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Exhibit 10.1
Central
European Media Enterprises Ltd.
$425,000,000
3.50% Senior Convertible Notes due 2013
Purchase Agreement
March
4, 2008
Lehman
Brothers Inc.
745
Seventh Avenue
New
York, New York 10019
United
States of America
J.P.
Morgan Securities Inc.
277
Park Avenue
New
York, New York 10172
United
States of America
Deutsche
Bank Securities Inc.
60
Wall Street
New
York, New York 10005
United
States of America
BNP
Paribas
16,
boulevard de Italiens
75009
Paris
France
ING
Bank N.V., London Branch
60
London Wall
London
EC2M 5TQ
England
Ladies
and Gentlemen:
Central
European Media Enterprises Ltd., a company organized under the
laws of Bermuda (the “ Company
”), proposes to issue and sell to you as the Initial
Purchasers (the “ Initial
Purchasers ”), for whom Lehman Brothers Inc.,
J.P. Morgan Securities Inc. and
Deutsche Bank Securities Inc. are acting as joint book-running
managers (the “ Joint
Book-Running Managers ”) and for whom
Lehman Brothers Inc. and J.P. Morgan Securities Inc. are
acting as representatives (the “ Representatives
”),
$425,000,000 aggregate principal amount of its 3.50% Senior
Convertible Notes due 2013 (the “ Firm
Notes ”) in the amounts indicated on Schedule 1
hereto.
The
Company also proposes to issue and sell to the Initial
Purchasers up to an additional $50,000,000 million aggregate
principal amount of its 3.50% Senior Convertible Note due 2013
(the “ Additional
Notes ”) if and to the extent that the
Representatives shall have determined to exercise the right of
the Initial Purchasers to purchase such Additional Notes
granted to the Initial Purchasers in Section 2
hereof. The Firm Notes and the Additional Notes are
hereinafter collectively referred to as the “
Notes
.” The Notes will be convertible into fully
paid, non-assessable shares of Class A common stock of the
Company, par value $0.08 per share (the “ Common
Stock ”), on the terms, and subject to the
conditions, set forth in the Indenture (as defined
below). As used herein, “ Conversion
Shares ” means the shares of Common Stock
issuable upon conversion of the Notes.
The
Notes will be issued pursuant to an Indenture to be dated as
of March 10, 2008 (the “ Indenture
”) among the Company, Central European Media Enterprises
N.V. ( “
CME
N.V. ”) and CME Media Enterprises B.V. (
“
CME
B.V . ” )
(together, the “ Guarantors
”), The Bank of New York as trustee (the “
Trustee
”) and security trustee (the “ Security
Trustee ”), and will be guaranteed on a senior
basis (the “ Guarantees
”) by the Guarantors.
Holders
of the Notes (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the
registration rights set forth in the registration rights
agreement (the “ Registration
Rights Agreement ”) to be entered into between
the Company and the Initial Purchasers to be dated March 10,
2008, pursuant to which the Company will agree, among other
things, to file with the Commission under the circumstances
set forth therein, a shelf registration statement under the
Securities Act (the “Resale Registration
Statement”) relating to resales by holders of the
Conversion Shares.
The
obligations of the Company under the Notes will be secured by
(a) a pledge of the shares of CME N.V. and CME B.V. and
(b) an assignment of the rights of the Company and CME
B.V. under the framework agreement by and between the Company
and PPF (Cyprus) Ltd. (“ PPF
”) dated as of December 13, 2004 (the “
Framework
Agreement ”).
The
shares of CME N.V. and CME B.V. are collectively referred to
as the “ Pledged
Shares ”, and the Pledged Shares and the
assignment of rights under the Framework Agreement are
collectively referred to as the “ Collateral
”. The share pledges in respect of the
Pledged Shares are referred to as the “ Share
Pledges ” and, together with the assignment
agreements evidencing the assignment of rights under the
Framework Agreement, the “ Security
Documents ”.
