<PAGE>
EXHIBIT 1.1
EXECUTION COPY
$577,173,000
CINEMARK, INC.
9 3/4% SENIOR DISCOUNT NOTES DUE 2014
PURCHASE AGREEMENT
March 29, 2004
LEHMAN BROTHERS INC.
GOLDMAN, SACHS & CO.
DEUTSCHE BANK SECURITIES INC.
CIBC WORLD MARKETS CORP.
BNY CAPITAL MARKETS, INC.
c/o Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
-and-
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Ladies and Gentlemen:
Cinemark,
Inc., a Delaware corporation (the "COMPANY"), proposes,
subject to the terms and conditions stated
herein, to issue and sell
$577,173,000 aggregate principal amount at
maturity of its 9 3/4% Senior
Discount Notes due 2014 (the "SECURITIES")
to Lehman Brothers Inc. ("LEHMAN
BROTHERS"), Goldman, Sachs & Co.
("GOLDMAN SACHS") and the other initial
purchasers named in Schedule 1 hereto
(collectively, the "INITIAL PURCHASERS").
The Securities will be issued pursuant to
an indenture (the "INDENTURE") to be
dated as of the Closing Date (as defined in
Section 2(a)) between the Company
and The Bank of New York Trust Company,
N.A., as trustee (the "TRUSTEE").
The Securities are being issued and sold in connection with a
recapitalization transaction pursuant to
which: (i) Popcorn Merger Corp., a
Delaware corporation and newly formed
subsidiary of Madison Dearborn Partners,
LLC ("MDP"), will merge with and into the
Company with the Company continuing as
the surviving corporation in accordance
with the Agreement and Plan of Merger,
dated as of March 12, 2004, between Popcorn
Merger Corp. and the Company (the
"MERGER AGREEMENT"); (ii) an affiliate of
MDP will purchase shares of
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2
common stock of the Company for
approximately $518.3 million in cash, subject to
certain adjustments; (iii) Lee Roy
Mitchell, the Mitchell Special Trust and
certain members of the Company's management
will retain a portion of their
current holdings of shares of common stock
of the Company; (iv) Cinemark USA,
Inc., a wholly owned indirect subsidiary of
the Company, will repurchase its
$105,000,000 aggregate principal amount of
8 1/2% Series B Senior Subordinated
Notes due 2008; (v) Cinemark USA, Inc. will
repay all amounts outstanding under
its Credit Agreement, dated as of February
14, 2003, as amended, with Lehman
Commercial Paper Inc., as administrative
agent, and a syndicate of lenders and
(vi) Cinemark USA, Inc. will enter into an
amended and restated credit facility,
consisting of a $260 million term loan and
a $100 million revolving credit
facility, with Lehman Commercial Paper
Inc., as administrative agent, Goldman,
Sachs Credit Partners L.P., as syndication
agent, Lehman Brothers and Goldman,
Sachs Credit Partners L.P., as joint
advisors, joint lead arrangers and joint
book-runners, and a syndicate of banks,
financial institutions and other
institutional lenders. For purposes of this
Agreement, the term
"RECAPITALIZATION" shall have the meaning
set forth in the Offering Memorandum
(as defined in Section 1(a)); and the term
"TRANSACTIONS" shall have the meaning
set forth in the Offering Memorandum.
On or prior to the Closing Date, the Company will execute an
escrow agreement, in the form and substance
to be agreed between the Company and
the Initial Purchasers, which shall conform
in all material respects with the
description thereof included in the
Offering Memorandum (the "ESCROW
AGREEMENT"), and will direct the deposit in
an escrow account (the "ESCROW
ACCOUNT") with The Bank of New York, as
escrow agent (the "ESCROW AGENT"), the
gross proceeds of the offering of the
Securities, together with an additional
$4,290,000, such that the escrowed funds
(the "ESCROWED FUNDS") are in an amount
sufficient to redeem the Securities in cash
at a redemption price equal to
100.0% of the accreted value of the
Securities on May 14, 2004, in the event
that the Recapitalization is not
consummated on or prior to May 12, 2004 or if
the Merger Agreement is terminated in
accordance with its terms prior to such
date. The Escrow Agreement shall provide
that the Escrowed Funds shall only be
released and paid out pursuant to the terms
of the Escrow Agreement.
