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EXHIBIT 4.3
NATUR-PHARMA INC.
10 1/4% SENIOR SUBORDINATED NOTES DUE 2006
PAYMENT OF PRINCIPAL AND INTEREST UNCONDITIONALLY
GUARANTEED BY EACH GUARANTOR THEREOF
PURCHASE AGREEMENT
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May 1, 1996
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CHASE SECURITIES INC.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005
Ladies and Gentlemen:
NATUR-PHARMA INC., a Utah corporation, which will be the
surviving entity of the Natur-Pharma Merger described below, proposes to issue
and sell to Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and
Chase Securities Inc. ("Chase") (collectively, the "Initial Purchasers") an
aggregate of $100,000,000 principal amount of 10 1/4% Senior Subordinated Notes
due 2006 (the "Securities"), subject to the terms and conditions set forth
herein, which notes are unconditionally guaranteed by Advanced Research Press,
Inc. ("ARP") and TLG Laboratories Holding Corp. (the "Holding Company", and
together with ARP, the "Guarantors"). As used herein, the "Company" means (i)
prior to the effectiveness of the Natur-Pharma Merger, Natur-Pharma Inc.
("Natur-Pharma"), and (ii) after the effectiveness of the Natur-Pharma Merger,
Twin Laboratories Inc. The Securities are to be issued pursuant to the
provisions of an Indenture (the "Indenture") to be dated as of May 7, 1996, by
and among the Company, the Guarantors and Fleet National Bank, as Trustee (the
"Trustee").
Pursuant to the Stock Purchase and Sale Agreement dated as
of March 5, 1996 (the "Acquisition Agreement"), by and among Messrs. Brian,
Dean, Neil, Ross,
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Steve and David Blechman and Stephen Welling and Ms. Jean Blechman
(collectively, the "Stockholders"), the Holding Company, the Company and Green
Equity Investors II, L.P. ("GEI"), among other things, (i) the Holding Company
will acquire all of the outstanding capital stock of Natur-Pharma and the
Company will become a wholly owned subsidiary of the Holding Company, (ii) Twin
Laboratories Inc., Alvita Products, Inc., Twinlab Export Corp., Twinlab
Specialty Corporation and B. Bros. Realty Corporation (together with ARP, the
"Affiliated Companies") will be merged into Natur-Pharma (the "Natur-Pharma
Merger"), and (iii) ARP will be merged with Natur-Pharma II Inc., a wholly owned
subsidiary of Natur-Pharma, with ARP surviving the merger and becoming a wholly
owned subsidiary of Natur-Pharma (the "Natur-Pharma II Merger") (the above
transactions are herein referred to as the "Acquisition"). In connection with
the Acquisition, the Company's name will be changed from Natur-Pharma Inc. to
Twin Laboratories Inc. Concurrently with the issuance and sale of the
Securities, the Company and the Guarantors will enter into a Credit Facility
(the "New Credit Facility") with Chemical Bank, as managing agent, and certain
lenders named therein which will consist of (i) a term loan in the amount of $53
million, and (ii) a revolving credit facility in the aggregate amount of $15
million, and in connection with the Acquisition and the Acquisition Agreement,
(i) GEI will acquire approximately 48% of the common stock of the Holding
Company for aggregate consideration of $4.8 million and shares of non-voting
junior redeemable preferred stock of the Holding Company for aggregate
consideration of $37.0 million, and (ii) certain other investors will acquire
approximately 7% of the common stock of the Holding Company for aggregate
consideration of $0.7 million and shares of non-voting senior redeemable
preferred stock of the Holding Company for aggregate considerations of $30.0
million.
For purposes of this Agreement, the term "Securities" means
the $100,000,000 aggregate principal amount of the notes of the Company (the
"Notes"), together with the guarantees (the "Guarantees") thereof by the
Guarantors. The Securities and the Indenture are more fully described in the
Offering Memorandum (as hereinafter defined). Capitalized terms used herein
without definition have the respective meanings specified in the Offering
Memorandum.
