Exhibit 10.4
EXECUTION VERSION
$295,500,000
LANDRY’S RESTAURANTS,
INC.
14% Senior Secured Notes due
2011
PURCHASE
AGREEMENT
February 4, 2009
JEFFERIES & COMPANY,
INC.
520 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
Landry’s Restaurants, Inc., a
Delaware corporation (the “ Company ”), and each
of the Guarantors (as hereinafter defined) hereby agree with you as
follows:
1. Issuance of
Notes . Subject to
the terms and conditions herein contained, the Company proposes to
issue and sell to Jefferies & Company, Inc. (the “
Initial Purchaser ”) $295,500,000 aggregate principal
amount of its 14% Senior Secured Notes due 2011 (the “
Notes ”). The Notes will be issued pursuant to an
indenture (the “ Indenture ”), to be dated as of
February 13, 2009, by and among the Company, the Guarantors
and Deutsche Bank Trust Company Americas, as trustee (the “
Trustee ”). Capitalized terms used, but not defined
herein, shall have the meanings set forth in the “
Description of Notes ” section of the Offering
Circular (as hereinafter defined).
The Notes will be offered and sold
to the Initial Purchaser pursuant to an exemption from the
registration requirements under the Securities Act of 1933, as
amended (the “ Securities Act ”). Upon original
issuance thereof, and until such time as the same is no longer
required under the applicable requirements of the Securities Act,
the Notes shall bear the legends set forth in the “Notice
to Investors” section of the Final Offering Circular
(defined below). The “ Final Offering Circular ”
shall mean the final offering circular, dated the date hereof,
including the information incorporated by reference therein. The
Company has prepared a preliminary offering circular, dated
January 15, 2009, including the information incorporated by
reference therein (the “ Preliminary Offering Circular
”) and a pricing term sheet attached hereto as Schedule
I (the “ Pricing Supplement ”), which
includes pricing terms and other information relating to the
purchase and sale of the Notes by the Initial Purchaser (the
“ Offering ”). The term “ Offering
Circular ” means, as of any date or time referred to in
this Agreement, the most recent offering circular (whether the
Preliminary Offering Circular or the Final Offering Circular, and
any amendment or supplement to either such document), including
exhibits and schedules thereto, including all information
incorporated by reference therein. The Preliminary Offering
Circular and the Pricing Supplement are together referred to herein
as the “ Pricing Disclosure Package
.”
On the Closing Date and concurrently
with the consummation of this Offering, the Company will enter into
an amended and restated senior secured credit facility among the
Company, the Guarantors, Wells Fargo Foothill, LLC, as
administrative agent, co-lead arranger and co-syndication agent,
and Jefferies Finance LLC, as co-lead arranger and co-syndication
agent, which will provide for a $50.0 million senior secured
revolving credit facility and a $165.6 million senior secured term
loan facility (as amended, supplemented, modified, extended or
restated from time to time, the “ Amended and Restated
Credit Agreement ”).
The proceeds of the Notes, together
with the borrowings under the Amended and Restated Credit
Agreement, will be used to (a) repurchase not less than $392.6
million in aggregate principal amount of the Company’s
outstanding 9.5% Senior Notes due 2014 (the “ 9.5%
Notes ”), (b) repurchase not less than $3.5 million
in aggregate principal amount of the Company’s outstanding
7.5% Senior Notes due 2014 (the “ 7.5% Notes ”)
and (c) pay related fees and expenses.
2. Terms of
Offering . The
Initial Purchaser has advised the Company, and the Company
understands, that the Initial Purchaser will make offers to sell
(the “ Exempt Resales ”) some or all of the
Notes purchased by the Initial Purchaser hereunder on the terms set
forth in the Pricing Disclosure Package and the Final Offering
Circular, as amended or supplemented, solely to persons (the
“ Subsequent Purchasers ”) whom the Initial
Purchaser reasonably believes to be (a) “qualified
institutional buyers” as defined in Rule 144A under the
Securities Act (“ QIBs ”), as such Rule may be
amended from time to time, (b) a limited number of
institutional “accredited investors” as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act
(“ Accredited Investors ”), as such Rule may be
amended from time to time, that make certain representations or
warranties to the Initial Purchaser as set forth in the Accredited
Investor Letter attached as Annex A to the Offering Circular, or
(c) non-U.S. persons permitted to purchase the Notes in
offshore transactions in reliance upon Regulation S under the
Securities Act (“ Regulation S Persons ”), as
such Rule may be amended from time to time.
Pursuant to the Indenture, each
Domestic Restricted Subsidiary (as hereinafter defined) of the
Company shall fully and unconditionally guarantee to each holder of
the Notes and the Trustee, on a senior secured basis, the payment
and performance of the Company’s Obligations under the
Indenture and the Notes (each such subsidiary being referred to
herein as a “ Guarantor ” and each such
guarantee being referred to herein as a “ Guarantee
”).