This is to confirm the agreement among the Company and the
Initial Purchasers concerning the offer,
issue and sale of the Securities.
The Securities will be offered and sold to the Initial
Purchasers
without being registered under the
Securities Act of 1933, as amended, and the
rules and regulations of the Securities and
Exchange Commission (the
"COMMISSION") thereunder (collectively, the
"SECURITIES ACT"), in reliance upon
an exemption therefrom.
Holders of the Securities (including the Initial Purchasers and
their direct and indirect transferees) will
be entitled to the benefits of a
Registration Rights Agreement, dated as of
the Closing Date (the "REGISTRATION
RIGHTS AGREEMENT"), the form of which is
contained in Annex A hereof, pursuant
to which the Company will agree, among
other things, to use its reasonable best
efforts to file with the Commission (i) a
registration statement under the
Securities Act (the "EXCHANGE OFFER
REGISTRATION STATEMENT") covering the
issuance of a series of the Company's debt
securities identical in all respects
to the Securities except that such debt
securities will not be subject to
transfer restrictions under the Securities
Act (the "EXCHANGE SECURITIES") and
the offer to exchange such Exchange
Securities for the Securities (the
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"EXCHANGE OFFER") and (ii) under certain
circumstances described therein, a
shelf registration statement pursuant to
Rule 415 under the Securities Act (the
"SHELF REGISTRATION STATEMENT"; and,
together with the Exchange Offer
Registration Statement, the "REGISTRATION
STATEMENTS"), and, in each case, to
use its reasonable best efforts to cause
the Registration Statements to be
declared effective within the time periods
specified therein.
This Agreement, the Indenture, the Registration Rights
Agreement
and the Escrow Agreement are referred to
herein collectively as the "TRANSACTION
DOCUMENTS".
SECTION 1. Representations, Warranties and
Agreements of the Company . The
Company represents and warrants to, and
agree with, the Initial Purchasers that:
(a) The Company has prepared a preliminary offering memorandum
dated March 19, 2004 (the "PRELIMINARY
OFFERING MEMORANDUM") and will prepare an
offering memorandum dated the date hereof
(the "OFFERING MEMORANDUM") setting
forth information concerning the Company,
the Securities and the Registration
Rights Agreement, in form and substance
satisfactory to you. Copies of the
Preliminary Offering memorandum have been,
and copies of the Offering Memorandum
will be, delivered by the Company to you.
As used in this Agreement,
"PRELIMINARY OFFERING MEMORANDUM" or
"OFFERING MEMORANDUM" means the Preliminary
Offering Memorandum or Offering Memorandum,
as the case may be, as amended or
supplemented, unless otherwise noted. Each
of the Preliminary Offering
Memorandum and the Offering Memorandum, as
of its respective date, did not, and
on the Closing Date the Offering Memorandum
will not, contain 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; provided
that the Company makes no
representation or warranty as to
information contained in or omitted from the
Preliminary Offering Memorandum or the
Offering Memorandum in reliance upon and
in conformity with written information
relating to the Initial Purchasers
furnished to the Company by the Initial
Purchasers specifically for inclusion
therein.
(b) The Company and each of its subsidiaries (as defined in
Section 14) have been duly organized and
are validly existing as corporations or
other business organizations, as
applicable, in good standing under the laws of
their respective jurisdictions of
incorporation or organization, as applicable,
are duly qualified to do business and are
in good standing as foreign
corporations or other business
organizations, as applicable, in each
jurisdiction in which their respective
ownership or lease of property or the
conduct of their respective businesses
requires such qualification, and have all
power and authority necessary to own or
hold their respective properties and to
conduct the businesses in which they are
engaged, except where the failure to so
qualify to be in good standing would not
reasonably be expected to have,
individually or in the aggregate, a
material adverse effect on the consolidated
financial position, stockholders' equity,
results of operations, business or
prospects of the Company and its
subsidiaries taken as a whole or on the
performance by the Company of its
obligations under this Agreement or the
Securities (a "MATERIAL ADVERSE EFFECT");
and none of the subsidiaries of the
Company, other than Cinemark USA, Inc.,
CNMK Holding, Inc., Cinemark Mexico
(USA), Inc., Cinemark Holdings Mexico S.A.
