Exhibit 10.1
AVIS BUDGET GROUP, INC.
3.50% Convertible Senior Notes due
2014
Purchase Agreement
October 7, 2009
J.P. Morgan Securities
Inc.
Citigroup Global Markets Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Barclays Capital Inc.
Deutsche Bank Securities Inc.
As Representatives of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o
J.P. Morgan Securities
Inc.
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
Avis Budget Group, Inc., a Delaware
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
representatives (the “Representatives”), $300,000,000
principal amount of its 3.50% Convertible Senior Notes due 2014
(the “Underwritten Securities”) and, at the option of
the Initial Purchasers, up to an additional $45,000,000 principal
amount of its 3.50% Convertible Senior Notes due 2014 (the
“Option Securities”) if and to the extent that the
Initial Purchasers shall have determined to exercise the option to
purchase such 3.50% Convertible Senior Notes due 2014 granted to
the Initial Purchasers in Section 2 hereof. The Underwritten
Securities and the Option Securities are herein referred to as the
“Securities”. The Securities will be convertible into
shares (the “Underlying Securities”) of common stock of
the Company, par value $0.01 per share (the “Common
Stock”). The Securities will be issued pursuant to an
Indenture to be dated as of October 13, 2009 (the
“Indenture”) between the Company and The Bank of Nova
Scotia Trust Company of New York, as trustee (the
“Trustee”).
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The Company hereby confirms its
agreement with the several Initial Purchasers concerning the
purchase and sale of the Securities, as follows:
1. 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
October 7, 2009 (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 Agreement. The
Company hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum, the other Time of Sale Information
(as defined below) and the Offering Memorandum in connection with
the offering and resale of the Securities by the Initial Purchasers
in the manner contemplated by this Agreement. References herein to
the Preliminary Offering Memorandum, the Time of Sale Information
and the Offering Memorandum shall be deemed to refer to and include
any document incorporated by reference therein.
At or prior to the time when sales
of the Securities were first made (the “Time of Sale”),
the Company had prepared the following information (collectively,
the “Time of Sale Information”): the Preliminary
Offering Memorandum, as supplemented and amended by the written
communications listed on Annex B hereto.
2. Purchase and Resale of the
Securities by the Initial Purchasers . (a) The Company
agrees to issue and sell the Underwritten 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 Underwritten Securities
set forth opposite such Initial Purchaser’s name in Schedule
1 hereto at a price equal to 97% of the principal amount thereof
(the “Purchase Price”) plus accrued interest, if any,
from October 13, 2009 to the Closing Date (as defined
below).
In addition, the Company agrees to
issue and sell the Option Securities to the several Initial
Purchasers as provided in this Agreement in order to cover
over-allotments, and the Initial Purchasers, on the basis of the
representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, shall have the option
to purchase, severally and not jointly, from the Company the Option
Securities at the Purchase Price plus accrued interest, if any,
from the Closing Date to the date of payment and
delivery.
If any Option Securities are to be
purchased, the amount of Option Securities to be purchased by each
Initial Purchaser shall be the amount of Option Securities which
bears the same ratio to the aggregate amount of Option Securities
being purchased as the amount of Underwritten Securities set forth
opposite the name of such Initial Purchaser in Schedule 1 hereto
(or such amount increased as set forth in Section 10 hereof)
bears to the aggregate amount of Underwritten Securities being
purchased from the Company by the several Initial Purchasers,
subject, however, to such adjustments to eliminate Securities in
denominations other than in multiples of $1,000 as the
Representatives in their sole discretion shall make.
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The Initial Purchasers may exercise
the option to purchase the Option Securities at any time in whole,
or from time to time in part, on or before the thirtieth day
following the date of this Agreement, by written notice from the
Representatives to the Company. Such notice shall set forth the
aggregate amount of Option Securities as to which the option is
being exercised and the date and time when the Option Securities
are to be delivered and paid for which may be the same date and
time as the Closing Date (as hereinafter defined) but shall not be
earlier than the Closing Date nor later than the tenth full
business day (as hereinafter defined) after the date of such notice
(unless such time and date are postponed in accordance with the
provisions of Section 10 hereof). Any such notice shall be
given at least two Business Days prior to the date and time of
delivery specified therein.
