EXHIBIT 1.1
EXECUTION COPY
BANC OF AMERICA SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
$200,000,000 AGGREGATE PRINCIPAL AMOUNT
APRIA HEALTHCARE GROUP INC.
3 3/8% CONVERTIBLE SENIOR NOTES
DUE 2033
PURCHASE AGREEMENT
DATED AUGUST 15, 2003
TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................................ 2
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE NOTES..................................................... 8
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY.......................................................... 10
SECTION 4. PAYMENT OF EXPENSES.......................................................................... 12
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASERS...................................... 12
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF INITIAL PURCHASERS............................. 15
SECTION 7. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES................................................ 15
SECTION 8. INDEMNIFICATION.............................................................................. 16
SECTION 9. CONTRIBUTION................................................................................. 18
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL INITIAL PURCHASERS.................................... 19
SECTION 11. TERMINATION OF THIS AGREEMENT............................................................... 20
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY......................................... 20
SECTION 13. NOTICES..................................................................................... 20
SECTION 14. SUCCESSORS.................................................................................. 21
SECTION 15. PARTIAL UNENFORCEABILITY.................................................................... 21
SECTION 16. GOVERNING LAW PROVISIONS.................................................................... 21
SECTION 17. GENERAL PROVISIONS.......................................................................... 21
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PURCHASE AGREEMENT
August 15, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
As Representatives of the several Initial Purchasers
c/o BANC OF AMERICA SECURITIES LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Apria Healthcare Group Inc., a Delaware corporation
(the "Company), proposes to issue and sell to the several purchasers named in
Schedule A (the "Initial Purchasers") $200,000,000 in aggregate principal amount
of its 3?% Convertible Senior Notes due 2033 (the "Firm Notes"). In addition,
the Company has granted to the Initial Purchasers an option to purchase up to an
additional $50,000,000 in aggregate principal amount of its 3?% Convertible
Senior Notes due 2033 (the "Optional Notes" and, together with the Firm Notes,
the "Notes"). The Notes will be redeemable at the Company's option at any time
after September 8, 2008. Banc of America Securities LLC ("BAS"), ▇.▇. ▇▇▇▇▇▇
Securities Inc. ("JP") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("MS") have agreed
to act as representatives of the several Initial Purchasers (in such capacity,
the "Representatives") in connection with the offering and sale of the Notes.
The Notes will be convertible into fully paid,
non-assessable shares of common stock, par value $.001 per share, of the Company
(the "Common Stock"). The Notes will be convertible initially at a conversion
rate of 28.6852 shares per $1,000 principal amount of the Notes, on the terms,
and subject to the conditions, set forth in the Indenture (as defined below).
Upon the fifth, seventh, tenth, fifteenth, twentieth and twenty-fifth
anniversaries of September 1, 2003, each holder of the Notes may require the
Company to purchase such Notes whether in cash or, at the seventh, tenth,
fifteenth, twentieth and twenty-fifth anniversaries of September 1, 2003, in
cash or (subject to certain limitations) shares of Common Stock, or any
combination thereof, at a purchase price equal to the issue price of the Notes
plus accrued and unpaid interest, if any. As used herein, "Conversion Shares"
means the shares of Common Stock into which the Notes are convertible. The Notes
will be issued pursuant to an indenture (the "Indenture") to be dated as of the
First Closing Date (as defined in Section 2), between the Company and U.S. Bank
National Association, as trustee (the "Trustee").
The Notes will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as
amended, and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder (the
"Securities Act"), in reliance upon an exemption therefrom.
Holders of the Notes (including the Initial
Purchasers and their direct and indirect transferees) will be entitled to the
benefits of a registration rights agreement, dated the First Closing Date,
between the Company and the Initial Purchasers (the "Registration Rights
Agreement"), pursuant to which the Company will agree to file with the
Commission a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Registration Statement") covering the resale of the Notes
and the Conversion Shares, and to use commercially reasonable efforts to cause
the Registration Statement to be declared effective. This Agreement, the
Indenture, the Notes and the Registration Rights Agreement are referred to
herein collectively as the "Operative Documents."
The Company understands that the Initial Purchasers
propose to make an offering of the Notes on the terms and in the manner set
forth herein and in the Offering Memorandum and agrees that the Initial
Purchasers may resell, subject to the conditions set forth herein, all or a
portion of the Notes to purchasers (the "Subsequent Purchasers") at any time
after the date of this Agreement. The Notes are to be offered and sold to or
through the Initial Purchasers without being registered with the Commission
under the Securities Act in reliance upon exemptions therefrom. The terms of the
Notes and the Indenture will require that investors that acquire Notes expressly
agree that Notes (and any Conversion Shares) may only be resold or otherwise
transferred, after the date hereof, if such Notes (or Conversion Shares) are
registered for sale under the Securities Act or if an exemption from the
registration requirements of the Securities Act is available (including the
exemption afforded by Rule 144A ("Rule 144A") thereunder).
The Company has prepared an offering memorandum dated
the date hereof setting forth information concerning the Company, the Notes, the
Registration Rights Agreement (as defined below) and the Common Stock in form
and substance reasonably satisfactory to the Initial Purchasers. As used in this
Agreement, "Offering Memorandum" means, collectively, the Preliminary Offering
Memorandum dated as of August 14, 2003 (the "Preliminary Offering Memorandum")
and the offering memorandum dated the date hereof (the "Final Offering
Memorandum"), each as amended or supplemented by the Company. As used herein,
each of the terms "Offering Memorandum", "Preliminary Offering Memorandum" and
"Final Offering Memorandum" shall include in each case the documents
incorporated or deemed to be incorporated by reference therein.
The Company hereby confirms its agreements with the
Initial Purchasers as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents, warrants and covenants
to each Initial Purchaser as follows:
(a) No Registration. Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 6 and their compliance
with the agreements set forth therein, it is not necessary, in connection with
the issuance and sale of the Notes to the Initial Purchasers, the offer, resale
and delivery of the Notes by the Initial Purchasers and the conversion of the
Notes into Conversion Shares, in each case in the manner contemplated by this
Agreement, the Indenture and the Offering Memorandum (other than the
registration of the Notes and the Conversion Shares pursuant to the Registration
Rights Agreement), to register the Notes or the Conversion Shares under the
Securities Act or to qualify the Indenture the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
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(b) No Integration. During the past six months, none of the Company or
any of its subsidiaries 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 Notes or the Conversion Shares in a manner that would require
registration under the Securities Act of the issuance or resale by the Initial
Purchasers (in each case as described herein) of the Notes or the Conversion
Shares.
(c) Rule 144A. No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Notes are listed on any
national securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended (together with the rules and regulations
promulgated thereunder, the "Exchange Act"), or quoted on an automated
inter-dealer quotation system.