de R.L. de C.V., Cinemark de Mexico
S.A. de C.V., CNMK Investments, Inc., CNMK
Delaware Investments II, L.L.C., CNMK
Delaware Investment Properties, L.P.,
and
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CNMK Texas Properties, Ltd., is a
"SIGNIFICANT SUBSIDIARY," as such term is
defined in Rule 405 under the Securities
Act.
(c) As of the Closing Date, the Company will have the
authorized
capitalization as set forth in the Offering
Memorandum, all of the issued shares
of capital stock of the Company will have
been duly authorized and validly
issued and will be fully paid and
non-assessable; and, as of the date hereof and
the Closing Date, all of the issued shares
of capital stock or membership
interests, as applicable, of each
subsidiary of the Company have been duly
authorized and validly issued and are fully
paid and non-assessable and, except
as described in the Offering Memorandum and
for directors' qualifying shares,
are owned directly or indirectly by the
Company, free and clear of all liens,
encumbrances, equities or claims.
(d) The Company has all necessary power and authority to
execute
and deliver this Agreement and perform its
obligations hereunder; this Agreement
has been duly authorized, executed and
delivered by the Company and the
transactions contemplated hereby have been
duly authorized by the Company;
assuming due authorization, execution and
delivery by the Initial Purchasers,
this Agreement constitutes a legally valid
and binding agreement of the Company,
enforceable against the Company in
accordance with its terms, subject to the
effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization,
moratorium and other similar laws relating
to or affecting creditors' rights
generally, general equitable principles
(whether considered in a proceeding in
equity or at law) and an implied covenant
of good faith and fair dealing, and
except with respect to the rights of
indemnification and contribution hereunder,
where enforcement hereof may be limited by
federal or state securities laws or
the policies underlying such laws; and this
Agreement will conform in all
material respects to the description
thereof contained in the Offering
Memorandum.
(e) The Company has all necessary power and authority to
execute
and deliver the Indenture and perform its
obligations thereunder; the Indenture
has been duly authorized by the Company
and, upon the effectiveness of the
Exchange Offer Registration Statement and
the Shelf Registration Statement (if
applicable), will be qualified under the
Trust Indenture Act of 1939, as
amended, and the rules and regulations of
the Commission thereunder
(collectively, the "TRUST INDENTURE ACT");
on the Closing Date, the Indenture
will have been duly executed and delivered
by the Company and, assuming due
authorization, execution and delivery of
the Indenture by the Trustee, the
Indenture will constitute a legally valid
and binding agreement of the Company,
enforceable against the Company in
accordance with its terms, subject to the
effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization,
moratorium and other similar laws relating
to or affecting creditors' rights
generally, general equitable principles
(whether considered in a proceeding in
equity or at law) and an implied covenant
of good faith and fair dealing; and
the Indenture will conform, when executed,
in all material respects to the
description thereof contained in the
Offering Memorandum.
(f) The Company has all necessary power and authority to
execute,
issue and deliver the Securities and
perform its obligations thereunder; the
Securities have been duly authorized by the
Company, and when the Securities are
delivered to and paid for by the Initial
Purchasers pursuant to this Agreement,
assuming due authentication thereof by the
Trustee, the Securities will be duly
executed and delivered by the Company and
will constitute legally valid and
binding obligations of the Company entitled
to the benefits of the Indenture and
enforceable
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5
against the Company in accordance with
their terms, subject to the effects of
bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and
other similar laws relating to or affecting
creditors' rights generally, general
equitable principles (whether considered in
a proceeding in equity or at law)
and an implied covenant of good faith and
fair dealing; and the Securities will
conform, when issued, in all material
respects to the description thereof
contained in the Offering Memorandum.