(b) The Company understands that the
Initial Purchasers intend to offer the Securities for resale on the
terms set forth in the Time of Sale Information. Each Initial
Purchaser, severally and not jointly, represents, warrants and
agrees that:
(i) it is a qualified institutional
buyer within the meaning of Rule 144A under the Securities Act (a
“QIB”) and an accredited investor within the meaning of
Rule 501(a) under the Securities Act;
(ii) it has not solicited offers
for, or offered or sold, and will not solicit offers for, or offer
or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule
502(c) of Regulation 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) it has not solicited offers
for, or offered or sold, and will not solicit offers for, or offer
or sell, the Securities as part of their initial offering
except:
(A) within the United States to
persons whom it reasonably believes to be QIBs in transactions
pursuant to Rule 144A under the Securities Act (“Rule
144A”) and in connection with each such sale, it has taken or
will take reasonable steps to ensure that the purchaser of the
Securities is aware that such sale is being made in reliance on
Rule 144A; or
(B) in accordance with the
restrictions set forth in Annex D 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 6(f) and 6(g), 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 D hereto),
and each Initial Purchaser hereby consents to such
reliance.
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(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) Payment for the Securities shall
be made by wire transfer in immediately available funds to the
account specified by the Company to the Representatives in the case
of the Underwritten Securities, at the offices of Skadden, Arps,
Slate, Meagher & Flom LLP, Four Times Square, New York, NY
at 10:00 A.M. New York City time on October 13, 2009, or at
such other time or place on the same or such other date, not later
than the fifth business day thereafter, as the Representatives and
the Company may agree upon in writing or, in the case of the Option
Securities, on the date and at the time and place specified by the
Representatives in the written notice of the Initial
Purchasers’ election to purchase such Option Securities. The
time and date of such payment for the Underwritten Securities is
referred to herein as the “Closing Date” and the time
and date for such payment for the Option Securities, if other than
the Closing Date, is herein referred to as the “Additional
Closing Date”.
Payment for the Securities to be
purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery to the nominee of
DTC, for the respective accounts of the several Initial Purchasers
of the Securities to be purchased on such date of one or more
global notes representing the Securities (collectively, the
“Global Note”), with any transfer taxes payable in
connection with the sale of such Securities duly paid by the
Company. The Global Note will be made available for inspection by
the Representatives at the office of J.P. Morgan Securities Inc.
set forth above not later than 1:00 P.M., New York City time, on
the business day prior to the Closing Date or the Additional
Closing Date, as the case may be.
(f) The Company acknowledges and
agrees that the Initial Purchasers are acting solely in the
capacity of an arm’s length contractual counterparty to the
Company 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 or any other person. Additionally, neither
the Representatives nor any other Initial Purchaser is advising the
Company or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company
shall consult with its own advisors concerning such matters and
shall be responsible for making its own independent investigation
and appraisal of the transactions contemplated hereby, and the
Initial Purchasers shall have no responsibility or liability to the
Company with respect thereto. Any review by the Initial Purchasers
of the Company, 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.
3. Representations and Warranties
of the Company . The Company represents and warrants to each
Initial Purchaser that:
(a) Preliminary Offering
Memorandum, Time of Sale Information and Offering Memorandum.
The Preliminary Offering Memorandum, as of its date, did not, the
Time of Sale
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Information, at the Time of Sale, did not, and
at the Closing Date, will not, and the Offering Memorandum, in the
form first used by the Initial Purchasers to confirm sales of the
Securities and as of the Closing Date, will not, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided that the Company makes 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 Representatives expressly for use in
the Preliminary Offering Memorandum, the Time of Sale Information
or the Offering Memorandum, it being understood and agreed that the
only such information furnished by any Initial Purchaser consists
of the information described as such in Section 7(b)
hereof.
(b) Additional Written
Communications. Other than the Preliminary Offering Memorandum
and the Offering Memorandum, the Company (including its agents and
representatives, other than the Initial Purchasers in their
capacity as such) has not made, used, prepared, authorized,
approved or referred to and will not prepare, make, use, authorize,
approve or refer to any “written communication” (as
defined in Rule 405 under the Securities Act) that constitutes an
offer to sell or solicitation of an offer to buy the Securities
(each such communication by the Company or its agents and
representatives (other than a communication referred to in clauses
(i), (ii) and (iii) below) an “Issuer Written
Communication”) other than (i) the Preliminary Offering
Memorandum, (ii) the Offering Memorandum, (iii) the
documents listed on Annex B hereto, including a term sheet
substantially in the form of Annex C hereto, which constitute part
of the Time of Sale Information, and (iv) each electronic road
show and any other written communications approved in writing in
advance by the Representatives.
