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EXHIBIT 10.14
$125,000,000
FURON COMPANY
8 1/8% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
February 26, 1998
▇▇▇▇▇▇ BROTHERS INC.,
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
BNY CAPITAL MARKETS, INC.
c/▇ ▇▇▇▇▇▇ Brothers, Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Furon Company, a California corporation (the "Company"),
proposes to issue and sell to you (the "Initial Purchasers") $125.0 million in
aggregate principal amount at maturity of its 8 1/8% Senior Subordinated Notes
due 2008 (the "Initial Notes") to be issued pursuant to the terms of an
Indenture (the "Indenture") between the Company and The Bank of New York, as
trustee (the "Trustee"), relating to the Initial Notes. The Initial Purchasers
propose to purchase the respective aggregate principal amount of Initial Notes
set forth opposite their name on Schedule 1 hereto. Capitalized terms used but
not defined herein shall have the meanings given to such terms in the
Indenture.
The Initial Notes will be offered and sold to you pursuant to
exemptions from the registration requirements under the Securities Act of 1933,
as amended (the "Securities Act"). The Company has prepared a preliminary
offering memorandum, dated February 12, 1998 (the "Preliminary Offering
Memorandum"), and a final offering memorandum (the "Offering Memorandum"),
dated February 26, 1998, relating to the Company and the Initial Notes. As
described in the Offering Memorandum, the Company will use the net proceeds
from the offering of the Initial Notes to repay a portion of existing
indebtedness under the Company's Credit Facility.
Upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the Securities
Act, the Initial Notes (and all securities issued in exchange therefor or in
substitution thereof) shall bear the following legend:
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"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISION OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."
You have represented and warranted to the Company that you
will make offers (the "Exempt Resales") of the Initial Notes purchased by you
hereunder on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom you reasonably believe to be
"qualified institutional buyers," as defined in Rule 144A under the Securities
Act ("QIBs"), and (ii) to persons other than U.S. Persons in offshore
transactions meeting the requirements of Rule 903 or 904 of Regulation S (such
persons specified in clauses (i) and (ii) being referred to herein as the
"Eligible Purchasers"). As used herein, the terms "offshore transaction" and
"U.S. person" have the respective meanings given to them in Regulation S. You
will offer the Initial Notes to Eligible Purchasers initially at a price equal
to 100% of the principal amount thereof. Such price may be changed at any time
without notice.
Holders (including subsequent transferees) of the Initial
Notes will have the registration rights set forth in the registration rights
agreement (the "Registration Rights Agreement"), to be dated March 4, 1998 (the
"Closing Date"), in the form of Exhibit A hereto, for so long as such Initial
Notes constitutes "Transfer Restricted Securities" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company will agree to file with the Securities and Exchange Commission (the
"Commission") under the
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circumstances set forth therein, (i) a registration statement under the
Securities Act (the "Exchange Offer Registration Statement") relating to the
Company's 8 1/8% New Notes due 2008 (the "New Notes" and, together with the
Initial Notes, the "Notes") to be offered in exchange for the Initial Notes
(such offer to exchange being referred to collectively as the "Exchange Offer")
and (ii) a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Shelf Registration Statement", and together with the
Exchange Offer Registration Statement, the "Registration Statements") relating
to the resale of the Initial Notes by certain holders of such Notes, and to use
its best efforts to cause such Registration Statements to be declared
effective. This Agreement, the Indenture and the Registration Rights Agreement
are hereinafter referred to collectively as the "Operative Documents."
1. Representations, Warranties and Agreements of the
Company. The Company represents, warrants and agrees as follows:
(a) The Preliminary Offering Memorandum and Offering
Memorandum have been prepared by the Company for use by the Initial Purchasers
in connection with the Exempt Resales. No order or decree preventing the use
of the Preliminary Offering Memorandum or the Offering Memorandum, or any order
asserting that the transactions contemplated by this Agreement are subject to
the registration requirements of the Securities Act, has been issued and no
proceeding for that purpose has commenced or is pending or, to the knowledge of
the Company, is contemplated.
(b) The Preliminary Offering Memorandum and the Offering
Memorandum as of their respective dates did not, and the Offering Memorandum as
of the Closing Date will not, contain an untrue statement of a material fact or
omit to state a material fact necessary, in order to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading, except that this representation and warranty does not apply to
statements in or omissions from the Preliminary Offering Memorandum and
Offering Memorandum relating to the Initial Purchasers and made in reliance
upon and in conformity with information furnished to the Company in writing by
or on behalf of the Initial Purchasers expressly for use therein.
(c) The market-related data included in the Preliminary
Offering Memorandum and the Offering Memorandum are based upon estimates by the
Company derived from sources which the Company believes to be reasonable;
however, no assurance is given that such market-related data are accurate in
all material respects.
(d) The Company is a corporation duly incorporated and
validly existing and in good standing under the laws of California with all
requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify or to be in good standing would not have a material adverse effect on
the condition (financial or other), business, properties or results of
operations of the Company and its Subsidiaries, taken as a whole (a "Material
Adverse Effect").
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(e) Medex, Inc. ("Medex") is a corporation duly
incorporated and validly existing and in good standing under the laws of Ohio
with all requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify or to be in good standing would not have a Material Adverse Effect.
(f) The Company has all requisite corporate power and
corporate authority to execute, deliver and perform its obligations under this
Agreement, the Indenture, the Notes and the Registration Rights Agreement.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Initial Purchasers, constitutes the legally valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether in a
proceeding in equity or at law) and except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws or
principles of public policy.
(h) The Registration Rights Agreement has been duly
authorized by the Company and, upon its execution and delivery by the Company
and, assuming due authorization, execution and delivery by the Initial
Purchasers, will constitute the legally valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms (subject
to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws relating to or affecting creditors' rights
generally from time to time in effect and to general principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific performance
or injunctive relief, regardless of whether in a proceeding in equity or at
law) and except as rights to indemnity and contribution thereunder may be
limited by federal or state securities laws or principles of public policy.
(i) The Indenture has been duly authorized by the
Company, and upon its execution and delivery by the Company and, assuming due
authorization, execution and delivery by the Trustee, will constitute the
legally valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws relating to or affecting creditors' rights generally from time to time in
effect and to general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive relief,
regardless of whether in a proceeding in equity or at law); no qualification of
the Indenture
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under the Trust Indenture Act of 1939 ("TIA") is required in connection with
the offer and sale of the Initial Notes contemplated hereby or in connection
with the Exempt Resales other than in connection with the performance of the
Company's obligations under the Registration Rights Agreement.
(j) The Initial Notes have been duly authorized by the
Company and when duly executed by the Company in accordance with the terms of
the Indenture and, assuming due authentication of the Initial Notes by the
Trustee, upon delivery to the Initial Purchasers against payment therefor in
accordance with the terms hereof, will have been validly issued and delivered,
and will constitute legally valid and binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against the Company in
accordance with their terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws relating
to or affecting creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of
whether in a proceeding in equity or at law).
(k) On or before the Closing Date the New Notes will have
been duly authorized by the Company and if and when duly issued and
authenticated in accordance with the terms of the Indenture and delivered in
accordance with the Exchange Offer provided for in the Registration Rights
Agreement, will constitute legally valid and binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against the Company in
accordance with their terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws relating
to or affecting creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of
whether in a proceeding in equity or at law).