In
connection with the offering of the Notes, the Security
Trustee, the Trustee and certain other parties will enter into
an amended and restated intercreditor agreement (the “
Intercreditor
Agreement ”). The Security Documents and the
Intercreditor Agreement are hereinafter referred to as the
“ Finance
Documents ”.
In
connection with the offering of the Notes, the Company will
enter into the capped call transactions with certain
affiliates of the Initial Purchasers pursuant to the
confirmations, each of which is dated March 4, 2008, is
subject to and forms a part of the ISDA Master Agreement
referenced therein and incorporates by reference certain
provisions of the 2002 ISDA Equity Derivatives Definitions and
the 2000 ISDA Definitions (such confirmations, together with
the related ISDA Master Agreements, are hereinafter referred
to collectively as the “ Option
Agreements ”).
The
Notes will be sold to the Initial Purchasers without being
registered under the U.S. Securities Act of 1933, as amended
(the “ Securities
Act ”), in reliance upon exemptions
therefrom. The Company has prepared a preliminary
offering memorandum dated March 3, 2008 (the “
Preliminary
Offering Memorandum ”) and will prepare an
offering memorandum dated the date hereof (the “
Offering
Memorandum ”) setting forth information
concerning the Company and its subsidiaries, the Notes, the
Guarantees and the Conversion Shares. Copies of the
Preliminary Offering Memorandum have been, and copies of the
Offering Memorandum will be, delivered by the Company to the
Initial Purchasers pursuant to the terms of this purchase
agreement (this “ Agreement
”). The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum, the
Time of Sale Information (as defined below) and the Offering
Memorandum in connection with the offering and resale of the
Notes by the Initial Purchasers in the manner contemplated by
this Agreement. Capitalized terms used but not
defined herein shall have the meanings given to such terms in
the Preliminary Offering Memorandum. References
herein to the Preliminary Offering Memorandum and the Offering
Memorandum shall be deemed to refer to and include any
document incorporated by reference therein.
At
5:30 p.m. (EST) on March 4, 2008 (the “ Time of
Sale ”), the following information shall have
been prepared (collectively, the “ Time of Sale
Information ”): the Preliminary Offering
Memorandum, as supplemented and amended by either of the term
sheets appended as Annex A hereto.
The
Company intends to use net proceeds from the offering to
purchase additional ownership interests in its operations
in Ukraine and for general corporate purposes. A portion of
the net proceeds from the offering will also be used to
pay the cost of the capped call transactions entered into in
connection with the offering of the Notes.
The
Company and each of the Guarantors hereby confirm their
agreement with the several Initial Purchasers concerning the
purchase and resale of the Notes, as follows:
1.
Purchase and
Resale of the Firm Notes
. (a) The Company agrees to issue and
sell the Firm Notes 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 Firm Notes set
forth opposite such Initial Purchaser’s name in Schedule
1 hereto at a purchase price equal to 98.50% of the principal
amount thereof plus accrued interest, if any, from March 10,
2008 to the Closing Date (as defined below). In
addition, the Company agrees to pay the Joint Book-Running
Managers a discretionary fee equal to 0.50% of the aggregate
principal amount of the Firm Notes, which discretionary fee
shall be divided among the Joint Book-Running Managers on the
basis set forth on Schedule 1A hereto. The Company
will not be obligated to deliver any of the Firm Notes except
upon payment for all the Firm Notes to be purchased as
provided herein.
(b) Each
of the Company and the Guarantors understands that the Initial
Purchasers intend to offer the Notes 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 Notes 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 Notes as part of
their initial offering except 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 Notes is aware that such sale is being made in reliance on
Rule 144A.
(c) Each
of the Company and the Guarantors acknowledges and agrees that
the Initial Purchasers may offer and sell the Notes to or
through any affiliate of an Initial Purchaser and that any
such affiliate may offer and sell the Notes purchased by it to
or through any Initial Purchaser.
