Purchase Agreement

 

 

indebtedness and to pay related fees and expenses.  The Transactions are expected to be consummated on a substantially concurrent basis on the Closing Date (as defined in Section 2(a) hereof), subject to the following paragraph.

 

In the event that the Closing Date occurs prior to the Acquisition Closing Date (as defined below) (referred to herein as the “Escrow Closing”), (i) the Securities will be guaranteed on an unsecured senior basis only by Parent and (ii) Funding and Parent will enter into an escrow and security agreement in form and substance reasonably satisfactory to the Initial Purchasers (the “Escrow Agreement”), and will direct the deposit into an escrow account (the “Escrow Account”) with Wells Fargo Bank, N.A., as escrow agent (the “Escrow Agent”), by the Initial Purchasers of the gross proceeds of the offering of the Notes ($150,000,000), and by Funding and Parent (or their affiliates on behalf of the Funding and Parent) an additional $1,268,750.00 (the “Additional Escrow Amount”), such that escrowed funds (the “Escrow Funds”) are in an amount sufficient to redeem the Securities at a price equal to 100% of the issue price of the Securities, plus accrued and unpaid interest from and including the Closing Date to but excluding May 10, 2006.  The Escrow Agreement shall provide that the Escrowed Funds shall only be released pursuant to the terms of the Escrow Agreement.

 

Concurrently with the consummation of the Acquisition, whether or not there is an Escrow Closing, (such time, the “Acquisition Closing Date”), the Company and Palace Finance (the “Specified Issuers”) and each of the Subsidiary Guarantors will enter into a joinder agreement to this Agreement, the form of which is attached hereto as Exhibit A (the “Joinder to the Purchase Agreement”).  In addition, on the Acquisition Closing Date, (i) Funding will merge with and into the Company, (ii) the Specified Issuers and each of the Subsidiary Guarantors will enter into a supplemental indenture (the “Supplemental Indenture”) among themselves and the Trustee or otherwise become parties to the Indenture, pursuant to which the Specified Issuers will assume the obligations under the Securities and each of the Subsidiary Guarantors will guarantee the Securities, and (iii) the Specified Issuers and the Subsidiary Guarantors will enter into a joinder agreement to the Registration Rights Agreement (as defined below) (the “Joinder to the Registration Rights Agreement”).

 

For purposes of this Agreement, the making of representations and warranties and the agreements, obligations, acknowledgments, confirmations and understandings of each of the Specified Issuers and the Subsidiary Guarantors shall not become effective until the execution and delivery of the Joinder to the Purchase Agreement, at which time such representations, warranties, agreements, obligations, acknowledgments, confirmations and understandings shall become effective and all representations, warranties, agreements, obligations, acknowledgments, confirmations and understandings of the Issuers, Parent and the Subsidiary Guarantors hereunder shall be joint and several.

 

The Securities will be sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption therefrom.  The Issuers, Parent and the Subsidiary Guarantors have prepared a preliminary offering memorandum dated March 17, 2006 and a supplement to the preliminary offering memorandum dated March 27,2006 (collectively, the “Preliminary Offering Memorandum”) and will prepare an offering memorandum dated the date hereof (the “Offering Memorandum”) setting forth information concerning the Issuers, Parent and the Subsidiary Guarantors and the Securities.  Copies of the Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered by the Issuers and Parent to the Initial Purchasers pursuant to the terms of this Agreement.  The Issuers and Parent hereby

 

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confirm that they have authorized the use of the Preliminary Offering Memorandum, the other Time of Sale Information (as defined below) and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers in the manner contemplated by this Agreement.  Capitalized terms used but not defined herein shall have the meanings given to such terms in the Preliminary Offering Memorandum.

 

At or prior to the time when sales of the Securities were first made (the “Time of Sale”), the following information shall have been prepared (collectively, the “Time of Sale Information”): the Preliminary Offering Memorandum, as supplemented and amended by the written communications listed on Annex A hereto.

 

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, to be dated the Closing Date and substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which the Issuers, Parent and the Subsidiary Guarantors (in the event of an Escrow Closing, after giving effect to the Joinder to the Registration Rights Agreement) will agree to file one or more registration statements with the Securities and Exchange Commission (the “Commission”) providing for the registration under the Securities Act of the Securities or the Exchange Securities referred to (and as defined) in the Registration Rights Agreement.

 

The Issuers and Parent hereby confirm their agreement with the several Initial Purchasers concerning the purchase and resale of the Securities, as follows:

 

1.             Purchase and Resale of the Securities .  (a) The Specified Issuers, or in the case of an Escrow Closing, Funding agree to issue and sell the Securities to the several Initial Purchasers as provided in this Agreement, and each Initial Purchaser, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Issuers the respective principal amount of Securities set forth opposite such Initial Purchaser’s name in Schedule 1 hereto at a price equal to 100% of the principal amount thereof plus accrued interest, if any, from April 12, 2006 to the Closing Date.  In the event that the Acquisition is consummated, the Issuers agree to pay to the Initial Purchasers the Initial Purchasers’ commission with respect to the Securities which will equal 2.5% of the aggregate gross proceeds of the Securities (the “Initial Purchasers’ Commission”).  In the event that the Closing Date occurs simultaneously with the Acquisition Closing Date (a “Non-Escrow Closing”), the Initial Purchasers’ Commission will be paid by netting the amount of the Initial Purchasers’ Commission from the payment price for the Securities such that the Initial Purchasers will pay the Issuers 97.5% of the principal amount of the Securities.  In the event of an Escrow Closing, the Initial Purchasers will deposit 100% of the gross proceeds of the offering of the Notes into the Escrow Account.  In the event of an Escrow Closing, the Initial Purchasers’ Commission will be paid upon the release of the Escrow Funds pursuant to the terms of the Escrow Agreement.  The Issuers will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein.

