Exhibit 1.1
Wise Metals Group
LLC
Wise Alloys Finance
Corporation
$150,000,000
10 ¼% Senior Secured Notes
due 2012
PURCHASE AGREEMENT
April 30, 2004
DEUTSCHE BANK SECURITIES INC.
60 Wall Street
New York, New York 10005
WACHOVIA CAPITAL MARKETS, LLC
301 S. College Street, 6th Floor
Charlotte, North Carolina 28288
Ladies and Gentlemen:
Wise Metals Group LLC, a Delaware
limited liability company (the “ Company ”) and
Wise Alloys Finance Corporation, a Delaware corporation and a
wholly-owned subsidiary of the Company (“Finance
Corp.”, and, together with the Company, the “
Issuers ”), hereby confirm their agreement with you
(the “ Initial Purchasers ”), as set forth
below.
Section 1. The Securities .
Subject to the terms and conditions herein contained, the Issuers
propose to issue and sell to each Initial Purchaser, severally and
not jointly, the aggregate principal amount of Notes (as defined
below) set forth in Schedule A opposite the name of such Initial
Purchaser. The 10 ¼% Senior Secured Notes due 2012 (the
“ Notes ”) are to be issued under an indenture
(the “ Indenture ”) to be dated as of May 5,
2004 by and between the Issuers, the guarantors listed on
Schedule 1 (the “ Guarantors ”) and The
Bank of New York, as Trustee (the “ Trustee ”),
and will be guaranteed on a senior secured basis by each of the
Guarantors (the “ Guarantees ”). The Notes and
the Guarantees are collectively referred to herein as the “
Securities .”
The Securities will be offered and
sold to the Initial Purchasers without being registered under the
Securities Act of 1933, as amended (the “ Act
”), in reliance on exemptions therefrom.
In connection with the sale of the
Securities, the Issuers have prepared a preliminary offering
memorandum dated April 21, 2004 (the “ Preliminary
Memorandum ”) and a
final offering memorandum dated April 30, 2004
(the “ Final Memorandum ”; the Preliminary
Memorandum and the Final Memorandum each herein being referred to
as a “ Memorandum ”) setting forth or including,
among other things, a description of the terms of the Securities
and the collateral securing the Securities, the terms of the
offering of the Securities, a description of the and any material
developments relating to the occurring after the date of the most
recent historical financial statements included therein.
Concurrently with the issuance of
the Securities, Wise Alloys LLC and Wise Recycling LLC will enter
into an amendment and restatement of the credit agreement dated as
of September 10, 2002 among Wise Alloys LLC and Wise Recycling LLC,
as borrowers, the guarantors party thereto from time to time,
Congress Financial Corporation, as agent (the “
Administrative Agent ”) and the lenders (the “
Lenders ”) party thereto from time to time (the
“ Credit Agreement ”) and will repay a portion
of the loans outstanding thereunder. In connection with the
foregoing, Wise Alloys LLC and Wise Recycling LLC will also enter
into documentation with the Administration Agent providing for the
release of certain liens (the “ Collateral Release
Documents ”).
Concurrently with the issuance of
the Securities, the Company will repay the entire amount of 15%
Senior Subordinated Secured Notes due September 10, 2009 (“
Existing Senior Notes ”) and accrued and unpaid
interest thereon. Furthermore, the Company will repurchase a
membership interest of Prudential Capital Partners, L.P.,
Prudential Capital Partners Management Fund, LP and Prudential
Capital Partners—U.S. Fund LP (collectively, “
Prudential Capital ”) and pay Prudential Capital a
prepayment premium relating to the Existing Senior
Notes.
The Notes will be secured on a first
priority basis by liens on certain real property of the Issuers and
the Guarantors set forth on Schedule 2 (each, a “
Mortgaged Property ” and together, the “
Mortgaged Properties ”) and certain personal property
of the Issuers as described in the Final Memorandum (the “
Primary Collateral ”), and documented by mortgages or
deeds of trust (collectively, the “ Mortgages ”)
evidencing the liens on the Mortgaged Properties and by the
security documents set forth on Schedule 3 evidencing the
liens on the Primary Collateral (together with the Mortgages, the
“ Primary Collateral Documents ”).