(d) Each
of the Company and the Guarantors acknowledges and agrees that
each Initial Purchaser is acting solely in the capacity of an
arm's length contractual counterparty to the Company and the
Guarantors with respect to the offering of Notes contemplated
hereby (including in connection with determining the terms of
the offering) and not as financial advisor or fiduciary to, or
agent of, the Company, the Guarantors or any other
person. Additionally, the Initial Purchasers are
not advising the Company, the Guarantors or any other person
as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction. The Company and the
Guarantors shall consult with their own advisors concerning
such matters and shall be responsible for making their own
independent investigation and appraisal of the transactions
contemplated hereby, and the Initial Purchasers shall have
neither any responsibility nor any liability to the Company or
the Guarantors with respect thereto. Any review by the Initial
Purchasers of the Company, the Guarantors, and 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, the Guarantors or any other person.
2.
Payment and
Delivery . (a) The closing of the
purchase of the Firm Notes by the several Initial Purchasers
will occur at the offices of Simpson Thacher & Bartlett
LLP, 425 Lexington Avenue, New York, New York 10017 at 9:00
A.M., New York time, on March 10, 2008, or at such other time
or place on the same or such other date, not later than the
fifth business day thereafter, as the Representative and the
Company may agree upon in writing. The time and
date of such payment and delivery is referred to herein as the
“ Closing
Date ”.
(b) The
Notes sold to QIBs in reliance on Rule 144A will be
represented by one or more global notes in registered form
without interest coupons attached (the “ Global
Notes ”).
(c) Payment
for the Firm Notes or Additional Notes shall be made by the
Representatives on behalf of the several Initial Purchasers in
immediately available funds to the Company against delivery of
the Global Notes, to the Trustee as custodian for The
Depository Trust Company (“ DTC
”), which shall cause DTC to credit the applicable Notes
to the accounts of the Initial Purchasers at
DTC. The Company agrees to duly pay any transfer
taxes payable in connection with the sale of the Firm Notes or
Additional Notes, as the case may be.
(d) The
Company agrees to issue and sell the Additional Notes to the
several Initial Purchasers as provided in this Agreement, 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
Additional Notes at the purchase price as for the Firm Notes
plus accrued interest, if any, from the Closing Date to the
Additional Closing Date. If any Additional Notes
are to be purchased, the principal amount of Additional Notes
to be purchased by each Initial Purchaser shall be the
principal amount of Additional Notes, which bears the same
ratio to the principal amount of Additional Notes being
purchased as the principal amount of Firm Notes set forth
opposite the name of such Initial Purchaser in Schedule 1
bears to the principal amount of Firm Notes, as the case may
be, being purchased from the Company by the several Initial
Purchasers. In addition, if the Initial Purchasers
elect to purchase Additional Notes, the Company agrees to pay
the Joint Book-Running Managers a discretionary fee equal to
0.50% of the aggregate principal amount of the Additional
Notes, which discretionary fee shall be divided among the
Joint Book-Running Managers on the basis set forth on Schedule
1A hereto. The Initial Purchasers may exercise the
option to purchase the Additional Notes 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 principal amount of Additional
Notes as to which the option is being exercised and the date
and time when the Additional Notes are to be delivered and
paid for (the “ Additional
Closing Date ”), which may be the same date and
time as the Closing Date but shall not be earlier than the
Closing Date nor later than the tenth full business day after
the date of such notice. Any such notice shall be
given at least two business days prior to the date and time of
delivery specified therein unless the Company and the
Representatives shall agree to a shorter notice
period.
3.
Representations
and Warranties of the Company and the Guarantors
. The Company, and the Guarantors jointly and
severally represent and warrant to each Initial Purchaser
that:
(a)
Preliminary O
ffering
Memorandum, Time of Sale Information and Offering
Memorandum . The Preliminary Offering
Memorandum, as of its date, did not, the Time of Sale
Information, at the Time of Sale, did not, and the Offering
Memorandum, as of its date and as of the Closing Date or the
Additional Closing Date, as the case may be, will not, contain
any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided
that the Company and the Guarantors make no representation or
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to
any Initial Purchaser furnished to the Company in writing by
such Initial Purchaser through the 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 is that
described in Section 7(b) hereof. No order or
decree preventing the use of the Time of Sale Information or
the Offering Memorandum, or any order asserting that the
transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act or any other
securities laws has been issued, and no proceeding for that
purpose has commenced or is pending or, to the knowledge of
the Company or any of the Guarantors, is
contemplated.