 

(b)           The Issuers and Parent understand that the Initial Purchasers intend to offer the Securities for resale on the terms set forth in the Time of Sale Information.  Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:

 

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(i)            it is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act (a “QIB”) and an accredited investor within the meaning of Rule 501(a) under the Securities Act;

 

(ii)           it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation 0 under the Securities Act (“Regulation 0”) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and

 

(iii)          it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities as part of their initial offering except:

 

(A)        within the United States to persons whom it reasonably believes to be QIBs in transactions pursuant to Rule 144A under the Securities Act (“Rule 144A”) and in connection with each such sale, it has taken or will take reasonable steps to ensure that the purchaser of the Securities is aware that such sale is being made in reliance on Rule 144A; or

 

(B)         in accordance with the restrictions set forth in Annex C hereto.

 

(c)           Each Initial Purchaser acknowledges and agrees that the Issuers and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Sections 6(f) and 6(g), counsel for the Issuers and counsel for the Initial Purchasers, respectively, may rely upon the accuracy of the representations and warranties of the Initial Purchasers, and compliance by the Initial Purchasers with their agreements, contained in paragraph (b) above (including Annex C hereto), and each Initial Purchaser hereby consents to such reliance.

 

(d)           The Issuers and Parent acknowledge and agree that the Initial Purchasers may offer and sell Securities to or through any affiliate of an Initial Purchaser and that any such affiliate may offer and sell Securities purchased by it to or through any Initial Purchaser.

 

(e)           The Issuers, Parent and the Subsidiary Guarantors acknowledge and agree that the Initial Purchasers are acting solely in the capacity of an arm’s length contractual counterparty to the Issuers, Parent and the Subsidiary Guarantors with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not as financial advisors or fiduciaries to, or agents of, the Issuers, Parent, the Subsidiary Guarantors or any other person.  Additionally, neither the Representative nor any other Initial Purchaser is advising the Issuers, Parent, the Subsidiary Guarantors or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.  The Issuers, Parent and the Subsidiary Guarantors shall consult with their own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representative nor any other Initial Purchaser shall have any responsibility or liability to the Issuers, Parent or the Subsidiary Guarantors with respect thereto.  Any review by the Representative or any Initial Purchaser of the Issuers, Parent, the Subsidiary Guarantors, and the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Representative or such Initial Purchaser, as the case may be, and shall not be on behalf of the Issuers, Parent, the Subsidiary Guarantors or any other person.

 

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2.             Payment and Delivery .  (a) Payment for and delivery of the Securities will be made at the offices of Simpson Thacher & Bartlett LLP at 10:00 A.M., New York City time, on April 12, 2006, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representative and the Issuers may agree upon in writing.  The time and date of such payment and delivery is referred to herein as the “Closing Date”.

 

(b)           Payment for the Securities shall be made by wire transfer in immediately available funds to (i) the account(s) specified by the Issuers to the Representative or (ii) in the event of an Escrow Closing, the Escrow Account, against delivery to the nominee of The Depository Trust Company, for the account of the Initial Purchasers, of one or more global notes representing the Securities (collectively, the “Global Note”), with any transfer taxes payable in connection with the sale of the Securities duly paid by the Issuers.  The Global Note will be made available for inspection by the Representative not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date.

 

3.             Representations and Warranties of the Issuers, Parent and the Subsidiary Guarantors .  The Issuers, Parent and the Subsidiary Guarantors jointly and severally represent and warrant to each Initial Purchaser that (it being acknowledged and agreed that the representations and warranties in clauses (h), (i), 0), (k), (I), (p)(ii) and (p)(iii) below with respect to the Company, Palace Finance and the Subsidiary Guarantors shall be deemed to be made only upon the Acquisition Closing Date):

 

(a)           Preliminary Offering Memorandum, Time of Sale Information and Offering Memorandum.  The Preliminary Offering Memorandum, as of its date, did not, the Time of Sale Information, at the Time of Sale, did not, and at the Closing Date, will not, and the Offering Memorandum, in the form first used by the Initial Purchasers to confirm sales of the Securities and as of the Closing Date, 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 Issuers, Parent and the Subsidiary Guarantors make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Initial Purchaser furnished to the Issuers in writing by or on behalf of such Initial Purchaser through the Representative expressly for use in the Preliminary Offering Memorandum, the Time of Sale Information or the Offering Memorandum.

 

(b)           Additional Written Communications.  Other than the Preliminary Offering Memorandum and the Offering Memorandum, the Issuers and Parent (including their agents and representatives, other than the Initial Purchasers in their capacity as such) have not made, used, prepared, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any written communication that constitutes an offer to sell or solicitation of an offer to buy the Securities other than the documents listed on Annex A hereto, including a term sheet substantially in the form of Annex B hereto, and other written communications used in accordance with Section 4(c).

 

(c)           Financial Statements.  The financial statements and the related notes thereto included in each of the Time of Sale Information and the Offering Memorandum present fairly the financial position of the Company and its subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby;

 

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the other financial information included in each of the Time of Sale Information and the Offering Memorandum has been derived from the accounting records of the Company and its subsidiaries and presents fairly the information shown thereby; and the pro forma financial information included in each of the Time of Sale Information and 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 financial information are reasonable and are set forth in each of the Time of Sale Information and the Offering Memorandum.

