Credit
Facility . As of the
date hereof, the Company is not aware of any fact which will
prevent it, on or prior to the Closing Time (as defined in
Section 2(b) hereof), to borrow funds under the Senior
Credit Facility, in amounts that are sufficient, together with the
proceeds from the proceeds of the offering of Securities
contemplated by this Agreement, as described in the Offering
Memorandum to repurchase the Subordinated Notes pursuant to the
terms of the Tender Offer and Consent Solicitation, or otherwise
redeem the Subordinated Notes.
(xli)
Tender Offer
and Consent Solicitation . The Company has
received such number of Consents irrevocably deposited pursuant to
the Tender Offer and Consent Solicitation as is necessary to amend
the Subordinated Notes Indenture as contemplated by the Tender
Offer and Consent Solicitation and the Company shall have entered
into a supplemental indenture amending the Subordinated Notes
Indenture as contemplated in the Tender Offer and Consent
Solicitation.
(xIiii)
The agreements, contracts or
instruments listed in Exhibit D attached hereto are, as of the
date hereof, the only material agreements, contracts or instruments
that are binding upon the Company and its subsidiaries on the date
hereof that are material to the operation of the business of the
Company and its subsidiaries.
(b) Officer’s
Certificates . Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the
Representative or to counsel for the Initial Purchasers shall be
deemed a representation and warranty by the Company to each Initial
Purchaser as to the matters covered thereby.
SECTION 2.
Sale and Delivery to Initial
Purchasers; Closing .
(a) Securities .
On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Initial Purchaser, severally and not
jointly, and each Initial Purchaser, severally and not jointly,
agrees to purchase from the Company, at the price set forth in
Sche
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