(b)
Additional
Written Communications . Other than
the Preliminary Offering Memorandum and the Offering
Memorandum, neither the Company, nor any Guarantor (including
its respective agents and representatives, other than the
Initial Purchasers in their capacity as such, as to which no
representation is made) has made, used, prepared, authorized,
approved or referred to or will prepare, make, use, authorize,
approve or refer to any written communication that constitutes
an offer to sell or solicitation of an offer to buy the Notes
other than the term sheet substantially in the form of Annex A
hereto and other written communications used in accordance
with Section 4(c).
(c)
Financial
Statements . The financial statements and
the related notes thereto included in each of the Time of Sale
Information and the Offering Memorandum present fairly the
financial position of the Company and its subsidiaries as of
the dates indicated and the results of their operations and
the changes in their cash flows for the periods specified;
such financial statements have been prepared in conformity
with generally accepted accounting principles in the United
States (“ GAAP
”) applied on a consistent basis throughout the periods
covered thereby; the other financial information and data
included in each of the Time of Sale Information and the
Offering Memorandum has been derived from the accounting
records or operating systems of the Company and its
subsidiaries and presents fairly the information shown
thereby.
(d)
No Material
Adverse Change . Since the date of the most
recent financial statements of the Company and its
subsidiaries included in each of the Time of Sale Information
and the Offering Memorandum, (i) there has not been any change
in the capital stock or long-term debt of the Company or any
of its subsidiaries, or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the
Company on any class of capital stock, or any material adverse
change, or any development in the business, properties,
financial position, results of operations, shareholders’
equity, cashflow or prospects of the Company and its
subsidiaries taken as a whole, (ii) other than this Agreement
among the Company, Guarantors and the Initial Purchasers,
dated March 4, 2008 neither the Company nor any of its
subsidiaries has entered into any transaction or material
agreement, that is of a type which would be required to be
disclosed as an exhibit to a registration statement filed in
connection with an offering of securities under the U.S.
federal securities laws, 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 or the Offering
Memorandum.
(e)
Organization
and Good Standing . The Company and each of
its subsidiaries have been duly organized and are validly
existing and, where applicable, in good standing under the
laws of their respective jurisdictions of organization, are
duly qualified to do business and, where applicable, are in
good standing in each jurisdiction in which their respective
ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have
all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which
they are engaged, except where the failure to be so qualified
or have such power or authority would not, individually or in
the aggregate, have a material adverse effect on the business,
properties, financial position, results of operations,
shareholders’ equity, cashflow or prospects of the
Company and its subsidiaries taken as a whole, or on the
performance by the Company and its subsidiaries of its
obligations under the Notes and the Guarantees (a “
Material Adverse
Effect ”). Except as disclosed in the
notes to the financial statements included in the Time of Sale
Information or the Offering Memorandum, none of the Company or
any of its material subsidiaries is in bankruptcy, liquidation
or receivership or subject to any similar
proceeding. The Company does not own or control,
directly or indirectly, any corporation, association or other
entity other than the subsidiaries listed in the Time of Sale
Information or the Offering Memorandum.
(f)
Capitalization
. The Company has capitalization as set forth in
the each of the Time of Sale Information and the Offering
Memorandum under the heading “Capitalization”; and
all the outstanding shares of capital stock or other equity
interests of the Company and of each direct and indirect
subsidiary of the Company, which, in the case of shares of
subsidiaries that are owned by the Company, have been duly and
validly authorized and issued, are fully paid and
non-assessable and, in the case of shares of subsidiaries, are
owned directly or indirectly by the Company, free and clear of
any lien, charge, encumbrance, security interest, restriction
on voting or transfer or any other claim of any third party,
except as otherwise disclosed in each of the Time of Sale
Information and the Offering Memorandum. Except as
otherwise disclosed in each of the Time of Sale Information
and the Offering Memorandum there are no outstanding options,
warrants or other rights to purchase or acquire any shares of
the capital stock of the Company or its direct or indirect
subsidiaries; and the capital stock of the Company conforms in
all material respects to the description thereof contained in
the Time of Sale Information and the Offering
Memorandum.