(g) The Company has all necessary power and authority to engage
in the Exchange Offer and to execute, issue
and deliver the Exchange Securities
and perform its obligations thereunder; the
Exchange Securities have been duly
authorized by the Company and, if and when
duly executed, authenticated and
issued in accordance with the terms of the
Indenture and delivered in accordance
with the Exchange Offer, assuming due
authentication of the Exchange Securities
by the Trustee, such Exchange Securities
will constitute legally valid and
binding obligations of the Company entitled
to the benefits of the Indenture,
enforceable against the Company in
accordance with their terms, except as the
enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and
other similar laws relating to or
affecting creditors' rights generally,
subject to general principles of equity
and to limitations on availability of
equitable relief, including specific
performance (whether considered in a
proceeding in equity or at law) and an
implied covenant of good faith and fair
dealing; and the Exchange Securities
will conform, when issued, in all material
respects to the description thereof
contained in the Offering Memorandum.
(h) The Company has all necessary power and authority to
execute
and deliver the Registration Rights
Agreement and perform its obligations
thereunder; the Registration Rights
Agreement and the transactions contemplated
thereby have been duly authorized by the
Company and, when duly executed and
delivered by the Company assuming due
authorization, execution and delivery by
the Initial Purchasers, the Registration
Rights Agreement will constitute a
legally valid and binding agreement of the
Company, enforceable against the
Company in accordance with its terms,
except as the enforceability thereof may
be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization,
moratorium and other similar laws relating
to or affecting creditors' rights
generally, subject to general principles of
equity and to limitations on
availability of equitable relief, including
specific performance (whether
considered in a proceeding in equity or at
law) and an implied covenant of good
faith and fair dealing, and except with
respect to the rights of indemnification
and contribution thereunder, where
enforcement thereof may be limited by federal
or state securities laws or the policies
underlying such laws; and the
Registration Rights Agreement will conform,
when executed and delivered, in all
material respects to the description
thereof contained in the Offering
Memorandum.
(i) The Company has all necessary power and authority to
execute
and deliver the Escrow Agreement and
perform its obligations thereunder; the
Escrow Agreement and the transactions
contemplated thereby have been duly
authorized by the Company and, when duly
executed and delivered by the Company
assuming due authorization, execution and
delivery by the Escrow Agent, the
Escrow Agreement will constitute a legally
valid and binding agreement of the
Company, enforceable against the Company in
accordance with its terms, except as
the enforceability thereof may be limited
by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and
other similar laws relating to or
affecting creditors' rights
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6
generally, subject to general principles of
equity and to limitations on
availability of equitable relief, including
specific performance (whether
considered in a proceeding in equity or at
law) and an implied covenant of good
faith and fair dealing; and the Escrow
Agreement will conform, when executed and
delivered, in all material respects to the
description thereof contained in the
Offering Memorandum.
(j) The execution, delivery and performance by the Company of
this Agreement and the other Transaction
Documents to which each is a party, the
issuance and sale of the Securities,
compliance by the Company with all
provisions hereof and thereof and the
consummation of the transactions
contemplated hereby and thereby will not
(i) conflict with or result in a breach
or violation of any of the terms or
provisions of, or constitute a default
under, any indenture, mortgage, deed of
trust, loan agreement, lease, pledge or
other agreement or instrument to which the
Company or any of its subsidiaries is
a party or by which the Company or any of
its subsidiaries is bound or to which
any of the property or assets of the
Company or any of its subsidiaries is
subject, (ii) result in any violation of
the provisions of the charter or bylaws
of the Company or the charter or bylaws or
any joint venture, partnership,
limited liability company, shareholders' or
other agreement or organizational
document of any of the Company's
subsidiaries, or (iii) result in any violation
of any statute or any order, rule or
regulation of any court or governmental
agency or body (whether domestic or
foreign) having jurisdiction over the
Company or any of its subsidiaries or any
of their properties or assets except,
in the case of clauses (i) and (iii), such
conflicts, breaches or violations
that would not reasonably be expected to
have, individually or in the aggregate,
a Material Adverse Effect, no consent,
approval, authorization or order of, or
filing or registration with, any such court
or governmental agency or body
(whether domestic or foreign) is required
for the execution, delivery and
performance by the Company of this
Agreement and the other Transaction Documents
to which it is a party, the issuance and
sale of the Securities and the
consummation of the transactions
contemplated hereby and thereby, except (i)
with respect to the transactions
contemplated by the Registration Rights
Agreement, as may be required under the
Securities Act and the qualification of
the Indenture under the Trust Indenture
Act, (ii) as required by applicable
state or foreign securities laws in
connection with the purchase and resale of
the Securities by the Initial Purchasers,
and (iii) as have been made or
obtained on or prior to the Closing
Date.