(c) Incorporated Documents.
The documents incorporated by reference in the Offering Memorandum
or the Time of Sale Information, when filed with the Securities and
Exchange Commission (the “Commission”) conformed or
will conform, as the case may be, in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder
(collectively, the “Exchange Act”) and such documents
did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not
misleading.
(d) Financial Statements. The
financial statements and the related notes thereto of the Company
and its subsidiaries included or incorporated by reference in each
of the Time of Sale Information and the Offering Memorandum present
fairly in all material respects the consolidated 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 U.S. generally accepted accounting
principles applied on a consistent basis throughout the periods
covered thereby; and the other financial information included or
incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum has been derived from the accounting
records of the Company and its subsidiaries and presents fairly in
all material respects the information shown thereby.
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(e) No Material Adverse
Change. Since the date of the most recent financial statements
of the Company included or incorporated by reference in each of the
Time of Sale Information 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 business 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 Time of Sale Information and the Offering
Memorandum.
(f) 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, be in good standing or have such power or
authority could not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the business,
properties, management, financial position, results of operations
or business prospects of the Company and its subsidiaries taken as
a whole or on the performance by the Company of its obligations
under the Transaction Documents (as defined below) (a
“Material Adverse Effect”). The Company does not own or
control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Schedule 2 to
this Agreement.
(g) Capitalization. The
Company has an authorized capitalization as set forth in each of
the Time of Sale Information and the Offering Memorandum under the
heading “Capitalization”; all the outstanding shares of
capital stock of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable and are not
subject to any pre-emptive or similar rights; except as described
in or expressly contemplated by the Time of Sale Information and
the Offering Memorandum, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or
options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the
Company or any of its subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such
subsidiary, any such convertible or exchangeable securities or any
such rights, warrants or options; the capital stock of the Company
conforms in all material respects to the description thereof
contained in the Time of Sale
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Information and the Offering Memorandum; and all
the outstanding shares of capital stock or other equity interests
of each subsidiary of the Company have been duly authorized and
validly issued, are fully paid and non-assessable (except as
otherwise described in each of the Time of Sale Information and the
Offering Memorandum) and are owned directly or indirectly by the
Company, free and clear of any lien, charge, encumbrance, security
interest, restriction on voting or transfer or any other claim of
any third party, except as described in the Time of Sale
Information and the Offering Memorandum.
(h) Due Authorization. The
Company has full right, power and authority to execute and deliver
this Agreement, the Securities and the Indenture (collectively, the
“Transaction Documents”) and to perform its 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 or by the Time of Sale Information and the
Offering Memorandum has been duly and validly taken.
(i) The Indenture . The
Indenture has been duly authorized by the Company 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 enforceable against the Company in
accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or other similar laws relating
to or affecting the enforcement of creditors’ rights
generally or by general equitable principles relating to
enforceability (collectively, the “Enforceability
Exceptions”).
(j) Purchase Agreement. This
Agreement has been duly authorized, executed and delivered by the
Company.
(k) The Securities. 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.
(l) The Underlying Securities
. Upon issuance and delivery of the Securities in accordance with
this Agreement and the Indenture, the Securities will be
convertible at the option of the holder thereof into shares of the
Underlying Securities in accordance the terms of the Securities;
the Underlying Securities reserved for issuance upon conversion of
the Securities have been duly authorized and reserved and, when
issued upon conversion of the Securities in accordance with the
terms of the Securities, will be validly issued, fully paid and non
assessable, and the issuance of the Underlying Securities will not
be subject to any preemptive or similar rights.
(m) Descriptions of the
Transaction Documents. Each Transaction Document conforms in
all material respects to the description thereof contained in each
of the Time of Sale Information and the Offering
Memorandum.