The Notes will also be secured on a
second priority basis by liens on certain other assets of the
Issuers and the Guarantors as described in the Final Memorandum
(the “ Secondary Collateral ” and, together with
the Primary Collateral, the “ Pledged Collateral
”), and documented by the documents set forth on Schedule
3 evidencing the liens on the Secondary Collateral (the “
Secondary Collateral Documents ” and, together with
the Primary Collateral Documents, the “ Collateral
Documents ”). The Trustee, on behalf of the holders of
the Notes, will enter into an intercreditor agreement (the “
Intercreditor Agreement ”) with the Issuers and with
the Agent for the Lenders.
The Initial Purchasers and their
direct and indirect transferees of the Notes will be entitled to
the benefits of the Registration Rights Agreement, substantially in
the form
-2-
attached hereto as Exhibit A (the “
Registration Rights Agreement ”), pursuant to which
the Issuers and the Guarantors have agreed, among other things, to
file a registration statement (the “ Registration
Statement ”) with the Securities and Exchange Commission
(the “ Commission ”) registering the Notes, the
Guarantees or the Exchange Notes and the related guarantees thereof
(as defined in the Registration Rights Agreement) under the
Act.
Section 2. Representations and
Warranties . The Issuers and the Guarantors jointly and
severally represent and warrant to and agree with the Initial
Purchasers on and as of the date hereof and the Closing Date, as
follows:
(a) Neither the Preliminary
Memorandum as of the date thereof nor the Final Memorandum nor any
amendment or supplement thereto as of the date thereof and at all
times subsequent thereto up to the Closing Date (as defined in
Section 3 below) contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact
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 set forth in this Section
2(a) do not apply to statements or omissions made in reliance upon
and in conformity with information relating to the Initial
Purchasers furnished to the Issuers in writing by the Initial
Purchasers expressly for use in the Preliminary Memorandum, the
Final Memorandum or any amendment or supplement thereto.
(b) As of the Closing Date, the
Company will have the authorized, issued and outstanding
capitalization set forth in the Final Memorandum; all of the
subsidiaries of the Company are listed in Schedule 4 (each,
a “ Subsidiary ” and together, the “
Subsidiaries ”); all of the outstanding shares of
capital stock or membership interests, as applicable, of the
Company and the Subsidiaries have been, and as of the Closing Date
will be, duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights; all of the outstanding shares capital stock or
membership interests, as applicable, of the Company and of each of
the Subsidiaries will be free and clear of all liens, encumbrances,
equities and claims or restrictions on transferability (other than
those imposed by the Act and the securities or “Blue
Sky” laws of certain jurisdictions) or voting; except as set
forth in the Final Memorandum, there are no (i) options, warrants
or other rights to purchase, (ii) agreements or other obligations
to issue or (iii) other rights to convert any obligation into, or
exchange any securities for, shares of capital stock of or
ownership interests in the Company or any of the Subsidiaries
outstanding. Except for the Subsidiaries or as disclosed in the
Final Memorandum, the Company does not own, directly or indirectly,
any shares of capital stock or any other equity or long-term debt
securities or have any equity interest in any firm, partnership,
joint venture or other entity. The sole stockholder of Finance
Corp. is the Company.
(c) Each of the Company and the
Subsidiaries is duly incorporated or otherwise organized, validly
existing and in good standing under the laws of its jurisdiction of
organization and has all requisite corporate or other
organizational power and authority to
-3-
own or lease its properties and conduct its
business as now conducted and as described in the Final Memorandum;
each of the Company and the Subsidiaries is duly qualified to do
business as a foreign corporation or entity in good standing in all
other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would
not, individually or in the aggregate, have a material adverse
effect on the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the
Company and the Subsidiaries, taken as a whole (any such event, a
“ Material Adverse Effect ”).
(d) Each of the Issuers has all
requisite corporate power and authority to execute, deliver and
perform each of its obligations under the Notes, the Exchange Notes
and the Private Exchange Notes (as defined in the Registration
Rights Agreement). The Notes, when issued, will be in the form
contemplated by the Indenture. The Notes, the Exchange Notes and
the Private Exchange Notes have each been duly and validly
authorized by each of the Issuers and, when executed by each of the
Issuers and authenticated by the Trustee in accordance with the
provisions of the Indenture and, in the case of the Notes, when
delivered to and paid for by the Initial Purchasers in accordance
with the terms of this Agreement, will constitute valid and legally
binding obligations of each of the Issuers, entitled to the
benefits of the Indenture, and enforceable against each of the
Issuers in accordance with their terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors’ rights generally, and (ii)
general principles of equity and the discretion of the court before
which any proceeding therefor may be brought.