(g)
Due
Authorization . The Company and each of the
Guarantors, as applicable, have full right, power and
authority to execute and deliver this Agreement, the Notes,
the Indenture (including the Guarantees set forth therein),
the Registration Rights Agreement, the Finance Documents and
any other agreement or instrument entered into with respect to
the offering of the Notes (collectively, the “
Transaction
Documents ”) and to perform their respective
obligations hereunder and thereunder; and all action
(corporate or other) required to be taken for the due and
proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions
contemplated thereby has been duly and validly
taken.
(h)
The
Indenture . The Indenture has been duly
authorized by the Company and each of the Guarantors and, when
duly executed and delivered in accordance with its terms by
each of the parties thereto, will constitute a valid and
legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the
Guarantors in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy,
fraudulent conveyance, insolvency or similar laws affecting
the enforcement of creditors’ rights generally or by
equitable principles relating to enforceability (collectively,
the “ Enforceability
Exceptions ”).
(i)
The Notes
and the Guarantees . The Notes have been
duly authorized by the Company and, when duly executed,
authenticated, issued and delivered as provided in the
Indenture and paid for as provided herein, will be duly and
validly issued and outstanding and will constitute valid and
legally binding obligations of the Company enforceable against
the Company in accordance with their terms, subject to the
Enforceability Exceptions, and will be entitled to the
benefits of the Indenture; and the Guarantees have been duly
authorized by each of the Guarantors and, when the Notes have
been duly executed, authenticated, issued and delivered as
provided in the Indenture and paid for as provided herein,
will be valid and legally binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in
accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the
Indenture.
(j)
The
Conversion Shares . The Company has all the
requisite corporate power and authority to issue and deliver
the Conversion Shares, if any, issuable upon conversion of the
Notes. The Conversion Shares have been duly and
validly authorized by the Company and, and when issued upon
conversion of the Notes in accordance with the terms of the
Notes, will be validly issued, fully paid and non-assessable,
and the issuance of the Conversion Shares will not be subject
to any preemptive or similar rights. The Board of
Directors of the Company has duly and validly adopted
resolutions reserving such Conversion Shares for issuance upon
conversion. The Conversion Shares will conform in
all material respects to the description thereof in each of
the Time of Sale Information and the Offering
Memorandum.
(k)
The Purchase
Agreement . This Agreement has been duly
executed and delivered by the Company and each of the
Guarantors, and when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute
a valid and legally binding agreement of the Company and each
of the Guarantors enforceable against the Company and each of
the Guarantors in accordance with its terms, subject to the
Enforceability Exceptions.
(l)
The
Registration Rights Agreement . The
Registration Rights Agreement has been duly executed and
delivered 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, subject to the Enforceability
Exceptions. The Registration Rights Agreement will
conform in all material respects to the description thereof in
each of the Time of Sale Information and the Offering
Memorandum.
(m)
The Finance
Documents. Each of the Finance Documents has been duly
executed and delivered by the Company and the Guarantors, as
applicable, and when duly executed and delivered in accordance
with their respective terms by each of the other parties
thereto, will constitute valid and legally binding agreements
of each of the Company and the Guarantors, as applicable,
enforceable against each of them in accordance with their
terms.
(n)
Creation,
Enforceability and Perfection of Security Interests.