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(n) 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 applicable 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 could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(o) No Conflicts. The
execution, delivery and performance by the Company of each of the
Transaction Documents, the issuance and sale of the Securities
(including the issuance of the Underlying Securities upon
conversion thereof) and the consummation of the transactions
contemplated by the Transaction Documents or the Time of Sale
Information and the Offering Memorandum 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) assuming the accuracy of, and the
Initial Purchasers’ compliance with, the representations,
warranties and agreements of the Initial Purchasers herein, and the
compliance by the holders of the Securities with the offering and
transfer restrictions set forth in the Offering Memorandum, result
in the violation of any applicable law or statute or any judgment,
order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of
clauses (i) and (iii) above, for any such conflict,
breach, violation or default that could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(p) No Consents Required.
Assuming the accuracy of, and the Initial Purchasers’
compliance with, the representations, warranties and agreements of
the Initial Purchasers herein, and the compliance by the holders of
the Securities with the offering and transfer restrictions set
forth in the Offering Memorandum, 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
of each of the Transaction Documents, the issuance and sale of the
Securities (including the issuance of the Underlying Securities
upon conversion thereof) and compliance by the Company with the
terms thereof and the consummation of the transactions contemplated
by the Transaction Documents or the Time of Sale Information and
the Offering Memorandum, except for such consents, approvals,
authorizations, orders and registrations or qualifications as have
been obtained or as may be required under applicable state
securities laws in connection with the purchase and resale of the
Securities by the Initial Purchasers.
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(q) Legal Proceedings. Except
as described in each of the Time of Sale Information and the
Offering Memorandum, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the
Company or any of its subsidiaries is or may be a party or to which
any property of the Company or any of its subsidiaries is or may be
the subject that, individually or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, could
reasonably be expected to have a Material Adverse Effect; and no
such investigations, actions, suits or proceedings are threatened
or, to the best knowledge of the Company (without having undertaken
any independent inquiry outside of the Company), contemplated by
any governmental or regulatory authority or by others.
(r) Independent Accountants.
Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its subsidiaries, are an
independent registered public accounting firm with respect to the
Company and its subsidiaries within the applicable rules and
regulations adopted by the Commission and the Public Company
Accounting Oversight Board (United States) and as required by the
Securities Act.
(s) 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 and adversely affect the
value of such property, (ii) do not materially interfere with
the use made and proposed to be made of such property by the
Company and its subsidiaries or (iii) could not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect.
(t) 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)
reasonably necessary for the conduct of their respective businesses
except where the failure to own or possess such rights could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and the conduct of their respective
businesses does not, and will not, conflict in any respect with any
such rights of others except which conflict could not, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect; 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 which infringement or conflict, if
the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to have a Material Adverse
Effect.
(u) No Undisclosed
Relationships. No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries, on the one
hand, and the directors, officers, stockholders or other affiliates
of the Company or any of its subsidiaries, on the other, that would
be required by the Securities Act to be described in a registration
statement to be filed with the Commission and that is not so
described in each of the Time of Sale Information and the Offering
Memorandum.
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(v) Investment Company Act.
None of the Company or any of its subsidiaries is, and solely after
giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in each of the
Time of Sale Information and the Offering Memorandum none of them
will be, an “investment company” or an entity
“controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “Investment Company
Act”).
(w) Taxes. Except as could
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, the Company and its subsidiaries
have paid all federal, state, local and foreign taxes, other than
those being contested in good faith and by appropriate proceedings
so long as there are adequate reserves for such taxes, and filed
all tax returns required to be paid or filed through the date
hereof; and except as otherwise disclosed in each of the Time of
Sale Information and the Offering Memorandum, there is no tax
deficiency that has been, or could reasonably be expected to be,
asserted against the Company or any of its subsidiaries or any of
their respective properties or assets.
(x) Licenses and Permits. The
Company and its subsidiaries possess such licenses, certificates,
permits and other authorizations issued by, and have made such
declarations and filings with, the appropriate federal, state,
local or foreign governmental or regulatory authorities that are
necessary for the ownership or lease of their respective properties
or the conduct of their respective businesses as described in each
of the Time of Sale Information and the Offering Memorandum, except
where the failure to possess or make the same could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and except as described in each of the
Time of Sale Information and the Offering Memorandum, neither the
Company nor any of its subsidiaries has received notice of any
revocation or modification of any such license, certificate, permit
or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed
in the ordinary course, which, if the subject of an unfavorable
decision, ruling or finding, could reasonably be expected to have a
Material Adverse Effect.