(e) Each of the Guarantors has all
requisite corporate power and authority to execute, deliver and
perform each of its obligations under the Guarantees. The
Guarantees, when issued, will be in the form contemplated by the
Indenture. The Guarantees and the guarantees of the Exchange Notes
and the Private Exchange Notes have each been duly and validly
authorized by each of the Guarantors and, when executed by each of
the Guarantors and upon authentication of the Notes by the Trustee
in accordance with the provisions of the Indenture and, in the case
of the Guarantees, when delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will
constitute valid and legally binding obligations of each of the
Guarantors, entitled to the benefits of the Indenture, and
enforceable against each of the Guarantors in accordance with their
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect
relating to creditors’ rights generally, and (ii) general
principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(f) Each of the Issuers and each of
the Guarantors has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture.
The Indenture meets the requirements for qualification under the
Trust Indenture Act of 1939, as amended (the “ TIA
”). The Indenture has been duly and validly authorized by
each of the
-4-
Issuers and each of the Guarantors and, when
executed and delivered by each of the Issuers and each of the
Guarantors (assuming the due authorization, execution and delivery
by the Trustee), will constitute a valid and legally binding
agreement of each of the Issuers and each of the Guarantors,
enforceable against each of the Issuers and each of the Guarantors
in accordance with its terms, except that the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors’ rights generally
and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be
brought.
(g) Each of the Issuers and each of
the Guarantors has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly
and validly authorized by each of the Issuers and each of the
Guarantors and, when executed and delivered by each of the Issuers
and each of the Guarantors (assuming the due authorization,
execution and delivery by the Initial Purchasers), will constitute
a valid and legally binding agreement of each of the Issuers and
each of the Guarantors enforceable against each of the Issuers and
each of the Guarantors in accordance with its terms, except that
(A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to
creditors’ rights generally, and (ii) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state
securities laws and public policy considerations.
(h) Each of the Issuers and each of
the Guarantors has all requisite corporate power and authority to
execute, deliver and perform its obligations under each Collateral
Document and the Intercreditor Agreement. Each Collateral Document
and the Intercreditor Agreement has been duly and validly
authorized by each of the Issuers and each of the Guarantors and,
when executed and delivered by each of the Issuers and each of the
Guarantors (assuming the due authorization, execution and delivery
by the other party or parties thereto), will constitute a valid and
legally binding agreement of each of the Issuers and each of the
Guarantors, enforceable against each of the Issuers and each of the
Guarantors in accordance with its terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect relating to creditors’ rights
generally, and (ii) general principles of equity and the discretion
of the court before which any proceeding therefor may be brought
and (B) any rights to indemnity or contribution thereunder may be
limited by federal and state securities laws and public policy
considerations.
(i) Each of the Issuers and each of
the Guarantors has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. This
Agreement and the consummation by each of the Issuers and each of
the Guarantors of the transactions contemplated hereby have been
duly and validly authorized by each of the Issuers and each of
the
-5-
Guarantors. This Agreement has been duly
executed and delivered by each of the Issuers and each of the
Guarantors.