 

(d)           No Material Adverse Change.  Since the date of the most recent financial statements of the Company included in each of the Time of Sale Information and the Offering Memorandum (i) there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management, financial position or results of operations of the Company and its subsidiaries taken as a whole; (ii) none of Parent, the Company or any of their respective subsidiaries has entered into any transaction or agreement that is material to Parent, the Company and their respective subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to Parent, the Company and their respective subsidiaries taken as a whole; and (iii) none of Parent, the Company or any of their respective subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Time of Sale Information.

 

(e)           Organization and Good Standing.  Each of the Issuers, Parent and their respective subsidiaries has been duly organized and is validly existing and in good standing under the laws of their respective jurisdictions of organization, is duly qualified to do business and is in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and has 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 be so qualified, in good standing or have such power or authority could not reasonably be expected to, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial position or results of operations of Parent, the Issuers and their respective subsidiaries taken as a whole or on the performance by the Issuers, Parent and the Subsidiary Guarantors of their obligations under the Securities and the Guarantees (a “Material Adverse Effect”).  The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Schedule 2 to this Agreement.

 

(f)            Limitations on the Activities of Funding and Palace Finance.  Other than in connection with or incident to its obligations under the Securities, the Indenture, the Escrow Agreement and in order to effectuate the Acquisition and the other related Transactions, Funding does not hold any assets or has not become liable for any obligations or engaged in any business activities.  Funding does not own or control, directly or indirectly, any corporation, association or other entity.  Other than in connection with or incident to its obligations under the Securities, the Indenture and the Credit Facility, Palace Finance does

 

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not hold any assets and has not become liable for any obligations or engaged in any business activities.  Palace Finance does not own or control, directly or indirectly, any corporation, association or other entity.

 

(g)           Capitalization.  The Company has an authorized capitalization as set forth in each of the Time of Sale Information and the Offering Memorandum under the heading “Capitalization”; all the outstanding shares of capital stock or other equity interests of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party except as otherwise described in each of the Time of Sale Information and the Offering Memorandum; and all the outstanding equity interests of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and, as of the Closing Date, will be owned directly by Parent, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party except as otherwise described in each of the Time of Sale Information and the Offering Memorandum.

 

(h)           Due Authorization.  The Issuers, Parent and each of the Subsidiary Guarantors have full right, power and authority to execute and deliver this Agreement, the Joinder Agreement to the Purchase Agreement (only with respect to the Specified Issuers and the Subsidiary Guarantors) the Securities, the Indenture (including each Guarantee set forth therein), the Supplemental Indenture (in the event of an Escrow Closing, only with respect to the Specified Issuers and the Subsidiary Guarantors), the Escrow Agreement (in the event of an Escrow Closing, only with respect to Parent and Funding), the Exchange Securities, the Registration Rights Agreement, the Joinder to the Registration Rights Agreement (in the event of an Escrow Closing, only with respect to the Specified Issuers and the Subsidiary Guarantors), the Acquisition Agreement (only with respect to Parent and the Company), the Senior Secured Credit Facility, together with any other documents, agreement or instruments delivered in connection therewith (the “Senior Credit Facility Documentation”) and each of the employment agreements (the “Employment Agreements”) of John A. Cora, Daniel S. Martinez and James “Chip” Cleary, respectively (only with respect to the Company) (collectively, the “Transaction Documents”) and to perform their respective obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of the transactions contemplated thereby has been duly and validly taken.

 

(i)            The Indenture and the Supplemental Indenture.  The Indenture has been duly authorized by the Issuers, Parent and each of the Subsidiary Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Issuers, Parent and each of the Subsidiary Guarantors enforceable against the Issuers, Parent and each of the Subsidiary Guarantors in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability (collectively, the “Enforceability Exceptions”); the Supplemental Indenture, if any, has been duly authorized by the Specified Issuers and each of the Subsidiary Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Specified Issuers and each of the Subsidiary Guarantors enforceable against the Specified Issuers and each of the Subsidiary Guarantors in accordance

 

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with its terms, subject to the Enforceability Exceptions; and on the Closing Date, the Indenture, and on the Acquisition Closing Date, the Indenture as supplemented by the Supplemental Indenture, if applicable, will conform in all material respects to the requirements of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the rules and regulations of the Commission applicable to an indenture that is qualified thereunder.

 

(j)            The Securities and the Guarantees.  The Securities have been duly authorized by the Issuers and, when duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Issuers enforceable against the Issuers in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and the Guarantees have been duly authorized by Parent and each of the Subsidiary Guarantors and, when the Securities have been duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be valid and legally binding obligations of Parent and each of the Subsidiary Guarantors, enforceable against Parent and each of the Subsidiary Guarantors in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.

 

(k)           The Exchange Securities.  On the Closing Date, the Exchange Securities (including the related guarantees) will have been duly authorized by the Issuers, Parent and each of the Subsidiary Guarantors and, when duly executed, authenticated, issued and delivered as contemplated by the Registration Rights Agreement, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Issuers, as issuer, and Parent and each of the Subsidiary Guarantors, as guarantor, enforceable against the Issuers, Parent and each of the Subsidiary Guarantors in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.

 

(l)            Purchase and Registration Rights Agreements.  This Agreement has been duly authorized, executed and delivered by the Issuers, Parent and each of the Subsidiary Guarantors; and the Registration Rights Agreement has been duly authorized by the Issuers, Parent and each of the Subsidiary Guarantors and on the Closing Date will be duly executed and delivered by the Issuers, Parent and each of the Subsidiary Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Issuers, Parent and each of the Subsidiary Guarantors enforceable against the Issuers, Parent and each of the Subsidiary Guarantors in accordance with its terms, subject to the Enforceability Exceptions, and except that rights to indemnity and contribution thereunder may be limited by applicable law and public policy.