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The Securities will be offered and sold to you without being
registered under the Securities Act of 1933, as amended (the "1933 Act"), in
reliance on an exemption therefrom. The Company and the Affiliated Companies
have prepared a preliminary offering memorandum dated April 19, 1996 (such
preliminary offering memorandum being hereinafter referred to as the
"preliminary offering memorandum"), and an offering memorandum dated May 1, 1996
(such offering memorandum, in the form first furnished to the Initial Purchasers
for use in connection with the offering of the Securities, being hereinafter
referred to as the "Offering Memorandum"), setting forth information regarding
the Company, the Holding Company, the Affiliated Companies and the Securities.
Unless otherwise explicitly provided for herein, all references herein to the
preliminary offering memorandum are to the preliminary offering memorandum at
April 19, 1996 and do not include any amendment or supplement subsequent
thereto. Each of the Company and the Affiliated Companies hereby confirms that
it has authorized the use of the preliminary offering memorandum and the
Offering Memorandum, and any amendments and supplements thereto, by the Initial
Purchasers in connection with the offering and resale by the Initial Purchasers
of the Securities in accordance with the terms and provisions of this Agreement.
Holders (including subsequent transferees) of the Securities
will have the registration rights set forth in the Registration Rights Agreement
(the "Registration Rights Agreement"), to be dated the Closing Date (as
hereinafter defined), in substantially the form of Exhibit A hereto. Pursuant to
the Registration Rights Agreement, the Company and the Guarantors will agree to
file with the Securities and Exchange Commission (the "Commission") under the
circumstances set forth therein, (i) a registration statement under the 1933 Act
(the "Exchange Offer Registration Statement") registering an issue of senior
subordinated notes identical in all material respects to the Securities (the
"Exchange Securities") to be offered in exchange for the Securities (the
"Exchange Offer") and (ii), under the circumstances set forth therein, a
registration statement pursuant to Rule 415 under the 1933 Act (the "Shelf
Registration Statement").
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This Agreement, the Indenture, the Securities, the
Registration Rights Agreement, the Acquisition Agreement, the New Credit
Facility, the agreements creating security interests in the assets of the
Company for the benefit of the holders of indebtedness arising under the New
Credit Facility (together with the New Credit Facility, the "Bank Agreements")
are sometimes referred to in this Agreement, individually, as a "Transaction
Agreement" and, collectively, as the "Transaction Agreements" and the
Acquisition, the Offering, the Natur-Pharma Merger, the Natur-Pharma II Merger,
the execution and delivery of the Bank Agreements, the execution and delivery of
the Indenture and the issuance and sale of the Securities are sometimes referred
to herein, individually, as a "Transaction" and collectively, as the
"Transactions."
1. Agreements to Sell and Purchase. On the basis of the
representations, warranties, covenants and agreements contained in this
Agreement, and subject to the terms and conditions herein set forth, the Compa-
ny, as to the Notes, and, the Guarantors, as to the Guarantees, agree to issue
and sell to each of the Initial Purchasers, and each of the Initial Purchasers
agrees, severally and not jointly, to purchase from the Company, as to the
Notes, and the Guarantors, as to the Guarantees, at a purchase price equal to
97% of the principal amount of the Securities (the "Purchase Price"), Securi-
ties in the respective principal amount set forth opposite their names on
Schedule A hereto.
2. Delivery and Payment. Delivery to you of and payment for the
Securities shall be made at 10:00 A.M., New York City time, on May 7, 1996 (such
time and date being referred to as the "Closing Date") at such place as you
shall reasonably designate. The Closing Date and the location of delivery of the
Securities may be varied by agreement among you and the Company.