(j) No consent, approval,
authorization or order of any court or governmental agency or body,
or third party is required for the issuance and sale by any of the
Issuers or any of the Guarantors of the Securities to the Initial
Purchasers or the consummation by each of the Issuers and each of
the Guarantors of the other transactions contemplated hereby,
except such as have been obtained and such as may be required under
state securities or “Blue Sky” laws in connection with
the purchase and resale of the Securities by the Initial
Purchasers. None of the Company or the Subsidiaries is (i) in
violation of its certificate of incorporation, bylaws or limited
liability company agreement (or similar organizational document),
(ii) in breach or violation of any statute, judgment, decree,
order, rule or regulation applicable to any of them or any of their
respective properties or assets, except for any such breach or
violation that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or (iii)
in breach of or default under (nor has any event occurred that,
with notice or passage of time or both, would constitute a default
under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, permit, certificate, contract or
other agreement or instrument to which any of them is a party or to
which any of them or their respective properties or assets is
subject (collectively, “ Contracts ”), except
for any such breach, default, violation or event that would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(k) The execution, delivery and
performance by each of the Issuers of this Agreement, the
Indenture, the Registration Rights Agreement, the Collateral
Documents and the Intercreditor Agreement and the consummation by
each of the Issuers and each of the Guarantors of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance and sale of the Securities to the Initial Purchasers) will
not conflict with or constitute or result in a breach of or a
default, or result in the creation or imposition of any lien,
charge or encumbrance upon any property of the Company or any of
the Subsidiaries, under (or an event that with notice or passage of
time or both would constitute a default under) or violation of any
of (i) the terms or provisions of any Contract, except for any such
conflict, breach, violation, default or event that would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (ii) the certificate of incorporation,
bylaws or limited liability company agreement (or similar
organizational document) of the Company or any of the Subsidiaries
or (iii) (assuming compliance with all applicable state securities
or “Blue Sky” laws and assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section
8 hereof) any statute, judgment, decree, order, rule or regulation
applicable to the Company or any of the Subsidiaries or any of
their respective properties or assets, except for any such
conflict, breach or violation that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
-6-
(l) The audited consolidated
financial statements and unaudited consolidated financial
statements of the Company included in the Final Memorandum present
fairly in all material respects the financial position, results of
operations and cash flows of the Company and the Subsidiaries at
the dates and for the periods to which they relate and have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except in each case as
otherwise stated therein. The summary and selected financial and
statistical data in the Final Memorandum present fairly in all
material respects the information shown therein and have been
prepared and compiled on a basis consistent with the audited
financial statements included therein, except as otherwise stated
therein. Ernst & Young LLP (the “ Independent
Accountants ”) is an independent public accounting firm
within the meaning of the Act and the rules and regulations
promulgated thereunder.
(m) The pro forma financial
information included in the Final Memorandum (i) comply as to form
in all material respects with the applicable requirements of
Regulation S-X promulgated under the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), (ii)
have been prepared in accordance with the Commission’s rules
and guidelines with respect to pro forma financial statements and
(iii) have been properly computed on the bases described therein;
the assumptions used in the preparation of the pro forma financial
data and other pro forma financial information included in the
Final Memorandum are reasonable and the adjustments used therein
are appropriate to give effect to the transactions or circumstances
referred to therein.
(n) There is not pending or, to the
knowledge of each of the Issuers and each of the Guarantors,
threatened any action, suit, proceeding, inquiry or investigation
to which the Company or any of the Subsidiaries is a party, or to
which the property or assets of the Company or any of the
Subsidiaries are subject, before or brought by any court,
arbitrator or governmental agency or body that, if determined
adversely to the Company or any of the Subsidiaries, would,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or that seeks to restrain, enjoin, prevent
the consummation of or otherwise challenge the issuance or sale of
the Securities to be sold hereunder or the performance of this
Agreement, the Indenture, the Registration Rights Agreements any
Collateral Document or the Intercreditor Agreement or the
consummation of the other transactions described hereby, thereby or
in the Final Memorandum.
(o) Each of the Company and the
Subsidiaries possesses all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has
made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, presently
required or necessary to own or lease, as the case may be, and to
operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the
Final Memorandum (“ Permits ”), except where the
failure to obtain such Permits would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect; each of the Company and the Subsidiaries has fulfilled and
performed all of its obligations with
-7-
respect to such Permits and no event has
occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit; and none
of the Company or the Subsidiaries has received any notice of any
proceeding relating to revocation or modification of any such
Permit, except as described in the Final Memorandum and except
where such revocation or modification would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
(p) Since the date of the most
recent financial statements appearing in the Final Memorandum,
except as described therein, (i) none of the Company or the
Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into or agreed to enter into any
transactions or contracts (written or oral), which liabilities,
obligations, transactions or contracts would, individually or in
the aggregate, be material to the general affairs, management,
business, condition (financial or otherwise), prospects or results
of operations of the Companies and its Subsidiaries, taken as a
whole, (ii) none of the Company or the Subsidiaries has purchased
any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its
capital stock (other than with respect to any of such Subsidiaries,
the purchase of, or dividend or distribution on, capital stock
owned by the Company) and (iii) there has been no change in the
membership interests, capital stock or long-term indebtedness of
the Company or the Subsidiaries.
