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RATHGIBSON, INC.
$200,000,000
11.25% Senior Notes due 2014
Purchase Agreement
February 1, 2006
BEAR, STEARNS & CO. INC.
WACHOVIA CAPITAL MARKETS, LLC
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RATHGIBSON, INC.
$200,000,000
11.25% Senior Notes due 2014
PURCHASE AGREEMENT
February 1, 2006
New York, New York
BEAR, STEARNS & CO. INC.
WACHOVIA CAPITAL MARKETS, LLC
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Ladies & Gentlemen:
RathGibson, Inc., a Delaware corporation (the "COMPANY"), proposes
to
issue and sell to Bear, Stearns & Co. Inc. and Wachovia Capital
Markets, LLC
(each, an "INITIAL PURCHASER" and, collectively, the "INITIAL
PURCHASERS")
$200,000,000 in aggregate principal amount of 11.25% Senior Notes
due 2014 (the
"INITIAL NOTES"), subject to the terms and conditions set forth
herein.
1.
The Transactions. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial
Purchasers
$200,000,000 in aggregate principal amount of the Initial Notes.
The Initial
Notes and the Exchange Notes (as defined below) are collectively
referred to
herein as the "NOTES." The Notes will (i) have the terms and
provisions that are
described in the Offering Memorandum (as defined below) under the
heading
"Description of Notes" and such other terms as are customary and
(ii) be issued
pursuant to an indenture (the "INDENTURE"), to be dated as of the
Closing Date
(as defined below), between the Company and The Bank of New York,
as trustee
(the "TRUSTEE").
The Initial Notes are being issued and sold in connection with the
acquisition (the "ACQUISITION") by RGCH Holdings Corp. (the
"PARENT"), a
wholly-owned subsidiary of RGCH Holdings LLC, a Delaware limited
liability
company ("RGCH"), of all of outstanding capital stock of the
Company, pursuant
to the Stock Purchase Agreement, dated as of December 6, 2005 (the
"ACQUISITION
AGREEMENT"), among the Company, Liberty Partners Holdings 10
L.L.C., the Parent
and the other parties thereto. Upon the consummation of the
Acquisition, all of
the Company's outstanding capital stock will be owned directly by
Parent and
indirectly by RGCH. In order to pay for the Acquisition and pay
related fees and
expenses, (i) the Company expects to enter into $50.0 million
revolving credit
facility secured by first priority security interests in the real
and personal
property of the Company and its subsidiaries, pursuant to a credit
agreement
among the Company, the guarantor party thereto and the lenders
party thereto
(the "CREDIT AGREEMENT"), (ii) the Company expects to issue and to
become
obligated under the Initial Notes and (iii) RGCH and certain senior
executives
will indirectly make a cash contribution in the aggregate of $67.5
million to
the common equity capital of the Company (the "EQUITY
CONTRIBUTION"). As used herein, the term "TRANSACTIONS" means
collectively (w)
the offering of the Initial Notes, (x) entering into the Credit
Facility, (y)
the Acquisition and (z) the Equity Contribution.
The Initial Purchasers and other holders (including the direct and
indirect transferees of the Initial Notes) of the Initial Notes
will be entitled
to the benefits of the exchange and registration rights agreement,
to be dated
as of the Closing Date (the "REGISTRATION RIGHTS AGREEMENT"), among
the Company
and the Initial Purchasers, in the form attached hereto as Exhibit
A, for so
long as such Initial Notes constitute "TRANSFER RESTRICTED
SECURITIES" (as
defined in the Registration Rights Agreement). Pursuant to the
Registration
Rights Agreement, the Company will agree, among other things, (i)
to file (A) a
registration statement (the "REGISTRATION STATEMENT") on the
appropriate form
with the Securities and Exchange Commission (the "COMMISSION")
under the
Securities Act of 1933, as amended (together with the rules and
regulations of
the Commission promulgated thereunder, the "ACT"), registering the
sale of an
issue of a series of senior unsecured notes (the "EXCHANGE NOTES")
identical in
all material respects to the Initial Notes (except that the
Exchange Notes will
not contain terms with respect to transfer restrictions) to be
offered in
exchange for the Initial Notes (the "EXCHANGE OFFER") and (B) under
certain
circumstances specified in the Registration Rights Agreement, a
shelf
registration statement pursuant to Rule 415 under the Act (the
"SHELF
REGISTRATION STATEMENT"), and (ii) to use its commercially
reasonable efforts to
cause any such Registration Statement to be declared effective.
The sale of the Initial Notes to the Initial Purchasers (the
"OFFERING")
will be made without registration under the Act, in reliance upon
the exemption
therefrom provided by Section 4(2) of the Act.
In connection with the sale of the Initial Notes, the Company has
prepared
a preliminary offering memorandum, dated January 19, 2006 (the
"PRELIMINARY
OFFERING MEMORANDUM"), and a final offering memorandum, dated the
date hereof
(the "OFFERING MEMORANDUM"), each setting forth information
regarding the
Company, the Initial Notes, the terms of the Offering and the
transactions
contemplated by the Operative Documents (as defined below). Any
references
herein to the Preliminary Offering Memorandum or the Offering
Memorandum shall
be deemed to include, in each case, all amendments and supplements
thereto. The
Parent and the Company hereby confirm that they have authorized the
use of the
Preliminary Offering Memorandum and the Offering Memorandum in
connection with
the offering and resale of the Initial Notes by the Initial
Purchasers.