The applicable pledging entity under each Security
Document owns the relevant collateral covered by such Security
Document (the “ Collateral
”), free and clear of any security interest, mortgage,
pledge, lien, encumbrance, restrictions on transfer or any
other similar claim of any other third party (except for the
security interests granted to BNY Corporate Trustee Services
Limited, under the indenture dated May 5, 2005 to
the €370,000,000 aggregate principal amount of
8.25% Senior Notes due 2012 and under the indenture dated May
9, 2007 to the €150,000,000 aggregate principal amount of
Senior Floating Rate Notes due 2014 (together, the “
Existing Senior
Notes ”) and to the European Bank for
Reconstruction and Development under a revolving loan
agreement dated July 21, 2006 for €100,000,000 and a
revolving loan agreement dated August 22, 2007 for
€50,000,000) (together, the “ EBRD Loan
” and together with the Existing Senior Notes, the
“ Existing Debt
Agreements ”). All filings and other
actions necessary or desirable to perfect and protect the
security interest in the Collateral to be created under the
Security Documents have been or will be at or prior to the
Closing Date duly made or taken and are or will be at or prior
to the Closing Date in full force and effect and, together
with the execution and delivery of the Security Documents by
the Company and each Guarantor, will create a valid and
enforceable security interest in the Collateral securing the
obligations of the Company and each Guarantor under the
Indenture.
(o)
Descriptions
and Fair Summaries . The descriptions in the
Time of Sale Information and the Offering Memorandum of
statutes, legal, governmental and regulatory proceedings and
contracts and other documents are accurate in all material
respects; the statements in the Time of Sale Information and
the Offering Memorandum under the headings “Description
of other indebtedness”, “Material Bermuda and
United States Federal Income Tax Considerations” and
“Risk Factors ¾ Risks Relating to Enforcement
Rights—We are a Bermuda company, and therefore
enforcement of civil liabilities and judgments may be
difficult.” fairly summarize the matters therein
described in all material respects; and each Transaction
Document conforms in all material respects to the description
thereof contained in the Time of Sale Information and the
Offering Memorandum.
(p)
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 license, authorization, law or
statute or any judgment, order, rule or regulation of any
court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (ii) and (iii) above, for any
such default or violation that would not, individually or in
the aggregate, have a Material Adverse Effect.
(q)
No
Conflicts . The authorization, execution,
delivery and performance by the Company and each of the
Guarantors of each of the Transaction Documents to which each
is a party, the issuance and sale of the Notes (including the
Guarantees) and the issuance and delivery of the Conversion
Shares and compliance by the Company and each of the
Guarantors with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents will
not (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, (ii) result in any
violation of the provisions of the charter or by-laws or
similar organizational documents of the Company or any of its
subsidiaries or (iii) result in the violation of any law or
statute or any judgment, order, rule or regulation of any
court or arbitrator or governmental or regulatory authority,
except in the case of clauses (i) and (iii) above, for any
such conflict, breach or violation that would not,
individually or in the aggregate, have a Material Adverse
Effect.
(r)
No Consents
Required . No consent, approval,
authorization, order, filing, registration or qualification of
or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and
performance by the Company and each of the Guarantors of each
of the Transaction Documents to which each is a party, the
issuance and sale of the Notes (including the Guarantees and
the issuance and delivery of the Conversion Shares issuable
upon conversion of the Notes) and compliance by the Company
and each of the Guarantors with the terms thereof and the
consummation of the transactions contemplated by the
Transaction Documents, except for such consents, approvals,
authorizations, orders and registrations or qualifications as
may be required under applicable securities laws in connection
with the purchase and resale of the Notes by the Initial
Purchasers.
(s)
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 to the best knowledge of the Company and
each of the Guarantors no such investigations, actions, suits
or proceedings are threatened by any governmental or
regulatory authority or by others.
(t)
Independent
Accountants . Deloitte & Touche LLP, who have
certified certain financial statements of the Company and its
subsidiaries are independent public accountants with respect
to the Company and its subsidiaries within the meaning of Rule
101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants and its
interpretations and rulings thereunder and applicable
accounting rules and regulations. The report of
Deloitte & Touche LLP on the audited financial statements
of the Company included in the Time of Sale Information and
the Offering Memorandum does not contain any limitation or
restriction on the ability of the Initial Purchasers or the
purchasers of the Notes to rely upon such report.