(d) Offering Memorandum. The Company hereby confirms that it has
authorized the use of the Offering Memorandum in connection with the offer and
sale of the Securities by the Initial Purchasers. Each document, if any, filed
or to be filed pursuant to the Exchange Act and incorporated by reference in the
Offering Memorandum complied or will comply when it is filed in all material
respects with the Exchange Act and the rules and regulations of the Commission
thereunder. The Preliminary Offering Memorandum does not contain and the Final
Offering Memorandum 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 as to information
contained in or omitted from the Offering Memorandum in reliance upon and in
conformity with written information furnished to the Company by or on the behalf
of the Initial Purchasers specifically for inclusion therein.
(e) Authorization of the Purchase Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(f) Authorization of the Indenture. The Indenture has been duly
authorized by the Company; on the First Closing Date, the Indenture will have
been duly executed and delivered by the Company and, assuming due authorization,
execution and delivery of the Indenture by the Trustee, will constitute a
legally valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium arrangement or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles, including principles of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
equitable remedies (regardless of whether enforcement is sought in a proceeding
at law or in equity); and the Indenture will conform in all material respects to
the description thereof contained in the Offering Memorandum.
(g) Authorization of the Notes. The Notes have been duly authorized by
the Company; when the Notes are executed, authenticated and issued in accordance
with the terms of the Indenture and delivered to and paid for by the Initial
Purchasers pursuant to this Agreement on the respective Closing Date (assuming
due authentication of the Notes by the Trustee), such Notes will constitute
legally valid and binding obligations of the Company, entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles including
principles of materiality, reasonableness, good faith and fair dealing and the
possible unavailability of equitable remedies (regardless of whether
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enforcement is sought in a proceeding at law or in equity); and the Notes will
conform in all material respects to the description thereof contained in the
Offering Memorandum.
(h) Authorization of the Conversion Shares. The Conversion Shares have
been duly authorized and reserved 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 such shares will not be subject to any
preemptive or similar rights.
(i) Authorization of the Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized, executed and delivered
by, and is a valid and binding agreement of, the Company, enforceable against
the Company in accordance with its terms, except as rights to indemnification
and contribution thereunder may be limited by applicable law or public policy
relating thereto and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles including principles of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of equitable remedies
(regardless of whether enforcement is sought in a proceeding at law or in
equity); and the Registration Rights Agreement will conform in all material
respects to the description thereof contained in the Offering Memorandum.
(j) No Material Adverse Change. Except as otherwise disclosed in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), subsequent to the respective dates as
of which information is given in the Offering Memorandum: (i) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business, or operations, whether or not arising from transactions in
the ordinary course of business, of the Company and its subsidiaries, considered
as one entity (any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business, nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
(k) Independent Accountants. Deloitte & Touche LLP, who have expressed
their opinion with respect to the financial statements (which term as used in
this Agreement includes the related notes thereto) and supporting schedules
included in the Offering Memorandum, are independent public or certified public
accountants as required by the Securities Act and the Exchange Act.
(l) Preparation of the Financial Statements. The financial statements
included or incorporated by reference in the Offering Memorandum present fairly,
in all material respects, the consolidated financial position of the Company and
its consolidated subsidiaries as of and at the dates indicated and the results
of their operations and cash flows for the periods specified. Such financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved, except
as may be expressly stated in the related notes thereto. The financial data set
forth in the Offering Memorandum under the captions "Summary Consolidated
Financial Information" and "Capitalization," and in the Company's Form 10-K for
the year ended December 31, 2002 under the caption "Selected Financial Data"
fairly present, in all material respects, the information set forth therein on a
basis consistent with that of the audited financial statements incorporated in
the
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Offering Memorandum. The Company's ratios of earnings to fixed charges set forth
in the Offering Memorandum have been calculated in compliance with Item 503(d)
of Regulation S-K under the Securities Act.
(m) Incorporation and Good Standing of the Company and its
Subsidiaries. Each of the Company and its significant subsidiaries (as defined
in Rule 1-02 of Regulation S-X) ("Significant Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Offering Memorandum and, in the case of the Company, to
enter into and perform its obligations under this Agreement. Each of the Company
and each Significant Subsidiary is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change. All of the issued and
outstanding capital stock of each subsidiary of the Company has been duly
authorized and validly issued, is fully paid and non-assessable and, except as
described in the Offering Memorandum, is owned by the Company, directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or claim.
(n) Capitalization and Other Capital Stock Matters. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Offering Memorandum under the caption "Capitalization" (other than for
subsequent issuances, if any, pursuant to equity incentive plans described in
the Offering Memorandum or upon exercise of outstanding options described in the
Offering Memorandum). The Common Stock (including the Conversion Shares)
conforms in all material respects to the description thereof contained in the
Offering Memorandum. All of the issued and outstanding shares of Common Stock
have been duly authorized and validly issued, are fully paid and non-assessable
and have been issued in compliance with applicable federal and state securities
laws. None of the outstanding shares of Common Stock were issued in violation of
any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its
subsidiaries other than those accurately described in the Offering Memorandum.
The description of the Company's equity incentive plans or arrangements, and the
options or other rights granted thereunder, set forth in the Offering Memorandum
accurately and fairly presents and summarizes such plans, arrangements, options
and rights.
(o) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of its
significant subsidiaries is in violation of its charter or by-laws or is in
default (or, with the giving of notice or lapse of time, would be in default)
("Default") under any indenture, mortgage, loan or credit agreement, note,
contract, franchise, lease or other instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound
(including, without limitation, the Company's senior secured credit agreement
with a syndicate of lenders led by Bank of America, N.A.), or to which any of
the property or assets of the Company or any of its subsidiaries is subject
(each, an "Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change.
The Company's execution, delivery and performance of
the Operative Documents and consummation of the transactions contemplated
thereby and by the Offering
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Memorandum (i) will not result in any violation of the provisions of the charter
or by-laws of the Company or any Significant Subsidiary, (ii) will not conflict
with or constitute a breach of, or 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, or require the consent of any
other party to, any Existing Instrument, except for Defaults that would not,
individually or in the aggregate, result in a Material Adverse Change and (iii)
will not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any subsidiary. No
consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency, is
required for the Company's execution, delivery and performance of the Operative
Documents and consummation of the transactions contemplated thereby and by the
Offering Memorandum, except (i) with respect to the transactions contemplated by
the Registration Rights Agreement, as may be required under the Securities Act,
the Trust Indenture Act and the Rules and Regulations promulgated thereunder and
(ii) such as have been obtained or made by the Company and are in full force and
effect and (iii) such as may be required under the Securities Act, applicable
state securities or blue sky laws and from the NASD.
(p) No Material Actions or Proceedings. Except as disclosed in the
Offering Memorandum, there are no pending actions, suits or proceedings against
or affecting the Company, any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate cause a Material Adverse
Change, or would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise material in
the context of the sale of the Notes; and, to the Company's knowledge, no such
actions, suits or proceedings are threatened or contemplated. No material labor
dispute with the employees of the Company or any of its subsidiaries exists or,
to the knowledge of the Company, is imminent that might cause a Material Adverse
Change.