(q) Each of the Company and the
Subsidiaries has filed all necessary federal, state and foreign
income and franchise tax returns that are required to be filed,
except where the failure to so file such returns would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, and has paid all taxes shown as due
thereon; and other than tax deficiencies that the Company or any
Subsidiary is contesting in good faith and for which the Company or
such Subsidiary has provided adequate reserves, there is no tax
deficiency that has been asserted against the Company or any of the
Subsidiaries that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse
Effect.
(r) The statistical and
market-related data included in the Final Memorandum are based on
or derived from sources that the Company and the Subsidiaries
believe to be reliable and accurate.
(s) None of the Company, the
Subsidiaries or any agent acting on their behalf has taken or will
take any action that might cause this Agreement or the sale of the
Notes to violate Regulation T, U or X of the Board of Governors of
the Federal Reserve System, in each case as in effect, or as the
same may hereafter be in effect, on the Closing Date.
(t) Each of the Company and the
Subsidiaries has good and marketable title in fee simple to all
real property and good title to all personal property described in
the Final Memorandum as being owned by it and good and marketable
title to a leasehold estate in the real and personal property
described in the Final Memorandum as being leased by it (including,
without limitation, all property in which a security interest is to
be granted pursuant
-8-
to the Collateral Documents) free and clear of
all liens, charges, encumbrances or restrictions, except (i) as
described in the Final Memorandum, (ii) for liens, charges,
encumbrances or restrictions existing under the Credit Agreement
and being released or terminated as of the Closing Date or
substantially concurrent therewith), and (iii) as would be
permitted by the Indenture. All leases, contracts and agreements to
which the Company or any of the Subsidiaries is a party or by which
any of them is bound are valid and enforceable against the Company
or such Subsidiary, and are valid and enforceable against the other
party or parties thereto and are in full force and effect with only
such exceptions as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The
Company and the Subsidiaries own or possess adequate licenses or
other rights to use all patents, trademarks, service marks, trade
names, copyrights and know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary to conduct the
businesses now or proposed to be operated by them as described in
the Final Memorandum, and none of the Company or the Subsidiaries
has received any notice of infringement of or conflict with (or
knows of any such infringement of or conflict with) asserted rights
of others with respect to any patents, trademarks, service marks,
trade names, copyrights or know-how that, if such assertion of
infringement or conflict were sustained, would, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
(u) The Mortgages, when executed and
delivered in connection with the issuance of the Notes and the
Guarantees and when properly recorded and indexed with the proper
governmental authorities (together with payment of the appropriate
filing or recording fees and any applicable taxes), and the fixture
filings, when delivered and filed as required by law to perfect a
security interest with respect to fixtures in the real property
subject to each such Mortgage, will create, in favor of the Trustee
for the benefit of the Secured Parties (as defined in the
Collateral Documents), (i) valid and enforceable mortgage liens on
such real property and (ii) perfected security interests in such
fixtures or other personal property superior to and prior to the
liens of all third persons other than the holders of Prior Liens
(as defined in the applicable Mortgage). The other Collateral
Documents, when executed and delivered in connection with the
issuance of the Notes and the Guarantees, will create, in favor of
the Trustee for the benefit of the Secured Parties, valid and
enforceable security interests in the personal property in which a
security interest is to be granted under the Collateral Documents,
and upon the filing of appropriate Uniform Commercial Code
financing statements and the taking of the other actions described
in the Collateral Documents, the security interests in personal
property will be perfected insofar as they may be perfected by
filing under the Uniform Commercial Code and the taking of the
other actions described in the Collateral Documents superior to and
prior to the liens of all third persons other than the holders of
Permitted Liens as defined in and permitted by the Collateral
Documents.
(v) There are no legal or
governmental proceedings involving or affecting the Company or any
Subsidiary or any of their respective properties or assets that
would be required to be described in a prospectus pursuant to the
Act that are not described in the Final
-9-
Memorandum, nor are there any material contracts
or other documents that would be required to be described in a
prospectus pursuant to the Act that are not described in the Final
Memorandum.