(u)
Title to
Real and Personal Property . The Company and
its subsidiaries have good and marketable title in fee simple
to, or have valid rights to lease or otherwise use, all items
of real and personal property that are material to the
respective businesses of the Company and its subsidiaries, in
each case free and clear of all liens, encumbrances, claims
and defects and imperfections of title except those that (i)
do not materially interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries
or (ii) could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
(v)
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, computer software and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems
or procedures) necessary for the conduct of their respective
businesses except where the failure to possess, or own such
rights would not have a Material Adverse Effect; and to the
knowledge of the Company the conduct of their respective
businesses will not conflict in any material respect with any
such rights of others, and the Company and its subsidiaries
have not received any notice of any claim of infringement of
or conflict with any such rights of others and are unaware of
any facts which would form a reasonable basis for any such
claim, except as to such conduct or infringement which would
not have a Material Adverse Effect.
(w)
Investment
Company Act . The Company is not, and after
giving effect to the offering and sale of the Notes and the
application of the proceeds thereof as described in each of
the Time of Sale Information and the Offering Memorandum will
not be, an “investment company” or an entity
“controlled” by an “investment
company” within the meaning of the U.S. Investment
Company Act of 1940, as amended, and the rules and regulations
of the U.S. Securities and Exchange Commission (the “
Commission
”) thereunder (collectively, the “ Investment
Company Act ”).
(x)
Passive
Foreign Investment Company . The Company is
not, and does not expect to become, a “passive foreign
investment company” as defined in Section 1297 of the
U.S. Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder. The Company
intends to conduct its business in a manner such that it will
not become a PFIC in the future under current laws and
regulations.
(y)
Taxes
. Except as would not have a Material Adverse
Effect, the Company and its subsidiaries have paid all
national, regional, local and other 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.
(z)
No
Withholding Tax . All payments to be made by
the Company under this Agreement and, except as otherwise
disclosed in each of the Time of Sale Information and the
Offering Memorandum, all interest, principal, additional
amounts, if any, and other payments on or under the Notes or
the Guarantees may, under the current laws and regulations of
Bermuda, The Netherlands Antilles and The Netherlands or any
political subdivision or any authority or agency therein or
thereof having power to tax, or of any other jurisdiction in
which the Company or a Guarantor, as the case may be, is
organized or is otherwise resident for tax purposes or any
jurisdiction from or through which a payment is made (each, a
“ Relevant Taxing
Jurisdiction ”), be paid in U.S. dollars that may
be converted into another currency and freely transferred out
of the Relevant Taxing Jurisdiction and all such interest on
the Notes will not be subject to withholding or other taxes
under the current laws and regulations of the Relevant Taxing
Jurisdiction and are otherwise payable free and clear of any
other tax, withholding or deduction in the Relevant Taxing
Jurisdiction and without the necessity of obtaining any
governmental authorization in the Relevant Taxing
Jurisdiction.
(aa)
Stamp
Duty . Except as otherwise disclosed in each
of the Time of Sale Information and the Offering Memorandum,
no stamp, issuance, transfer or other similar taxes or duties
are payable by or on behalf of the Initial Purchasers in
Bermuda, The Netherlands Antilles and The Netherlands, the
United Kingdom or the United States or any political
subdivision or taxing authority thereof or therein on (i) the
creation, issue or delivery by the Company of the Notes or the
Conversion Shares, (ii) the creation, issue or delivery by the
Guarantors of the Guarantees, (iii) the purchase by the
Initial Purchasers of the Notes in the manner contemplated by
this Agreement, (iv) the resale and delivery by the Initial
Purchasers of the Notes contemplated by this Agreement or (v)
the execution and delivery of this Agreement and the other
Transaction Documents and the consummation of the transactions
contemplated hereby and thereby.
(bb)
No Labor
Disputes . No labor disturbance by or
dispute with employees of the Company or any of its
subsidiaries exists or, to the best knowledge of the Company
and each of the Guarantors, is threatened which could,
individually or in the aggregate, have a Material Adverse
Effect; to the best knowledge of the Company and each of the
Guarantors, no labor disturbance by or dispute with employees
or agents of suppliers or customers of the Company or any of
its subsidiaries is threatened which could, individually or in
the aggregate, have a Material Adverse Effect.