The Parent and the Company understand that the Initial Purchasers
propose
to make an offering of the Initial Notes (the "EXEMPT RESALES")
only on the
terms and in the manner set forth in the Offering Memorandum, as
amended or
supplemented, and Sections 4, 5 and 12 hereof as soon as
practicable after this
Agreement has been executed and delivered, solely to (i) persons in
the United
States whom the Initial Purchasers reasonably believe to be
qualified
institutional buyers ("QIBS") as defined in Rule 144A under the
Act, as such
rule may be amended from time to time ("RULE 144A"), in
transactions under Rule
144A, and (ii) in transactions under Rule 144A and outside the
United States to
certain persons in reliance on Regulation S ("REGULATION S") under
the Act
(each, a "REG S INVESTOR"). The QIBs and the Reg S Investors are
collectively
referred to herein as the "ELIGIBLE PURCHASERS." The Initial
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Purchasers will offer the Initial Notes to such Eligible Purchasers
initially at
a price equal to 100.0% of the principal amount thereof. Such price
may be
changed at any time without notice.
The payment of principal of, premium and liquidated damages, if
any, and
interest on the Initial Notes and the Exchange Notes will be fully
and
unconditionally guaranteed on a senior unsecured basis, jointly and
severally by
any subsidiary of the Company (collectively, the "SUBSIDIARIES" and
individually, a "SUBSIDIARY") formed or acquired after the Closing
Date that
executes an additional guarantee in accordance with the terms of
the Indenture,
and respective successors and assigns of the subsidiaries of the
Company
referred to above (collectively, the "GUARANTORS"), pursuant to
their guarantees
(the "GUARANTEES"). The Initial Notes and the Guarantees attached
thereto are
herein collectively referred to as the "SECURITIES"; and the
Exchange Notes and
the Guarantees attached thereto are herein collectively referred to
as the
"EXCHANGE SECURITIES." The Company and the Guarantors are herein
collectively
referred to as the "ISSUERS". This Agreement, the Initial Notes,
the Guarantees
of the Initial Notes, the Exchange Notes, the Guarantees of the
Exchange Notes,
the Indenture and the Registration Rights Agreement are hereinafter
referred to
collectively as the "OFFERING DOCUMENTS," and together with the
Credit Agreement
and the Acquisition Agreement are hereinafter referred to
collectively as the
"OPERATIVE DOCUMENTS." Capitalized terms used herein and not
otherwise defined
shall have the meanings assigned to such terms in the Indenture.
Notwithstanding any provision hereof to the contrary, all
representations,
warranties, covenants and agreements of the Company contained
herein shall not
be effective prior to the Closing Date, and the parties hereto
agree that the
Company shall execute this Agreement at or prior to the Closing
Date.
2.
Representations and Warranties of the Parent and the Company. The
Parent, on the date hereof, severally, and the Company, as of the
Closing Date,
jointly and severally, represent and warrant to the Initial
Purchasers that:
(a)
The Preliminary Offering Memorandum as of its date does not,
the Preliminary Offering Memorandum, as supplemented by the
information and
documents listed on Schedule A hereto, taken together (the
"DISCLOSURE
PACKAGE"), as of the Applicable Time (as defined) and as of the
date of the
Closing Date, does not and will not, and the Offering Memorandum,
as of its date
and as of the Closing Date, does not and will not, and any
supplement or
amendment to them will not, contain 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, except that the representations and warranties
contained in this
paragraph shall not apply to statements in or omissions from the
Preliminary
Offering Memorandum or the Offering Memorandum (or any supplement
or amendment
thereto, including the Disclosure Package) made in reliance upon
and in
conformity with information relating to the Initial Purchasers
furnished to the
Parent or the Company in writing by the Initial Purchasers
expressly for use
therein. The Offering Memorandum and any amendment or supplement
thereto
complied or will comply in all material respects with subsection
(d)(4) of Rule
144A. For purposes of this Agreement, the "APPLICABLE TIME" is 5:00
p.m. (New
York City time) on the date of this Agreement.
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(b)
No order or decree preventing the use of the Preliminary
Offering Memorandum or the Offering Memorandum, or any amendment or
supplement
thereto, or any order asserting that any of the transactions
contemplated by
this Agreement are subject to the registration requirements of the
Act, has been
issued and no proceeding for that purpose has commenced or is
pending or, to the
knowledge of the Parent or the Company, is contemplated.
(c)
Subsequent to the respective dates as of which information
is given in the Offering Memorandum or, if the Offering Memorandum
is not in
existence, the most recent Preliminary Offering Memorandum, except
as disclosed
in the Disclosure Package and the Offering Memorandum, the Company
has not
declared, paid or made any dividends or other distributions of any
kind on or in
respect of its capital stock and there has been no material adverse
change or
any development involving a prospective material adverse change, in
the capital
stock or the long-term debt, or material increase in the short-term
debt, of the
Company from that set forth in the Disclosure Package and the
Offering
Memorandum, whether or not arising from transactions in the
ordinary course of
business, in or affecting (i) the business, condition (financial or
otherwise),
results of operations, stockholders' equity, properties or
prospects of the
Company and each Subsidiary, individually or taken as a whole; or
(ii) the
ability of the Company to consummate the Offering or any of the
other
transactions contemplated by the Operative Documents. Since the
date of the
latest balance sheet included in the Offering Memorandum or, if the
Offering
Memorandum is not in existence, the most recent Preliminary
Offering Memorandum,
neither the Company nor any Subsidiary has incurred or undertaken
any liability
or obligation, whether direct or indirect, liquidated or
contingent, matured or
unmatured, or entered into any transaction, including any
acquisition or
disposition of any business or asset, which is material to the
Company and the
Subsidiaries, individually or taken as a whole, except for
liabilities,
obligations and transactions which are disclosed in the Disclosure
Package and
the Offering Memorandum.