 

(m)          The Joinder to the Purchase Agreement.  As of the Acquisition Closing Date, the Joinder to the Purchase Agreement will have been duly authorized by each of the Specified Issuers and Subsidiary Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of each of the Specified Issuers and Subsidiary Guarantors enforceable against each of the Specified Issuers and Subsidiary Guarantors in accordance with its terms, subject to the Enforceability Exceptions, and except that rights to indemnity and contribution thereunder may be limited by applicable law and public policy.

 

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(n)           Joinder to the Registration Rights Agreement.  As of the Acquisition Closing Date, in the event of an Escrow Closing, the Joinder to the Registration Rights Agreement will have been duly authorized by each of the Specified Issuers and Subsidiary Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of each of the Specified Issuers and Subsidiary Guarantors enforceable against each of the Specified Issuers and Subsidiary Guarantors in accordance with its terms, subject to the Enforceability Exceptions, and except that rights to indemnity and contribution thereunder may be limited by applicable law and public policy.

 

(o)           Escrow Agreement.  The Escrow Agreement has been duly authorized by Funding and Parent and, in the event of an Escrow Closing, when executed and delivered in accordance with its terms by each of the parties thereto will constitute a valid and legally binding obligation of the Funding and Parent, enforceable against the Funding and Parent in accordance with its terms, subject to the Enforceability Exceptions.  Upon the Escrow Closing, the Escrow Agreement will be effective to create in favor of the Escrow Agent, for its benefit and the benefit of the holders of the Securities, a valid security interest in all rights of the Funding and Parent in (a) the Escrow Account, (b) all “security entitlements” (as such term is defined in Section 8-1 02(a) of the Uniform Commercial Code of New York (“UCC”)) with respect to all “financial assets” (as such term is defined in Section 8-1 02(a) of the UCC) held in the Escrow Account and (c) all “proceeds” (as such term is defined in Section 9-102(a) of the UCC) of such security entitlements, in each case, securing the Securities).  Such security interests will constitute first priority perfected security interests in the Collateral (as defined in the Escrow Agreement) free and clear of all liens and security interests, other than the liens and security interests granted under the Escrow Agreement.

 

(p)           Other Transaction Documents.  (i) The Acquisition Agreement has been duly authorized, executed and delivered by Parent and the Company and constitutes a valid and binding agreement of Parent and the Company enforceable against each of Parent and the Company in accordance with its terms, subject to the Enforceability Exceptions.  The Employment Agreements have been duly authorized, executed and delivered by Parent and the Company and constitute valid and binding agreements of Parent and the Company enforceable against each of Parent and the Company in accordance with its terms, subject to the Enforceability Exceptions.  (iii) The Senior Credit Facility Documentation has been duly authorized by the Company and, to the extent a party thereto, Parent and the Company’s subsidiaries and, when executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and binding agreement of the Company and, to the extent a party thereto, Parent and the Company’s subsidiaries, enforceable against the Company and, to the extent a party thereto, Parent and the Company’s subsidiaries in accordance with its terms, subject to the Enforceability Exceptions.

 

(q)           Descriptions of the Transaction Documents.  Each Transaction Document conforms in all material respects to the description thereof contained in each of the Time of Sale Information and the Offering Memorandum.

 

(r)            No Violation or Default.  None of the Issuers, Parent or any of their respective subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, 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 or other agreement or instrument to which the Issuers, Parent or any of their respective subsidiaries is

 

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a party or by which the Issuers, Parent or any of their respective subsidiaries is bound or to which any of the property or assets of the Issuers, Parent or any of their respective subsidiaries is subject, including, without limitation, the Acquisition Agreement; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

 

(s)           No Conflicts.  The execution, delivery and performance by the Issuers, Parent and each of the Subsidiary Guarantors of each of the Transaction Documents to which each is a party, the issuance and sale of the Securities (including the Guarantees) and compliance by the Issuers, Parent and each of the Subsidiary Guarantors with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents 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, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of Parent, the Company or any of their respective subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Parent, the Company or any of their respective subsidiaries is a party or by which Parent, the Company or any of their respective subsidiaries is bound or to which any of the property or assets of Parent, the Company or any of their respective subsidiaries is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of Parent, the Company or any of their respective subsidiaries or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default that would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

 

(t)            No Consents Required.  No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Issuers, Parent and each of the Subsidiary Guarantors of each of the Transaction Documents to which each is a party, the issuance and sale of the Securities (including the Guarantees) and compliance by the Issuers, Parent and each of the Subsidiary Guarantors with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents, except for such consents, approvals, authorizations, orders and registrations or qualifications which have been obtained or as may be required (i) under applicable state securities and blue sky laws in connection with the purchase and resale of the Securities by the Initial Purchasers, (ii) with respect to the Exchange Securities (including the related guarantees) under the Securities Act, the Trust Indenture Act and applicable state securities laws as contemplated by the Registration Rights Agreement and (iii) prior to the Acquisition Closing Date, the landlord consents under the Acquisition Agreement.

 

(u)           Legal Proceedings.  Except as described in each of the Time of Sale Information and the Offering Memorandum, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its subsidiaries is or may be a party or to which any property of the Company or any of its subsidiaries is or may be the subject that, individually or in the aggregate, if determined adversely to the Company or any of its subsidiaries, could reasonably be expected to have a Material Adverse Effect; and no such investigations, actions, suits or proceedings are

 

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threatened or, to the knowledge of the Issuers, Parent and each of the Subsidiary Guarantors, contemplated by any governmental or regulatory authority or by others.