(l) The First Amended and Restated Credit Agreement,
dated as of March 27, 1997, as amended on February 3, 1998, by and among Furon
Company, the various lenders thereto, the Bank of New York, as swing line
lender and administration agent, and BNY Capital Markets, Inc., as arranging
agent providing for up to $200 million of revolving credit borrowings (the
"Credit Agreement"), and any and all other agreements and instruments ancillary
to or entered into in connection with the transaction contemplated by the
Credit Agreement (the "Credit Documents"), were duly and validly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the other parties thereto, constitute the valid and
binding agreements of the Company, enforceable against the Company in
accordance with their respective terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of whether
in a proceeding in equity or at law). As of the date hereof, the Company will
have at least $175.0 million of borrowings available to it under the Credit
Agreement (giving effect to the covenants and conditions contained in the
Credit Agreement) after the Closing of the sale of the
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Initial Notes hereunder, the receipt by the Company of the proceeds therefrom
and the application of such proceeds as described under the caption "Use of
Proceeds" in the Offering Memorandum.
(m) All the shares of capital stock of the Company
outstanding prior to the issuance of the Initial Notes have been duly
authorized and validly issued and are fully paid and nonassessable.
(n) Neither the Company nor any of its Subsidiaries owns
capital stock or other equity interests of any corporation or entity except
that of wholly owned Subsidiaries other than as disclosed in the Offering
Memorandum or the Company's Exchange Act reports. Each of the Subsidiaries
(other than Medex, as to which Section 1(e) applies) is a corporation duly
incorporated and validly existing and in good standing under the laws of its
jurisdiction of its incorporation, with all requisite 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 registered and qualified
to conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure to so register or
qualify or be in good standing would not have a Material Adverse Effect. All
the outstanding shares of capital stock of each of the Company's Subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable,
and are wholly owned by the Company directly, or indirectly through one of its
other Subsidiaries, free and clear of any lien, adverse claim, security
interest, equity or other encumbrance, except as specifically described in the
Offering Memorandum.
(o) There are no legal or governmental proceedings
pending or, to the knowledge of the Company or Medex , threatened, against the
Company or any of its Subsidiaries or to which any of their respective
properties is subject, that are not disclosed in the Offering Memorandum and
which, are reasonably likely to have a Material Adverse Effect or to materially
and adversely affect the issuance of the Notes or the consummation of the other
transactions contemplated by the Operative Documents. Neither the Company nor
any of its Subsidiaries is involved in any strike, job action or labor dispute
with any group of employees, and, to the knowledge of the Company or Medex, no
such action or dispute is threatened.
(p) No material relationship, direct or indirect, exists
between or among the Company or any of its Subsidiaries on the one hand, and
the directors, officers, shareholders, customers or suppliers of the Company or
any of its Subsidiaries on the other hand, that would be required to be
described in the Offering Memorandum pursuant to Regulation S-K of the Act if
Regulation S-K were applicable to the Offering Memorandum, which is not so
described in the Offering Memorandum or the Company's Exchange Act reports.
(q) The execution, delivery and performance of this
Agreement and the other Operative Documents and the issuance of the Initial
Notes and the New Notes and the consummation of the transactions contemplated
hereby and thereby will not conflict with, or result in a breach or violation
of any of the terms or provisions of, or (including with the giving of notice
or the lapse of time or both) constitute a default under (i) any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its
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Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound or to which any of the properties or assets of the Company or any of its
Subsidiaries is subject, (ii) the provisions of the charter, by-laws or other
organizational documents of the Company or any of its Subsidiaries or (iii) any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its Subsidiaries or any of
their properties or assets, except in the cases of clause (i) or (iii), such
breaches, violations or defaults that in the aggregate would not reasonably be
expected to have a Material Adverse Effect; and no consent, approval,
authorization or order of, or filing or registration with, any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement and the other Operative Documents and the
issuance of the Initial Notes and the New Notes and the consummation of the
transactions contemplated hereby and thereby except (A) as may be required by
the securities or "blue sky" laws of any state of the United States in
connection with the sale of the Initial Notes and the New Notes, and (B) as
contemplated by the Registration Rights Agreement and (C) as required under the
TIA for the issuance of the New Notes, and (D) in connection with trading of
the Notes on PORTAL.
(r) The accountants, Ernst & Young LLP, who have
certified certain of the financial statements included as part of the Offering
Memorandum, are independent public accountants under Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public Accountants
(the "AICPA"), and its interpretation and rulings.
(s) The consolidated historical financial statements,
together with the related notes thereto, set forth in the Offering Memorandum
comply as to form in all material respects with the requirements of Regulation
S-X under the Securities Act applicable to registration statements on Form S-3
under the Securities Act. Such historical financial statements fairly present
the financial position of the Company and its Subsidiaries at the respective
dates indicated and the results of operations and cash flows for the respective
periods indicated, in each case in accordance with generally accepted
accounting principles ("GAAP") consistently applied throughout such periods.
The other financial and statistical information and data included in the
Offering Memorandum are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company and its Subsidiaries.
(t) Except as disclosed in the Offering Memorandum, since
the date of the latest audited consolidated financial statements of the Company
and its Subsidiaries included in the Offering Memorandum, neither the Company
nor any of its Subsidiaries has incurred any liability or obligation, direct or
contingent, or entered into any transaction, in each case not in the ordinary
course of business, that is material to the Company and its Subsidiaries, taken
as a whole, and there has been no material adverse change, nor to the Company's
knowledge, after due inquiry, any development involving a prospective material
adverse change, in the condition (financial or other), business, properties or
results of operations of the Company and, except as disclosed in or
contemplated by the Offering Memorandum, since November 1, 1997, there has been
no (i) dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock (other than the payment of regular
quarterly cash dividends), (ii) issuance of securities (other than pursuant to
the Company's employee benefit plans and the
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issuance of the Initial Notes offered hereby) or (iii) material increase in
short-term or long-term debt of the Company.
(u) The Company and its Subsidiaries, on a consolidated
basis, maintain a system of internal 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 consolidated financial statements in
conformity with GAAP 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.
(v) The Company and each of its Subsidiaries has good and
marketable title to all property (real and personal) described in the Offering
Memorandum as being owned by it, free and clear of all liens, claims, security
interests or other encumbrances except for Permitted Liens (as such term is
defined in the Credit Agreement) or to the extent failure to have such title or
existence of such liens would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect. All the material property
described in the Offering Memorandum as being held under lease by the Company
and each of its Subsidiaries is held under valid, subsisting and enforceable
leases, with only such exceptions as would not in the aggregate, have a
Material Adverse Effect. In addition, except as described in the Offering
Memorandum, the consummation of the transactions contemplated by this Agreement
will not give rise to any third party rights of first refusal under any
Material Agreement (as herein defined) as to which the Company and any of its
Subsidiaries or any of their property or assets may be subject.
(w) The Company and each of its Subsidiaries own or
possess all patents, trademarks, trademark registration, service marks, service
▇▇▇▇ registrations, trade names, copyrights, licenses, inventions, trade
secrets and rights described in the Offering Memorandum as being owned by any
of them or necessary for the conduct of their respective businesses, and the
Company is not aware of any claim to the contrary or any challenge by any other
person to the rights of the Company or any of the Subsidiaries with respect to
such rights that is reasonably likely, in the aggregate, to have a Material
Adverse Effect.