(d)
Each of the Parent and the Company has been duly
incorporated or formed and is validly existing as a corporation or
other entity
in good standing under the laws of its jurisdiction of
incorporation. The
Company has all requisite power and authority to carry on its
business as it is
currently being conducted and as described in the Disclosure
Package and the
Offering Memorandum, and to own, lease and operate its properties.
Each of the
Company and each of the Subsidiaries is duly qualified and
authorized to do
business and is in good standing as a foreign corporation or other
entity in
each jurisdiction in which the character or location of its
properties (owned,
leased or licensed) or the nature or conduct of its business
requires such
qualification, except for those failures to be so qualified or in
good standing
which (individually or in the aggregate) could not reasonably be
expected to
have a material adverse effect on (A) the properties, business,
results of
operations, condition (financial or otherwise), stockholders'
equity, properties
or prospects of the Company and the Subsidiaries, individually or
taken as a
whole; (B) the long-term debt or capital stock of the Company or
any Subsidiary;
(C) the issuance or marketability of the Notes or (D) the validity
of this
Agreement or any other Operative Document or the transactions
described in the
Disclosure Package and the Offering Memorandum under the caption
"Use of
Proceeds" (any such effect being a "MATERIAL ADVERSE EFFECT").
(e)
As of the Closing Date, the Company will not have any
subsidiaries within the meaning of Rule 405 under the Act. As of
the Closing
date, the Company holds no
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ownership or other interest, nominal or beneficial, direct or
indirect, in any
corporation, partnership, joint venture or other business entity.
(f)
Except as disclosed in the Disclosure Package and the
Offering Memorandum, neither the Company nor any Subsidiary has
outstanding
subscriptions, rights, warrants, calls, commitments of sale or
options to
acquire, or any preemptive rights or other rights to subscribe for
or to
purchase, or any contracts or commitments to issue or sell, or
instruments
convertible into or exchangeable for, any capital stock or other
equity interest
in, the Company or the Subsidiaries (any "RELEVANT SECURITY"). The
authorized,
issued and outstanding capital stock of the Company is as set forth
in the
Disclosure Package and the Offering Memorandum. All of the issued
and
outstanding shares of capital stock of the Company are fully paid
and
non-assessable and have been duly and validly authorized and
issued, in
compliance with all applicable state, federal and foreign
securities laws and
not in violation of or subject to any preemptive or similar right
that does or
will entitle any person, upon the issuance or sale of any security,
to acquire
from the Company or any Subsidiary any Relevant Security.
(g)
When the Initial Notes are issued and delivered pursuant to
this Agreement, no securities of the Company or any Subsidiary are
(i) of the
same class (within the meaning of Rule 144A under the Act) as the
Initial Notes
and (ii) listed on a national securities exchange registered under
Section 6 of
the Securities Exchange Act of 1934, as amended (together with the
rules and
regulations of the Commission promulgated thereunder, the "EXCHANGE
ACT"); or
quoted in a United States automated inter-dealer quotation system.
(h)
The Parent has, and at the Closing Date the Company will
have, the required corporate power and authority or other power and
authority to
execute, deliver and perform its obligations under this Agreement
and each of
the other Operative Documents to which it is a party and to
consummate the
transactions contemplated hereby and thereby, including, without
limitation, the
corporate power and authority or other power and authority to
issue, sell and
deliver the Notes as provided herein and therein.
(i)
At the Closing Date, the Initial Notes will have been duly
and validly authorized by the Company for issuance and sale to the
Initial
Purchasers pursuant to this Agreement and, when executed by the
Company and
authenticated by the Trustee in accordance with the provisions of
the Indenture
and when delivered to and paid for by the Initial Purchasers in
accordance with
the terms hereof and thereof, will have been duly and validly
executed, issued
and delivered and will constitute valid and legally binding
obligations of the
Company, entitled to the benefits of the Indenture and enforceable
against the
Company in accordance with their terms, except that the enforcement
thereof may
be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect
relating to or
affecting creditors' rights generally and (ii) general principles
of equity
(regardless of whether such enforcement is considered in a
proceeding at law or
in equity) ((i) and (ii) are referred to herein collectively as the
"ENFORCEABILITY EXCEPTIONS"). The Disclosure Package and the
Offering Memorandum
each contain a summary of the terms of the Initial Notes, which
summary is
accurate in all material respects. At the Closing Date, the Initial
Notes will
be substantially in the form contemplated by the Indenture.
5
(j)
At the Closing Date, the Exchange Notes will have been duly
and validly authorized for issuance by the Company and, when issued
and executed
by the Company and authenticated by the Trustee in accordance with
the terms of
the Exchange Offer and the Indenture, will constitute valid and
legally binding
obligations of the Company, entitled to the benefits of the
Indenture and
enforceable against the Company in accordance with their terms,
except that the
enforcement thereof may be limited by the Enforceability
Exceptions.
(k)
At the Closing Date, the Credit Facility will be duly and
validly authorized by the Company and the guarantor party thereto
and, when duly
executed and delivered by the Company and the guarantor party
thereto, will be
the legal, valid and binding obligation of the Company and the
guarantor party
thereto, enforceable against each of them in accordance with its
terms, subject
to the Enforceability Exceptions. The Disclosure Package and
Offering Memorandum
each contain a summary of the terms of the Credit Facility, which
summary is
accurate in all material respects and reflects the proposed terms
as of the date
hereof.