Pursuant to the terms of the
Indenture and the Collateral Agreements, all of the Company’s
and each Guarantor’s obligations under the Indenture, the
Notes and the Guarantees will be secured by a Lien on substantially
all the assets of the Company and the Guarantors; provided,
however , that pursuant to the terms of the Intercreditor
Agreement, such Lien will be contractually subordinated to a Lien
on the Collateral that secures all Obligations under the Amended
and Restated Credit Agreement and certain other permitted
indebtedness.
Holders of the Notes will have the
registration rights set forth in the registration rights agreement
applicable to the Notes (the “ Registration Rights
Agreement ”), to be executed on and dated as of the
Closing Date, in a form reasonably acceptable to the Initial
Purchaser in conformity in all material respects with the
description of such registration rights contained in the Pricing
Disclosure Package and the Final Offering Circular. Pursuant to the
Registration Rights Agreement, the Company and the Guarantors will
agree, among other things, to file with the SEC (i) a
registration statement under the Securities Act relating to the 14%
Senior Secured Notes due 2011 (the “ Exchange Notes
”), which shall be identical to the Notes (except that the
Exchange Notes shall have been registered pursuant to such
registration statement and will not be subject to restrictions on
transfer or contain additional interest provisions) to be offered
in exchange for the Notes (such offer to exchange being referred to
as the “ Exchange Notes Offer ”), and/or
(ii) under certain circumstances, a shelf registration
statement pursuant to Rule 415 under the Securities Act (the
“ Shelf Registration Statement ”) relating to
the resale by certain holders of the Notes. If required under the
Registration Rights Agreement, the Company will issue Exchange
Notes and cause the Guarantors to issue exchange guarantees to the
Initial Purchaser (the “ Private Exchange Notes
” and “ Private Exchange Guarantees ,”
respectively). If the Company fails to satisfy its obligations
under the Registration Rights Agreement, it will be required to pay
additional interest to the holders of the Notes under certain
circumstances in accordance with the terms of the Registration
Rights Agreement.
This Agreement, the Indenture, the
Collateral Agreements, the Registration Rights Agreement, the
Notes, the Exchange Notes, the Private Exchange Notes, the
Guarantees and the Private Exchange Guarantees are collectively
referred to herein as the “ Transaction Documents
.” The Offering, the entry into the Amended and Restated
Credit Agreement and the application of the proceeds therefrom as
described in the Pricing Disclosure Package and the Offering
Circular and the issuance and sale of the Notes in accordance with
this Agreement are collectively referred to herein as the “
Transactions ”.
3. Purchase, Sale and
Delivery . On the
basis of the representations, warranties, agreements and covenants
contained herein and subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to the Initial
Purchaser, and the Initial Purchaser agrees to purchase from the
Company, the Notes at a purchase price of 84.649% of the aggregate
principal amount thereof. Delivery to the Initial Purchaser of and
payment for the Notes shall be made at a Closing (the “
Closing ”) to be held at 10:00 a.m., New York time, on
February 13, 2009 (the “ Closing Date ”) at
the New York offices of Proskauer Rose LLP.
The Company shall deliver to the
Initial Purchaser one or more certificates representing the Notes
in global form, registered in such names and denominations as the
Initial Purchaser may request against payment by the Initial
Purchaser of the purchase price therefor (net of expenses of the
Initial Purchaser that are reimburseable by the Company) by
immediately available Federal funds bank wire transfer to such bank
account or accounts as the Company shall designate to the Initial
Purchaser at least two business days prior to the Closing Date. The
certificates representing the Notes in definitive form shall be
made available to the Initial Purchaser for inspection at the New
York offices of Proskauer Rose LLP (or such other place as shall be
reasonably acceptable to the Initial Purchaser) not later than
10:00 a.m. one business day immediately preceding the Closing Date.
Notes to be represented by one or more definitive global securities
in book-entry form will be deposited on the Closing Date, by or on
behalf of the Company, with The Depository Trust Company (“
DTC ”) or its designated custodian, and registered in
the name of Cede & Co.
4. Representations and
Warranties of the Company and the Guarantors
. The Company and the Guarantors
jointly and severally represent and warrant to the Initial
Purchaser that, as of the date hereof and as of the Closing
Date:
(a) No Material Misstatement or
Omission . The Pricing Disclosure Package, and any amendment or
supplement thereto as of the date thereof and at all times
subsequent thereto up to the Closing Date and the Final Offering
Circular and any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date,
do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, except that the representations and warranties set
forth in this Section 4(a) do not apply to statements
or omissions made in reliance upon and in conformity with the
Initial Purchaser Information (as defined in Section 11
). No injunction or order has been issued and no proceeding is
pending or threatened, that either (i) asserts that any of the
Transactions is subject to the registration requirements of the
Securities Act or (ii) would prevent or suspend the issuance
or sale of any of the Notes or the use of the Pricing Disclosure
Package, the Final Offering Circular or any amendment or supplement
thereto, in any jurisdiction. The Pricing Disclosure Package and
Final Offering Circular, as of their respective dates, contained
all the information specified in Rule 144A(d)(4) of the Securities
Act.