(x) The Company, and its Subsidiaries have such permits,
licenses, franchises, certificates, consents, orders and other approvals or
authorizations of any governmental or regulatory authority ("Permits"),
including, without limitation, any permits or approvals required by the United
States Food and Drug Administration ("FDA") and corresponding state agencies
and any other entity or agency regulating the sale or distribution of medical
device products in countries other than the United States (a "Foreign Agency"),
as are necessary under applicable law to own their respective properties and to
conduct their respective businesses in the manner described in the Offering
Memorandum, except to the extent that the failure to have such Permits would
not have a Material Adverse Effect. The Company and its Subsidiaries have
fulfilled and performed in all material respects, all their respective material
obligations with respect to the Permits, and no event has occurred which
allows, or after notice or lapse of time
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would allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit, subject in each case
to such qualification as may be set forth in the Offering Memorandum and except
to the extent that any such revocation or termination would not have a Material
Adverse Effect. Except as described in the Offering Memorandum, the Company
and its Subsidiaries are not required to register with the FDA or file for FDA
approval of its products.
(y) Neither the Company nor any of its Subsidiaries nor
any director, officer, nor, to the knowledge of the Company, any agent,
employee or other person associated with or acting on behalf of the Company or
any of its Subsidiaries, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or
is in violation of any provision of the Foreign Corrupt Practices Act of 1977;
or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(z) The Company is not currently and will not be, upon
sale of the Initial Notes in accordance herewith and the application of the net
proceeds therefrom as described in the Offering Memorandum under the caption
"Use of Proceeds," an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(aa) Neither the Company nor any affiliate (as defined in
Rule 501(b) of Regulation D ("Regulation D") under the Securities Act) of the
Company has directly, or through any agent (provided that no representation is
made as to the Initial Purchasers or any person acting on their behalf), (i)
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which is or could
be integrated with the offering and sale of the Notes in a manner that would
require the registration of the Initial Notes under the Securities Act or (ii)
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D, including, but not limited to, advertisements,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or
general advertising) in connection with the offering of the Initial Notes. No
securities of the same class as the Initial Notes have been issued and sold by
the Company within the six-month period immediately prior to the date hereof.
(bb) Except as permitted by the Securities Act, the Company
has not distributed and, prior to the Closing Date will not distribute, any
offering material in connection with the offering and sale of the Initial Notes
other than the Preliminary Offering Memorandum and Offering Memorandum.
(cc) When the Initial Notes are issued and delivered
pursuant to this Agreement, such Initial Notes will not be of the same class
(within the meaning of Rule 144A under the Securities Act) as securities of the
Company that are listed on a national securities exchange registered under
Section 6 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or that are quoted in a United States automated inter-dealer quotation
system.
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(dd) Assuming (i) that the Initial Notes are issued, sold
and delivered under the circumstances contemplated by the Offering Memorandum
and this Agreement, (ii) that your representations and warranties in Section 2
are true, (iii) compliance by you with your covenants set forth in Section 2
and (iv) that each of the Eligible Purchasers is either (A) an entity that you
reasonably believe to be a QIB or (B) a person who is not a "U.S. person" and
who acquires the Initial Notes outside the United States in an "offshore
transaction" (within the meaning of Regulation S), the purchase of the Initial
Notes by you pursuant hereto and the initial resale of the Initial Notes
pursuant to the Exempt Resales is exempt from the registration requirements of
the Securities Act.
(ee) The Company and each of its Subsidiaries are in
compliance in all material respects with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); except as would
not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for which the
Company would have any liability; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); each
"pension plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification, except as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect; and the statements set forth in the Offering Memorandum under
the caption "Notice to Investors" do not include any untrue statements of
material facts and do not omit any material facts necessary in order to make
such statements, in light of the circumstances under which they were made, not
misleading.
(ff) Set forth on Exhibit B hereto is a list of each
employee pension plan with respect to which the Company or any corporation
considered an affiliate of the Company within the meaning of Section 407(d)(7)
of ERISA (an "Affiliate") is a party in interest or a disqualified person. The
execution and delivery of this Agreement, the other Operative Documents and the
sale of the Initial Notes to be purchased by the Eligible Purchasers will not
involve any prohibited transaction within the meaning of Section 406 of ERISA
or Section 4975 of the Code. The representation made by the Company in the
preceding sentence is made in reliance upon and subject to the accuracy of, and
compliance with, the representations and covenants made or deemed made by the
Eligible Purchasers as set forth in the Offering Memorandum under the section
entitled "Notice to Investors."
(gg) Except as described in the Offering Memorandum, there
are no contracts, agreements or understandings between the Company or any of
its Subsidiaries and any person granting such person the right to require the
Company or any of its Subsidiaries to file a registration statement under the
Securities Act with respect to any securities of the Company and its
Subsidiaries owned or to be owned by such person or to require the Company or
any of its Subsidiaries to include such securities in the securities registered
pursuant to the
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Registration Statements or in any securities being registered pursuant to any
other registration statement filed by the Company or any of its Subsidiaries
under the Securities Act.
(hh) The Company and each of its Subsidiaries carry, or
are covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of its businesses and the value of its properties and
as is customary for companies engaged in similar businesses in similar
industries.
(ii) The Company and each of its Subsidiaries have filed
(or obtained extensions in filing) all Federal, state and local income and
franchise tax returns required to be filed through the date hereof and have
paid all taxes due thereon, other than those being contested in good faith and
for which reserves have been provided in accordance with GAAP or those
currently payable without penalty or interest. No tax deficiency has been
determined adversely to the Company or any of its Subsidiaries nor does the
Company or any of its Subsidiaries have any knowledge of any tax deficiency
which, if determined adversely to the Company, would have a Material Adverse
Effect.
(jj) Except as set forth in, or specifically contemplated
by, the Offering Memorandum, there has been no storage, disposal, generation,
transportation, handling or treatment of toxic wastes, medical wastes,
hazardous wastes or hazardous substances by the Company or any of its
Subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or
leased by the Company or any of its Subsidiaries in violation of any applicable
law, ordinance, rule, regulation or order, or which would require remedial
action under any applicable law, ordinance, rule, regulation or order, except
for any violation or remedial action which would not have, or would not be
reasonably likely to have, singularly or in the aggregate, a Material Adverse
Effect; except as set forth in, or specifically contemplated by, the Offering
Memorandum there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into
the environment surrounding such property of any toxic wastes, medical wastes,
solid wastes, hazardous wastes or hazardous substances due to or caused by the
Company or any of its Subsidiaries or with respect to which the Company or any
of its Subsidiaries has knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate, a Material
Adverse Effect; and the terms "hazardous wastes," "toxic wastes," "hazardous
substances" and "medical wastes" shall have the meanings specified in any
applicable local, state, federal and foreign laws or regulations with respect
to environmental protection.
(kk) None of the Company or any of its affiliates or any
person acting on its or their behalf has engaged or will engage during the
applicable restricted period in any directed selling efforts within the meaning
of Rule 902(b) of Regulation S with respect to the Notes, and the Company and
its affiliates and all persons acting on its or their behalf have complied with
and will comply with the offering restrictions requirements of Regulation S in
connection with the offering of the Notes outside of the United States;
provided, that, no representation or covenant is made as to the Initial
Purchasers or any person acting on their behalf.