(w) Except as would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (A) each of the Company and the
Subsidiaries is in compliance with and not subject to liability
under applicable Environmental Laws (as defined below), (B) each of
the Company and the Subsidiaries has made all filings and provided
all notices required under any applicable Environmental Law, and
has and is in compliance with all Permits required under any
applicable Environmental Laws and each of them is in full force and
effect, (C) there is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter or request for information
pending or, to the knowledge of the Company or any of the
Subsidiaries, threatened against the Company or any of the
Subsidiaries under any Environmental Law, (D) no lien, charge,
encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or property
owned, operated, leased or controlled by the Company or any of the
Subsidiaries, (E) none of the Company or the Subsidiaries has
received notice that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“
CERCLA ”), or any comparable state law and (F) no
property or facility of the Company or any of the Subsidiaries is
(i) listed or proposed for listing on the National Priorities List
under CERCLA or is (ii) listed in the Comprehensive Environmental
Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list
maintained by any state or local governmental authority.
For purposes of this Agreement,
“ Environmental Laws ” means the common law and
all applicable federal, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated,
approved or entered thereunder, relating to pollution or protection
of public or employee health and safety or the environment,
including, without limitation, laws relating to (i) emissions,
discharges, releases or threatened releases of hazardous materials
into the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata),
(ii) the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of hazardous
materials, and (iii) underground and aboveground storage tanks and
related piping, and emissions, discharges, releases or threatened
releases therefrom.
(x) There is no strike, labor
dispute, slowdown or work stoppage with the employees of the
Company or any of the Subsidiaries that is pending or, to the
knowledge of the Company or any of the Subsidiaries,
threatened.
(y) The Company and its Subsidiaries
are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent
and customary in the business in which they are engaged as such
business is currently constituted;
-10-
all policies of insurance and fidelity or surety
bonds insuring the Company and its Subsidiaries and their business,
assets, employees, officers and directors are in full force and
effect; the Company and its Subsidiaries are in compliance with the
terms of such policies and instruments in all material respects;
and there are no claims by any of the Company or its Subsidiaries
under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of
rights clause; none of the Company or the Subsidiaries has been
refused any insurance coverage sought or applied for; and none of
the Company or the Subsidiaries has reason to believe that it will
not be able to obtain insurance coverage as may be necessary to
continue its business at a cost that would not reasonably be
expected to have a Material Adverse Effect, except as set forth in
or contemplated in the Final Memorandum (exclusive of any amendment
or supplement thereto).
(z) None of the Company or the
Subsidiaries has any liability for any prohibited transaction or
funding deficiency or any complete or partial withdrawal liability
with respect to any pension, profit sharing or other plan that is
subject to the Employee Retirement Income Security Act of 1974, as
amended (“ ERISA ”), to which the Company or any
of the Subsidiaries makes or ever has made a contribution and in
which any employee of the Company or of any Subsidiary is or has
ever been a participant. With respect to such plans, the Company
and each Subsidiary is in compliance in all material respects with
all applicable provisions of ERISA.
(aa) Each of the Company and the
Subsidiaries (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls that 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 in
accordance with GAAP and to maintain accountability for its assets,
(C) access to its assets is permitted only in accordance with
management’s authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.
(bb) None of the Company or the
Subsidiaries is, or immediately after the sale of the Securities to
be sold hereunder and application of the proceeds therefrom as
described in the Final Memorandum under the heading “Use of
Proceeds” will be, an “investment company” or
“promoter” or “principal underwriter” for
an “investment company,” as such terms are defined in
the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
(cc) The Notes, the Indenture, the
Registration Rights Agreement, the Guarantees, each Collateral
Document and the Intercreditor Agreement will conform in all
material respects to the descriptions thereof in the Final
Memorandum. The statements in the Final Memorandum under the
headings “Capitalization,” “Description of Other
Indebtedness,” “Description of Notes” and
“Exchange Offer; Registration Rights” are true and
correct in all material respects and, to the extent such statements
describe law, statutes, legal proceedings
-11-
or provisions of agreements, such statements
accurately describe such law, statutes, legal proceedings and the
material provisions of such agreements.
(dd) No holder of securities of the
Company or any Subsidiary will be entitled to have such securities
registered under the registration statements required to be filed
by the Company pursuant to the Registration Rights Agreement other
than as expressly permitted thereby. Other than as set forth in the
Final Memorandum, no holder of securities of the Company or any
Subsidiary has any other rights to have any securities registered
by the Company or a Subsidiary under the Act.