 

(v)           Independent Accountant.  Deloitte & Touche, LLP (“Deloitte”) who have certified certain financial statements of the Company and its respective subsidiaries are independent public accountants with respect to Parent, the Company and its subsidiaries within the meaning of (i) Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants and its interpretations and rulings thereunder and (ii) the applicable rules and regulations adopted by the Commission and the Public Accounting Oversight Board (United States) and as required by the Securities Act.

 

(w)          Title to Real and Personal Property.  The Company and its subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property that are material to the respective businesses of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries or (ii) could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

(x)            Title to Intellectual Property.  The Company and its subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses; and the conduct of their respective businesses will not conflict in any material respect with any such rights of others, and the Company and its subsidiaries have not received any notice of any claim of infringement of or conflict with any such rights of others.

 

(y)           No Undisclosed Relationships.  No relationship, direct or indirect, exists between or among Parent, the Issuers or any of their respective subsidiaries, on the one hand, and the directors, officers, stockholders or other affiliates of Parent, the Issuers or any of their respective subsidiaries, on the other, that would be required by the Securities Act to be described in a registration statement to be filed with the Commission and that is not so described in each of the Time of Sale Information and the Offering Memorandum.

 

(z)            Investment Company Act.  None of Parent, the Issuers or any of their respective subsidiaries is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in each of the Time of Sale Information and the Offering Memorandum none of them will be, an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Investment Company Act”).

 

(aa)         Taxes.  The Company and its subsidiaries have paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date hereof; and except as otherwise disclosed in each of the Time of Sale Information and the Offering Memorandum, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their respective properties or assets.

 

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(bb)         Licenses and Permits.  The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in each of the Time of Sale Information and the Offering Memorandum, except where the failure to possess or make the same would not, individually or in the aggregate, have a Material Adverse Effect; and except as described in each of the Time of Sale Information and the Offering Memorandum, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course.

 

(cc)         No Labor Disputes.  No labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to the best knowledge of the Issuers, Parent and each of the Subsidiary Guarantors, is contemplated or threatened and none of the Issuers, Parent or any Subsidiary Guarantor is aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of the Company’s or any of the Company’s subsidiaries’ principal suppliers, contractors or customers, except as would not reasonably be expected to have a Material Adverse Effect.

 

(dd)         Compliance With Environmental Laws.  (i) The Company and its subsidiaries (x) are, and at all prior times were, in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, requirements, decisions and orders relating to the protection of human health or safety, the environment, natural resources, hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”), (y) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses, and (z) have not received notice of any actual or potential liability under or relating to any Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and have no knowledge of any event or condition that would reasonably be expected to result in any such notice, and (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company or its subsidiaries, except in the case of each of (i) and (ii) above, for any such failure to comply, or failure to receive required permits, licenses or approvals, or cost or liability, as would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect; and (iii) except as described in each of the Time of Sale Information and the Offering Memorandum, (x) there are no proceedings that are pending, or that are known by the Company or Parent to be contemplated, against the Company or any of its subsidiaries under any Environmental Laws in which a governmental entity is also a party, other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (y) the Company and its subsidiaries are not aware of any issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws or concerning hazardous or toxic substances or wastes, pollutants or contaminants, that could reasonably be expected to have a Material Adverse Effect on the capital expenditures, earnings or competitive position of the Company and its subsidiaries, and (z) none of the Company and its subsidiaries anticipates material capital expenditures relating to any Environmental Laws.

 

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(ee)         Compliance With ERISA. (i) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the Company or any member of its “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”» would have any liability (each, a “Plan”) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code, whether or not waived, has occurred or is reasonably expected to occur; (iv) the fair market value of the assets of each Plan exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan); (v) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur; and (vi) neither the Company nor any member of the Controlled Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC, in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan”, within the meaning of Section 4001 (a)(3) of ERISA).

 

(ff)           Accounting Controls.  The Company and its subsidiaries maintain systems of internal accounting controls sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including, but not limited to internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  Except as disclosed in each of the Time of Sale Information and the Offering Memorandum, there are no material weaknesses or significant deficiencies in the Company’s internal controls.

 

(gg)         No Unlawful Payments.  Neither the Company nor any of its subsidiaries or, to the knowledge of the Issuers, Parent and each of the Subsidiary Guarantors, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

 

(hh)         Insurance.  The Company and its subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are

 

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adequate to protect the Company and its subsidiaries and their respective businesses; and neither the Company nor any of its subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.

 

(ii)           Compliance with Money Laundering Laws.  The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

(jj)           Compliance with OFAC.  None of the Company, any of its subsidiaries or, to the knowledge of the Issuers, Parent and each Subsidiary Guarantor, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Issuers will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

(kk)         Solvency.  On and immediately after the Closing Date (in the event of an Escrow Closing, with respect to Funding) and the Acquisition Closing Date, the Specified Issuers (after giving effect to the issuance of the Securities and the other transactions related thereto as described in each of the Time of Sale Information and the Offering Memorandum) will be Solvent.  As used in this paragraph, the term “Solvent” means, with respect to a particular date, that on such date (i) the present fair market value (or present fair saleable value) of the assets of the Company is not less than the total amount required to pay the liabilities of the Company on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured; (ii) the Company is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business; (iii) assuming consummation of the issuance of the Securities as contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum, the Company is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature; (iv) the Company is not engaged in any business or transaction, and does not propose to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which the Company is engaged; and (v) the Company is not a defendant in any civil action that would result in a judgment that the Company is or would become unable to satisfy.

 

(ll)           No Restrictions on Subsidiaries.  Except as disclosed in the Time of Sale Information and the Offering Memorandum, no subsidiary of the Company is currently

 

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prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.