One or more of the Securities in definitive form, registered
in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"),
or such other name(s) as the Initial Purchasers may request in writing upon at
least two business days' notice to the Company, having an aggregate principal
amount corresponding to the aggregate principal amount of Securities sold
pursuant to Rule 144A under the 1933 Act, as such rule may be amended from time
to time ("Rule 144A"), to qualified institu-
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tional buyers within the meaning of Rule 144A ("QIBs") (collectively, the
"Global Securities"), and one or more Securities in definitive form, registered
in such names and denominations as the Initial Purchasers may so request, having
an aggregate principal amount corresponding to the aggregate principal amount of
the Securities sold to Institutional Accredited Investors (as defined herein)
(collectively, the "Certificated Securities"), shall be delivered by the Company
to the Initial Purchasers on the Closing Date with any transfer taxes payable
upon initial issuance thereof duly paid by the Company, for your respective
accounts against payment by the Initial Purchasers of the purchase price thereof
by wire transfer of same day funds to such bank account as the Company shall
designate at least two business days prior to the Closing Date. The Global
Securities and Certificated Securities in definitive form shall be made
available to you at the offices of DLJ (or at such other place as shall be
acceptable to you) for inspection not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date.
3. Offering of the Securities and the Initial Purchasers'
Representations.
(a) You have advised the Company that it is your
intention, as promptly as you deem appropriate after the Company shall have
furnished you with copies of the Offering Memorandum, to resell the Securities
pursuant to the procedures and upon the terms and subject to the conditions set
forth in the Offering Memorandum.
(b) Each Initial Purchaser represents, warrants and
agrees with respect to itself, that such Initial Purchaser:
(i) is not acquiring the Securities with a view
to any distribution thereof or with any present intention of
offering or selling any of the Securities in a transaction
that would violate the 1933 Act or the securities laws of any
State of the United States or any other applicable
jurisdiction;
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(ii) will solicit offers for Securities only
from, and will offer Securities only to, persons that it
reasonably believes are (x) QIBs within the meaning of Rule
144A in transactions meeting the requirements of Rule 144A and
that, in connection with each such sale, it has taken or will
take reasonable steps to ensure that the purchaser of such
Securities is aware that such sale is being made in reliance
on Rule 144A, (y) a limited number of other institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) under the 1933 Act ("Institutional Accredited
Investors")) which the Initial Purchaser maintains on its list
of persons regularly contacted regarding Rule 144A offerings
and which regularly conduct business with such Initial
Purchaser or (z) institutions that are outside the United
States and are not U.S. persons (and are not purchasing for
the account or benefit of a U.S. person) within the meaning of
Regulation S under the 1933 Act;
(iii) will offer and sell the Securities only (x)
to persons who it reasonably believes to be QIBs, (y) to
institutions which it reasonably believes are Institutional
Accredited Investors that execute and deliver a letter
containing certain representations and agreements in the form
attached as Annex A to the Offering Memorandum or (z) to
institutions in transactions that occur outside the United
States within the meaning of Regulation S under the 1933 Act;
(iv) is an Institutional Accredited Investor 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 Securities;
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(v) has not and will not offer or sell the
Securities by any form of general solicitation or general
advertising, including but not limited to the methods
described in Rule 502(c) of Regulation D under the 1933 Act;
and,
(vi) is not a pension or welfare plan (as defined
in Section 3 of the Employee Retirement Income Act of 1974, as
amended, or the rules and regulations promulgated thereunder
("ERISA")) and it is not acquiring the Securities on behalf of
a person whose funds to be used for the purchase of the
Securities constitute assets allocated to any qualified trust
that contains the assets of any employee benefit plan with
respect to which the Company is a party in interest or
disqualified person or the use of such assets would not
constitute a non-exempt prohibited transaction under ERISA or
the Code. The representation made in the preceding sentence is
made solely in reliance upon such Initial Purchaser's review
of "Notice to Investors" in the Offering Memorandum, which
describes the employee benefit plans with respect to which the
Company is a party in interest or a disqualified person.