(b) Subsidiaries . Each
corporation, partnership, limited liability company or other entity
in which the Company, directly or indirectly through any of its
subsidiaries, owns more
than 50% of any class of equity
securities or interests is listed on Schedule II attached
hereto (the “ Subsidiaries ”). Each Subsidiary
that is an Unrestricted Subsidiary has an asterisk
(“*”) next to its name on such schedule.
(c) Incorporation and Good
Standing . Each of the Company and its Subsidiaries
(i) has been duly organized or formed, as the case may be, is
validly existing and, other than Landry’s Seafood
House-Biloxi, Inc., is in good standing under the laws of its
jurisdiction of organization, (ii) has all requisite
corporate, limited liability company or partnership power and
authority, as applicable, to carry on its business and to own,
lease and operate its properties and assets as currently being
operated, and (iii) is duly qualified or licensed to do
business and is in good standing as a foreign corporation, limited
liability company, partnership or other entity as the case may be,
authorized to do business in each jurisdiction in which the nature
of such businesses or the ownership or leasing of such properties
requires such qualification, except, in each case, where such
failure would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on (A) the
properties, business, operations, earnings, assets, liabilities or
condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, (B) the ability of the Company
or the Guarantors to perform their obligations in all material
respects under any of the Transaction Documents, (C) the
enforceability of any Collateral Agreement or the attachment,
perfection or priority of any of the Security Interests intended to
be created under the Transaction Documents, (D) the validity
or enforceability of any of the Transaction Documents, or
(E) the consummation of any of the Transactions (each, a
“ Material Adverse Effect ”).
(d) Landry’s Seafood
House-Biloxi, Inc. The failure of Landry’s Seafood
House-Biloxi Inc. to be in good standing under the laws of its
jurisdiction of organization did not, and is not reasonably
expected to, have a Material Adverse Effect.
(e) Capitalization and Other
Stock Matters . All of the issued and outstanding shares of
capital stock of the Company and the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable,
and were not issued in violation of, and are not subject to, any
preemptive or similar rights. The table in the “
Capitalization ” section of the Offering Circular
(including the footnotes thereto) sets forth, as of its date,
(i) the actual cash and cash equivalents and capitalization of
the Company and (ii) the as adjusted cash and cash equivalents
and capitalization of the Company after giving effect to the
Transactions. Except as set forth in the table in the “
Capitalization ” section of the Offering Circular,
immediately following the Closing neither the Company nor any of
the Subsidiaries will have any liabilities, absolute or accrued,
contingent or otherwise, other than (A) liabilities that are
reflected in the Financial Statements (as hereinafter defined) or
(B) liabilities incurred subsequent to the date thereof in the
ordinary course of business, consistent with past practice, or in
connection with the Transactions, that would not, individually or
in the aggregate, be reasonably expected to have a Material Adverse
Effect. All of the outstanding shares of capital stock or other
equity interests of each of the Subsidiaries are owned, directly or
indirectly, by the Company, free and clear of all liens, security
interests, mortgages, pledges, charges, equities, claims or
restrictions on transferability or encumbrances of any kind
(collectively, “ Liens ), except as set forth in the
Offering Circular and other than those imposed by the Securities
Act and the securities or “Blue Sky” laws of certain
domestic or foreign jurisdictions and Liens (i) securing
indebtedness outstanding under the Credit Agreement, dated as of
December 22, 2008, by and among the Company, the Guarantors
and the lenders thereto and (ii) constituting Permitted Liens.
Except as disclosed in the Offering Circular, there are no
outstanding (A) options, warrants, subscriptions, calls or
other rights for unaffiliated third parties to purchase from the
Company or any of the Subsidiaries, (B) agreements, contracts,
arrangements or other obligations of the Company or any of the
Subsidiaries to issue to, or to
repurchase or otherwise acquire
from, any unaffiliated third parties or (C) other rights of
unaffiliated third parties to convert any obligation into or
exchange any securities for, in the case of each of clauses
(A) through (C), any shares of capital stock of or other
ownership or equity interests in the Company or any of the
Subsidiaries.
(f) Organizational Authority
. The Company and each of the Guarantors has all requisite
corporate or partnership power and authority, as applicable, to
execute, deliver and perform their respective obligations under
(i) the Transaction Documents to which they are a party and
(ii) the Amended and Restated Credit Agreement, and to
consummate the transactions contemplated thereby; and all necessary
corporate or partnership action, as the case may be, has been taken
by the Company and each of the Guarantors to authorize the making,
execution, delivery, performance and consummation, as the case may
be, of the Transaction Documents and the Amended and Restated
Credit Agreement.
