7-3/4% Senior Notes due
2013
J.P. Morgan
Securities Inc.
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Res-Care, Inc., a
Kentucky corporation (the “Company”), proposes to issue
and sell to the several Initial Purchasers listed in
Schedule 1 hereto (the “Initial Purchasers”), for
whom you are acting as representative (the
“Representative”), $150,000,000 principal amount of its
7-3/4% Senior Notes due 2013 (the “Securities”). The
Securities will be issued pursuant to an Indenture to be dated as
of October 3, 2005 (the “Indenture”) among the
Company, the guarantors listed in Schedule 2 hereto (the
“Guarantors”) and Wells Fargo Bank, National
Association, as trustee (the “Trustee”), and will be
guaranteed on an unsecured senior basis by each of the Guarantors
(the “Guarantees”).
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 Company
has prepared a preliminary offering memorandum dated
September 14, 2005 (the “Preliminary Offering
Memorandum”) and will prepare an offering memorandum dated
the date hereof (the “Offering Memorandum”) setting
forth information concerning the Company and the Securities. Copies
of the Preliminary Offering Memorandum have been, and copies of the
Offering Memorandum will be, delivered by the Company to the
Initial Purchasers pursuant to the terms of this purchase agreement
(this “Agreement”). The Company hereby confirms that it
has authorized the use of the Preliminary Offering Memorandum and
the Offering Memorandum in connection with the offering and resale
of the Securities by the Initial Purchasers solely in the manner
contemplated by this Agreement. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the
Offering Memorandum.
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 (as
defined below) and substantially in the form attached hereto as
Exhibit A (the “Registration Rights Agreement”),
pursuant to which the Company and the Guarantors 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 Company hereby
confirms its 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 Company
agrees 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
Company the respective principal amount of Securities set forth
opposite such Initial Purchaser’s name in Schedule 1
hereto at a price equal to 98.276% of the principal amount thereof
plus accrued interest, if any, from October 3, 2005 to the
Closing Date. The Company 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
Company understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Offering
Memorandum. Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that:
(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) neither it
nor any person acting on its behalf has solicited offers for, or
offered or sold, or will 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 D
under the Securities Act (“Regulation D”) or in
any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act; and
(iii) neither it
nor any person acting on its behalf has solicited offers for, or
offered or sold, or will solicit offers for, or offer or sell, the
Securities as part of their initial offering except:
2
(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 A hereto.
(c) Each
Initial Purchaser acknowledges and agrees that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 5(f) and 5(h), counsel for the Company 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 A
hereto), and each Initial Purchaser hereby consents to such
reliance.
(d) The
Company acknowledges and agrees 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
Company and the Guarantors acknowledge and agree that each Initial
Purchaser is acting solely in the capacity of an arm’s length
contractual counterparty to the Company and the Guarantors with
respect to the offering of Securities contemplated hereby
(including in connection with determining the terms of the
offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company, the Guarantors or any other person.
Additionally, no Initial Purchaser is advising the Company, the
Guarantors or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company
and the 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 the Initial Purchasers shall have no
responsibility or liability to the Company or the Guarantors with
respect thereto. Any review by the Initial Purchasers of the
Company, the Guarantors, the transactions contemplated hereby or
other matters relating to such transactions will be performed
solely for the benefit of the Initial Purchasers and shall not be
on behalf of the Company or the Guarantors.
2.
Payment and Delivery . (a) Payment for and delivery of
the Securities will be made at the offices of Simpson Thacher &
Bartlett LLP, New York, New York at 9:00
3
A.M., New York
City time, on October 3, 2005, 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 Company 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 the account(s) specified by the Company to the
Representative 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
Company. 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 Company and the
Guarantors . The Company and the Guarantors jointly and
severally represent and warrant to each Initial Purchaser
that:
(a)
Offering Memorandum. The Preliminary Offering Memorandum, as
of its date, did 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 Company and the 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 Company in
writing by such Initial Purchaser through the Representative
expressly for use in the Preliminary Offering Memorandum and the
Offering Memorandum.
(b)
Financial Statements. The financial statements and the
related notes thereto included in the Preliminary Offering
Memorandum 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; and the other financial information
included in the Preliminary Offering Memorandum and the Offering
Memorandum has been derived from the accounting records of the
Company and its subsidiaries and presents fairly the information
shown thereby.
4
(c) No
Material Adverse Change. Since the date of the most recent
financial statements of the Company included in the Preliminary
Offering Memorandum and the Offering Memorandum, (i) there has
not been any material 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, results of operations or prospects
of the Company and its subsidiaries taken as a whole;
(ii) neither the Company nor any of its subsidiaries has
entered into any transaction or agreement that is material to the
Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to
the Company and its subsidiaries taken as a whole; and
(iii) neither the Company nor any of its subsidiaries has
sustained any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or 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 Preliminary Offering Memorandum and the Offering
Memorandum.