(k) Except as described in the Offering Memorandum, there are
no
contracts, agreements or understandings
between the Company and any person
granting such person the right to require
the Company to file a registration
statement under the Securities Act with
respect to any securities of the Company
owned or to be owned by such person or to
require the Company to include such
securities in any securities being
registered pursuant to any registration
statement filed by the Company under the
Securities Act.
(l) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest
audited financial statements included in
the Offering Memorandum, any loss or
interference with its business from fire,
explosion, flood or other calamity, whether
or not covered by insurance, or from
any labor dispute or court or governmental
action, order or decree (whether
domestic or foreign) otherwise than as set
forth or contemplated in the Offering
Memorandum except where such losses or
interferences would not reasonably be
expected to have, individually or in the
aggregate, a Material Adverse Effect;
and, since such date, there has not been
any material change in the capital
stock or material increase in the long-term
debt of the
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7
Company or any of its subsidiaries or any
adverse change, or any development
involving a prospective adverse change,
that would reasonably be expected to
have, individually or in the aggregate, a
Material Adverse Effect, otherwise
than as set forth or contemplated in the
Offering Memorandum.
(m) The consolidated financial statements (including the
related
notes) included in the Offering Memorandum
present fairly in all material
respects the financial position and results
of operations of the Company and its
subsidiaries, at the dates and for the
periods indicated, and have been prepared
in conformity with generally accepted
accounting principles in the United States
applied on a consistent basis throughout
the periods involved; the pro forma
information (including the related notes)
included in the Offering Memorandum
has been prepared in accordance with the
Commission's rules and guidance with
respect to pro forma financial information,
and the assumptions underlying such
pro forma information are, as of the dates
of the Preliminary Offering
Memorandum and the Offering Memorandum,
reasonable for presenting the
significant effects directly attributable
to the Transactions and are set forth
in the Offering Memorandum.
(n) Deloitte & Touche LLP, who have certified certain
financial
statements of the Company, whose report
appears in the Offering Memorandum and
who have delivered the initial letter
referred to in Section 5(f) hereof, are
independent public accountants as required
by the Securities Act and the Rules
and Regulations.
(o) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real
property and good and marketable
title to all personal property owned by
them, in each case free and clear of all
liens, encumbrances and defects, except
such as are described in the Offering
Memorandum or such as could not,
individually or in the aggregate, have a
Material Adverse Effect; and, except as
described in the Offering Memorandum,
all assets held under lease by the Company
and its subsidiaries are held by them
under valid, subsisting and enforceable
leases, except such as are described in
the Offering Memorandum or such as could
not, individually or in the aggregate,
have a Material Adverse Effect.
(p) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and
covering such risks which the Company
believes are adequate for the conduct of
their respective businesses and the
value of their respective properties.
(q) The Company and each of its subsidiaries own, possess or
can
acquire on reasonable terms adequate rights
to use all material patents, patent
applications, trademarks, service marks,
trade names, trademark registrations,
service mark registrations, copyrights and
licenses necessary for the conduct of
their respective businesses and have no
reason to believe that the conduct of
their respective businesses will conflict
with, and have not received any notice
of any claim of conflict with, any such
rights of others that, if determined
adversely to the Company or any of its
subsidiaries would reasonably be likely
to have, individually or in the aggregate,
a Material Adverse Effect.