(l)
At the Closing Date, the Indenture will have been duly and
validly authorized by the Company and meets the requirements for
qualification
under the Trust Indenture Act of 1939, as amended (the "TRUST
INDENTURE ACT"),
and the rules and regulations of the Commission applicable to an
indenture so
qualified, and, when duly executed and delivered by the Company
(assuming the
due authorization, execution and delivery by the Trustee) will
constitute a
valid and legally binding agreement of the Company, enforceable
against each of
them in accordance with its terms, except that the enforcement
thereof may be
limited by the Enforceability Exceptions.
(m)
At the Closing Date, the Registration Rights Agreement will
have been duly and validly authorized by the Company and when duly
executed and
delivered by the Company (assuming the due authorization, execution
and delivery
by the Initial Purchasers), will constitute a valid and legally
binding
obligation of the Company, enforceable against each of them in
accordance with
its terms except that the enforcement thereof may be limited by the
Enforceability Exceptions. The Registration Rights Agreement
conforms in all
material respects to the description thereof in the Disclosure
Package and the
Offering Memorandum.
(n)
The Parent has, and at the Closing Date the Company will
have, duly and validly authorized, executed and delivered this
Agreement.
(o)
None of the Parent, the Company or any Subsidiary is (i) in
violation of its certificate or articles of incorporation, bylaws
or other
organizational documents, (ii) in default under, and no event has
occurred
which, with notice or lapse of time or both or otherwise, would
constitute a
default under, or result in the creation or imposition of any lien,
charge,
mortgage, pledge, security interest, claim, limitation on voting
rights, equity,
trust or other encumbrance, preferential arrangement, defect or
restriction of
any kind whatsoever (any "LIEN") upon, any of its property or
assets pursuant
to, any bond, debenture, note, indenture, mortgage, deed of trust,
loan
agreement or other agreement or instrument to which it is a party
or by which it
is bound or to which any of its properties or assets is subject, or
(iii) in
violation in any respect of any law, rule, regulation, ordinance,
directive,
judgment, decree or order of any judicial, regulatory or other
legal or
governmental agency or body (including, without limitation,
environmental laws,
statutes, ordinances, rules, regulations, judgments or court
decrees), foreign
or domestic, except (in the case clauses (ii) and (iii) above)
violations or
defaults that could not (individually or in the aggregate)
reasonably be
expected to have a Material Adverse Effect and except
6
(in the case of clause (ii) alone) for any Lien disclosed in the
Disclosure
Package and the Offering Memorandum.
(p)
None of (i) the execution, delivery, and performance by the
Parent and the Company of this Agreement and consummation of the
transactions
contemplated by the Operative Documents to which each of them,
respectively, is
a party, (ii) the issuance and sale of the Initial Notes and the
issuance of the
Exchange Notes, or (iii) consummation by the Company of the
transactions
described in the Disclosure Package and the Offering Memorandum
under the
caption "Use of Proceeds," (A) violates or will violate, conflicts
with or will
conflict with, requires or will require consent under, or results
or will result
in a breach of any of the terms and provisions of, or constitutes
or will
constitute a default (or an event which with notice or lapse of
time, or both,
would constitute a default) under, or results or will result in the
creation or
imposition of any Lien upon any properties or assets of the Company
or any
Subsidiary, or an acceleration of any indebtedness of the Company
or any
Subsidiary pursuant to (1) any provision of the certificate of
incorporation,
articles of incorporation, charter, bylaws, certificate of
formation, limited
liability company agreement, partnership agreement or other
organizational
document of the Company or any Subsidiary, (2) any bond, debenture,
note,
indenture, mortgage, deed of trust, loan agreement or other
agreement,
instrument, franchise, license or permit to which the Company or
any Subsidiary
is a party or by which the Company or any Subsidiary or their
respective
properties, operations or assets is or may be bound, (3) or any
statute, law,
ordinance, rule or regulation applicable to the Company or any
Subsidiary or any
of their properties or assets, (4) any directive, judgment, decree
or order of
any judicial, regulatory or other legal or governmental agency or
body, domestic
or foreign or (5) the compliance by the Company with all of the
provisions of
the Acquisition Agreement required to be complied with by it on or
before the
Closing Date violates, except (in the case of clauses (2), (3), (4)
and (5)
above) as could not reasonably be expected to have a Material
Adverse Effect.
(q)
True and correct copies of the Acquisition Agreement and all
material documents and agreements related to the transactions
contemplated
thereby have been delivered to the Initial Purchasers, and there
have been no
amendments, modifications or waivers thereto or in the exhibits or
schedules
thereto, except as have been delivered or made available to the
Initial
Purchasers.
(r)
Each of the Company and the Subsidiaries has all necessary
consents, approvals, authorizations, orders, registrations,
qualifications,
licenses, filings and permits of, with and from all judicial,
regulatory and
other legal or governmental agencies, bodies or administrative
agencies, and all
third parties, foreign and domestic (collectively, the "CONSENTS"),
to own,
lease and operate its properties and conduct its business as it is
now being
conducted and as disclosed in the Disclosure Package and the
Offering
Memorandum, except where lack of such Consent could not reasonably
be expected
to have a Material Adverse Effect, and each such Consent is valid
and in full
force and effect, and neither the Company nor any Subsidiary has
received notice
of any investigation or proceeding which results in or, if decided
adversely to
the Company or any Subsidiary, could reasonably be expected to
result in, the
revocation of, or imposition of a restriction on, any Consent,
other than those
investigations or proceedings that could not reasonably be expected
to have a
Material Adverse Effect. Each of
7
the Company and the Subsidiaries is in compliance with all
applicable laws,
rules, regulations, ordinances, directives, judgments, decrees and
orders,
foreign and domestic, except where failure to be in compliance
could not
reasonably be expected to have a Material Adverse Effect. No
Consent contains a
materially burdensome restriction not adequately disclosed in the
Disclosure
Package and the Offering Memorandum.