 

(mm)       No Broker’s Fees.  None of Parent, the Issuers or any of their respective subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against any of them or any Initial Purchaser for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities.

 

(nn)         Rule 144A Eligibility.  On the Closing Date, the Securities will not be of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in an automated inter-dealer quotation system; and each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its respective date, contains or will contain all the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act.

 

(oo)         No Integration.  Neither the Issuers nor any of their respective affiliates (as defined in Rule 501 (b) of Regulation D) 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), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.

 

(pp)         No General Solicitation or Directed Selling Efforts.  Neither the Issuers nor any of their respective affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as to which no representation is made) has (i) solicited offers for, or offered or sold, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation 0 or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act or (ii) engaged in any directed selling efforts within the meaning of Regulation S under the Securities Act (“Regulation S”), and all such persons have complied with the offering restrictions requirement of Regulation S.

 

(qq)         Securities Law Exemptions.  Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 1 (b) (including Annex C hereto) and their compliance with their 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 Time of Sale Information and the Offering Memorandum, to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act.

 

(rr)           No Stabilization.  None of the Issuers, Parent or any of the Subsidiary Guarantors has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.

 

(ss)         Margin Rules.  Neither the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Issuers as described in each of the Time of Sale

 

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Information and the Offering Memorandum will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

 

(tt)           Forward-Looking Statements.  No forward-looking statement (within the meaning of Section 27 A of the Securities Act and Section 21 E of the Exchange Act) contained in any of the Time of Sale Information or the Offering Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

 

(uu)         Statistical, Market and Attendance Data.  Nothing has come to the attention of the Issuers that has caused the Issuers to believe that the statistical, market-related and attendance data included in each of the Time of Sale Information and the Offering Memorandum is not based on or derived from sources that are reliable and accurate in all material respects.

 

4.             Further Agreements of the Issuers, Parent and the Subsidiary Guarantors .  The Issuers, Parent and each of the Subsidiary Guarantors jointly and severally covenant and agree with each Initial Purchaser that:

 

(a)           Delivery of Copies.  The Issuers and Parent will deliver to the Initial Purchasers as many copies of the Preliminary Offering Memorandum, any other Time of Sale Information and the Offering Memorandum (including all amendments and supplements thereto) as the Representative may reasonably request.

 

(b)           Offering Memorandum, Amendments or Supplements.  Before finalizing the Offering Memorandum or making or distributing any amendment or supplement to any of the Time of Sale Information or the Offering Memorandum, the Issuers and Parent will furnish to the Representative and counsel for the Initial Purchasers a copy of the proposed Offering Memorandum or such amendment or supplement for review, and will not distribute any such proposed Offering Memorandum, amendment or supplement to which the Representative reasonably objects.

 

(c)           Additional Written Communications.  Before using, authorizing, approving or referring to any written communication (as defined in the Securities Act) that constitutes an offer to sell or a solicitation of an offer to buy the Securities (an “Issuer Written Communication”) (other than written communications that are listed on Annex A hereto and the Offering Memorandum), the Issuers and Parent will furnish to the Representative and counsel for the Initial Purchasers a copy of such written communication for review and will not use, authorize, approve or refer to any such written communication to which the Representative reasonably objects.

 

(d)           Notice to the Representative.  The Issuers and Parent will advise the Representative as promptly as practicable, and confirm such advice in writing, (i) of the issuance by any governmental or regulatory authority of any order preventing or suspending the use of any of the Time of Sale Information or the Offering Memorandum or the initiation or threatening of any proceeding for that purpose; (ii) of the occurrence of any event at any time prior to the completion of the initial offering of the Securities as a result of which any of the Time of Sale Information or the Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when such Time of Sale Information or the Offering Memorandum is

 

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delivered to a purchaser, not misleading; and (iii) of the receipt by the Issuers or Parent of any notice with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Issuers and Parent will use their commercially reasonable efforts to prevent the issuance of any such order preventing or suspending the use of any of the Time of Sale Information or the Offering Memorandum or suspending any such qualification of the Securities and, if any such order is issued, will obtain as soon as practicable the withdrawal thereof.

 

(e)           Ongoing Compliance of the Offering Memorandum and Time of Sale Information.  (1) If at any time prior to the completion of the initial offering of the Securities (i) any event shall occur or condition shall exist as a result of which the Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Offering Memorandum to comply with law, the Issuers and Parent will immediately notify the Initial Purchasers thereof and forthwith prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers such amendments or supplements to the Offering Memorandum as may be necessary so that the statements in the Offering Memorandum as so amended or supplemented will not, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, be misleading or so that the Offering Memorandum will comply with law and (2) if at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which any of the Time of Sale Information as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) it is necessary to amend or supplement any of the Time of Sale Information so that any of the Time of Sale Information will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Issuers and Parent will immediately notify the Initial Purchasers thereof and forthwith prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers such amendments or supplements to any of the Time of Sale Information as may be necessary so that the statements in any of the Time of Sale Information as so amended or supplemented will not, in light of the circumstances under which they were made, be misleading.

 

(f)            Blue Sky Compliance.  The Issuers and Parent will qualify, or will assist the Initial Purchasers in qualifying, the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representative shall reasonably request and will continue such qualifications, or will continue to assist in such qualifications, in effect so long as required for the offering and resale of the Securities; provided that none of the Issuers, Parent or any of the Subsidiary Guarantors shall be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.

 

(g)           Clear Market.  During the period from the date hereof through and including the date that is 180 days after the date hereof, the Issuers, Parent and each of the Subsidiary

 

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Guarantors will not, without the prior written consent of the Representative, offer, sell, contract to sell or otherwise dispose of any debt securities issued or guaranteed by the Issuers, Parent or any of the Subsidiary Guarantors and having a tenor of more than one year.