(d)
Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and
in good standing under the laws of their respective jurisdictions
of organization, are duly qualified to do business and are 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 have all power and authority
necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure
to be so qualified or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on
the business, properties, management, financial position, results
of operations or prospects of the Company and its subsidiaries
taken as a whole or on the performance by the Company and the
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 3 to this Agreement.
(e)
Capitalization. The Company has an authorized capitalization
as set forth in the Preliminary Offering Memorandum and the
Offering Memorandum under the heading “Capitalization”;
and 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
(except, in the case of any foreign subsidiary, for
directors’ qualifying shares) and are owned directly or
indirectly by the Company, free and clear of
5
any lien,
charge, encumbrance, security interest, restriction on voting or
transfer or any other claim of any third party.
(f) Due
Authorization. The Company and each of the Guarantors have full
right, power and authority to execute and deliver this Agreement,
the Securities, the Indenture (including each Guarantee set forth
therein), the Exchange Securities and the Registration Rights
Agreement (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.
(g) The
Indenture . The Indenture has been duly authorized by the
Company and each of the 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 Company and each of the Guarantors enforceable against the
Company and each of the Guarantors in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the
enforcement of creditors’ rights generally or by equitable
principles relating to enforceability, regardless of whether the
issue of enforceability is considered in a proceeding in equity or
law (collectively, the “Enforceability Exceptions”);
and on the Closing Date, the Indenture 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.
(h) The
Securities and the Guarantees . The Securities have been duly
authorized by the Company 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
Company enforceable against the Company 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 each of the 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 each of
the Guarantors, enforceable against each of the Guarantors in
accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the
Indenture.
(i) The
Exchange Securities . On the Closing Date, the Exchange
Securities (including the related guarantees) will have been duly
authorized by the Company and each of the Guarantors and, when duly
executed, authenticated, issued and delivered as
6
contemplated by
the Registration Rights Agreement, will be duly and validly issued
and outstanding and will constitute valid and legally binding
obligations of the Company, as issuer, and each of the Guarantors,
as guarantor, enforceable against the Company and each of the
Guarantors in accordance with their terms, subject to the
Enforceability Exceptions, and will be entitled to the benefits of
the Indenture.
(j)
Purchase and Registration Rights Agreements. This Agreement
has been duly authorized, executed and delivered by the Company and
each of the Guarantors; and the Registration Rights Agreement has
been duly authorized by the Company and each of the 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 Company and each of the Guarantors
enforceable against the Company and each of the 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.
(k)
Descriptions of the Transaction Documents . Each Transaction
Document conforms in all material respects to the description
thereof contained in the Preliminary Offering Memorandum and the
Offering Memorandum.
(l) No
Violation or Default. Neither the Company nor any of its
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 Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject; 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,
individually or in the aggregate, have a Material Adverse
Effect.
(m)
Disclosure Controls and Procedures. The Company has
established and maintains “disclosure controls and
procedures” (as defined in Rule 13a-15(e) and 15d-15(e)
of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission thereunder (collectively, the
“Exchange Act”)); the Company’s “disclosure
controls and procedures” are reasonably designed to ensure
(i) that information required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in the rules and regulations of the Commission,
and (ii) that such information is accumulated and communicated
to the Company’s management, including
7
its Chief
Executive Officer and interim Chief Financial Officer, as
appropriate to allow timely decisions regarding required
disclosure.
(n) No
Conflicts. The execution, delivery and performance by the
Company and each of the 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 Company
and each of the 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 the Company or
any of its subsidiaries pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the
charter or by-laws or similar organizational documents of the
Company or any of its 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 or violation that
would not, individually or in the aggregate, have a Material
Adverse Effect.
(o) 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 Company and each of the 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 Company and each of the 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
(i) as may be required under applicable state securities laws
in connection with the purchase and resale of the Securities by the
Initial Purchasers, (ii) as may be required with respect to
the Exchange Securities (including the related guarantees) under
the Securities Act and applicable state securities laws as
contemplated by the Registration Rights Agreement and
(iii) that would not have a Material Adverse Effect upon the
ability of the Company to consummate the offering of the
Securities.
(p) Legal
Proceedings. Except as described in the Preliminary Offering
Memorandum 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
8
expected to
have a Material Adverse Effect; and no such investigations,
actions, suits or proceedings are threatened or, to the best
knowledge of the Company and each of the Guarantors, contemplated
by any governmental or regulatory authority or threatened by
others.
(q)
Independent Accountants. KPMG LLP, who have certified
certain financial statements of the Company and its subsidiaries,
are independent public accountants with respect to the Company and
its subsidiaries within the meaning of Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public
Accountants and its interpretations and rulings
thereunder.
(r) 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.
(s) 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.
(t)
Investment Company Act. Neither the Company nor any of its
subsidiaries is, and after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as
described in 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, “Investment Company Act”).