(g) The Transactions . This
Agreement has been duly and validly authorized, executed and
delivered by the Company and the Guarantors. At the Closing Date,
the Transaction Documents and the Amended and Restated Credit
Agreement will be duly and validly authorized by the Company and
the Guarantors. Each of this Agreement, the Indenture, the
Collateral Agreements and the Amended and Restated Credit
Agreement, when executed and delivered by the Company and the
Guarantors, will constitute a legal, valid and binding obligation
of each of the Company and the Guarantors, enforceable against each
of the Company and the Guarantors in accordance with its terms,
except as the enforceability hereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer, fraudulent conveyance and other laws now or
hereafter in effect relating to creditors’ rights generally
and (ii) general principles of equity (whether applied by a
court of law or equity) and the discretion of the court before
which any proceeding therefore may be brought.
(h) The Notes . The Notes,
when issued, will be in the form contemplated by the Indenture.
When executed and delivered by the Company, the Guarantors and the
Trustee, the Indenture will meet the requirements for qualification
under the Trust Indenture Act of 1939, as amended (the “
TIA ”). At the Closing Date, the Notes, the Exchange
Notes and the Private Exchange Notes will have each been duly and
validly authorized by the Company and, in the case of the Notes,
when delivered to and paid for by the Initial Purchaser in
accordance with the terms of this Agreement and the Indenture and
authenticated by the Trustee, will have been duly executed,
authenticated, issued and delivered and will be legal, valid and
binding obligations of the Company, entitled to the benefit of the
Indenture, the Registration Rights Agreement and the Collateral
Agreements, and enforceable against the Company in accordance with
their terms, except as the enforceability hereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer, fraudulent conveyance and other laws now or
hereafter in effect relating to creditors’ rights generally
and (ii) general principles of equity (whether applied by a
court of law or equity) and the discretion of the court before
which any proceeding therefore may be brought.
(i) The Guarantees . The
Guarantees, when issued, will be in the form contemplated by the
Indenture. At the Closing Date, the Guarantees will have been duly
and validly authorized by the Guarantors and, when executed by the
Guarantors, will have been duly executed, issued and delivered and
will be legal, valid and binding obligations of the Guarantors,
entitled to the benefit of the Indenture, the Registration Rights
Agreement and the Collateral Agreements, and enforceable against
the Guarantors in accordance with their terms, except as the
enforceability hereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer,
fraudulent conveyance and other laws now or hereafter in effect
relating to creditors’ rights generally and (ii) general
principles of equity (whether applied by a court of law or equity)
and the discretion of the court before which any proceeding
therefore may be brought.
(j) Registration Rights
Agreement . At the Closing Date, the Registration Rights
Agreement will be duly and validly authorized by the Company and
the Guarantors. The Registration Rights Agreement, when executed by
the Company and the Guarantors, will constitute a legal, valid and
binding obligation of the Company and the Guarantors, and
enforceable against the Company and the Guarantors in accordance
with its terms, except as the enforceability hereof may be limited
by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer, fraudulent conveyance and other laws now or
hereafter in effect relating to creditors’ rights generally
and (ii) general principles of equity (whether applied by a
court of law or equity) and the discretion of the court before
which any proceeding therefore may be brought. No holder of
securities of the Company or any of the Subsidiaries will be
entitled to have such securities registered under the registration
statements required to be filed by the Company and the Guarantors
with respect to the Notes pursuant to the Registration Rights
Agreement.
(k) No Violations . Neither
the Company nor any of its Subsidiaries is (i) in violation of
its certificate of incorporation, by-laws or similar organizational
documents (the “ Charter Documents ”),
(ii) in violation of any federal, state, local or foreign
statute, law (including, without limitation, common law) or
ordinance, or any judgment, decree, rule, regulation or order
(collectively, “ Applicable Law ”) of any
federal, state, local and other governmental authority,
governmental or regulatory agency or body, court, arbitrator or
self-regulatory organization, domestic or foreign (each, a “
Governmental Authority ”) applicable to any of them or
any of their respective properties or assets, or (iii) in
breach of the terms or provisions of or in default under any bond,
debenture, note or other evidence of indebtedness, indenture,
mortgage, deed of trust, lease or any other agreement or instrument
to which any of them is a party or by which any of them or their
respective property or assets are or may be bound (collectively,
“ Applicable Agreements ”), except for such
violations, breaches or defaults that would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect. All Applicable Agreements material to the Company and its
Subsidiaries are in full force and effect and are legal, valid and
binding obligations of the Company or any of its Subsidiaries, as
the case may be. There exists no condition that, with the passage
of time or otherwise, would constitute (a) a violation of the
Charter Documents or Applicable Laws, (b) a breach of or
default under any Applicable Agreement, or (c) result in the
imposition of any penalty or the acceleration of any indebtedness,
except with respect to (b) and (c) above, that would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(l) No Conflict . Neither the
execution, delivery or performance of the Transaction Documents nor
the consummation of any transactions contemplated therein will
violate or constitute a breach of or a default (with the passage of
time or otherwise) under, require the consent of any person (other
than consents already obtained and in full force and effect and
consents described under Section 4(o) ) under, result
in the imposition of a Lien on any properties or assets of the
Company or any of its Subsidiaries (except for Liens pursuant to
the Collateral Agreements), or result in an acceleration of
indebtedness under or pursuant to (i) the Charter Documents,
(ii) any Applicable Agreement, or (iii) any Applicable
Law. Immediately after consummation of the Offering and the
Transactions, no Default or Event of Default under the Notes, the
Indenture or the Amended and Restated Credit Agreement will
exist.