 

(h)           Use of Proceeds.  On the Acquisition Closing Date, the Issuers will apply the net proceeds from the sale of the Securities as described in each of the Time of Sale Information and the Offering Memorandum under the heading “Use of proceeds”.

 

(i)            Supplying Information.  While the Securities remain outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Issuers, Parent and each of the Subsidiary Guarantors will, during any period in which the Issuers are not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, furnish to holders of the Securities and prospective purchasers of the Securities designated by such holders, upon the request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

(j)            PORTAL and OTC.  The Issuers and Parent will assist the Initial Purchasers in arranging for the Securities to be designated Private Offerings, Resales and Trading through Automated Linkages (“PORTAL”) Market securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. (the “NASD”) relating to trading in the PORTAL Market and for the Securities to be eligible for clearance and settlement through The Depository Trust Company COTC”).

 

(k)           No Resales by the Issuers and Parent.  The Issuers and Parent will not, and will not permit any of their respective affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been acquired by any of them, except for Securities purchased by the Issuers, Parent or any of their respective affiliates and resold in a transaction registered under the Securities Act.

 

(l)            No Integration.  Neither the Issuers, Parent nor any of their respective affiliates (as defined in Rule 501 (b) of Regulation D) will, directly or through any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.

 

(m)          No General Solicitation or Directed Selling Efforts.  None of the Issuers, Parent or any of their respective affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation 0 or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act or (ii) engage in any directed selling efforts within the meaning of Regulation S, and all such persons will comply with the offering restrictions requirement of Regulation S.

 

(n)           No Stabilization.  None of the Issuers, Parent or any of the Subsidiary Guarantors will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities-

 

(o)           Compliance with Escrow Agreement; Payment of Initial Purchasers’ Commission.  In the event of an Escrow Closing, upon the Acquisition Closing Date pursuant to the terms of the Escrow Agreement, the Issuers, Parent and the Subsidiary Guarantors will

 

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comply with the terms of the Escrow Agreement, including delivering and causing to be delivered such documents, certificates and opinions as are required thereunder, and the Escrow Agent will release Escrow Funds in an amount equal to the Initial Purchasers’ Commission to the Initial Purchasers as provided under Section 1(a) of this agreement.

 

(p)           Opinions upon Acquisition Closing Date.  In the event of an Escrow Closing, upon the Acquisition Closing Date, the Issuers, Parent and the Subsidiary Guarantors will cause Kirkland & Ellis LLP, counsel to the Issuers and Parent, to furnish to the Representative at the request of the Issuers their written opinion dated the Acquisition Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annex 0-1 hereto.

 

(q)           Joinder to the Purchase Agreement; Joinder to the Registration Rights Agreement; Supplemental Indenture.  In the event of an Escrow Closing, simultaneous with the consummation of the Acquisition on the Acquisition Closing Date, Funding and Parent will cause the Specified Issuers and Subsidiary Guarantors to become a party to (i) this Agreement by executing and delivering the Joinder to the Purchase Agreement, (ii) the Registration Rights Agreement by executing and delivering the Joinder to the Registration Rights Agreement and (iii) the Indenture by executing and delivering the Supplemental Indenture.

 

(r)            Release of Escrow Funds.  In the event of an Escrow Closing, Funding and Parent shall not, and shall cause their respective affiliates not to, seek the release of Escrow Funds from the Escrow Account unless such release is in compliance with the terms of the Indenture and the Escrow Agreement.

 

5.             Certain Agreements of the Initial Purchasers .  Each Initial Purchaser hereby represents and agrees that it has not and will not use, authorize use of, refer to, or participate in the planning for use of, any written communication that constitutes an offer to sell or the solicitation of an offer to buy the Securities other than (i) a written communication that contains no “issuer information” (as defined in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation by reference) in the Preliminary Offering Memorandum, (ii) any written communication listed on Annex A or prepared pursuant to Section 4(c) above, (iii) any written communication prepared by such Initial Purchaser and approved by the Issuers and Parent in advance in writing or (iv) any written communication relating to or that contains the terms of the Securities and/or other information that was included (including through incorporation by reference) in the Preliminary Offering Memorandum.

 

6.             Conditions of Initial Purchasers’ Obligations .  The obligation of each Initial Purchaser to purchase Securities on the Closing Date as provided herein is subject to the performance by the Issuers, Parent and each of the Subsidiary Guarantors of their respective covenants and other obligations hereunder and to the following additional conditions:

 

(a)           Representations and Warranties.  The representations and warranties of Funding and Parent, and, subject to the fifth paragraph of this Agreement and the first paragraph of Section 3 of this Agreement, the Specified Issuers and the Subsidiary Guarantors, contained herein shall be true and correct on the date hereof and on and as of the Closing Date; and the statements of the Issuers, Parent, the Subsidiary Guarantors and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date.

 

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(b)           No Downgrade.  Subsequent to the execution and delivery of this Agreement, (i) no downgrading shall have occurred in the rating accorded the Securities or any other debt securities or preferred stock issued or guaranteed by the Company or any of its subsidiaries by any “nationally recognized statistical rating organization”, as such term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act; and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Securities or of any other debt securities or preferred stock issued or guaranteed by the Issuers or any of their respective subsidiaries (other than an announcement with positive implications of a possible upgrading).

 

(c)           No Material Adverse Change.  No event or condition of a type described in Section 3(d) hereof shall have occurred or shall exist, which event or condition is not described in each of the Time of Sale Information (excluding any amendment or supplement thereto) and the Offering Memorandum (excluding any amendment or supplement thereto) the effect of which in the judgment of the Representative makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum.