(cc)
Licenses and
Permits . The Company and its subsidiaries
possess all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and
filings with, the appropriate national, regional, local or
other governmental or regulatory authorities that are
necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as
described in each of the Time of Sale Information and the
Offering Memorandum, except where the failure to possess or
make the same would not, individually or in the aggregate,
have a Material Adverse Effect; and except as described in
each of the Time of Sale Information and the Offering
Memorandum, neither the Company nor any of its subsidiaries
has received notice of any revocation or modification of any
such license, certificate, permit or authorization or has any
reason to believe that any such license, certificate, permit
or authorization will not be renewed in the ordinary course,
except where receipt of such notice of any revocation or
modification of any such license, certificate, permit or
authorization would not have a Material Adverse
Effect.
(dd)
Books and
Records . The minute books and records of
the Company, each of its subsidiaries relating to proceedings
of their respective shareholders, boards of directors and
committees of their respective boards of directors made
available to counsel for the Initial Purchasers are their
original minute books and records or are true, correct and
complete copies thereof, with respect to all proceedings of
said shareholders, boards of directors and committees since
January 1, 2003, through the date hereof. In the
event that definitive minutes have not been prepared with
respect to any proceedings of such shareholders, boards of
directors or committees, the Company has provided counsel for
the Initial Purchasers with originals or true, correct and
complete copies of draft minutes, which drafts, if any,
reflect all material events that occurred in connection with
such proceedings.
(ee)
Compliance
with Environmental Laws . The Company and
its subsidiaries (i) are in compliance with any and all
applicable international, national, regional, local and other
laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or
contaminants (collectively, “ Environmental
Laws ”), (ii) have received and are in compliance
with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their
respective businesses (collectively, “ Environmental
Permits ”), and (iii) have not received notice of
any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, except in
any such case for any such failure to comply with, or failure
to receive required permits, licenses or approvals, or
liability, as would not, individually or in the aggregate,
have a Material Adverse Effect; and the Company and its
subsidiaries are not aware of any pending investigation which
might reasonably be expected to lead to a claim of such
liability, except any such liability as would not,
individually or in the aggregate, have a Material Adverse
Effect.
(ff)
Compliance
with Employee Arrangements . Except as would
not be reasonably expected to have a Material Adverse Effect,
each benefit and compensation plan, agreement, policy and
arrangement that is maintained, administered or contributed to
by the Company or any of its subsidiaries for current or
former employees or directors of, or independent contractors
with respect to, the Company or any of its subsidiaries, or
with respect to which any of such entities could reasonably be
expected to have any current, future or contingent liability
or responsibility, has been maintained in compliance with its
terms and the requirements of any applicable statutes, orders,
rules and regulations; the Company and each of its
subsidiaries and each of their respective affiliates have
complied with all applicable statutes, orders, rules and
regulations in regard to such plans, agreements, policies and
arrangements.
(gg)
Related
Party Transactions . Except as otherwise
disclosed in each of the Time of Sale Information and the
Offering Memorandum, no material relationship, direct or
indirect, exists between or among any of the Company or any of
its subsidiaries on the one hand, and any director, officer,
shareholder, or other affiliate of the Company or any of its
subsidiaries on the other hand, which is material to either
entity having an interest in the relationship.
(hh)
Insurance
. Except as would not be reasonably expected to
have a Material Adverse Effect, the Company and its
subsidiaries have insurance covering their respective
properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and
risks as are adequate to protect the Company and its
subsidiaries and except as would not be reasonably expected to
have a Material Adverse Effect their respective businesses;
and neither the Company nor any of its subsidiaries has (i)
received notice from any insurer or agent of such insurer that
capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or
(ii) any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage
expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its
business.
(ii)
Accounting
Controls . Except as otherwise disclosed in each of the
Time of Sale Information and the Offering Memorandum, the
Company makes and keeps books and records which are accurate
in all material respects and maintain systems of internal
accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to
maintain asset accountability, (iii) access to assets is
permitted only in a
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