(m) Accurate Description . To
the extent described in the Pricing Disclosure Package and the
Final Offering Circular, when executed and delivered, the
Transaction Documents and the Amended and Restated Credit Agreement
will conform in all material respects to the descriptions thereof
in the Pricing Disclosure Package and the Final Offering
Circular.
(n) Incorporation by
Reference . The portion of the Company’s Annual Report on
Form 10-K/A filed with the Securities and Exchange Commission on
April 29, 2008 incorporated by reference into the Offering
Circular (the “ Incorporated Information ”)
complies in all material respects with all applicable requirements
of the Exchange Act, including the rules and regulations
promulgated thereunder, and the Incorporated Information does not
and (as amended or supplemented, if amended or supplemented) 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 the light of circumstances under which they were made,
not misleading.
(o) Summaries of Certain
Information . The statements set forth in the Offering Circular
under the captions “Description of Notes,”
“Description of Certain Indebtedness,”
“Regulatory Environment” and “Certain U.S.
Federal Income Tax Considerations,” insofar as they
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present, in all material respects, the
information called for with respect to such legal matters,
documents or proceedings.
(p) No Third Party Consents .
Except as may be required by the Nevada Gaming Commission with
respect to the pledge of the capital stock of Landry’s
Gaming, Inc., no consent, approval, authorization or order of any
Governmental Authority, or third party is required for the issuance
and sale by the Company of the Notes to the Initial Purchaser, the
issuance of the Guarantee by the Guarantors, or the consummation by
the Company and the Guarantors of the other transactions
contemplated by the Transaction Documents, except such as have been
obtained and such as may be required under state securities or
“Blue Sky” laws in connection with the purchase and
resale of the Notes by the Initial Purchaser.
(q) No Material Actions or
Proceedings . Except as disclosed in the Pricing Disclosure
Package and the Final Offering Circular, there is no action, claim,
suit, demand, hearing, notice of violation or deficiency, or
proceeding, domestic or foreign (collectively, “
Proceedings ”), pending or, to the knowledge of the
Company or any of the Subsidiaries, threatened, that either
(i) seeks to restrain, enjoin, prevent the consummation of, or
otherwise challenge any of the Transaction Documents or any of the
Transactions contemplated therein, or (ii) would, individually
or in the aggregate, be reasonably expected to have a Material
Adverse Effect. Neither the Company nor any of the Subsidiaries are
subject to any judgment, order, decree, rule or regulation of any
Governmental Authority that would, individually or in the
aggregate, be reasonably expected to have a Material Adverse
Effect.
(r) All Necessary Permits .
The Company and the Subsidiaries possess all licenses, permits,
certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all
Governmental Authorities presently required or necessary to own or
lease, as the case may be, and to operate their respective
properties and to carry on their respective businesses as now or
proposed to be conducted as set forth in the Pricing Disclosure
Package and the Final Offering Circular (“ Permits
”). Each of the Company and its Subsidiaries 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. None of the Company or its Subsidiaries has received
any notice of any proceeding relating to revocation or modification
of any such Permit, except where such revocation or modification
would not, individually or in the aggregate, be reasonably expected
to have a Material Adverse Effect.
(s) Title to Properties .
Each of the Company and its Subsidiaries has good and marketable
title to all real property owned by it, good and valid title to all
personal property owned by it and good and valid title to all
leasehold estates in real and personal property being leased by it
and, as of the Closing Date, will be free and clear of all Liens
(other than Permitted Liens). All Applicable Agreements to which
the Company or any of its respective Subsidiaries is a party or by
which any of them is bound are valid and enforceable against each
of the Company or such Subsidiary, as applicable, and, to the
Company’s knowledge, are valid and enforceable against the
other party or parties thereto in accordance with its terms and are
in full force and effect with only such exceptions as would not
reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.