(q) Intellectual Property Rights. The Company and its subsidiaries own,
possess or can acquire on reasonable terms, the right to use trademarks, trade
names and other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property (collectively,
"Intellectual Property Rights") necessary to conduct the business now operated
by them, except to the extent that the failure to own or possess the right to
use such Intellectual Property would not, singly or in the aggregate, have a
Material Adverse Change, and except as set forth in the Offering Memorandum,
neither the Company nor any of its subsidiaries have received any notice of
infringement of or conflict with asserted rights of others with respect to any
intellectual property rights that, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a Material
Adverse Change.
(r) All Necessary Permits, etc. The Company and each Significant
Subsidiary possess such valid and current certificates, authorizations or
permits issued by the appropriate state or federal regulatory agencies or bodies
necessary to conduct their respective businesses, and neither the Company nor
any subsidiary has received any notice of proceedings relating to the revocation
or modification of, or non-compliance with, any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Change.
(s) Title to Properties. Except as disclosed in the Offering
Memorandum, the Company and its subsidiaries have good and marketable title to
all real properties and all other material properties and assets owned by them,
in each case free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made or to be made
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thereof by them; and except as disclosed in the Offering Memorandum, the Company
and its subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would interfere with the use made or
to be made thereof by them except such as would not have a Material Adverse
Change.
(t) Company Not an "Investment Company". The Company is not, and, after
receipt of payment for the Notes and application of the proceeds as described in
the Offering Memorandum, will not be, required to register as an "investment
company" within the meaning of Investment Company Act and will conduct its
business in a manner so that it will not become subject to the Investment
Company Act.
(u) No Price Stabilization or Manipulation. The Company has not taken
and will not take, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in stabilization or manipulation of
the price of the Notes or the Conversion Shares to facilitate the sale or resale
of the Notes.
(v) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or any subsidiary or any other
person required to be described in the Offering Memorandum that have not been
described as required.
(w) Recent Sales. Except as disclosed in the Offering Memorandum and
except for options granted under, or contracts or commitments pursuant to, the
Company's previous or currently existing stock option or other similar officer,
director or employee benefit plans or pursuant to outstanding options, rights or
warrants, the Company has not sold or issued any shares of Common Stock, any
security convertible into shares of Common Stock or any security of the same
class as the Notes during the six-month period preceding the date of the
Offering Memorandum, including any sales pursuant to Rule 144A or under
Regulations D or S of the Securities Act.
(x) No General Solicitation. None of the Company or any of its
affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act
("Regulation D")), has, directly or through an agent, engaged in any form of
general solicitation or general advertising in connection with the offering of
the Notes or the Conversion Shares (as those terms are used in Regulation D)
under the Securities Act or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; the Company has not entered into
any contractual arrangement with respect to the distribution of the Notes or the
Conversion Shares except for this Agreement, and the Company will not enter into
any such arrangement except for the Registration Rights Agreement and as may be
contemplated hereby and thereby.
(y) Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(aa) Compliance with Environmental Laws. Except as disclosed in the
Offering Memorandum or as would not, either individually or in the aggregate,
result in a Material Adverse Change,, neither the Company nor any of its
subsidiaries is (i) in violation of any statute,
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rule, regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "Environmental Laws"), (ii) owns or operates any real property
contaminated with any substance that is subject to any Environmental Laws, (iii)
is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or (iv) is subject to any claim relating to any
Environmental Laws; and the Company is not aware of any pending investigation
which might lead to such a claim.
(bb) Brokers. Except for the Initial Purchasers pursuant to the terms
hereof, there is no broker, finder or other party that is entitled to receive
from the Company any brokerage or finder's fee or other fee or commission as a
result of any transactions contemplated by this Agreement.
(cc) No Outstanding Loans or Other Indebtedness. There are no
outstanding loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees or indebtedness by the Company to or
for the benefit of any of the officers or directors of the Company or any of the
members of any of their families, except as disclosed in the Offering
Memorandum.
(dd) Reporting Company. The Company is subject to and in compliance in
all material respects with the reporting requirements of Section 13 or Section
15(d) of the Exchange Act.
Any certificate signed by an officer of the Company
in connection with this Agreement and delivered to the Representatives or to
counsel for the Initial Purchasers shall be deemed to be a representation and
warranty by the Company to each Initial Purchaser as to the matters set forth
therein.
The Company acknowledges that the Initial Purchasers
and, for purposes of the opinions to be delivered pursuant to Section 5 hereof,
counsel to the Company and counsel to the Initial Purchasers, will rely upon the
accuracy and truthfulness of the foregoing representations and hereby consents
to such reliance.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE NOTES.
(a) The Firm Notes. The Company agrees to issue and sell to each
Initial Purchaser the Firm Notes upon the terms herein set forth. On the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company the respective
principal amount of Firm Notes set forth opposite their names on Schedule A at a
purchase price of 100% of the aggregate principal amount thereof.
(b) The First Closing Date. Delivery of the Firm Notes to be purchased
by the Initial Purchasers and payment therefor shall be made at the offices of
Shearman & Sterling LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (or such other
place as may be agreed to by the Company and the Representatives) at 9:00 a.m.
New York time, on August 20, 2003, or such other time and date not later than
four business days after the date hereof as may be agreed to between the Company
and the Representatives (the time and date of such closing are called the "First
Closing Date").
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(c) The Optional Notes; the Second Closing Date. In addition, on the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Initial Purchasers to purchase, severally
and not jointly, up to $50,000,000 aggregate principal amount of Optional Notes
from the Company at the same price as the purchase price to be paid by the
Initial Purchasers for the Firm Notes as set forth in Section 2(a) of this
Agreement. The option granted hereunder may be exercised at any time (but not
more than once) upon notice by BAS on behalf of the Representatives to the
Company, which notice may be given at any time within 13 days from the date of
this Agreement. Such notice shall set forth (i) the amount (which shall be an
integral multiple of $1,000 in aggregate principal amount) of Optional Notes as
to which the Initial Purchasers are exercising the option, (ii) the names and
denominations in which the Optional Notes are to be registered and (iii) the
time, date and place at which such Notes will be delivered (which time and date
may be simultaneous with, but not earlier than, the First Closing Date; and in
such case the term "First Closing Date" shall refer to the time and date of
delivery of the Firm Notes and the Optional Notes). Such time and date of
delivery, if subsequent to the First Closing Date, is called the "Second Closing
Date" and shall be determined by the Representatives. Such date may be the same
as the Closing Date but not earlier than the Closing Date nor later than 10
business days after the date of such notice. If any Optional Notes are to be
purchased, each Initial Purchaser agrees, severally and not jointly, to purchase
the principal amount of Optional Notes (subject to such adjustments to eliminate
fractional amount as the Representatives may determine) that bears the same
proportion to the total principal amount of Optional Notes to be purchased as
the principal amount of Firm Notes set forth on Schedule A opposite the name of
such Initial Purchaser bears to the total principal amount of Firm Notes. The
Representatives may cancel the option at any time prior to its expiration or
exercise by giving written notice of such cancellation to the Company.