 

(d)           Officer’s Certificate.  The Representative shall have received on and as of the Closing Date (including in the case of any Escrow Closing) a certificate of an executive officer of each of the Issuers, Parent and each of the Subsidiary Guarantors who has specific knowledge of such Issuers’, Holding’s or such Subsidiary Guarantor’s financial matters and is satisfactory to the Representative (i) confirming that such officer has carefully reviewed the Time of Sale Information and the Offering Memorandum and, to the best knowledge of such officer, the representations set forth in Sections 3(a) and 3(b) hereof are true and correct, (ii) confirming that the other representations and warranties of the Issuers, Parent and the Subsidiary Guarantors in this Agreement are true and correct and that the Issuers, Parent and the Subsidiary Guarantors have complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date and (iii) to the effect set forth in paragraphs (b) and (c) above.

 

(e)           Comfort Letters.  On the date of this Agreement and on the Closing Date, Deloitte shall have furnished to the Representative, at the request of the Issuers, letters, dated the respective dates of delivery thereof and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in each of the Time of Sale Information and the Offering Memorandum; provided that the letter delivered on the Closing Date shall use a “cut-off’ date no more than three business days prior to the Closing Date.

 

(f)            Opinion of Counsel for the Issuers, Parent and Subsidiary Guarantors.  Kirkland & Ellis LLP, counsel for the Issuers and Parent, shall have furnished to the Representative, at the request of the Issuers, their written opinion and 10b-5 statement, dated the Closing Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annex 0-1 and 0-2 hereto.

 

(g)           Opinion and 10b-5 Statement of Counsel for the Initial Purchasers.  The Representative shall have received on and as of the Closing Date an opinion and 10b-5 statement of Simpson Thacher & Bartlett LLP, counsel for the Initial Purchasers, with respect

 

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to such matters as the Representative may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

 

(h)           No Legal Impediment to Issuance.  No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantees; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantees.

 

(i)            Good Standing.  The Representative shall have received on and as of the Closing Date satisfactory evidence of the good standing of Parent, the Issuers and their respective subsidiaries in their respective jurisdictions of organization and their good standing in such other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form of telecommunication, from the appropriate governmental authorities of such jurisdictions.

 

(j)            Joinder to the Purchase Agreement.  The Initial Purchasers shall have received a Joinder to the Purchase Agreement that shall have been executed and delivered by a duly authorized officer of each of the Specified Issuers and the Subsidiary Guarantors.  In the event of an Escrow Closing, this condition precedent shall not be effective and, in lieu thereof, shall become a condition precedent to the release of Escrow Funds under the Escrow Agreement.

 

(k)           Indenture.  The Indenture shall have been duly executed and delivered by a duly authorized officer of each of the Issuers, Parent, the Subsidiary Guarantors and the Trustee, and the Securities shall have been duly executed and delivered by a duly authorized officer of each of the Issuers and duly authenticated by the Trustee.  In the event of an Escrow Closing, this condition precedent with respect to each of the Specified Issuers and the Subsidiary Guarantors shall not be effective and, in lieu thereof, shall become a condition precedent to the release of Escrow Funds under the Escrow Agreement.

 

(l)            Registration Rights Agreement.  The Initial Purchasers shall have received a counterpart of the Registration Rights Agreement that shall have been executed and delivered by a duly authorized officer of each of the Issuers, Parent and the Subsidiary Guarantors.  In the event of an Escrow Closing, this condition precedent with respect to each of the Specified Issuers and the Subsidiary Guarantors shall not be effective and, in lieu thereof, shall become a condition precedent to the release of Escrow Funds under the Escrow Agreement.

 

(m)          PORTAL and DTC.  The Securities shall have been approved by the NASD for trading in the PORTAL Market and shall be eligible for clearance and settlement through DTC.

 

(n)           Transactions.  On or prior to the Closing Date, but subject to the last sentence of this clause (n), (i) all of the conditions precedent to the release of the Escrow Funds that are required to be described in the officers’ certificate specified in the Time of Sale Information and the Offering Memorandum shall have been satisfied, (ii) the Company shall have entered into the Senior Credit Facility Documentation on substantially the terms described in each of the Time of Sale Information and the Offering Memorandum and

 

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otherwise in form and substance reasonably satisfactory to the Representative, all conditions precedent to borrowings thereunder shall be satisfied or waived (without waiver or amendment of any material provision thereof unless consented to by the Representative), no default shall exist thereunder and the Initial Purchasers shall have received conformed counterparts thereof and all other documents and agreements entered into and received thereunder in connection with the closing of the Senior Secured Credit Facility, (iii) each of the other components of the Transactions shall have been consummated in a manner consistent in all material respects with the description thereof in each of the Time of Sale Information and the Offering Memorandum (including, without limitation, the funding and consummation of the purchase of the Company pursuant to the Acquisition Agreement) (without waiver or amendment of any material provision thereof unless consented to by the Representative) and (iv) Funding shall have merged with and into the Company.  In the event of an Escrow Closing, (x) this condition precedent with respect to each of the Specified Issuers and the Subsidiary Guarantors shall not be effective and, in lieu thereof, shall become a condition precedent to the release of the Escrow Funds under the Escrow Agreement and (y) clause (iv) above shall become a condition precedent to the release of Escrow Funds under the Escrow Agreement; provided however that on the Closing Date, the Representatives shall have received a certificate of an executive officer of each of the Issuers, Parent and each of the Subsidiary Guarantors (which may be combined with each of the respective officer’s certificates required by Section 6(d) of thi