(r) Except as described in the Offering Memorandum, there are
no
legal or governmental proceedings (whether
domestic or foreign) pending to which
the Company or any of its subsidiaries is a
party or of which any property or
assets of the Company or any of its
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8
subsidiaries is the subject which, if
determined adversely to the Company or any
of its subsidiaries, would reasonably be
expected to have, individually or in
the aggregate, a Material Adverse Effect;
and to the best of the Company's
knowledge, no such proceedings are
threatened or contemplated by governmental
authorities or threatened by others.
(s) There are no contracts or other documents which would be
required to be described in the Offering
Memorandum if the Offering Memorandum
were a prospectus included in a
registration statement on Form S-1 that has not
been so described therein.
(t) No relationship, direct or indirect, exists between or
among
the Company on the one hand, and the
directors, officers, stockholders,
customers or suppliers of the Company on
the other hand, which would be required
to be described in the Offering Memorandum
if the Offering Memorandum were a
prospectus included in a registration
statement on Form S-1 that has not been so
described therein.
(u) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is
imminent, which would reasonably be
expected to have, individually or in the
aggregate, a Material Adverse Effect.
(v) The Company and members of its controlled group within the
meaning of Sections 414 of the Internal
Revenue Code of 1986, as amended,
including the regulations and published
interpretations thereunder (the "CODE")
are in compliance in all respects with all
presently applicable provisions of
the Employee Retirement Income Security Act
of 1974, as amended, including the
regulations and published interpretations
thereunder ("ERISA"), except where the
failure to be in such compliance would not
reasonably be likely to have,
individually or in the aggregate, a
Material Adverse Effect; no "REPORTABLE
EVENT" (as defined in ERISA) has occurred
and is continuing with respect to any
"PENSION PLAN" (as defined in ERISA) for
which the Company and such members
would have any liability; except for
matters that would not reasonably be likely
to have, individually or in the aggregate,
a Material Adverse Effect; the
Company and such members have not incurred
and do not expect to incur liability
under (i) Title IV of ERISA with respect to
termination of, or withdrawal from,
any "PENSION PLAN" or (ii) Sections 412 or
4971 of the Code, and each "PENSION
PLAN" for which the Company and such
members would have any liability that is
intended to be qualified under Section
401(a) of the Code is so qualified in all
material respects and nothing has occurred,
whether by action or by failure to
act, which would cause the loss of such
qualification.
(w) The Company has filed (or obtained extensions to file) all
federal, state, local and foreign income
and franchise tax returns required to
be filed by it through the date hereof,
except where the failure to so file
would not reasonably be expected to have,
individually or in the aggregate, a
Material Adverse Effect, and has paid all
taxes due thereon, other than those
(i) currently payable without penalty or
interest or (ii) being contested in
good faith and by appropriate proceedings
and for which, in the case of both (i)
and (ii), adequate reserves have been
established on the books and records of
the Company in accordance with generally
accepted accounting principles in the
United States. No tax deficiency has been
determined adversely to the Company or
any of its subsidiaries which has had (nor
does the Company have any knowledge
of any tax deficiency which, if determined
adversely to the Company or any of
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9
its subsidiaries) or would reasonably be
expected to have, individually or in
the aggregate, a Material Adverse
Effect.
(x) Since the date as of which information is given in the
Offering Memorandum through the date
hereof, and except as may otherwise be
disclosed in the Offering Memorandum, the
Company has not (i) issued or granted
any securities (other than pursuant to the
Company's employee benefit plans
described in the Offering Memorandum), (ii)
incurred any material liability or
obligation, direct or contingent, other
than liabilities and obligations which
were incurred in the ordinary course of
business, (iii) entered into any
material transaction not in the ordinary
course of business or (iv) declared or
paid any dividend on its capital stock.
(y) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting
controls which provide reasonable
assurance that (A) transactions are
executed in accordance with management's
authorization, (B) transactions are
recorded as necessary to permit preparation
of its financial statements and to maintain
accountability for its assets, (C)
access to its assets is permitted only in
accordance with management's
authorization and (D) the recorded
accountability for its assets is compared
with existing assets at reasonable
intervals.