(s)
No Consent is required for (i) the execution, delivery and
performance by each of the Company of this Agreement or
consummation of the
Offering, the Exchange Offer and the other transactions
contemplated by the
Operative Documents to which each of them, respectively, is a party
or (ii) the
issuance, sale and delivery of the Initial Notes (and the issuance
of the
Exchange Notes in connection with the Exchange Offer), except such
Consents as
have been or will be obtained and made on or prior to the Closing
Date (or, in
the case of the Registration Rights Agreement, will be obtained and
made under
the Act, the Trust Indenture Act, and state securities or blue sky
laws and
regulations) and that the Commission must declare the Registration
Statement
effective pursuant to the Registration Rights Agreement.
(t)
Except as disclosed in the Disclosure Package and the
Offering Memorandum, there is (i) no judicial, regulatory, arbitral
or other
legal or governmental action, suit, investigation or proceeding or
other
litigation or arbitration before or by any court, arbitrator or
governmental
agency, body or official, domestic or foreign, pending to which the
Company or
any Subsidiary is or may be a party or of which the business,
property,
operations or assets of the Company or any Subsidiary is or may be
subject, (ii)
no statute, rule, regulation or order that has been enacted,
adopted or issued
by any governmental agency or that has been proposed by any
governmental body,
and (iii) no injunction, restraining order or order of any nature
by a federal
or state court or foreign court of competent jurisdiction to which
the Company
or any Subsidiary is or may be subject or to which the business,
property,
operations or assets of the Company or any Subsidiary is or may be
subject,
that, individually or in the aggregate, if determined adversely to
the Company
or any Subsidiary, could reasonably be expected to have a Material
Adverse
Effect; to the knowledge of the Parent and the Company, no such
proceeding,
litigation or arbitration is threatened or contemplated; and the
defense of all
such proceedings, litigation and arbitration against or involving
the Company or
any Subsidiary could not reasonably be expected to have a Material
Adverse
Effect.
(u)
There exists as of the date hereof (after giving effect to
the transactions contemplated by each of the Operative Documents)
no event or
condition that would constitute a default or an event of default
(in each case
as defined in each of the Operative Documents) under any of the
Operative
Documents that would result in a Material Adverse Effect or
materially adversely
affect the ability of the Company to consummate the Offering and
the other
transactions contemplated by the Operative Documents, including,
without
limitation, the Exchange Offer.
(v)
No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental
agency that
prevents the issuance of the Notes or prevents or suspends the use
of the
Offering Memorandum; no injunction, restraining order or order of
any nature by
a federal or state court of competent jurisdiction has been issued
that prevents
the issuance of the Notes or prevents or suspends the sale of the
Initial Notes
in any jurisdiction referred to in Section 2(d) hereof; and every
request of any
securities authority or
8
agency of any jurisdiction for additional information has been
complied with in
all material respects.
(w)
There is (i) no significant unfair labor practice complaint
pending against the Company or any Subsidiary nor, to the knowledge
of the
Parent and the Company, threatened against any of them, before the
National
Labor Relations Board, any state or local labor relations board or
any foreign
labor relations board, and no significant grievance or significant
arbitration
proceeding arising out of or under any collective bargaining
agreement is so
pending against the Company or any of its subsidiaries or, to the
knowledge of
the Parent and the Company, threatened against any of them, (ii) no
significant
strike, labor dispute, slowdown, or stoppage pending against the
Company or any
of its subsidiaries nor, to the knowledge of the Parent and the
Company,
threatened against any of them which (individually or in the
aggregate), could
reasonably be expected to have a Material Adverse Effect, (iii) no
labor
disturbance by the employees of the Company or any Subsidiary or,
to the
knowledge of the Parent and the Company, no such disturbance is
imminent and the
Company is not aware of any existing or imminent labor disturbances
by the
employees of any of its respective, or any Subsidiary's, principal
suppliers,
manufacturers, customers or contractors that, in any such case
(individually or
in the aggregate), could reasonably be expected to have a Material
Adverse
Effect, and (iv) no union representation question existing (to the
knowledge of
the Parent and the Company) with respect to the employees of the
Company or any
Subsidiary. To the knowledge of the Parent and the Company, no
collective
bargaining organizing activities are taking place with respect to
the Company or
any Subsidiary. None of the Company or any of its subsidiaries has
violated (i)
any federal, state or local law or foreign law relating to
discrimination in
hiring, promotion or pay of employees or (ii) any applicable wage
or hour laws,
except for those violations that could not reasonably be expected
to have a
Material Adverse Effect.
(x)
No "prohibited transaction" (as defined in either Section
406 of the Employee Retirement Income Security Act of 1974, as
amended,
including the rules, regulations and published interpretations
thereunder
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as
amended from
time to time (the "CODE")), "accumulated funding deficiency" (as
defined in
Section 302 of ERISA) or other event of the kind described in
Section 4043(b) of
ERISA (other than events with respect to which the 30-day notice
requirement
under Section 4043 of ERISA has been waived) has occurred with
respect to any
employee benefit plan for which the Company or any Subsidiary would
have any
liability that could reasonably be expected to have a Material
Adverse Effect;
each employee benefit plan for which the Company or any Subsidiary
would have
any liability is in compliance with applicable law, including
(without
limitation) ERISA and the Code, except where noncompliance could
not reasonably
be expected to have a Material Adverse Effect; the Company has not
incurred and
does not reasonably expect to incur liability under Title IV of
ERISA with
respect to the termination of, or withdrawal from any "pension
plan"; and each
plan for which the Company would have any liability that is
intended to be
qualified under Section 401(a) of the Code is so qualified and, to
the Company's
knowledge, nothing has occurred, whether by action or by failure to
act, which
could cause the loss of such qualification. The execution and
delivery of this
Agreement, the other Operative Documents and the sale of the
Securities to be
purchased by Eligible Purchasers will not involve any prohibited
transaction
within the meaning of Section 406 of ERISA or Section 4975 of the
Internal
Revenue Code of 1986. The representation made by the Company in the
preceding
sentence is made in reliance upon and subject to the accuracy of,
and
9
compliance with, the representations and covenants made or deemed
made by
Eligible Purchasers as set forth in the Offering Memorandum under
the caption
"Notice to Investors."