(d) Payment for the Notes. Payment for the Notes shall be made at the
First Closing Date (and, if applicable, at the Second Closing Date) by wire
transfer of immediately available funds to the order of the Company.
It is understood that the Representatives have been
authorized, for their own accounts and the accounts of the several Initial
Purchasers, to accept delivery of and receipt for, and make payment of the
purchase price for, the Firm Notes and any Optional Notes the Initial Purchasers
have agreed to purchase. BAS, individually and not as a Representative of the
Initial Purchasers, may (but shall not be obligated to) make payment for any
Notes to be purchased by any Initial Purchaser whose funds shall not have been
received by the Representatives by the First Closing Date or the Second Closing
Date, as the case may be, for the account of such Initial Purchaser, but any
such payment shall not relieve such Initial Purchaser from any of its
obligations under this Agreement.
(e) Delivery of the Notes. The Company shall deliver, or cause to be
delivered, to the Representatives for the accounts of the several Initial
Purchasers the Firm Notes at the First Closing Date, against the receipt of a
wire transfer of immediately available funds for the amount of the purchase
price therefor. The Company shall also deliver, or cause to be delivered, to the
Representatives for the accounts of the several Initial Purchasers, the Optional
Notes the Initial Purchasers have agreed to purchase at the First Closing Date
or the Second Closing Date, as the case may be, against the receipt of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The global certificates representing the Notes shall be in such
denominations ($1,000 and integral multiples thereof) and registered in such
names as the Representatives shall have requested at least one full business day
prior to the First Closing Date (or the Second Closing Date, as the case may be)
and shall be made available for inspection on
9
the business day preceding the First Closing Date (or the Second Closing Date,
as the case may be). Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
the Initial Purchasers.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY.
The Company further covenants and agrees with each
Initial Purchaser as follows:
(a) Representatives' Review of Proposed Amendments and Supplements.
During such period beginning on the date hereof and ending on the date which is
the earlier of nine months after the date hereof or the completion of the resale
of the Notes by the Initial Purchasers (as notified by the Initial Purchasers to
the Company), prior to amending or supplementing the Offering Memorandum (other
than filing reports under the Exchange Act), the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or supplement,
and the Company shall not print or distribute such proposed amendment or
supplement to which the Representatives reasonably object.
(b) Amendments and Supplements to the Offering Memorandum and Other
Securities Act Matters. If, at any time prior to the earlier of nine months
after the date hereof or the completion of the resale of the Notes by the
Initial Purchasers (as notified by the Initial Purchasers to the Company), any
event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Offering Memorandum in order that the Offering
Memorandum will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a purchaser,
not misleading, or if in the opinion of the Representatives or counsel for the
Representatives it is otherwise necessary to amend or supplement the Offering
Memorandum to comply with law, the Company shall promptly notify the Initial
Purchasers and prepare, subject to Section 3(a) hereof, such amendment or
supplement as may be necessary to correct such untrue statement or omission.
(c) Copies of Offering Memorandum. The Company agrees to furnish the
Representatives, without charge, until the earlier of nine months after the date
hereof or the completion of the resale of the Notes by the Initial Purchasers
(as notified by the Initial Purchasers to the Company) as many copies of the
Offering Memorandum and any amendments and supplements thereto as the
Representatives may request.
(d) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Initial Purchasers, as the Initial
Purchasers may reasonably request from time to time, to qualify or register the
Notes for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required for
the distribution of the Notes. The Company shall not be required to qualify as a
foreign corporation or to take any action that would subject it to general
service of process in any such jurisdiction where it is not presently qualified
or where it would be subject to taxation as a foreign corporation. The Company
will advise the Representatives promptly of the suspension of the qualification
or registration of (or any such exemption relating to) the Notes for offering,
sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company shall use
commercially reasonable efforts to obtain the withdrawal thereof at the earliest
possible moment.
10
(e) Rule 144A Information. For so long as any of the Notes are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company shall provide to any holder of the Notes or to any
prospective purchaser of the Notes designated by any holder, upon request of
such holder or prospective purchaser, information required to be provided by
Rule 144A(d)(4) of the Securities Act if, at the time of such request, the
Company is not subject to the reporting requirements under Section 13 or 15(d)
of the Exchange Act.
(f) Legends. Each of the Notes will bear, to the extent applicable, the
legend contained in "Notice to Investors" in the Offering Memorandum for the
time period and upon the other terms stated therein.
(g) No General Solicitation. Except following the effectiveness of the
Registration Statement (as defined in the Registration Rights Agreement), the
Company will not, and will cause its subsidiaries not to, solicit any offer to
buy or offer to sell the Notes by means of any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act.
(h) No Integration. The Company will not, and will cause its
subsidiaries not to, sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any "security" (as defined in the Securities Act) in a
transaction that could be integrated with the sale of the Notes in a manner that
would require the registration under the Securities Act of the issuance or
resale by the Initial Purchasers (in each case as described herein) of the
Notes.
(i) Rule 144 Tolling. During the period of two years after the last
Closing Date, the Company will not, and will not permit any of its "affiliates"
(as defined in Rule 144 under the Securities Act) to, resell any of the Notes
which constitute "restricted securities" under Rule 144 that have been
reacquired by any of them.
(j) Use of Proceeds. The Company shall apply the net proceeds from the
sale of the Notes sold by it in the manner described under the caption "Use of
Proceeds" in the Offering Memorandum.
(k) Transfer Agent. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Stock.
(l) Agreement Not to Offer or Sell Additional Securities. During the
period commencing on the date hereof and ending on the 90th day following the
date of the Final Offering Memorandum, the Company will not, without the prior
written consent of BAS on behalf of the Representatives (which consent may be
withheld at the sole discretion of the Representatives), directly or indirectly,
sell, offer, contract or grant any option to sell, pledge, transfer or establish
an open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of or transfer, or announce the offering of
(other than announcements related to long-term incentive plans), or file any
registration statement under the Securities Act in respect of, any shares of
Common Stock, options or warrants to acquire shares of the Common Stock or
securities exchangeable or exercisable for or convertible into shares of Common
Stock (other than as contemplated by this Agreement with respect to the Notes
and the Conversion Shares); provided, however, that the Company may issue (i)
shares of its Common Stock or options to purchase its Common Stock, or Common
Stock upon exercise of options, pursuant to any stock option, stock bonus or
other stock plan or arrangement described in the Final Offering
11
Memorandum, (ii) the Notes to be sold hereunder and (iii) the Conversion Shares
upon conversion of the Notes.