12
(ll) The sale of the Initial Notes pursuant to Regulation
S are "offshore transactions" and are not part of a plan or scheme to evade the
registration provisions of the Securities Act.
(mm) Set forth on Exhibit C hereto is a list of all the
Subsidiaries of the Company. Except for Medex, none of the Subsidiaries,
individually or in the aggregate, is or are material to the condition
(financial or other), business, properties or results of operations of the
Company.
2. Representations, Warranties and Agreements of the
Initial Purchasers. Each Initial Purchaser represents and warrants with
respect to itself that:
(a) Such Initial Purchaser is a QIB with such knowledge
and experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Initial Notes.
(b) Such Initial Purchaser (i) is not acquiring the
Initial Notes with a view to any distribution thereof or with any present
intention of offering or selling any of the Initial Notes in a transaction that
would violate the Securities Act or the securities laws of any State of the
United States or any other applicable jurisdiction; (ii) in connection with the
Exempt Resales, will solicit offers to buy the Notes only from, and will offer
to sell the Notes only to, the Eligible Purchasers in accordance with this
Agreement and on the terms contemplated by the Offering Memorandum; and (iii)
will not offer or sell the Notes pursuant to, nor has it offered or sold the
Notes by, or otherwise engaged in, any form of general solicitation or general
advertising (within the meaning of Regulation D; including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio,
or any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising) in connection with the offering of the
Initial Notes.
(c) It understands that the Notes have not been and will
not be registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S or pursuant to an exemption from the
registration requirements of the Securities Act. The Initial Purchasers
represent that they have not offered, sold or delivered the Notes, and will not
offer, sell or deliver the Notes (i) as part of its distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
offering and the Closing Date or such longer period as may then be applicable
under Regulation S (such period, the "Restricted Period"), within the United
States or to, or for the account or benefit of U.S. persons, except in
accordance with Rule 144A under the Securities Act or another applicable
exemption. Accordingly, each Initial Purchaser represents and agrees that
neither it, its affiliates nor any persons acting on its or their behalf has
engaged or will engage in any directed selling efforts within the meaning of
Rule 902(b) of Regulation S with respect to the Notes, and it, its affiliates
and all persons acting on its behalf have complied and will comply with the
offering restriction requirements of Regulation S.
(d) Such Initial Purchaser agrees that, at or prior to
confirmation of all sales of Notes pursuant to Regulation S, it will have sent
to each distributor, dealer or person receiving a
13
selling concession, fee or other remuneration that purchases Notes from it
during the Restricted Period a confirmation or notice substantially to the
following effect:
"The Notes covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering or the closing date, except in either
case in accordance with Regulation S (or Rule 144A if available)
under the Securities Act. Terms used above have the meanings
assigned to them in Regulation S."
Such Initial Purchaser further agrees that it has not entered
and will not enter into any contractual arrangement with respect to the
distribution or delivery of the Notes, except with its affiliates or with the
prior written consent of the Company.
(e) Such Initial Purchaser agrees not to cause any
advertisement of the Notes to be published in any newspaper or periodical or
posted in any public place and not to issue any circular relating to the Notes,
except such advertisements as may be permitted by Regulation S.
(f) The sale of the Initial Notes pursuant to Regulation
S are "offshore transactions" and are not part of a plan or scheme to evade the
registration provisions of the Securities Act.
(g) Such Initial Purchaser understands that the Company
and, for purposes of the opinions to be delivered to you pursuant to Section 7
hereof, counsel to the Company and counsel to the Initial Purchasers, will rely
upon the accuracy and truth of the foregoing representations and you hereby
consent to such reliance.
The terms used in this Section 2 that have meanings assigned
to them in Regulation S are used herein as so defined.
3. Purchase of the Notes by the Initial Purchasers. On
the basis of the representations and warranties contained in, and subject to
the terms and conditions of, this Agreement, the Company agrees to sell $125.0
million in aggregate principal amount of Initial Notes to the several Initial
Purchasers and each of the Initial Purchasers, severally and not jointly,
agrees to purchase the aggregate principal amount of Initial Notes set opposite
that Initial Purchaser's name on Schedule 1 hereto. Each Initial Purchaser
will purchase such aggregate principal amount of Initial Notes at an aggregate
purchase price equal to 97.375% of the principal amount thereof (the "Purchase
Price").
The Company shall not be obligated to deliver any of the
Initial Notes to be delivered, except upon payment for all the Initial Notes to
be purchased on such Closing Date as provided herein.
14
4. Delivery of and Payment.
(a) Delivery to the Initial Purchasers of and payment for
the Initial Notes shall be made at 10:00 a.m., New York City time, on the
Closing Date at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place or time as you and the
Company shall designate.
(b) One or more Initial Notes in definitive form,
registered in the name of Cede & Co., as nominee of The Depository Trust
Company ("DTC"), or such other names as the Initial Purchasers may request upon
at least one business days' notice to the Company, having an aggregate
principal amount at maturity corresponding to the aggregate principal amount of
Initial Notes sold pursuant to Exempt Resales (collectively, the "Global
Notes"), shall be delivered by the Company to the Initial Purchasers, against
payment by the Initial Purchasers of the purchase price thereof by wire
transfer of immediately available funds as the Company may direct by written
notice delivered to you two business days prior to the Closing Date. The
Global Notes in definitive form shall be made available to you for inspection
not later than 10:00 a.m. on the day immediately preceding the Closing Date.
(c) Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Initial Purchaser hereunder.
5. Further Agreements of the Company. The Company
agrees:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, of (i) the issuance by any state securities
commission of any stop order suspending the qualification or exemption from
qualification of any Initial Notes for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purpose by the Commission or any
state securities commission or other regulatory authority, and (ii) the
happening of any event that makes any statement of a material fact made in the
Offering Memorandum untrue or that requires the making of any additions to or
changes in the Offering Memorandum in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Company shall use its best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemption of the Initial Notes under any
state securities or Blue Sky laws and, if at any time any state securities
commission shall issue any stop order suspending the qualification or exemption
of the Initial Notes under any state securities or Blue Sky laws, the Company
shall use every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(b) To furnish to you, without charge, as many copies of
the Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as you may reasonably request. The Company
consents to the use of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendments and supplements thereto required pursuant to
this Agreement, by you in connection with the Exempt Resales that are in
compliance with this Agreement.
15
(c) Not to amend or supplement the Offering Memorandum
prior to the Closing Date unless you shall previously have been advised of, and
shall not have reasonably objected to, such amendment or supplement within a
reasonable time, but in any event not longer than two Business Days after being
furnished a copy of such amendment or supplement. If, in connection with any
Exempt Resales or market-making transactions after the date of this Agreement
and prior to the consummation of the Exchange Offer, any event shall occur
that, in the judgment of the Company or in the judgment of counsel to you,
makes any statement of a material fact in the Offering Memorandum untrue or
that requires the making of any additions to or changes in the Offering
Memorandum in order to make the statements in the Offering Memorandum, in light
of the circumstances at the time that the Offering Memorandum is delivered to
prospective Eligible Purchasers, not misleading, or if it is necessary to amend
or supplement the Offering Memorandum to comply with any applicable laws, the
Company shall promptly notify you of such event and prepare an appropriate
amendment or supplement to the Offering Memorandum so that (i) the statements
in the Offering Memorandum as amended or supplemented will, in light of the
circumstances at the time that the Offering Memorandum is delivered to
prospective Eligible Purchasers, not be misleading and (ii) the Offering
Memorandum will comply with applicable law.