(z) Neither the Company nor any of its subsidiaries (i) is in
violation of (A), in the case of the
Company, its charter or bylaws or (B) in
the case of any of the Company's
subsidiaries, its charter or bylaws or any of
its joint venture, partnership, limited
liability company, shareholders' or
other agreement or organizational document
as the case may be, except in the
case of this clause (B), where such
violation would not be reasonably expected
to have, individually or in the aggregate,
a Material Adverse Effect, (ii) is in
default in any respect, and no event has
occurred which, with notice or lapse of
time or both, would constitute such a
default, in the due performance or
observance of any term, covenant or
condition contained in any indenture,
mortgage, deed of trust, loan agreement,
lease, pledge or other agreement or
instrument to which it is a party or by
which it is bound or to which any of its
properties or assets is subject or (iii) is
in violation in any respect of any
law, ordinance, governmental rule,
regulation or court decree (whether domestic
or foreign) to which it or its property or
assets may be subject or has failed
to obtain any material license, permit,
certificate, franchise or other
governmental authorization or permit
(whether domestic or foreign) necessary to
the ownership of its property or to the
conduct of its business, except in the
case of clauses (ii) and (iii), such
defaults, events, violations or failures
that in the aggregate would not reasonably
be expected to have, individually or
in the aggregate, a Material Adverse Effect
and provided, however, that while
the Company believes that it is in
compliance with the provisions of the
Americans with Disabilities Act of 1990, as
disclosed in the Offering
Memorandum, it is a party to legal
proceedings alleging violations of that act.
(aa) Neither the Company nor any of its subsidiaries, nor to
the
best of the Company's knowledge, any
director, officer, agent, employee or other
person associated with or acting on behalf
of the Company or any of its
subsidiaries, has used any corporate or
organizational funds for any unlawful
contribution, gift, entertainment or other
unlawful expense relating to
political activity; made any direct or
indirect unlawful payment to any foreign
or domestic government official or employee
from corporate funds; violated or is
in violation of
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10
any provision of the Foreign Corrupt
Practices Act of 1977; or made any bribe,
rebate, payoff, influence payment, kickback
or other unlawful payment.
(bb) There has been no storage, disposal, generation,
manufacture, refinement, transportation,
handling or treatment of toxic wastes,
medical wastes, hazardous wastes or
hazardous substances by the Company or any
of its subsidiaries (or, to the knowledge
of the Company, any of its
predecessors in interest) at, upon or from
any of the property now or previously
owned or leased by the Company or its
subsidiaries in violation of any
applicable law, ordinance, rule,
regulation, order, judgment, decree or permit
or which would require remedial action
under any applicable law, ordinance,
rule, regulation, order, judgment, decree
or permit, except for any violation or
remedial action which would not reasonably
be expected to have, individually or
in the aggregate, a Material Adverse
Effect; there has been no spill, discharge,
leak, emission, injection, escape, dumping
or release of any kind onto such
property or into the environment
surrounding such property of any toxic wastes,
medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or
caused by the Company or any of its
subsidiaries or with respect to which the
Company or any of its subsidiaries have
knowledge, except for any such spill,
discharge, leak, emission, injection,
escape, dumping or release which would not
reasonably be expected to have,
individually or in the aggregate, a Material
Adverse Effect; and the terms "HAZARDOUS
WASTES", "TOXIC WASTES", "HAZARDOUS
SUBSTANCES" and "MEDICAL WASTES" shall have
the meanings specified in any
applicable local, state, federal and
foreign laws or regulations with respect to
environmental protection.
(cc) The Company is not and, as of the Closing Date after
giving
effect to the Transactions, the issuance
and sale of the Securities and the
application of the net proceeds therefrom
as described in the Offering
Memorandum, will not be, an "INVESTMENT
COMPANY" as defined in the Investment
Company Act of 1940, as amended, and the
rules and regulations of the Commission
thereunder (collectively, the "INVESTMENT
COMPANY ACT").
(dd) The industry, statistical and market-related data included
in the Offering Memorandum are derived from
sources that the Company reasonably
and in good faith believes to be accurate,
reasonable and reliable, and such
data agrees with the sources from which
they were derived.
(ee) The Company has not taken, directly or indirectly, any
action designed to cause or result in, or
which has constituted or which might
reasonably be expected to constitute, the
stabilization or manipulation of the
price of any security of the Company in
connection with this transaction.