(m) Investment Limitation. The Company shall not invest or otherwise
use the proceeds received by the Company from its sale of the Notes in such a
manner as would require the Company or any of its subsidiaries to register as an
investment company under the Investment Company Act.
(n) Inclusion of Conversion Shares. The Company will use its
commercially reasonable efforts to have the Conversion Shares approved by the
New York Stock Exchange ("NYSE") for inclusion prior to the effectiveness of the
Registration Statement.
(o) Trust Indenture Act. As of the date of the effectiveness of the
Registration Statement filed pursuant to the Registration Rights Agreement the
Company will cause the Indenture to be qualified under the Trust Indenture Act.
(p) DTC. The Company will cooperate with the Representatives and use
commercially reasonable efforts to permit the Notes to be eligible for clearance
and settlement through the facilities of DTC.
SECTION 4.PAYMENT OF EXPENSES.
The Company agrees to pay all costs, fees and
expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Notes (including all printing and engraving costs, and any charges by DTC), (ii)
all fees and expenses of the Trustee under the Indenture, (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Notes to the Initial Purchasers, (iv) all fees and expenses of the
Company's counsel, independent public or certified public accountants and other
advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, shipping and distribution of the Offering Memorandum, all
amendments and supplements thereto and this Agreement, (vi) all filing fees,
attorneys' fees and expenses incurred by the Company or the Initial Purchasers
in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Notes for offer and
sale under the state securities or blue sky laws or the provincial securities
laws of Canada, and, if requested by the Representatives, preparing and printing
a "Blue Sky Survey" or memorandum, and any supplements thereto, advising the
Initial Purchasers of such qualifications, registrations and exemptions, (vii)
the expenses of the Company and the Initial Purchasers in connection with the
marketing and offering of the Notes, (viii) the fees and expenses associated
with including the Conversion Shares on the New York Stock Exchange, (ix) all
expenses and fees in connection with admitting the Notes for trading in the
PORTAL Market and (x) any fees payable in connection with the rating of the
Notes, if the Notes are so rated. Except as provided in this Section 4, Section
7, Section 10 and Section 11 hereof, the Initial Purchasers shall pay their own
expenses, including the fees and disbursements of their counsel.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASERS.
The obligations of the several Initial Purchasers to
purchase and pay for the Notes as provided herein on the First Closing Date and,
with respect to the Optional Notes, the Second Closing Date, shall be subject to
the accuracy of the representations and warranties on the part of the Company
set forth in Section 1 hereof as of the date hereof and as of the First Closing
12
Date as though then made and, with respect to the Optional Notes, as of the
Second Closing Date as though then made, to the timely performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from Deloitte & Touche LLP, independent
public or certified public accountants for the Company, a letter dated the date
hereof addressed to the Initial Purchasers, in form and substance satisfactory
to the Representatives, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to Initial Purchasers,
delivered according to Statement of Auditing Standards No. 72 (or any successor
bulletin), with respect to the audited and unaudited financial statements and
certain financial information contained in the Offering Memorandum.
(b) No Material Adverse Change or Rating Agency Change. For the period
from and after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Notes, the Second Closing Date:
(i) in the judgment of BAS, there shall not have occurred
any material adverse change, or any development that could reasonably
be expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, operations or
prospects, whether or not arising from transactions in the ordinary
course of business, of the Company and its subsidiaries, considered as
one entity, that makes it impractical or inadvisable to proceed with
the offering or the sale and payment for the Notes; and
(ii) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded
any securities of the Company or any of its subsidiaries by any
"nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act.
(c) Opinion of Counsel for the Company. On each of the First Closing
Date and the Second Closing Date the Representatives shall have received the
favorable opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, dated
as of such Closing Date, the form of which is attached as Exhibit A, and of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President, General Counsel and Secretary of
the Company, dated as of such Closing Date, the form of which is attached as
Exhibit B.
(d) Opinion of Counsel for the Initial Purchasers. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the favorable opinion of Shearman & Sterling LLP, counsel for the Initial
Purchasers, dated as of such Closing Date, with respect to certain matters in
form and substance satisfactory to the Initial Purchasers.
(e) Officers' Certificate. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsection (b)(ii) of this Section 5, and further to the effect that:
13
(i) for the period from and after the date of this
Agreement and prior to such Closing Date, there has not occurred any
Material Adverse Change;
(ii) the representations, warranties and covenants of the
Company set forth in Section 1 of this Agreement are true and correct
with the same force and effect as though expressly made on and as of
such Closing Date; and
(iii) the Company has complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed
or satisfied hereunder at or prior to such Closing Date.
(f) Bring-down Comfort Letter. On each of the First Closing Date and
the Second Closing Date the Representatives shall have received from Deloitte &
Touche LLP, independent public or certified public accountants for the Company,
a letter dated such date, in form and substance satisfactory to the
Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First Closing Date or
Second Closing Date, as the case may be.
(g) Registration Rights Agreement. The Company and the Initial
Purchasers shall have executed and delivered the Registration Rights Agreement
(in form and substance satisfactory to the Initial Purchasers), and the
Registration Rights Agreement shall be in full force and effect.
(h) Lock-Up Agreement from Certain Securityholders of the Company. On
or prior to the date hereof, the Company shall have furnished to the
Representatives an agreement in the form of Exhibit C hereto from each of the
persons set forth on Schedule B hereto, and such agreement shall be in full
force and effect on each of the First Closing Date and the Second Closing Date.
(i) PORTAL Designation. The Notes shall have been designated
PORTAL-eligible securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc.
(j) Additional Documents. On or before each of the First Closing Date
and the Second Closing Date, the Representatives and counsel for the Initial
Purchasers shall have received such information, documents and opinions as they
may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Notes as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by BAS on
behalf of the Representatives by notice to the Company at any time on or prior
to the First Closing Date and, with respect to the Optional Notes, at any time
prior to the Second Closing Date, which termination shall be without liability
on the part of any party to any other party, except that Section 4, Section 7,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination.
14
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF INITIAL
PURCHASERS.
Each of the Initial Purchasers represents and warrants that it
is a "qualified institutional buyer," as defined in Rule 144A of the Securities
Act ("QIB"). Each Initial Purchaser agrees with the Company that:
(a) The Notes and the Conversion Shares have not been and will
not be registered under the Securities Act in connection with the initial
offering of the Notes.
(b) The Initial Purchasers are purchasing the Notes pursuant
to a private sale exemption from registration under the Securities Act.
(c) The Notes have not been and will not be offered or sold by
such Initial Purchaser or its affiliates acting on its behalf except in
accordance with Rule 144A.
(d) The Initial Purchasers have not solicited offers for, or
offered or sold and will not solicit offers for, the Notes in the United States
by means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D, including (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar medium or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising in the United States, or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act.