(d) To cooperate with you and your counsel in connection
with the qualification of the Initial Notes for offer and sale by you and by
dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request (provided, however, that the Company shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general consent to
service of process in any jurisdiction in which it is not now so subject or
subject itself to taxation in excess of a nominal amount in any such
jurisdiction where it is not then so subject). Subject to the provisions in
the first sentence of this Section 5(d), the Company shall continue such
qualification in effect so long as required by law for distribution of the
Initial Notes and shall file such consents to service of process or other
documents as may be necessary in order to effect such qualification.
(e) Prior to the Closing Date, to furnish to you, any
internal consolidated financial statements of the Company that have been
prepared by the Company for any period subsequent to the period covered by the
financial statements appearing in the Offering Memorandum.
(f) To use its reasonable best efforts to do and perform
all things required to be done and performed under this Agreement by it prior
to or after the Closing Date and to satisfy all conditions precedent on its
part to the delivery of the Initial Notes.
(g) 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) that would be integrated with the sale of the Initial Notes in a manner
that would require the registration under the Securities Act of the sale to you
or the Eligible Purchasers of Initial Notes.
(h) For a period of 120 days from the date of the
Offering Memorandum, not to, directly or indirectly, sell, contract to sell,
grant any option to purchase, issue any instrument
16
convertible into or exchangeable for, or otherwise transfer or dispose of, any
debt securities of the Company or any of its Subsidiaries in a public or
private offering for cash having a maturity of more than one year from the date
of issue of such securities, except (i) for the New Notes in connection with
the Exchange Offer or (ii) with the prior consent of ▇▇▇▇▇▇ Brothers Inc.,
which consent shall not be unreasonably withheld.
(i) For the period that is two years after the Closing
Date or for so long as necessary to comply with Rule 144A in connection with
resales by registered holders or beneficial owners of Initial Notes, whichever
is longer, to make available to such registered holder or beneficial owner of
Initial Notes in connection with any sale thereof and any prospective purchaser
of such Initial Notes from such registered holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto).
(j) To comply with its agreements in the Registration
Rights Agreement, and all agreements set forth in the representation letters of
the Company to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer.
(k) To use its reasonable best efforts to effect the
inclusion of the Notes in the National Association of Securities Dealers, Inc.
Automated Quotation System - PORTAL ("PORTAL").
(l) To apply the net proceeds from the sale of the
Initial Notes being sold by the Company as set forth in the Offering Memorandum
under the caption "Use of Proceeds."
(m) During the period that is two years after the Closing
Date, to take such steps as shall be necessary to ensure that the Company does
not become an "investment company" within the meaning of such term under the
Investment Company Act of 1940 and the rules and regulations of the Commission
thereunder.
6. Expenses. The Company agrees that, whether or not
the transactions contemplated by this Agreement are consummated or this
Agreement becomes effective or is terminated, to pay all costs, expenses, fees
and taxes incident to and in connection with: (i) the preparation, printing,
filing and distribution of the Preliminary Offering Memorandum and the Offering
Memorandum (including, without limitation, financial statements) and all
amendments and supplements thereto (but not, however, legal fees and expenses
of your counsel incurred in connection therewith), (ii) the preparation,
printing (including, without limitation, word processing and duplication costs)
and delivery of this Agreement, the Indenture, any Blue Sky Memoranda and any
other agreements, memoranda, correspondence and other documents printed and
delivered in connection herewith and with the Exempt Resales (but not, however,
legal fees and expenses of your counsel incurred in connection with any of the
foregoing other than fees of such counsel plus reasonable disbursements
incurred in connection with the preparation, printing and delivery of such Blue
Sky Memoranda), (iii) the issuance and delivery by the Company of the Notes,
(iv) the qualification of the Notes for offer and sale under the securities or
Blue Sky laws of the several states (including, without limitation, the
reasonable fees and disbursements of your counsel relating to such registration
or qualification), (v) furnishing such
17
copies of the Preliminary Offering Memorandum and the Offering Memorandum, and
all amendments and supplements thereto, as may be reasonably requested by the
Initial Purchasers for use in connection with the initial Exempt Resales, (vi)
the preparation of certificates for the Notes including, without limitation,
printing and engraving, (vii) the fees, disbursements and expenses of the
Company's counsel and accountants, (viii) all expenses and listing fees in
connection with the application for quotation of the Initial Notes in PORTAL,
(ix) all fees and expenses (including fees and expenses of counsel) of the
Company in connection with approval of the Notes by DTC for "book-entry"
transfer and (x) the performance by the Company of its other obligations under
this Agreement to the extent not provided for above.
7. Conditions of Initial Purchasers' Obligations. The
respective obligations of the Initial Purchasers hereunder are subject to the
accuracy, when made and again on the Closing Date (as if made again on and as
of such date), of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Offering Memorandum shall have been printed and
copies made available to you not later than 9:00 a.m., New York City time, on
the Business Day following the date of this Agreement, or at such later date
and time as you may approve in writing.
(b) No Initial Purchaser shall have discovered and
disclosed to the Company on or prior to such Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact which, in the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial
Purchasers, is material or omits to state a fact which, in the opinion of such
counsel, is material and is necessary to make the statements, in the light of
the circumstances under which they were made, not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the other
Operative Documents, the Offering Memorandum and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the Initial
Purchasers, and the Company shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters.
(d) O'Melveny & ▇▇▇▇▇ LLP shall have furnished to the
Initial Purchasers, its written opinion, as counsel to the Company, addressed
to the Initial Purchasers and dated as of the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers and their counsel,
to the effect that:
(i) The Company is a corporation validly existing
and in good standing under the laws of the State of California and has
corporate power and corporate authority to own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum.
18
(ii) The Company has corporate power and corporate
authority to execute, deliver and perform its obligations under the Operative
Documents and to authorize, issue and sell the Notes as contemplated by this
Agreement.
(iii) This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(iv) The Registration Rights Agreement has been
duly authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Initial Purchasers, will
constitute the legally valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws relating to or affecting creditors' rights generally from
time to time in effect and to general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing, and the possible unavailability of specific performance or injunctive
relief, regardless of whether in a proceeding in equity or at law) and except
as rights to indemnity and contribution thereunder may be limited by federal or
state securities laws or principles of public policy.
(v) The Indenture has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Trustee, will constitute the legally valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, and the possible unavailability of
specific performance or injunctive relief, regardless of whether in a
proceeding in equity or at law); no qualification of the Indenture under the
TIA is required in connection with the offer and sale of the Initial Notes
contemplated hereby or in connection with the initial resale of such Initial
Notes in the manner contemplated by this Agreement and the Offering Memorandum,
it being understood that no opinion will be expressed as to any subsequent
resale of any Initial Notes.
(vi) The Initial Notes have been duly authorized
by all requisite corporate action of the Company and when duly executed by the
Company in accordance with the terms of the Indenture and, assuming due
authentication of the Initial Notes by the Trustee, upon delivery to the
Initial Purchasers against payment therefor in accordance with the terms
hereof, will have been validly issued and delivered, and will constitute
legally valid and binding obligations of the Company entitled to the benefits
of the Indenture, enforceable against the Company in accordance with their
terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws relating to or affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether in a
proceeding in equity or at law).