(t) Tax Law Compliance . All
Tax returns required to be filed by the Company and each of the
Subsidiaries have been filed and all such returns are true,
complete, and correct in all material respects. All material Taxes
that are due and payable by the Company and any of its Subsidiaries
have been paid other than those (i) currently payable without
penalty or interest or (ii) being contested in good faith and
by appropriate proceedings and for which adequate reserves have
been established in accordance with generally accepted accounting
principles of the United States, consistently applied (“
GAAP ”). To the knowledge of the Company there are no
actual or proposed material Tax assessments due and payable against
the Company or any of the Subsidiaries. The accruals and reserves
on the books and records of the Company and its Subsidiaries in
respect of any material Tax liability for any period not finally
determined are adequate to meet any assessments of Tax for any such
period. For purposes of this Agreement, the term “Tax”
and “Taxes” shall mean all federal, state, local and
foreign taxes, and other assessments of a similar nature (whether
imposed directly or through withholding), including any interest,
additions to tax, or penalties applicable thereto.
(u) Intellectual Property
Rights . Each of the Company and its Subsidiaries owns, or has
a valid and enforceable license to use, all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks,
service marks, logos, designs, domain names and trade names
(collectively, “ Intellectual Property ”) used
in the conduct of its business as is currently operated and, as of
the Closing Date, such Intellectual Property owned by the Company
or its Subsidiaries will be free and clear of all Liens other than
Permitted Liens. No claims or notices of any potential claim have
been asserted by any person challenging the use of any such
Intellectual Property by the Company or any of the Subsidiaries or
questioning the validity, effectiveness or enforceability of the
Intellectual Property or any license or agreement related thereto,
other than any claims that, if successful, would not, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Neither the Company, nor to the Company’s
knowledge, any other party to any licenses, sublicenses, and other
agreements or arrangements to which the Company is a party and
pursuant to which any other Person is authorized to have access to,
or use of, Intellectual Property owned by the Company, or to
exercise any other right with regard thereto (“
Intellectual Property Licenses ”), is in breach or
default under such Intellectual Property License, and no event has
occurred which with notice or lapse of time would constitute a
breach or default by the Company (or to the Company’s
knowledge, any other party thereto) or permit termination by the
Company other than any claims that, if successful, would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. To the knowledge of the Company, the use
of such Intellectual Property by the Company or its Subsidiaries
will not violate, misappropriate or
infringe on the Intellectual
Property rights of any other person, and there are no pending or to
the knowledge of the Company, threatened, proceedings or litigation
or other adverse claims or communications by any person alleging
any such violation, misappropriation or infringement.
(v) Accounting Systems . The
Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) material
transactions are executed in accordance with management’s
general or specific authorization, (ii) material transactions
are recorded as necessary to permit preparation of financial
statements in conformity with GAAP, 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 material
differences.
(w) Preparation of the Financial
Statements . The audited and unaudited consolidated financial
statements and related notes of the Company and its Subsidiaries
contained in the Pricing Disclosure Package and the Final Offering
Circular (the “ Financial Statements ”) present
fairly the financial position, results of operations, cash flows
and changes in stockholders’ equity of the Company and its
consolidated Subsidiaries, as of the respective dates and for the
respective periods to which they apply and have been prepared in
accordance with GAAP consistently applied throughout the periods
involved (except as otherwise expressly disclosed in the notes
thereto) and comply as to form with the applicable accounting
requirements of the Securities Act and the related rules and
regulations and has been accurately extracted from the financial
statements of the Company and its Subsidiaries. The non-GAAP
financial measures set forth in the Final Offering Circular comply
with Regulation G and Item 10(e) of Regulation S-K. The
financial data set forth under “ Summary Consolidated
Historical and Pro Forma Financial Information ” and
“ Selected Consolidated Financial Information ”
included in the Pricing Disclosure Package and Final Offering
Circular has been prepared on a basis consistent with that of the
Financial Statements and present fairly the financial position and
results of operations of the Company and its consolidated
Subsidiaries as of the respective dates and for the respective
periods indicated. The unaudited pro forma financial information
contained in the Pricing Disclosure Package and Final Offering
Circular have been prepared in accordance with the requirements of
Regulation S-X and give effect to assumptions used in the
preparation thereof on a reasonable basis and in good faith. All
other financial, statistical and market and industry-related data
included in the Pricing Disclosure Package and the Final Offering
Circular are fairly and accurately presented and are based on or
derived from sources that the Company believes to be reliable and
accurate in all material respects.