(e) The Initial Purchasers have not offered or sold, and will
not offer or sell, any Notes except to persons whom they reasonably believe to
be QIBs.
(f) Each Initial Purchaser hereby represents and agrees with
the Company that prior to or contemporaneously with the purchase of the
Securities, the Initial Purchaser will inform, and cause each of its affiliates
to inform, purchasers acquiring Securities from such Initial Purchaser or
affiliate, as the case may be, that the Securities (i) are being sold to them in
reliance on Rule 144A under the Securities Act, (ii) have not been and, except
as described in the Offering Memorandum, will not be registered under the
Securities Act, and (iii) may not be offered, sold or otherwise transferred
except as described in the Offering Memorandum.
SECTION 7. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES.
If this Agreement is terminated by the
Representatives pursuant to Section 5, Section 10 or Section 11, or if the sale
to the Initial Purchasers of the Notes on the First Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof,
the Company agrees to reimburse the Representatives and the other Initial
Purchasers (or such Initial Purchasers as have terminated this Agreement with
respect to themselves), severally, upon demand for all out-of-pocket expenses
that shall have been reasonably incurred by the Representatives and the Initial
Purchasers in connection with the proposed purchase and the offering and sale of
the Notes, including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, facsimile and telephone charges.
15
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Initial Purchasers. The Company agrees to
indemnify and hold harmless each Initial Purchaser, its officers and employees,
and each person, if any, who controls any Initial Purchaser within the meaning
of the Securities Act and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Initial Purchaser or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact, in each case, necessary to make the statements therein not
misleading; or upon any inaccuracy in the representations and warranties of the
Company contained herein and to reimburse each Initial Purchaser and each such
controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by BAS) as such expenses are reasonably incurred
by such Initial Purchaser or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company by the Representatives expressly for use in the Offering Memorandum
(or any amendment or supplement thereto); and provided, further, that with
respect to any Preliminary Offering Memorandum, the foregoing indemnity
agreement shall not inure to the benefit of any Initial Purchaser from whom the
person asserting any loss, claim, damage, liability or expense purchased Notes,
or any person controlling such Initial Purchaser, if copies of the Final
Offering Memorandum were timely delivered to the Initial Purchaser pursuant to
Section 2 and a copy of the Final Offering Memorandum (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Initial Purchaser to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Notes to such person, and if the Final Offering
Memorandum (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth in this Section 8(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. Each
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company, each of its directors, each of its officers and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, against any loss, claim, damage, liability or expense,
as incurred, to which the Company, or any such director, officer or controlling
person may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Initial Purchaser), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue or alleged untrue statement of
a material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in
16
the Offering Memorandum (or any amendment or supplement thereto), in reliance
upon and in conformity with written information furnished to the Company by the
Representatives expressly for use therein; and to reimburse the Company, or any
such director, officer or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action. The Company
hereby acknowledges that the only information that the Initial Purchasers have
furnished to the Company expressly for use in the Offering Memorandum are the
statements set forth in Schedule C; and the Initial Purchasers confirm that such
statements are correct. The indemnity agreement set forth in this Section 8(b)
shall be in addition to any liabilities that each Initial Purchaser may
otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof may be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (BAS in the case of Section 8(b) and Section 9), representing
the indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.
(d) Settlements. No party shall be liable for any settlement of any
proceeding effected without its written consent, but if any proceeding for which
the indemnifying party is entitled to indemnification hereunder is settled with
such consent or if there is a final judgment for the plaintiff in any such
proceeding, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or
17
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by Section 8(c) hereof,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than (A) 60 days after receipt by such indemnifying party of
the aforementioned request and (B) 30 days after receipt by such indemnifying
party of a notice of the proposed settlement and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent (x) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (y) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is
for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the Initial
Purchasers, on the other hand, from the offering of the Notes pursuant to this
Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Initial Purchasers, on the other
hand, in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Initial Purchasers, on the other hand, in connection with the offering
of the Notes pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Notes
pursuant to this Agreement (before deducting expenses) received by the Company,
and the total discount received by the Initial Purchasers bear to the aggregate
initial offering price of the Notes. The relative fault of the Company, on the
one hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company, on the one hand, or the Initial
Purchasers, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice
18
shall be required with respect to any action for which notice has been given
under Section 8(c) for purposes of indemnification.
The Company and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no
Initial Purchaser shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes purchased by it and
distributed to investors were offered to investors exceeds the amount of any
damages which such Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to this Section 9 are several,
and not joint, in proportion to their respective commitments as set forth
opposite their names in Schedule A. For purposes of this Section 9, each officer
and employee of an Initial Purchaser and each person, if any, who controls an
Initial Purchaser within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as such Initial Purchaser, and each
director of the Company, each officer of the Company, and each person, if any,
who controls the Company within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL INITIAL PURCHASERS.
If, on the First Closing Date or the Second Closing
Date, as the case may be, any one or more of the several Initial Purchasers
shall fail or refuse to purchase Notes that it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Notes which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase does not exceed 10% of the aggregate principal amount of the Notes
to be purchased on such date, the other Initial Purchasers shall be obligated,
severally, in the proportions that the principal amount of Firm Notes set forth
opposite their respective names on Schedule A bears to the aggregate principal
amount of Firm Notes set forth opposite the names of all such non-defaulting
Initial Purchasers, or in such other proportions as may be specified by the
Representatives with the consent of the non-defaulting Initial Purchasers, to
purchase the Notes which such defaulting Initial Purchaser or Initial Purchasers
agreed but failed or refused to purchase on such date. If, on the First Closing
Date or the Second Closing Date, as the case may be, any one or more of the
Initial Purchasers shall fail or refuse to purchase Notes and the aggregate
principal amount of Notes with respect to which such default occurs exceeds 10%
of the aggregate principal amount of Notes to be purchased on such date, and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Notes are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party (other than a
defaulting Initial Purchaser) to any other party except that the provisions of
Section 4, Section 7, Section 8 and Section 9 shall at all times be effective
and shall survive such termination. In any such case either the Representatives
or the Company shall have the right to postpone the First Closing Date or the
Second Closing Date, as the case may be, but in no event for longer than seven
days in order that the required changes, if any, to the Offering Memorandum or
any other documents or arrangements may be effected.
19
As used in this Agreement, the term "Initial
Purchaser" shall be deemed to include any person substituted
for a defaulting Initial Purchaser under this Section 10. Any action taken under
this Section 10 shall not relieve any defaulting Initial Purchaser from
liability in respect of any default of such Initial Purchaser under this
Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT.