(y) 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 (without
having undertaken any independent inquiry outside of the Company)
of the Company, is contemplated or threatened and the Company is
not aware of any existing or imminent labor disturbance by, or
dispute with, the employees of any of its or its
subsidiaries’ principal suppliers, contractors or customers,
except as would not have a Material Adverse Effect.
(z) Compliance With Environmental
Laws. (i) The Company and its subsidiaries (x) are,
and at all prior times were, in compliance with any and all
applicable federal, state, local and foreign laws, rules,
regulations, requirements, decisions and orders relating to the
protection of human health or safety, the environment, natural
resources, hazardous or toxic substances or
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wastes, pollutants or contaminants
(collectively, “Environmental Laws”), (y) have
received and are in compliance with all permits, licenses,
certificates or other authorizations or approvals required of them
under applicable Environmental Laws to conduct their respective
businesses, and (z) have not received notice of any actual or
potential liability under or relating to any Environmental Laws,
including for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or
contaminants, and have no knowledge of any event or condition that
would reasonably be expected to result in any such notice;
(ii) there are no costs or liabilities associated with
Environmental Laws of or relating to the Company or its
subsidiaries, except in the case of each of (i) and
(ii) above, for any such failure to comply, or failure to
receive required permits, licenses or approvals, or cost or
liability, as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and
(iii) except as described in each of the Time of Sale
Information and the Offering Memorandum, (x) there are no
proceedings that are pending, or that are known to be contemplated,
against the Company or any of its subsidiaries under any
Environmental Laws in which a governmental entity is also a party,
other than such proceedings regarding which it is reasonably
believed no monetary sanctions of $100,000 or more will be imposed,
(y) the Company and its subsidiaries are not aware of any
issues regarding compliance with Environmental Laws, or liabilities
or other obligations under Environmental Laws or concerning
hazardous or toxic substances or wastes, pollutants or
contaminants, that could reasonably be expected to have a Material
Adverse Effect, and (z) none of the Company and its
subsidiaries anticipates material capital expenditures relating to
any Environmental Laws.
(aa) Compliance With ERISA.
(i) Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), for which the Company or
any member of its “Controlled Group” (defined as any
organization which is a member of a controlled group of
corporations within the meaning of Section 414 of the Internal
Revenue Code of 1986, as amended (the “Code”)) would
have any liability (each, a “Plan”) has been maintained
in compliance in all material respects with its terms and the
requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Code;
(ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any Plan excluding transactions effected
pursuant to a statutory or administrative exemption; (iii) for
each Plan that is subject to the funding rules of Section 412
of the Code or Section 302 of ERISA, no “accumulated
funding deficiency” as defined in Section 412 of the
Code, whether or not waived, has occurred or is reasonably expected
to occur; and (iv) for each Plan that is subject to the
funding rules of ERISA or the Code, the fair market value of the
assets of each such Plan is not less than the present value of all
benefits accrued under such Plan (determined based on those
assumptions used to fund such Plan).
(bb) Disclosure Controls .
The Company and its subsidiaries maintain an effective system of
“disclosure controls and procedures” (as defined in
Rule 13a-15(e) of the Exchange Act) that is designed to ensure that
information required to be disclosed by the Company in reports that
it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the
Commission’s rules and forms, including controls and
procedures designed to ensure that such information is accumulated
and
12
communicated to the Company’s management
as appropriate to allow timely decisions regarding required
disclosure. The Company and its subsidiaries have carried out
evaluations of the effectiveness of their disclosure controls and
procedures as and when required by Rule 13a-15 of the Exchange
Act.
(cc) Accounting Controls. The
Company and its subsidiaries maintain systems of “internal
control over financial reporting” (as defined in Rule
13a-15(f) of the Exchange Act) that comply with the requirements of
the Exchange Act and have been designed by, or under the
supervision of, their respective principal executive and principal
financial officers, or persons performing similar functions, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with U.S. generally accepted accounting
principles, including, but not limited to internal accounting
controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with U.S.
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except
as disclosed in the Time of Sale Information and the Offering
Memorandum, there are no material weaknesses in the Company’s
internal controls.
(dd) 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 at a cost
that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(ee) No Unlawful Payments.