(ee) Immediately after the
consummation of the transactions contemplated by this Agreement and
the Indenture, the fair value and present fair saleable value of
the assets of each of the Company and the Subsidiaries (each on a
consolidated basis) will exceed the sum of its stated liabilities
and identified contingent liabilities; none of the Company or the
Subsidiaries (each on a consolidated basis) is, nor will any of the
Company or the Subsidiaries (each on a consolidated basis) be,
after giving effect to the execution, delivery and performance of
this Agreement, and the consummation of the transactions
contemplated hereby, (i) left with unreasonably small capital with
which to carry on its business as it is proposed to be conducted,
(ii) unable to pay its debts (contingent or otherwise) as they
mature or (iii) otherwise insolvent.
(ff) None of the Company, the
Subsidiaries or any of their respective Affiliates (as defined in
Rule 501(b) of Regulation D under the Act) has directly, or through
any agent, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any “security” (as
defined in the Act) that is or could be integrated with the sale of
the Notes in a manner that would require the registration under the
Act of the Securities or (ii) engaged in any form of general
solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the
Securities or in any manner involving a public offering within the
meaning of Section 4(2) of the Act. The Company has not paid or
agreed to pay to any person any compensation for soliciting another
to purchase any securities of the Company (except as contemplated
by this Agreement). Assuming the accuracy of the representations
and warranties of the Initial Purchasers in Section 8 hereof, it is
not necessary in connection with the offer, sale and delivery of
the Securities to the Initial Purchasers in the manner contemplated
by this Agreement to register any of the Securities under the Act
or to qualify the Indenture under the TIA. The Securities satisfy
the eligibility requirements of Rule 144A(d)(3) under the
Act.
(gg) No securities of the Company or
any Subsidiary are of the same class (within the meaning of Rule
144A under the Act) as the Securities and listed on a national
securities exchange registered under Section 6 of the Exchange Act,
or quoted in a U.S. automated inter-dealer quotation
system.
-12-
(hh) None of the Company or the
Subsidiaries has taken, nor will any of them take, directly or
indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of
the price of the Securities.
(ii) None of the Company, the
Subsidiaries, any of their respective Affiliates or any person
acting on its or their behalf (other than the Initial Purchasers)
has engaged in any directed selling efforts (as that term is
defined in Regulation S under the Act (“ Regulation S
”)) with respect to the Securities; the Company, the
Subsidiaries and their respective Affiliates and any person acting
on its or their behalf (other than the Initial Purchasers) have
complied with the offering restrictions requirement of Regulation
S.
Any certificate signed by any
officer of the Company or any Subsidiary and delivered to the
Initial Purchasers or to counsel for the Initial Purchasers shall
be deemed a joint and several representation and warranty by the
Company and each of the Subsidiaries to the Initial Purchasers as
to the matters covered thereby.
Section 3. Purchase, Sale and
Delivery of the Notes . On the basis of the representations,
warranties, agreements and covenants herein contained and subject
to the terms and conditions herein set forth, the Issuers agree to
issue and sell to the Initial Purchasers, and the Initial
Purchasers agree to purchase, severally and not jointly, the
$150,000,000 of Notes from the Issuers at 97.25% of their principal
amount. One or more certificates in definitive form for the Notes
and the Guarantees that the Initial Purchasers have agreed to
purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Initial Purchasers request
upon notice to the Company at least 36 hours prior to the Closing
Date, shall be delivered by or on behalf of the Issuers to the
Initial Purchasers, against payment by or on behalf of the Initial
Purchasers of the purchase price therefor by wire transfer (same
day funds), to such account or accounts as the Company shall
specify prior to the Closing Date, or by such means as the parties
hereto shall agree prior to the Closing Date. Delivery of the Notes
shall be made through the facilities of The Depository Trust
Company, or its designated custodian, unless the Initial Purchasers
shall otherwise instruct. Payment for the Notes shall be made at
the offices of Cahill Gordon & Reindel LLP, 80 Pine Street, New
York, New York at 10:00 A.M., New York time, on May 5, 2004, or at
such other place, time or date as the Initial Purchasers, on the
one hand, and the Issuers, on the other hand, may agree upon, such
time and date of delivery against payment being herein referred to
as the “ Closing Date .” The Issuers will make
such certificate or certificates for the Notes available for
checking and packaging by Deutsche Bank Securities Inc. at the
offices of Deutsche Bank Securities Inc. in New York, New York, or
at such other place as Deutsche Bank Securities Inc. may designate,
at least 24 hours prior to the Closing Date.