(u)
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 the Preliminary Offering Memorandum and the
Offering Memorandum, there is no tax deficiency that has
been,
9
or to the
knowledge of the Company could reasonably be expected to be,
asserted against the Company or any of its subsidiaries or any of
their respective properties or assets.
(v)
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 the Preliminary
Offering Memorandum 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 the Preliminary Offering Memorandum 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.
(w) 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 Company and each of the Guarantors, is
contemplated or threatened, except as would not reasonably be
expected to have a Material Adverse Effect.
(x)
Compliance With Environmental Laws. The Company and its
subsidiaries (i) are in compliance with any and all applicable
federal, state, local and foreign laws, rules, regulations,
decisions and orders relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, “Environmental
Laws”); (ii) have received and are in compliance with
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses; and (iii) have not received notice of any actual
or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except in any such case for any such
failure to comply with, or failure to receive required permits,
licenses or approvals, or liability, as would not, individually or
in the aggregate, have a Material Adverse Effect.
(y)
Compliance With ERISA. Each employee benefit plan, within
the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), that is
maintained, administered or contributed to by the Company or any of
its affiliates for employees or former employees of the Company and
its affiliates 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 Internal
Revenue Code of 1986, as amended (the “Code”); no
prohibited transaction,
10
within the
meaning of Section 406 of ERISA or Section 4975 of the
Code, has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative
exemption; and for each such 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 has been incurred, whether or not
waived, and the fair market value of the assets of each such plan
(excluding for these purposes accrued but unpaid contributions)
exceeds the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions.
(z)
Accounting Controls. The Company and its subsidiaries
maintain systems of 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.
(aa)
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 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.
(bb) No
Unlawful Payments. Neither the Company nor any of its
subsidiaries nor, to the best knowledge of the Company and each of
the 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.
(cc)
Solvency. On and immediately after the Closing Date, the
Company (after giving effect to the issuance of the Securities and
the other transactions related thereto as
11
described in
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 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.
(dd) No
Restrictions on Subsidiaries . No subsidiary of the Company is
currently 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.
(ee) No
Broker’s Fees. Neither the Company nor any of its
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.
(ff)
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.
(gg) No
Integration. Neither the Company nor any of its 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
12
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.
(hh) No
General Solicitation or Directed Selling Efforts. None of the
Company or any of its 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 D 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.
(ii)
Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained
in Section 1(b) (including Annex A 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 and the Offering Memorandum, to register the
Securities under the Securities Act or to qualify the Indenture
under the Trust Indenture Act.
(jj) No
Stabilization. Neither the Company nor any of the 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.
(kk)
Margin Rules . Neither the issuance, sale and delivery of
the Securities nor the application of the proceeds thereof by the
Company as described in 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.
(ll)
Forward-Looking Statements. No forward-looking statement
(within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Preliminary
Offering Memorandum and the Offering Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other
than in good faith.
(mm)
Statistical and Market Data . Nothing has come to the
attention of the Company that has caused the Company to believe
that the statistical and market-related data included in the
Preliminary Offering Memorandum and the Offering Memorandum is not
based on or derived from sources that are reliable and accurate in
all material respects.
13
(nn)
Sarbanes-Oxley Act. The Company and, to the best knowledge
of the Company, the Company’s directors and officers, in
their capacities as such, are in compliance with the provisions of
the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith.
4.
Further Agreements of the Company and the Guarantors . The
Company and each of the Guarantors jointly and severally covenant
and agree with each Initial Purchaser that:
(a)
Delivery of Copies. The Company will deliver to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum
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 the Preliminary Offering Memorandum or
the Offering Memorandum, the Company will furnish to the
Representative and counsel for the Initial Purchasers a copy of the
proposed Offering Memorandum, amendment or supplement for review,
and will not distribute any such proposed Offering Memorandum,
amendment or supplement to which the Representative reasonably
objects.
(c)
Notice to the Representative. The Company will advise the
Representative promptly, 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 the
Preliminary Offering Memorandum 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 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 the Offering
Memorandum is delivered to a purchaser, not misleading; and
(iii) of the receipt by the Company 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 Company will use its
reasonable best efforts to prevent the issuance of any such order
preventing or suspending the use of the Preliminary Offering
Memorandum or the Offering Memorandum or suspending any such
qualification of the Securities and, if any such order is issued,
will obtain as soon as possible the withdrawal thereof.
14
(d)
Ongoing Compliance of the Offering Memorandum. 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 Company 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.
(e) Blue
Sky Compliance. The Company will qualify 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 in effect so long as required for
the offering and resale of the Securities; provided that
neither the Company nor any of the 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.
(f) Clear
Market. During the period from the date hereof through and
including the date that is 180 days after the date hereof, the
Company and each of the Guarantors will not, without the prior
written consent of the Representative, offer, sell, contract to
se
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