19
(vii) The New Notes have been duly authorized by
the Company and if and when duly issued and authenticated in accordance with
the terms of the Indenture and delivered in accordance with the Exchange Offer
provided for in the Registration Rights Agreement, will constitute legally
valid and binding obligations of the Company entitled to the benefits of the
Indenture, enforceable against the Company in accordance with their terms
(subject to the qualification that the enforceability of the Company's
obligations thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws relating to or affecting creditors' rights generally from time to time in
effect and to general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive relief,
regardless of whether in a proceeding in equity or at law).
(viii) Assuming due authorization, execution and
delivery by the parties thereto, the Credit Agreement constitutes the valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity, including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, regardless of whether in a proceeding in equity or
at law).
(ix) To the knowledge of such counsel, there are
no legal or governmental proceedings pending or threatened against the Company
or any of its Subsidiaries, or to which any of their respective properties is
subject, that are not disclosed in the Offering Memorandum and which are
reasonably likely to have a Material Adverse Effect or to materially and
adversely affect the issuance of the Notes or the consummation of the other
transactions contemplated by the Operative Documents.
(x) None of the issuance, offer or sale of the
Initial Notes, the execution, delivery or performance by the Company of this
Agreement, the other Operative Documents, compliance by the Company with the
provisions hereof or thereof nor consummation by the Company of the
transactions contemplated hereby or thereby (i) requires any consent, approval,
authorization or other order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may be required in connection with the registration
under the Securities Act of the New Notes in accordance with the Registration
Rights Agreement, qualification of the Indenture under the TIA and compliance
with the securities or Blue Sky laws of various jurisdictions), or (ii)
violates or will violate or constitutes or will constitute a breach of, or a
default under, the certificate of incorporation or by-laws, or other
organizational documents, of the Company or any of its Subsidiaries or (iii)
violates or will violate or constitutes or will constitute a breach of, or a
default under any agreement listed on a certificate of an officer of the
Company as being any agreement material to the Company and its Subsidiaries,
taken as a whole (the "Material Agreements"), or (iv) violates or will violate
any law, rule or regulation of the United States or the State of New York or
the General Corporation Law of the State of California that we have in the
exercise of customary professional diligence, recognized as applicable to the
Company or to
20
transactions of the type contemplated by this Agreement, or, to such counsel's
knowledge, any order or decree of any court or government agency or
instrumentality to which the property or assets of the Company or any of its
Subsidiaries are subject or (v) will result in the creation or imposition of
any Lien upon any property or assets of the Company or any of its Subsidiaries
pursuant to the terms of any agreement or instrument to which any of them is a
party or by which any of them may be bound or under which any of their
respective property or assets is subject, except in each case in clauses (i)
through (v), such breaches, conflicts or defaults that, individually or in the
aggregate would not have a Material Adverse Effect.
(xi) The Company is not and, immediately upon sale
of the Initial Notes to be issued and sold thereby in accordance herewith and
the application of the net proceeds to the Company of such sale as described in
the Offering Memorandum under the caption "Use of Proceeds," will not be an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(xii) When the Initial Notes are issued and
delivered pursuant to this Agreement, such Initial Notes will not be of the
same class (within the meaning of Rule 144A under the Securities Act) as
securities of the Company that are listed on a national securities exchange
registered under Section 6 of the Exchange Act or that are quoted in a United
States automated inter-dealer quotation system.
(xiii) Assuming (i) the accuracy of, and compliance
by you with, your representations, warranties, and covenants in Section 2, (ii)
that the initial resale of the Initial Notes by you is made only to Eligible
Purchasers, (iii) the accuracy of the Company's representations and warranties
with respect to whether (x) any form of general solicitation was used by the
Company and (y) other offerings of securities are of the same class as other
securities of the Company that are listed on a national securities exchange
registered under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system, and (iv) that each QIB to whom you originally
sell the Initial Notes receives a copy of the Offering Memorandum at or prior
to the delivery of a confirmation of sale, no registration of the Initial Notes
under the Securities Act and no qualification of the Indenture under the TIA is
required in connection with the purchase of the Initial Notes by you, or the
initial resale of the Initial Notes by you to Eligible Purchasers in the manner
contemplated by the Agreement and the Offering Memorandum.
(xiv) The descriptions of the Indenture, the
Initial Notes and the Registration Rights Agreement in the Offering Memorandum
conform in all material respects to the terms thereof.
(xv) The statements set forth under the heading
"Description of Notes" in the Offering Memorandum, insofar as such statements
purport to summarize certain provisions of the Initial Notes, provide a fair
summary of such provisions; and the statements set forth under the heading
"Risk Factors -- Fraudulent Conveyance Statutes" in the Offering Memorandum
insofar as they refer to statements of law or legal conclusions, are accurate
in all material respects and present fairly the information shown.
21
(xvi) The statements set forth under the heading
"Description of Certain Indebtedness" in the Offering Memorandum, insofar as
such statements purport to summarize certain provisions of the Credit
Agreement, provide a fair summary of such provisions.
In addition, such counsel shall also state that such counsel
has participated in conferences with certain officers of the Company,
representatives of the independent public accountants for the Company and your
representatives and counsel concerning the preparation of the Offering
Memorandum and, although such counsel has made certain inquiries and
investigations in connection with the preparation of the Offering Memorandum,
it has not independently verified the accuracy, completeness or fairness of the
statements contained therein, and the limitations inherent in the examination
made by it and the knowledge available to it are such that it is not passing
upon and does not assume any responsibility for the accuracy or completeness of
the statements contained in the Offering Memorandum. However, on the basis of
the foregoing participation and review, and relying as to materiality to an
extent upon opinions of officers and other representatives of the Company, such
counsel does not believe that the Offering Memorandum, as of its date or as of
the Closing Date, included or includes an untrue statement of a material fact
or omitted or omits to state a material fact necessary 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 or
opinion with respect to the financial statements and other financial data
included therein).
The opinion of such counsel may be limited to the laws of the
state of New York, the General Corporation Law of the State of California, and
the Federal laws of the United States. Such counsel may take such other
exceptions as are customary or appropriate.
(e) ▇▇▇▇ & ▇▇▇▇, special Ohio counsel to the Company,
shall have furnished to the Initial Purchasers, its written opinion, as special
counsel to the Company, addressed to the Initial Purchasers and dated as of the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers and their counsel, to the effect that:
(i) Medex is a corporation validly existing and
in good standing under the laws of the State of Ohio and has corporate power
and corporate authority to own, lease and operate its properties and to conduct
its business as presently conducted. Medex is duly qualified as a foreign
corporation to conduct business and is in good standing in the State of
Georgia.
(ii) All the outstanding shares of capital stock
of Medex have been duly authorized by all requisite corporate action on the
part of Medex and are validly issued, fully paid and nonassessable, and are
wholly owned by the Company, free and clear of any lien, adverse claim,
security interest, equity or other encumbrance.
(f) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, general counsel to the Company,
shall have furnished to the Initial Purchasers, its written opinion, as counsel
to the Company, addressed to the Initial Purchasers and dated as of the Closing
Date, in form and substance reasonably satisfactory to the Initial Purchasers
and their counsel, to the effect that:
22
(i) The Company is qualified as a foreign
corporation to do business in the States of Alabama, Connecticut, Florida,
Illinois, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, New York,
Ohio, Pennsylvania, Rhode Island, Texas, Vermont and Washington and is in good
standing in each of those States.