Section 4. Offering by the
Initial Purchasers . The Initial Purchasers propose to make an
offering of the Notes at the price and upon the terms set forth in
the Final Memorandum as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is
advisable.
-13-
Section 5. Covenants of the
Issuers and Guarantors . The Issuers and the Guarantors jointly
and severally covenant and agree with the Initial Purchasers as
follows:
(a) The Issuers shall not amend or
supplement the Final Memorandum or any amendment or supplement
thereto of which the Initial Purchasers shall not previously have
been advised and furnished a copy for a reasonable period of time
prior to the proposed amendment or supplement and as to which the
Initial Purchasers shall not have given their consent. The Issuers
shall promptly, upon the reasonable request of the Initial
Purchasers or counsel for the Initial Purchasers, make any
amendments or supplements to the Preliminary Memorandum or the
Final Memorandum that may be necessary or advisable in connection
with the resale of the Securities by the Initial
Purchasers.
(b) The Issuers and the Guarantors
shall cooperate with the Initial Purchasers in arranging for the
qualification of the Securities for offering and sale under the
securities or “Blue Sky” laws of which jurisdictions as
the Initial Purchasers may designate and shall continue such
qualifications in effect for as long as may be necessary to
complete the resale of the Notes; provided , however
, that in connection therewith, neither of the Issuers nor any of
the Guarantors shall be required to qualify as a foreign
corporation or to execute a general consent to service of process
in any jurisdiction or subject itself to taxation in excess of a
nominal dollar amount in any such jurisdiction where it is not then
so subject.
(c) If, at any time prior to the
completion of the distribution by the Initial Purchasers of the
Notes or the Private Exchange Notes, any event occurs or
information becomes known as a result of which the Final Memorandum
as then amended or supplemented would include any untrue statement
of a material fact, or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other
reason it is necessary at any time to amend or supplement the Final
Memorandum to comply with applicable law, the Issuers and the
Guarantors shall promptly notify the Initial Purchasers thereof and
shall prepare, at the expense of the Issuers, an amendment or
supplement to the Final Memorandum that corrects such statement or
omission or effects such compliance.
(d) The Issuers shall, without
charge, provide to the Initial Purchasers and to counsel for the
Initial Purchasers as many copies of the Preliminary Memorandum and
the Final Memorandum or any amendment or supplement thereto as the
Initial Purchasers may reasonably request.
(e) The Issuers shall apply the net
proceeds from the sale of the Notes as set forth under “Use
of Proceeds” in the Final Memorandum.
(f) The Issuers shall cause the
Notes to be secured by perfected first priority liens and second
priority liens, as applicable, (except as provided in the Indenture
and the Collateral Documents) on the Collateral to the extent and
in the manner provided for in the Indenture and the Collateral
Documents and as described in the Final Memorandum.
-14-
(g) For so long as any of the
Securities remain outstanding, the Issuers and the Guarantors shall
furnish to the Initial Purchasers copies of all reports and other
communications (financial or otherwise) furnished by the Issuers or
any Guarantors to the Trustee or to the holders of the Securities
and, as soon as available, copies of any reports or financial
statements furnished to or filed by either of the Issuers or any
Guarantor with the Commission or any national securities exchange
on which any class of securities of the Issuers or any Guarantor
may be listed.
(h) Prior to the Closing Date, the
Issuers shall furnish to the Initial Purchasers, as soon as they
have been prepared, a copy of any unaudited interim financial
statements of the Company for any period subsequent to the period
covered by the most recent financial statements appearing in the
Final Memorandum.
(i) None of the Issuers or any of
their Affiliates shall sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any “security”
(as defined in the Act) that could be integrated with the sale of
the Securities in a manner which would require the registration
under the Act of the Securities.
(j) The Company shall not, and shall
not permit any of the Subsidiaries to, engage in any form of
general