(y)
There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release
of any kind
of toxic or other wastes or other hazardous substances by, due to,
or caused by
the Company or any Subsidiary (or, to the knowledge of the Parent
and the
Company, any other entity for whose acts or omissions the Company
is or may be
liable) upon any other property now or previously owned or leased
by the Company
or any Subsidiary, or upon any other property, which would be a
violation of or
give rise to any liability under any applicable law, rule,
regulation, order,
judgment, decree or permit relating to the protection of human
health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants
or contaminants ("ENVIRONMENTAL LAW") that could reasonably be
expected to have
a Material Adverse Effect. There has been no disposal, discharge,
emission or
other release of any kind onto such property or into the
environment surrounding
such property of any toxic or other wastes or other hazardous
substances that
could reasonably be expected to have a Material Adverse Effect,
with respect to
which the Parent, the Company or any Subsidiary has knowledge.
Neither the
Company nor any Subsidiary has agreed to assume, undertake or
provide
indemnification for any liability of any other person under any
Environmental
Law, including any obligation for cleanup or remedial action. There
is no
pending or, to the knowledge of the Parent and the Company,
threatened
administrative, regulatory or judicial action, claim or notice of
noncompliance
or violation, investigation or proceedings relating to any
Environmental Law
against the Company or any Subsidiary that could reasonably be
expected to have
a Material Adverse Effect.
(z)
There is no alleged liability, or to the knowledge of the
Parent and the Company, potential liability (including, without
limitation,
alleged or potential liability or investigatory costs, cleanup
costs,
governmental response costs, natural resource damages, property
damages,
personal injuries or penalties) of the Company or any Subsidiary
arising out of,
based on or resulting from (i) the presence or release into the
environment of
any Hazardous Material (as defined) at any location, whether or not
owned by the
Company or such Subsidiary, as the case may be, or (ii) any
violation or alleged
violation of any Environmental Law, other than as disclosed in the
Disclosure
Package and the Offering Memorandum or could not reasonably be
expected to have
a Material Adverse Effect. The term "HAZARDOUS MATERIAL" means (i)
any
"hazardous substance" as defined by the Comprehensive Environmental
Response,
Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste"
as defined by the Resource Conservation and Recovery Act of 1976,
as amended,
(iii) any petroleum or petroleum product, (iv) any polychlorinated
biphenyl, and
(v) any pollutant or contaminant or hazardous, dangerous or toxic
chemical,
material, waste or substance regulated under or within the meaning
of any other
law relating to protection of human health or the environment or
imposing
liability or standards of conduct concerning any such chemical
material, waste
or substance.
(aa)
The Company and each Subsidiary has such permits, licenses,
franchises and authorizations of governmental or regulatory
authorities
("PERMITS"), including, without limitation, under any applicable
Environmental
Laws, as are necessary to own, lease and operate its respective
properties and
to conduct its businesses, except where the failure to have such
permits could
not reasonably be expected to have a Material Adverse Effect; the
Company and
10
each Subsidiary has fulfilled and performed all of its obligations
with respect
to such permits and no event has occurred which 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, except
as described in the Disclosure Package and the Offering Memorandum,
such permits
contain no restrictions to the Company or any Subsidiary, as the
case may be,
that could reasonably be expected to have a Material Adverse
Effect.
(bb)
The Company and each Subsidiary owns or leases all such
properties as are necessary to the conduct of its business as
presently operated
and as proposed to be operated as described in the Disclosure
Package and the
Offering Memorandum. The Company and the Subsidiaries have (i) good
and
marketable title in fee simple to all of real property and good and
marketable
title to all personal property owned by them, in each case free and
clear of all
Liens except such as are described in the Disclosure Package and
the Offering
Memorandum or such as do not (individually or in the aggregate)
materially
affect the value of such property or interfere with the use made or
proposed to
be made of such property by the Company and the Subsidiaries); (ii)
peaceful and
undisturbed possession of any real property and buildings held
under lease or
sublease by the Company and the Subsidiaries and such leased or
subleased real
property and buildings are held by them under valid, subsisting and
enforceable
leases and no default exists thereunder, (including, to the
knowledge of the
Parent and the Company, defaults by the landlord) with such
exceptions as are
not material to, and do not materially interfere with, the use made
and proposed
to be made of such property and buildings by the Company and the
Subsidiaries;
(iii) all licenses, certificates, permits, authorizations,
approvals, franchises
and other rights from, and have made all declarations and filings
with, all
federal, state and local authorities, all self-regulatory
authorities and all
courts and other tribunals (each, an "AUTHORIZATION") necessary to
engage in the
business conducted by any of them in the manner described in the
Disclosure
Package and the Offering Memorandum, except where lack of such
Authorization
could not reasonably be expected to have a Material Adverse Effect;
and (iv) no
reason to believe that any governmental body or agency is
considering limiting,
suspending or revoking any such Authorization. All such
Authorizations are valid
and in full force and effect and the Company and each Subsidiary is
in
compliance with the terms and conditions of all such Authorizations
and with the
rules and regulations of the regulatory authorities having
jurisdiction with
respect thereto, except where failure of such Authorizations to be
valid and in
full force and effect or lack of compliance could not reasonably be
expected to
have a Material Adverse Effect. Neither the Company nor any
Subsidiary has
received any notice of any claim adverse to its ownership of any
real or
personal property or of any claim against the continued possession
of any real
property, whether owned or held under lease or sublease by the
Company or any
Subsidiary that could reasonably be expected to have a Material
Adverse Effect.