(x) No Material Adverse
Change . Subsequent to the respective dates as of which
information is given in the Pricing Disclosure Package and the
Final Offering Circular, except as disclosed therein,
(i) neither the Company nor any of its Subsidiaries has
incurred any liabilities, direct or contingent, that are material,
individually or in the aggregate, to the Company, or has entered
into any transactions not in the ordinary course of business,
(ii) there has not been any material decrease in the capital
stock or any material increase in long-term indebtedness or any
material increase in short-term indebtedness of the Company, or any
payment of or declaration to pay any dividends or any other
distribution with respect to the Company or any of its
Subsidiaries, and (iii) there has not been any material
adverse change in the properties, business, operations, earnings,
assets, liabilities or financial condition of the Company and the
Subsidiaries in the aggregate. To the knowledge of the Company
after reasonable inquiry, there is no event that is reasonably
likely to occur, which if it were to occur, would, individually or
in the aggregate, have a Material Adverse Effect, except as
disclosed in the Pricing Disclosure Package and the Final Offering
Circular.
(y) Rating Agencies . No
“nationally recognized statistical rating organization”
(as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act) (i) has imposed (or has informed the Company
that it is considering imposing) any condition (financial or
otherwise) on the Company retaining any rating assigned to the
Company or any of its Subsidiaries or to any securities of the
Company or any of the Subsidiaries, or (ii) has indicated to
the Company that it is considering (A) the downgrading,
suspension, or withdrawal of, or any review for a possible change
that does not indicate the direction of the possible change in, any
rating so assigned, or (B) any change in the outlook for any
rating of the Company or any of the Subsidiaries or any securities
of the Company or any of the Subsidiaries.
(z) Use of Proceeds; Going
Concern of the Company . All indebtedness represented by the
Notes is being incurred for the purposes set forth in the Pricing
Disclosure Package and Final Offering Circular as indicated in the
“ Use of Proceeds ” section of the Pricing
Disclosure Package and Final Offering Circular and in good faith.
On the Closing Date, after giving pro forma effect to the Offering
and the making of the loans and other credit extensions under the
Amended and Restated Credit Agreement and the use of proceeds
therefrom as indicated in the “ Use of Proceeds
” section of the Pricing Disclosure Package and Final
Offering Circular, the Company and the Guarantors (i) will be
Solvent, (ii) will have sufficient capital for carrying on its
business as presently conducted and (iii) will be able to pay
its debts as they mature. 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 and each
Guarantor is not less than the total amount required to pay the
liabilities of the Company and each Guarantor on its total existing
debts and liabilities (including contingent liabilities) as they
become absolute and matured; (ii) the Company and each
Guarantor is able to 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 Offering and issuance of the Notes and
Guarantees as contemplated by this Agreement and the Pricing
Disclosure Package and Final Offering Circular, neither the Company
nor any Guarantor is incurring debts or liabilities beyond its
ability to pay as such debts and liabilities mature;
(iv) neither the Company nor any Guarantor is 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 or any
Guarantor is engaged; and (v) neither the Company nor any
Guarantor is otherwise insolvent under the standards set forth in
Applicable Laws.
(aa) Market Manipulation .
The Company has not and, to its knowledge, no one acting on its
behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Notes, (ii) sold,
bid for, purchased, or paid anyone any compensation for soliciting
purchases of, any of the Notes, or (iii) except as disclosed
in the Pricing Disclosure Package and the Final Offering Circular,
paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company;
provided , that no representation is made in this subsection
with respect to the actions of the Initial Purchaser.
(bb) Securities Act; Trust
Indenture Act . Without limiting any provision herein, no
registration under the Securities Act and no qualification of the
Indenture under the TIA is required for the sale of the Notes to
the Initial Purchaser as contemplated hereby or for the Exempt
Resales, assuming (i) that the purchasers in the Exempt
Resales are QIBs, Accredited Investors or Regulation S Persons and
(ii) the accuracy of the Initial Purchaser’s
representations and warranties contained in this
Agreement.
(cc) Rule 144A . The Notes
are eligible for resale pursuant to Rule 144A under the Securities
Act and no other securities of the Company are of the same class
(within the meaning of Rule 144A under the Securities Act) as the
Notes and listed on a national securities exchange registered under
Section 6 of the Securities Exchange Act of 1934, as amended,
including the rules and regulations promulgated thereunder (the
“ Exchange Act ”), or quoted in a U.S. automated
inter-dealer quotation system. No securities of the Company of the
same class as the Notes have been offered, issued or sold by the
Company or any of its Affiliates within the six-month period
immediately prior to the date hereof.
(dd) Regulation D; Regulation
S . Neither of the Company nor any of its Affiliates or other
person acting on behalf of the Company has offered or sold the
Notes by means of any general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act or, with
respect to Notes sold outside the United States to Regulation S
Persons, by means of any directed selling efforts within the
meaning of Rule 902 under the Securities Act, and the Company, any
affiliate of the Company and any person acting on behalf of the
Company have complied with and will implement the “offering
restrictions” within the meaning of such Rule 902;
provided , that no representation is made in this subsection
with respect to the actions of the Initial Purchaser.