On or prior to the First Closing Date this Agreement
may be terminated by the Representatives by notice given to the Company if at
any time (i) trading or quotation in any of the Company's securities shall have
been suspended or limited by the Commission or by the NYSE, or trading in
securities generally on either the Nasdaq Stock Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any federal, New York, Delaware or California authority; (iii) there
shall have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States' or international
political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable to market the
Notes in the manner and on the terms described in the Offering Memorandum or to
enforce contracts for the sale of securities; or (iv) there shall have occurred
any material adverse change, or any development that could reasonably be
expected to result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or not
arising from transactions in the ordinary course of business, of the Company and
its subsidiaries, considered as one entity, that in the judgment of BAS, makes
it impractical or inadvisable to proceed with the offering or the sale and
payment for the Notes. Any termination pursuant to this Section 11 shall be
without liability on the part of (a) the Company to any Initial Purchaser,
except that the Company shall be obligated to reimburse the expenses of the
Representatives and the Initial Purchasers pursuant to Sections 4 and 7 hereof,
(b) any Initial Purchaser to the Company, or (c) of any party hereto to any
other party except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, contribution, agreements,
representations, warranties and other statements of the Company, of its officers
and of the several Initial Purchasers set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation, or statement as to the result hereof, made by or on behalf of
any Initial Purchaser or the Company or any of its or their partners, officers
or directors or any controlling person, as the case may be, (ii) acceptance of
the Notes and payment for them hereunder and (iii) any termination of this
Agreement.
SECTION 13. NOTICES.
All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Initial Purchasers:
Banc of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If to the Company:
Apria Healthcare Group Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel and Secretary
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Any party hereto may change the address for receipt of communications
by giving written notice to the others.
SECTION 14. SUCCESSORS.
This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Initial Purchasers
pursuant to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder. The term "successors" shall not include any purchaser
of the Notes as such from any of the Initial Purchasers merely by reason of such
purchase.
SECTION 15. PARTIAL UNENFORCEABILITY
The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
SECTION 16. GOVERNING LAW PROVISIONS.
(a) Governing Law Provisions. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 17. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may
21
be executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement may not be amended or modified unless in writing by
all of the parties hereto. The Table of Contents and the Section headings herein
are for the convenience of the parties only and shall not affect the
construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Offering Memorandum (and any amendments and
supplements thereto), as required by the Securities Act and the Exchange Act.
22
If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return to the Company the
enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.
Very truly yours,
APRIA HEALTHCARE GROUP INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
[Signature Page to the Purchase Agreement]
The foregoing Purchase Agreement is hereby confirmed
and accepted by the Representatives as of the date first above written.
BANC OF AMERICA SECURITIES LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
Acting as Representatives of the
several Initial Purchasers named in
the attached Schedule A.
By BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
[Signature Page to the Purchase Agreement]
By ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
[Signature Page to the Purchase Agreement]
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Director
[Signature Page to the Purchase Agreement]
SCHEDULE A
AGGREGATE PRINCIPAL
AMOUNT OF FIRM NOTES
INITIAL PURCHASERS TO BE PURCHASED
Banc of America Securities LLC ............................................ $ 68,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. ............................................... $ 56,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ......................................... $ 56,000,000
Credit Lyonnais Securities (USA) Inc. ..................................... $ 6,667,000
Fleet Securities, Inc. .................................................... $ 6,667,000
Scotia Capital (USA) Inc. ................................................. $ 6,666,000
============
Total.......................................................... $200,000,000
SCHEDULE B
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
I.T. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇. Lose
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE C
The third paragraph under the caption "Plan of Distribution" on page 54 of the
Offering Memorandum, concerning the terms of the offering by the Initial
Purchasers.
The first two sentences of the twelfth paragraph under the caption "Plan of
Distribution" on page 55 of the Offering Memorandum, concerning the
over-allotment and stabilizing transactions by the Initial Purchasers.
The eleventh paragraph under the caption "Plan of Distribution" on page 55 of
the Offering Memorandum, concerning the intent of the Initial Purchasers to make
a market in the notes.
The fourteenth paragraph under the caption "Plan of Distribution" on page 55 of
the Offering Memorandum, concerning the short sales of the notes by Banc of
America Securities LLC.
EXHIBIT A
Form of opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, subject to customary qualifications
and limitations
References to the Offering Memorandum in this Exhibit
A include any supplements thereto at the Closing Date.
(i) The Purchase Agreement has been duly authorized,
executed and delivered by the Company.
(ii) The Indenture has been duly authorized by the
Company; on the First Closing Date, the Indenture will have been duly
executed and delivered by the Company and, assuming due authorization,
execution and delivery of the Indenture by the Trustee, will constitute
a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms subject to (i) the
effect of any bankruptcy, insolvency, reorganization, moratorium
arrangement or other similar laws relating to or affecting the rights
and remedies of creditors generally (including the effect of any
statutory or other laws regarding fraudulent transfers or preferential
transfers) and (ii) by general principles of equity, including without
limitation concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance,
injunctive relief or other equitable remedies, regardless of whether
enforceability is considered in a proceeding in equity or at law.
(iii) The Notes have been duly authorized by the Company;
when the Notes are executed, authenticated and issued in accordance
with the terms of the Indenture and delivered to and paid for by the
Initial Purchasers pursuant to the Purchase Agreement on the respective
Closing Date (assuming due authentication of the Notes by the Trustee),
such Notes will constitute legal, valid and binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, subject to (i) the
effect of any bankruptcy, insolvency, reorganization, moratorium,
arrangement or other similar laws relating to or affecting the rights
and remedies of creditors' generally (including the effect of statutory
or other laws regarding fraudulent transfers or preferential transfers)
and (ii) by general principles of equity, including without limitation
concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance, injunctive
relief or other equitable remedies, regardless of whether
enforceability is considered in a proceeding in equity or at law.
(iv) The shares of Common Stock initially issuable upon
conversion of the Notes have been duly authorized and reserved 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 such shares will not be subject to any preemptive
or similar rights arising (i) by operation of the charter or by-laws of
the Company or the General Corporation Law of the State of Delaware, or
(ii) under any Material Agreement (as defined below).
(v) The Registration Rights Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
obligation of, the Company, enforceable against the Company in
accordance with its terms subject to (i) the effect of any bankruptcy,
insolvency, reorganization, moratorium, arrangement or other similar
laws relating to or affecting the rights and remedies of creditors'
generally (including the
A-1
effect of statutory or other laws regarding fraudulent transfers or
preferential transfers) and (ii) by general principles of equity,
including without limitation concepts of materiality, reasonableness,
good faith and fair dealing and the possible unavailability of specific
performance, injunctive relief or other equitable remedies, regardless
of whether enforceability is considered in a proceeding in equity or at
law.
(vi) Assuming the accuracy of the representations of the
Company and the Initial Purchasers and compliance by them with their
agreements contained in the Purchase Agreement, Neither registration of
the Notes under the Securities Act of 1933, as amended, nor
qualification of the Indenture under the Trust Indenture Act of 1939,
as amended, is required for (i) the offer and sale of the Notes by the
Company to the Initial Purchasers or (ii) the initial re-offer and
resale of the Notes by the Initial Purchasers, in each case in the
manner contemplated by the Purchase Agreement and the Offering
Memorandum. Such counsel need express no opinion, however, as to when
or under what circumstances any Notes sold by the Initial Purchasers
may be reoffered or resold.