(cc)
The Company and each Subsidiary (i) owns or possesses
adequate right to use all patents, patent applications, patent
rights, licenses,
formulae, customer lists, inventions, copyrights, know-how
(including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential
information, software, systems or procedures), trademarks, service
marks, trade
names, trademark registrations, service mark registrations,
computer programs,
technical data and information, and know-how and other intellectual
property
(including trade secrets and other unpatented and/or unpatentable
proprietary or
confidential information, systems or procedures, the "INTELLECTUAL
PROPERTY")
necessary for the conduct of their respective businesses as
presently being
conducted and as described in the Disclosure Package and the
11
Offering Memorandum, except where lack of ownership or possession
of such
Intellectual Property could not reasonably be expected to have a
Material
Adverse Effect, and (ii) have no reason to believe that the conduct
of their
respective businesses does or will conflict with any such rights of
others, and
have not received any notice of any claim of conflict with, any
such right of
others that could reasonably be expected to have a Material Adverse
Effect. To
the knowledge of the Parent and the Company, all material technical
information
developed by and belonging to the Company or any Subsidiary which
has not been
patented has been kept confidential. Neither the Company nor any
Subsidiary has
granted or assigned to any other person or entity any right to
manufacture, have
manufactured, assemble or sell the current products and services of
the Company
and the Subsidiaries or those products and services described in
the Disclosure
Package and the Offering Memorandum. To the knowledge of the
Company, there is
no infringement by third parties of any Intellectual Property of
the Company or
any Subsidiary; there is no pending or, to the knowledge of the
Parent and the
Company, threatened action, suit, proceeding or claim by others
challenging the
Company's or any Subsidiary's rights in or to any Intellectual
Property, and the
Company is unaware of any facts which would form a reasonable basis
for any such
claim; and there is no pending or, to the knowledge of the Parent
and the
Company, threatened action, suit, proceeding or claim by others
that the Company
or any Subsidiary infringes or otherwise violates any patent,
trademark,
copyright, trade secret or other proprietary rights of others,
except for such
actions, suits, proceedings or claims that could not reasonably be
expected to
have a Material Adverse Effect, and the Company is unaware of any
other fact
which would form a reasonable basis for any such claim.
(dd)
Each of the Company and the Subsidiaries has timely filed
all material tax returns required to be filed (including in
accordance with
applicable extensions) by it and has paid or made provision (to the
extent
required by GAAP) for the payment of all taxes, assessments,
governmental or
other similar charges, including without limitation, all sales and
use taxes and
all taxes that the Company or any Subsidiary is obligated to
withhold from
amounts owing to employees, creditors and third parties, with
respect to the
periods covered by such tax returns (whether or not such amounts
are shown as
due on any tax return). No deficiency assessment with respect to a
proposed
adjustment of the Company's or any Subsidiary's federal, state,
local or foreign
taxes is pending or, to the knowledge of the Parent and the
Company, threatened.
There are no material proposed additional tax assessments against
the Company or
any Subsidiary, or the assets or property of the Company or any of
Subsidiary.
The accruals and reserves on the books and records of the Company
and the
Subsidiaries in respect of tax liabilities for any taxable period
not finally
determined are adequate (in accordance with GAAP) to meet any
assessments and
related liabilities for any such period and, since January 31,
2005, the Company
and the Subsidiaries have not incurred any liability for taxes
other than in the
ordinary course of its business. There is no tax Lien, whether
imposed by any
federal, state, foreign or other taxing authority, outstanding
against the
assets, properties or business of the Company or any Subsidiary,
except for any
tax not yet due and payable.
(ee)
The Company and the Subsidiaries maintain a system of
internal accounting and other controls sufficient to provide
reasonable
assurances 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 accountability for
assets; (iii)
access to assets is
12
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accounting for assets is
compared with
existing assets at reasonable intervals and appropriate action is
taken with
respect to any differences.
(ff)
The Company and the Subsidiaries maintain insurance in such
amounts and covering such risks as the Company reasonably considers
adequate for
the conduct of its business and the value of its properties and as
is customary
for companies engaged in similar businesses in similar industries,
all of which
insurance is in full force and effect, except where the failure to
maintain such
insurance could not reasonably be expected to have a Material
Adverse Effect.
There are no material claims by the Company or any Subsidiary under
any such
policy or instrument as to which any insurance company is denying
liability or
defending under a reservation of rights clause. The Company
reasonably believes
that it will be able to renew its existing insurance as and when
such coverage
expires or will be able to obtain replacement insurance adequate
for the conduct
of the business and the value of its properties at a cost that
could not
reasonably be expected to have a Material Adverse Effect. Neither
the Company
nor any Subsidiary has received notice from any insurer or agent of
such insurer
that substantial capital improvements or other expenditures will
have to be made
in order to continue such insurance.
(gg)
The Company has in effect insurance covering the Company,
its directors, officers for liabilities or losses arising in
connection with
this Offering, including, without limitation, liabilities or losses
arising
under the Act, the Exchange Act, and applicable foreign securities
laws.