(ff) Assuming the accuracy of the representations and
warranties
of the Initial Purchasers contained in
Section 6 and their compliance with the
agreements set forth therein, it is not
necessary, in connection with the
issuance and sale of the Securities to the
Initial Purchasers and the offer,
resale and delivery of the Securities by
the Initial Purchasers in the manner
contemplated by this Agreement, the
Indenture, the Registration Rights Agreement
and the Offering Memorandum, to register
the Securities under the Securities Act
or to qualify the Indenture under the Trust
Indenture Act.
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11
(gg) No securities of the same class (within the meaning of
Rule
144A(d)(3) under the Securities Act) as the
Securities are listed on any
national securities exchange registered
under Section 6 of the Securities
Exchange Act of 1934, as amended, and the
rules and regulations of the
Commission thereunder (collectively, the
"EXCHANGE ACT") or quoted on an
automated inter-dealer quotation
system.
(hh) Assuming the accuracy of the representations and
warranties
of the Initial Purchasers contained in
Section 6 hereto and their compliance
with the agreements set forth therein, none
of the Company or any of its
Affiliates (as defined in Rule 501(b) of
Regulation D, an "AFFILIATE"), has,
directly or through an agent, engaged in
any form of general solicitation or
general advertising in connection with the
offering of the Securities (as those
terms are used in Regulation D) under the
Securities Act or in any manner
involving a public offering within the
meaning of Section 4(2) of the Securities
Act; and the Company has not entered and
will not enter into any contractual
arrangement with respect to the
distribution of the Securities, except for this
Agreement and the Registration Rights
Agreement.
(ii) Assuming the accuracy of the representations and
warranties
of the Initial Purchasers contained in
Section 6 hereto and their compliance
with the agreements set forth therein, none
of the Company or any of its
Affiliates has, directly or through any
agent, sold, offered for sale, solicited
offers to buy or otherwise negotiated in
respect of, any "security" (as defined
in the Securities Act) which is or will be
integrated with the sale of the
Securities in a manner that would require
the registration under the Securities
Act of the Securities.
(jj) None of the Company, its Affiliates nor any person acting
on
its or their behalf (other than the Initial
Purchasers in connection with this
Agreement) has engaged or will engage in
any directed selling efforts (as that
term is defined in Regulation S) with
respect to the Securities and each of the
Company and its Affiliates and any person
acting on its or their behalf (other
than the Initial Purchasers in connection
with this Agreement) has complied and
will comply with the offering restrictions
requirement of Regulation S.
(kk) Immediately after the consummation of the Transactions and
the other transactions contemplated by this
agreement, (i) the fair value and
present fair saleable value of the assets
of the Company and its subsidiaries
taken as a whole on a going concern basis
will exceed the sum of their stated
liabilities and identified contingent
liabilities taken as a whole; and (ii) the
Company on a consolidated basis is not, nor
will be, after giving effect to the
execution, delivery and performance of this
Agreement, and the consummation of
the Transactions and the other transactions
contemplated hereby and thereby, (a)
left with unreasonably small capital with
which to carry on its business as it
is proposed to be conducted, (b) unable to
pay its debts (contingent or
otherwise) as they mature or (c) otherwise
insolvent.
SECTION 2. Purchase, Sale and Delivery of Securities. (a) On the
basis
of the representations and warranties
contained in, and subject to the terms and
conditions of, this Agreement, the Company
agrees to sell to each Initial
Purchaser, and each Initial Purchaser
agrees, severally and not jointly, to
purchase from the Company, at a purchase
price of 62.373% of the principal
amount at maturity of Securities set forth
opposite that Initial Purchaser's
name in Schedule I hereto.
<PAGE>
12
Delivery of and payment for the Securities shall be made at the
offices of Simpson Thacher & Bartlett
LLP, 425 Lexington Avenue, New York, New
York, at 11:00 A.M., New York City time, on
March 31, 2004, or such other date
or place as shall be determined by
agreement of the Initial Purchasers and the
Company (such date and time of delivery and
payment for the Securities being
referred to he