(ii) All the shares of capital stock of the
Company outstanding prior to the issuance of the Initial Notes have been duly
authorized by all requisite corporate action on the part of the Company and are
validly issued, fully paid and nonassessable.
(iii) Except as described in the Offering
Memorandum, the consummation of the transactions contemplated by this agreement
shall not cause any third party to have any rights of first refusal under any
Material Agreement.
(iv) The Credit Agreement has been duly and
validly authorized, executed and delivered by the Company.
(v) To the knowledge of such counsel, except as
disclosed in the Offering Memorandum, there are no contracts, agreements or
understandings between the Company or any of its Subsidiaries and any person
granting such person the right to require the Company or any of its
Subsidiaries to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such person or
to require the Company or any of its Subsidiaries to include such securities in
the securities registered pursuant to the Registration Statements or in any
securities being registered pursuant to any other registration statement filed
by the Company or any of its Subsidiaries under the Securities Act.
(vi) The statements set forth under the heading
"Business -- Legal Proceedings" in the Offering Memorandum insofar as they
refer to statements of law or legal conclusions, are accurate in all material
respects and present fairly the information shown.
(g) The Initial Purchasers shall have received from
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C., special regulatory counsel to the Company, its
written opinion, as special counsel to the Company, dated as of the Closing
Date, in form and substance reasonably satisfactory to the Initial Purchasers
and their counsel, to the effect that:
(i) the statements of federal law and regulation
contained under the captions "Risk Factors -- Government Regulation," "Business
-- Medical Device Business" and " -- FDA Compliance/Product Regulation" in the
Offering Memorandum (collectively, the "Regulatory Portion") are, in all
material respects, correct and accurate statements or summaries of applicable
federal law and regulation, subject to the qualifications set forth therein;
(ii) to such counsel's knowledge, the Company's
medical device business (as described in the Offering Memorandum) does not
violate the FDC Act or any FDA rule or regulation, and, to such counsel's
knowledge, there are no Federal Food, Drug and
23
Cosmetic Act (the "FCA") judicial or administrative proceedings pending or
threatened against the Company.
In addition, such counsel shall also state that nothing has come to the
attention of such counsel that would lead such counsel to believe that the
information contained in the Regulatory Portion of the Offering Memorandum (or
any amendments or supplements thereof) contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(h) The Initial Purchasers shall have received from
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchasers, such opinion or opinions,
dated as of the Closing Date, with respect to the issuance and sale of the
Initial Notes, the Offering Memorandum and other related matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of enabling
them to pass upon such matters.
(i) The Company and the Trustee shall have entered into
the Indenture and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(j) The Company and the Initial Purchasers shall have
entered into the Registration Rights Agreement and the Initial Purchasers shall
have received counterparts, conformed as executed, thereof.
(k) With respect to the letter of Ernst & Young LLP
delivered to the Initial Purchasers concurrently with the execution of this
Agreement (the "initial letter"), the Company shall have furnished to the
Initial Purchasers a letter (as used in this paragraph, the "bring-down
letter") of such auditor, addressed to the Initial Purchasers and dated such
Closing Date (i) confirming that they are independent auditors with respect to
the Company under Rule 101 of the AICPA's Code of Professional Conduct and its
interpretations and rulings, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Offering Memorandum, as of a date not more than two Business Days prior to the
date of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
(l) The Company shall have furnished to the Initial
Purchasers a certificate, dated as of the Closing Date, of its Chief Executive
Officer or President and its Chief Financial Officer or Treasurer stating that:
(i) The representations, warranties and
agreements of the Company (after giving effect to all materiality qualifiers
therein) in Section 1 are true and correct as of such Closing Date and giving
effect to the consummation of the transactions contemplated by this Agreement;
the Company has complied in all material respects with all its agreements
contained herein; and the condition set forth in Section 7(m) has been
fulfilled; and
24
(ii) They have examined the Preliminary Offering
Memorandum and the Offering Memorandum and, in their opinion, the Preliminary
Offering Memorandum as of its date and the Offering Memorandum as of its date
and the Closing Date did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and (ii) since the date of the
Offering Memorandum, no event has occurred which should have been set forth in
a supplement or amendment to the Offering Memorandum.
(m) (i) The Company and its Subsidiaries, taken as a
whole, shall not have sustained since the date of the latest audited financial
statements included in the Offering Memorandum any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Offering Memorandum or (ii) since such date there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
Subsidiaries or any change, or any development involving a prospective change,
in or affecting condition (financial or other), business properties, or results
of operations of the Company and its Subsidiaries, taken as a whole otherwise
than as set forth or contemplated in the Offering Memorandum, the effect of
which, in any such case described in clause (i) or (ii), is, in the judgment of
the Initial Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the payment for and delivery of the Notes being
delivered on such Closing Date on the terms and in the manner contemplated in
the Offering Memorandum.
(n) There shall exist at and as of the Closing Date no
conditions that would constitute a default (or an event that with notice or the
lapse of time, or both, would constitute a default) under the Credit Agreement.
On the Closing Date, the Credit Agreement shall be in full force and effect,
shall conform to the description thereof contained in the Offering Memorandum
(after giving effect to the amendment described therein) and shall not have
been materially modified.
(o) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have been furnished with such
other documents and opinions, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Agreement and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(p) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities.
(q) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock
25
Exchange or the American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall have
been established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United
States shall be such) as to make it, in the judgment of a majority in interest
of the several Initial Purchasers, impracticable or inadvisable to proceed with
the public offering or delivery of the Notes being delivered on such Closing
Date on the terms and in the manner contemplated in the Offering Memorandum.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
8. Indemnification and Contribution.
(a) 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, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Notes), to which
that Initial Purchaser, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Memorandum or the Offering Memorandum (in each case as
amended or supplemented), or (ii) the omission or alleged omission to state in
any Preliminary Offering Memorandum or the Offering Memorandum (in each case as
amended or supplemented) any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading or (iii) any act or failure to act or any
alleged act or failure to act by any Initial Purchaser in connection with, or
relating in any manner to, the Notes or the offering contemplated hereby, and
which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered by clauses (i)
or (ii) above (provided that the Company and its Subsidiaries shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Initial Purchaser through its gross
negligence or willful misconduct); and shall reimburse each Initial Purchaser
and each such officer, employee or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by that Initial Purchaser,
officer, employee or controlling person in connection with investigating or
26
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company and its Subsidiaries shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Offering Memorandum or the Offering
Memorandum (in each case as amended or supplemented) in reliance upon and in
conformity with written information concerning such Initial Purchaser furnished
to the Company by or on behalf of any Initial Purchaser specifically for
inclusion therein. The foregoing indemnity agreement is in addition to any
liability which the Company and its Subsidiaries may otherwise have to any
Initial Purchaser or to any officer, employee or controlling person of that
Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly,
shall indemnify and hold harmless the Company, its officers and employees, each
of its directors, and each person, if any, who controls the Company within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company or any such director, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Offering Memorandum or the Offering Memorandum (in each case as
amended or supplemented) or in any Blue Sky application or (ii) the omission or
alleged omission to state in any Preliminary Offering Memorandum or the
Offering Memorandum (in each case as amended or supplemented) or in any Blue
Sky application any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning such
Initial Purchaser furnished to the Company by or on behalf of that Initial
Purchaser specifically for inclusion therein, and shall reimburse the Company
and any such director, officer, employee or controlling person for any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Initial Purchaser may otherwise have to the
Company or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided, however, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate
27
therein and, to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Initial Purchasers shall have the right to employ counsel to represent
jointly the Initial Purchasers and their respective officers, employees and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Initial Purchasers against the
Company under this Section 8 if, in the reasonable judgment of the Initial
Purchasers, it is advisable for the Initial Purchasers, officers, employees and
controlling persons to be jointly represented by separate counsel, and in that
event the reasonable fees and expenses of such separate counsel shall be paid
by the Company. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with the consent of the
indemnifying party or if there be a final judgment of the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Initial Purchasers on the other
from the offering of the Initial Notes 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 with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in respect
thereof, 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 with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of
28
the Initial Notes purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total discounts and
commissions received by the Initial Purchasers with respect to the Initial
Notes purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the Initial Notes under this Agreement, in
each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Initial Purchasers, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Initial Purchasers agree that it
would not be just and equitable if contributions pursuant to this Section 8(d)
were to be 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 into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section shall be deemed to include, for purposes of
this Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Initial Notes purchased by it was resold to
Eligible Purchasers exceeds the amount of any damages which such Initial
Purchaser has otherwise paid or become liable to pay by reason of any 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 as provided in this Section 8(d) are several in
proportion to their respective underwriting obligations and not joint.