(hh)
Except as disclosed in the Disclosure Package and the
Offering Memorandum, after giving effect to the Transactions, no
relationship,
direct or indirect, exists between or among the Company, any
Subsidiary or any
affiliate of the Company, on the one hand, and any director,
officer,
stockholder, customer or supplier of the Company, any Subsidiary or
any
affiliate of the Company, on the other hand, which would be
required by the Act
to be described in the Disclosure Package and the Offering
Memorandum if the
Disclosure Package and the Offering Memorandum were prospectuses
included in
registration statements on Form S-1 filed with the Commission.
There are no
outstanding loans, advances (except normal advances for business
expenses in the
ordinary course of business) or guarantees of indebtedness by the
Company to or
for the benefit of any of the officers or directors of the Company
or any of
their respective family members.
(ii)
The Company and each Subsidiary is not now and, after giving
effect to the Transactions, as contemplated hereunder and
application of the net
proceeds of such sale as described in the Disclosure Package and
the Offering
Memorandum under the caption "Use of Proceeds," will not be, an
"investment
company" or a company "controlled" by an "investment company"
within the meaning
of the Investment Company Act of 1940, as amended (the "INVESTMENT
COMPANY
ACT").
(jj)
Except as described in the Disclosure Package and the
Offering Memorandum, no holder of any Relevant Security has any
rights to
require registration of any Relevant Security by reason of the
execution by the
Company of this Agreement or any other Operative Document to which
it is a party
or the consummation by the Company of the
13
transactions contemplated hereby and thereby, or as part or on
account of, or
otherwise in connection with the Offering and any of the other
transactions
contemplated by the Operative Documents, and any such rights so
disclosed have
been effectively waived by the holders thereof, and any such
waivers remain in
full force and effect.
(kk)
None of the Company, any Subsidiary, or any affiliate
(within the meaning of Rule 144 under the Act) has (i) taken,
directly or
indirectly, any action designed to, or that might reasonably be
expected to,
cause or result in stabilization or manipulation of the price of
any security of
the Company or any of its subsidiaries to facilitate the sale or
resale of the
Notes or (ii) since the date of the Preliminary Offering Memorandum
(A) sold,
bid for, purchased or paid any person any compensation for
soliciting purchases
of the Notes or (B) paid or agreed to pay to any person any
compensation for
soliciting another to purchase any other securities of the Company
or any of its
subsidiaries.
(ll)
None of the Company or any Subsidiary or any of their
respective affiliates (as defined in Rule 501(b) of Regulation D
under the Act)
or representatives 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) which is or could be integrated with the sale
of the Notes
in a manner that would require the registration under the Act of
the Notes 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 offer
and sale of the Securities or in connection with Exempt Resales of
the
Securities, or in any manner involving a public offering within the
meaning of
Section 4(2) of the Act. Assuming the accuracy of the Initial
Purchasers'
representations and warranties set forth in Section 3 hereof,
neither (i) the
offer and sale of the Initial Notes to the Initial Purchasers in
the manner
contemplated by this Agreement, the Disclosure Package and the
Offering
Memorandum nor (ii) the Exempt Resales requires registration under
the Act and
prior to the effectiveness of any Registration Statement, the
Indenture does not
require qualification under the Trust Indenture Act. No securities
of the same
class as the Notes have been issued and sold by the Company or any
Subsidiary
within the six-month period immediately prior to the date hereof.
(mm)
The financial statements, including the notes thereto, and
the supporting schedules included in the Disclosure Package and the
Offering
Memorandum present fairly the financial position as of the dates
indicated and
the cash flows and results of operations for the periods specified
of the
Company and its consolidated subsidiaries for which financial
statements are
included in the Disclosure Package and the Offering Memorandum;
except as
otherwise stated in the Disclosure Package and the Offering
Memorandum, said
financial statements have been prepared in conformity with United
States
generally accepted accounting principles applied on a consistent
basis
throughout the periods involved; and the supporting schedules
included in the
Disclosure Package and the Offering Memorandum present fairly the
information
required to be stated therein. No other financial statements or
supporting
schedules are required to be included in the Disclosure Package or
the Offering
Memorandum if the Disclosure Package or the Offering Memorandum,
respectively,
were included in a registration statement filed pursuant to the
Act. The other
financial and statistical information included in the Offering
Memorandum
presents fairly the information included therein and has been
prepared on a
basis consistent with that of the financial statements that are
included in the
Disclosure Package or the Offering Memorandum, respectively, and
the books and
records of the respective entities presented
14
therein and, to the extent such information is a range, projection
or estimate,
is based on the good faith belief and estimates of the management
of the Company
and the Subsidiaries.
(nn)
PricewaterhouseCoopers, LLP who have certified or will
certify the financial statements and supporting schedules and
information
included or to be included as part of the Disclosure Package and
the Offering
Memorandum, is an independent public accounting firm as required by
the Act and
the Exchange Act.
(oo)
Each of the Disclosure Package and the Offering Memorandum
contains, if any, all pro forma and as adjusted financial
information and
statements which are required to be included or incorporated by
reference in
accordance in all material respects with Regulation S-X in the
Disclosure
Package and the Offering Memorandum if the Disclosure Package or
the Offering
Memorandum, respectively, were included in a registration statement
filed
pursuant to the Act. The pro forma and as adjusted financial
information and
statements have been properly compiled and prepared in accordance
with the
applicable requirements of the Act and the Exchange Act and
includes all
adjustments necessary to present fairly in accordance with United
States
generally accepted accounting principles the pro forma and as
adjusted financial
position of the respective entity or entities presented therein at
the
respective dates indicated and their cash flows and the results of
operations
fo