Neither the Company nor any of its subsidiaries nor, to the best
knowledge of the Company, 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 unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(ff) Compliance with Money
Laundering Laws . The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements
of the Currency and Foreign Transactions Reporting
13
Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering
Laws is pending or, to the best knowledge of the Company,
threatened.
(gg) Compliance with OFAC.
None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee or affiliate
of the Company or any of its subsidiaries is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Department of the Treasury
(“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering of the Securities
hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(hh) 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, other than as
disclosed in the Time of Sale Information and the Offering
Memorandum.
(ii) 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 the
Company or any of its subsidiaries or any Initial Purchaser for a
brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Securities.
(jj) 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 Time of Sale
Information 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.
(kk) 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 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.
14
(ll) 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.
(mm) Securities Law
Exemptions . Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained herein (including
Annex D hereto) and their compliance with their agreements set
forth therein, and the compliance by the holders of Securities with
the offering and transfer restrictions set forth in the Offering
Memorandum, it is not necessary, in connection with the issuance
and sale of the Securities to the Initial Purchasers and the offer,
resale and delivery of the Securities by the Initial Purchasers in
the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum, to register the Securities
under the Securities Act or to qualify the Indenture under the
Trust Indenture Act of 1939, as amended (the “Trust Indenture
Act”).
(nn) No Stabilization. The
Company has not 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.
(oo) 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 any of the Time of Sale Information or
the Offering Memorandum has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good
faith.
(pp) 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 or incorporated by reference in each
of the Time of Sale Information and the Offering Memorandum is not
based on or derived from sources that are reliable and accurate in
all material respects.
(qq) Solvency . On and
immediately after the Closing Date, the Company (on a consolidated
basis after giving effect to the issuance of the Securities and the
other transactions related thereto as described in each of the Time
of Sale Information and the Offering Memorandum) will be Solvent.
As used in this paragraph, the term “Solvent” means,
with respect to a particular date, that on such date (i) the
present fair market value (or present fair saleable value) of the
assets of the Company is not less than the total amount required to
pay the liabilities of the Company on its total existing debts and
liabilities (including contingent liabilities) as they become
absolute and matured; (ii) the Company is able to realize upon
its assets and pay its debts and other liabilities, contingent
obligations and commitments as they mature and become due in the
normal course of business; (iii) assuming consummation of the
issuance of the Securities as contemplated by this Agreement, the
Time of Sale Information and the Offering Memorandum, the Company
is not incurring debts or liabilities beyond its ability to pay as
such debts and liabilities mature; (iv) the Company is not
engaged in any business or transaction, and does not propose to
engage in any business or transaction, for which its property would
constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which
the Company is engaged; and (v) the Company is not a defendant
in any civil action that would result in a judgment that the
Company is or would become unable to satisfy
15
(rr) 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 Time of Sale Information and the Offering Memorandum will
violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of
Governors.
4. Further Agreements of the
Company . The Company covenants and agrees 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, any other Time of Sale
Information, any Issuer Written Communication and the Offering
Memorandum (including all amendments and supplements thereto) as
the Representatives may reasonably request.
(b) Offering Memorandum,
Amendments or Supplements . Before finalizing the Offering
Memorandum or making or distributing any amendment or supplement to
any of the Time of Sale Information or the Offering Memorandum or
filing with the Commission any document that will be incorporated
by reference therein, the Company will furnish to the
Representatives and counsel for the Initial Purchasers a copy of
the proposed Offering Memorandum or such amendment or supplement or
document to be incorporated by reference therein for review, and
will not distribute any such proposed Offering Memorandum,
amendment or supplement or file any such document with the
Commission to which the Representatives reasonably object, provided
that, if in the opinion of the Company’s outside counsel,
such proposed amendment or supplement is required by law, the
Company can make such amendment or supplement, notwithstanding any
such reasonable objection.
(c) Additional Written
Communications. Before using, authorizing, approving or
referring to any Issuer Written Communication, the Company will
furnish to the Representatives and counsel for the Initial
Purchasers a copy of such written communication for review and will
not use, authorize, approve or refer to any such written
communication to which the Representatives reasonably
object.
(d) Notice to the
Representatives. The Company will advise the Representatives
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 any of the Time of Sale
Information, any Issue