(ee) Benefit Plans . With
respect to each employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ ERISA ”)), and each other
employee benefit plan, program, policy or arrangement
(collectively, “ Benefit Plans ”), maintained,
sponsored or contributed to by the Company, the Subsidiaries or any
entity that would be deemed a “single employer” with
the Company or any Subsidiary under Section 414(b), (c),
(m) or (o) of the Internal Revenue Code of 1986, as
amended (the “ Code ”) or Section 4001 of
ERISA (each, an “ ERISA Affiliate ”):
(i) each Benefit Plan complies in form and has been
maintained, operated and administered in accordance with its terms
and Applicable Law, including without limitation, ERISA and the
Code, except where non-compliance would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect; and (ii) no “prohibited transaction,”
within the meaning of Section 4975 of the Code and
Section 406 of ERISA, has occurred or is reasonably expected
to occur with respect to the Benefit Plans that would reasonably be
expected to, individually or in the aggregate, have a Material
Adverse Effect. None of the Company, any Subsidiary or any ERISA
Affiliate contributes to, is required to contribute to, or
otherwise participated in or participates in or in any way,
directly or indirectly, has any liability with respect to any plan
subject to Section 412 of the Code, Section 302 of ERISA
or Title IV of ERISA, including, without limitation, any
“multiemployer plan” (within the meaning of Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code) or
any single employer pension plan (within the meaning of
Section 4001(a)(15) of ERISA) which is subject to Sections
4063, 4064 and 4069 of ERISA.
(ff) Labor Matters .
(i) Other than as disclosed in the Pricing Disclosure Package
and the Final Offering Circular, neither the Company nor any of its
Subsidiaries is party to or bound by any collective bargaining
agreement with any labor organization; (ii) none of the
employees of the Company or any of its Subsidiaries is represented
by a labor union, and, to the knowledge of the Company, no union
organizing activities are taking place that could reasonably be
expected to, individually or in the aggregate, have a Material
Adverse Effect; (iii) to the Company’s knowledge, no
union organizing or decertification efforts are underway or
threatened against the Company or any of its Subsidiaries;
(iv) no labor strike, work stoppage, slowdown, or other
material labor dispute is pending against the Company or any of its
Subsidiaries, or, to the knowledge of the Company, threatened
against the Company or any of its Subsidiaries; (v) there is
no worker’s compensation liability, experience or matter that
could be reasonably expected to
have, individually or in the
aggregate, a Material Adverse Effect; (vi) to the knowledge of
the Company, there is no threatened or pending liability against
the Company or any of its Subsidiaries pursuant to the Worker
Adjustment Retraining and Notification Act of 1988, as amended
(“ WARN ”), or any similar state or local law;
(vii) other than as disclosed in the Pricing Disclosure
Package and the Final Offering Circular, there is no
employment-related charge, complaint, grievance, investigation,
unfair labor practice claim, or inquiry of any kind, pending
against the Company or any of its Subsidiaries that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect; (viii) other than as disclosed in the
Pricing Disclosure Package and the Final Offering Circular, to the
knowledge of the Company, no employee or agent of the Company or
any of its Subsidiaries has committed any act or omission giving
rise to liability for any violation identified in subsection
(vi) and (vii) above, other than such acts or omissions
that would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect; and (ix) no term or
condition of employment exists through arbitration awards,
settlement agreements, or side agreement to which the Company or
its Subsidiaries is a party is contrary to the express terms of any
applicable collective bargaining agreement.
(gg) Federal Reserve
Regulations . None of the transactions contemplated in the
Transaction Documents or the application of the proceeds from the
sale of the Notes will violate or result in a violation of
Section 7 of the Exchange Act, (including, without limitation,
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part
221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors
of the Federal Reserve System).
(hh) Investment Company Act .
Neither the Company nor any of its Subsidiaries is an open-end
investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under
Section 8 of the United States Investment Company Act of 1940,
as amended, including the rules and regulations promulgated
thereunder (the “ Investment Company Act ”).
Neither the Company nor any of its Subsidiaries, after giving
effect to the Offering and sale of the Notes and the application of
the proceeds thereof as described in the Pricing Disclosure Package
and the Final Offering Circular, will be an “investment
company” as defined in the Investment Company Act.
(ii) Brokers . The Company
has not engaged any broker, finder, commission agent or other
person (other than the Initial Purchaser) in connection with the
Offering or any of the transactions contemplated in the Transaction
Documents, and the Company is not under any obligation to pay any
broker’s fee or commission in connection with such
transactions, except for commissions and fees to the Initial
Purchaser.
(jj) Environmental Matters .
The Company and each of its Subsidiaries (i) is in compliance
with any and all applicable foreign, federal, state and local laws
and regulations relating to health and safety (as it applies to
exposure to hazardous substances), or pollution or the protection
of the environment or the handling, storage, generation,
discharg