(e) The Initial Purchasers severally confirm and the
Company acknowledges that the last paragraph on the cover page, the
stabilization legend on page iii, the table of Initial Purchasers and the
information contained in the fifth, sixth, seventh, ninth and tenth paragraphs
of the section entitled "Plan of Distribution" constitute the only information
concerning such Initial Purchasers furnished in writing to the Company by or on
behalf of the Initial Purchasers specifically for inclusion in the Preliminary
Offering Memorandum or the Offering Memorandum.
9. Termination. The obligations of the Initial
Purchasers hereunder may be terminated by ▇▇▇▇▇▇ Brothers Inc. by notice given
to the Company prior to delivery of and payment for the Initial Notes if, prior
to that time, any of the events described in Sections 7(m), 7(p) or 7(q) shall
have occurred or if the Initial Purchasers shall decline to purchase the
Initial Notes for any reason permitted under this Agreement.
10. Reimbursement of Initial Purchasers' Expenses. If
the Company shall fail to tender the Initial Notes for delivery to the Initial
Purchasers by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any
other condition of the Initial Purchasers' obligations hereunder required to be
fulfilled by the Company is not fulfilled, the Company will reimburse the
Initial Purchasers for all reasonable out-of-pocket expenses (including the
fees and disbursements of their counsel) incurred by the Initial Purchasers in
connection with this Agreement and the proposed purchase
29
of the Initial Notes, and upon demand the Company shall pay the full amount
thereof to ▇▇▇▇▇▇ Brothers Inc.
11. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or
sent by mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇); and
(b) if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to Furon Company, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer (Fax:
▇▇▇-▇▇▇-▇▇▇▇), with a copy to O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇ (Fax:
▇▇▇-▇▇▇-▇▇▇▇).
Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof. The Company shall be entitled to
act and rely upon any request, consent, notice or agreement given or made on
behalf of the Initial Purchasers by ▇▇▇▇▇▇ Brothers Inc. Any notice of a
change of address or facsimile transmission number must be given by the Company
or by the Initial Purchasers, as the case may be, in writing, at least three
days in advance of such change.
12. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the Initial
Purchasers, the Company and their respective successors. This Agreement and
the terms and provisions hereof are for the sole benefit of only those persons,
except that (i) the representations, warranties, indemnities and agreements of
the Company contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control any Initial Purchaser
within the meaning of Section 15 of the Securities Act and (ii) the
representations, warranties, indemnities and agreements of the Initial
Purchasers contained in this Agreement shall be deemed to be for the benefit of
directors, officers and employees of the Company and any person controlling the
Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 12, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision
contained herein.
13. Survival. The respective indemnities,
representations, warranties and agreements of the Initial Purchasers and the
Company contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Notes and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
30
14. Definition of the Terms "Business Day" and
"Subsidiary." For purposes of this Agreement, "Business Day" means any day on
which the New York Stock Exchange, Inc. is open for trading, and "Subsidiary"
means with respect to the Company, (i) any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
capital stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by the Company, (ii) any
partnership (a) the sole general partner or the managing general partner of
which is the Company or an entity described in clause (i) and related to the
Company or (b) the only general partners of which are the Company or of one or
more entities described in clause (i) and related to the Company (or any
combination thereof) and (iii) any limited liability company, the sole managing
member or the majority of the managing members of which are persons described
in clause (i) or (ii).
15. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of New York without regard to
principles of conflicts of laws.
16. Counterparts. This Agreement may be executed in one
or more counterparts and, if executed in more than one counterpart, the
executed counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
[signature pages follow]
31
If the foregoing correctly sets forth the agreement between
the Initial Purchasers and the Company, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
FURON COMPANY
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President and
Chief Financial Officer
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
Senior Managing Director
BNY CAPITAL MARKETS, INC.
By: /s/ ▇▇▇▇ ▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇
Managing Director
32
SCHEDULE 1
Initial Purchasers Principal Amount of Notes
------------------ --------------------------
▇▇▇▇▇▇ Brothers Inc. $ 81,250,000
Bear, ▇▇▇▇▇▇▇ & Co. Inc. 37,500,000
BNY Capital Markets, Inc. 6,250,000
------------------
Total $ 125,000,000
==================
33
EXHIBIT A
Registration Rights Agreement
34
EXHIBIT B
Employee pension plans with respect to which the Company or
any corporation considered an affiliate of the Company within the meaning of
Section 407(d)(7) of ERISA is a party-in-interest or disqualified person:
Furon Company Employees Profit Sharing Retirement Plan;
Furon Company Employees Stock Ownership Plan;
Pension Plan for Bargaining Unit Employees of CHR Industries,
Inc.;
Medex, Inc. 401(k) Savings Plan.
35
EXHIBIT C
Furon Company Subsidiaries
STATE OR OTHER JURISDICTION OF
NAME OF SUBSIDIARY INCORPORATION OR ORGANIZATION
------------------ -----------------------------
Medex, Inc. Ohio
Ashfield Medical Systems Limited United Kingdom
Medex Medical France SARL France
Medex Medical GmbH Germany
AS Medical GmbH Germany
Medex Medical S.r.l. Italy
Medex Medical, Inc. Ohio
Medex Medical Limited United Kingdom
Medex Medical Instrumentation, Inc. Ohio
▇▇▇▇▇▇▇ Plastics, Inc.* New Jersey
CHR Industries, Inc.* Connecticut
▇▇▇▇▇ Industries Corporation* Rhode Island
Fluorocarbon Components, Inc.* New York
Fluorocarbon Foreign Sales Corporation Barbados
Furon B.V. Netherlands
Furon Europe, S.A. Belgium
Furon Limited England
Furon Seals N.V./S.A. Belgium
Furon S.A. Belgium
Premier Python Products, Ltd. England
Premier Python Systems, Inc. Georgia
Sepco Corporation* California
* A general business corporation with a wholly owned domestic subsidiary.