(vii) Each document filed pursuant to the Exchange Act that
is incorporated by reference in the Offering Memorandum when it was so
filed complied in all material respects on its face as to form with the
Exchange Act and the rules and regulations of the Commission thereunder
(it being understood that such counsel need express no belief as to the
financial statements and related notes thereto or schedules,
statistical information and other information of an accounting or
financial nature included or incorporated by reference in, or omitted
from, such document).
(viii) The statements in the Offering Memorandum under the
captions (A) "Description of Capital Stock," "Description of Notes" and
"Recent Developments--Amendment to Senior Secured Credit Facility," in
each case insofar as such statements purport to describe summaries of
provisions of the Company's charter, by-laws, or documents, such
statements present in all material respects an accurate summary of such
provisions, and (B) "Material Federal U.S. Income Tax Considerations,"
insofar as the statements purport to describe specific provisions of
the Internal Revenue Code, such statements present in all material
respects an accurate summary of such provisions.
(ix) To our knowledge (A) no legal or governmental
actions, suits or proceedings are pending to which the Company or any
of the Company's Significant Subsidiaries is a party, or to which the
property of the Company or any of its Significant Subsidiaries is
subject that are required to be described in the Offering Memorandum
(assuming for this opinion only that the offering was a registered
offering under Form S-3) and are not described therein and (B) except
as described in the Offering Memorandum, no such proceedings have been
threatened in writing against the Company or any of its Significant
Subsidiaries or with respect to any of their respective properties.
(x) The Company's execution, delivery and performance of
the Purchase Agreement, the Notes, the Registration Rights Agreement
and the Indenture, and consummation of the transactions contemplated
thereby do not and will not violate, or require any filing with, or
approval of any governmental authority or agency of the States of New
York or California or of the United States of America under any law or
regulation of the States of New York and California or the United
States of America applicable to the Company that, in our experience, is
generally applicable to transactions in the nature of those
contemplated by the Purchase Agreement or the Delaware General
Corporation
A-2
Law. This paragraph (xiii) does not include any opinion regarding any
federal or state securities or blue sky laws or regulations.
(xi) The execution and delivery of the Purchase Agreement,
the Indenture and the Notes by the Company and the performance by the
Company of its obligations thereunder (other than performance by the
Company of its obligations under the indemnification section of the
Purchase Agreement, as to which no opinion need be rendered) (i) have
been duly authorized by all necessary corporate action on the part of
the Company; (ii) will not result in any violation of the provisions of
the charter or by-laws of the Company formed under the laws of the
States of California, New York or Delaware; (iii) will not constitute a
breach of, or 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 Significant Subsidiaries pursuant to, (A) the
Company's senior secured credit agreement with a syndicate of lenders
led by Bank of America, N.A., or (B) to the best knowledge of such
counsel, any other agreement filed or incorporated by reference as an
exhibit to the Company's Form 10-K for the year ended December 31, 2002
(the senior secured credit agreement described in (A) and the documents
described in (B) being collectively referred to as the "Material
Contracts"); or (iv) to the knowledge of such counsel, will not result
in any violation of any order, judgment or decree of any court or other
agency of government applicable to the Company or any Significant
Subsidiary which is identified to us in an officers' certificate.
(xii) The Company is not, and after receipt of payment for
the Notes will not be, an "investment company" within the meaning of
Investment Company Act.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Company, representatives of the independent public or certified public
accountants for the Company and with representatives and counsel of the Initial
Purchasers at which the contents of the Final Offering Memorandum and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Offering Memorandum (other than as specified
above), on the basis of the foregoing, no facts have come to their attention
which would lead them to believe that the Final Offering Memorandum, as of its
date or at the First Closing Date or the Second Closing Date, as the case may
be, contained an untrue statement of a material fact or omitted 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 (it being
understood that such counsel need express no belief as to the financial
statements and related notes thereto or schedules, statistical information and
other information of an accounting or financial nature included or incorporated
by reference in the Final Offering Memorandum).
In rendering such opinion, such counsel may (A) state the its
opinion is limited to the application of the General Corporation Law of the
State of Delaware, the General Corporation Law of the State of California, the
laws of the State of New York and the federal laws of the United States of
America, and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
A-3
EXHIBIT B
Form of opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, subject to customary qualifications and
limitations
References to the Offering Memorandum in this Exhibit
B include any supplements thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Offering Memorandum.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except for such jurisdictions where the failure to so qualify or to be
in good standing would not, singly or in the aggregate, result in a
Material Adverse Change.
(iv) Except for such jurisdictions where the failure to so
qualify or to be in good standing would not, either individually or in
the aggregate, result in a Material Adverse Change, each Significant
Subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business.
(v) No legal or governmental actions, suits or
proceedings are pending to which the Company or any of the Company's
Significant Subsidiaries is a party, or to which the property of the
Company or any of its Significant Subsidiaries is subject that are
required to be described in the Offering Memorandum (assuming for this
opinion only that the offering was a registered offering under Form
S-3) and are not described therein. To such counsel's knowledge, except
as described in the Offering Memorandum, no such proceedings have been
threatened in writing against the Company or any of its Significant
Subsidiaries or with respect to any of their respective properties. No
material labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is imminent
that might cause a Material Adverse Change.
(vi) To the best knowledge of such counsel, neither the
Company nor any Significant Subsidiary is in violation of its charter
or by-laws or any law, administrative regulation or administrative or
court decree applicable to the Company or any Significant Subsidiary or
is in default under any Material Agreement, except in each such case
for such violations or defaults as would not, either individually or in
the aggregate, result in a Material Adverse Change.
(vii) The Company is in material compliance with the
reporting requirements of Section 13 and Section 15(d) of the Exchange
Act.
B-1
In addition, such counsel shall state that he has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public or certified public
accountants for the Company and with representatives and counsel of the Initial
Purchasers at which the contents of the Final Offering Memorandum and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Offering Memorandum (other than as specified
above), on the basis of the foregoing, no facts have come to their attention
which would lead him to believe that the Final Offering Memorandum, as of its
date or at the First Closing Date or the Second Closing Date, as the case may
be, contained an untrue statement of a material fact or omitted 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 (it being
understood that such counsel need express no belief as to the financial
statements and related notes thereto or schedules, statistical information and
other information of an accounting or financial nature included or incorporated
by reference in the Final Offering Memorandum).
In rendering such opinion, such counsel may (A) state the his
opinion is limited to the application of the General Corporation Law of the
State of Delaware, the laws of the State of New York and the federal laws of the
United States of America, and (B) as to matters of fact, to the extent he deems
proper, on certificates of responsible officers of the Company and public
officials.
B-2