4. Agreements of the Company. Each of the Company and the
Guarantors, jointly and severally, agrees with each of you that:
(a) It will advise you promptly and, if requested by any
of you, confirm such advice in writing, (i) of the issuance by any
state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Securities
for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any state securities commission or other
regulatory authority, and (ii) of the happening of any event during
such period as in your rea-
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sonable judgment, upon the advice of counsel, you are required to
deliver an Offering Memorandum in connection with sales of the
Securities by you which event makes any statement of a material fact
made in the Offering Memorandum untrue or which requires the making of
any additions to or changes in the Offering Memorandum (as amended or
supplemented from time to time) in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Each of the Company, the Affiliated Companies and the
Guarantors shall use its best efforts to prevent the issuance of any
order suspending the qualification or exemption of the Securities under
any state securities or Blue Sky laws, and, if at any time, any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption of the Securities under
any state securities or Blue Sky laws, the Company, the Affiliated
Companies and the Guarantors shall use every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(b) It will not make any amendment or supplement to the
preliminary offering memorandum or the Offering Memorandum, of which
you shall not previously have been advised and provided a copy within
two business days prior to the delivery thereof or to which you shall
reasonably object. During such period as in your reasonable judgment,
upon advice of counsel, you are required to deliver an Offering
Memorandum in connection with sales of the Securities, the Company and
the Guarantors shall promptly prepare, upon your reasonable request,
any amendment or supplement to the Offering Memorandum that may be
necessary or advisable in connection with resales of the Securities.
(c) It will furnish to you and to those persons who you
identify to the Company, without charge, as many copies of the Offering
Memorandum (and of any amendments or supplements thereto) as you may
reasonably request.
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(d) If, during such period as in your reasonable
judgment, upon the advice of counsel, you are required to deliver the
Offering Memorandum in connection with sales of the Securities by you,
any event shall occur as a result of which it becomes necessary to
amend or supplement the Offering Memorandum in order to make the
statements therein, in light of the circumstances existing as of the
date the Offering Memorandum is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with any law, it will promptly prepare an
appropriate amendment or supplement to the Offering Memorandum so that
the statements in the Offering Memorandum, as so amended or
supplemented, will not, in the light of the circumstances existing as
of the date the Offering Memorandum is so delivered, be misleading, and
will comply with applicable law, and will furnish to you without charge
such number of copies thereof as you may reasonably request.
(e) It will cooperate with you and your counsel in
connection with the registration or qualification of the Securities for
offer and sale by you under the state securities or Blue Sky laws of
such jurisdictions as you may reasonably request (provided, that
neither the Company nor the Guarantors shall be obligated to qualify as
a foreign corporation in any jurisdiction in which it is not 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 to subject itself to general taxation in any such
jurisdiction). The Company and the Guarantors will continue such
qualification in effect so long as required by law for distribution of
the Securities by you.
(f) After the closing of the Exchange Offer, the Company
will, so long as the Securities are outstanding, file on a timely basis
with the Commission, to the extent such filings are accepted by the
Commission, and whether or not the Company has a class of securities
reg-
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istered under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the annual reports, quarterly reports and other documents
that the Company would be required to file if it were subject to
Section 13 or Section 15 of the 1934 Act. For a period of five (5)
years hereafter and thereafter for so long as you are making a market
in the Securities, the Company will furnish to you copies of all such
reports and information, together with such other documents, reports
and information as shall be furnished by the Company to the holders of
the Securities, and such other information concerning the Company and
its Subsidiaries as you may reasonably request.
(g) For so long as and at any time that it is not subject
to Section 13 or 15(d) of the 1934 Act, the Company, upon request of
any holder of the Securities, will furnish to such holder, and to any
prospective purchaser or purchasers of the Securities designated by
such holder, information satisfying the requirements of subsection
(d)(4)(i) of Rule 144A under the 1933 Act; provided, however, that the
Company's obligations under this Section 4(g) shall terminate upon the
earlier of (i) the date the Exchange Offer is concluded and the
exchange of the Exchange Securities for the Securities tendered therein
is consummated or (ii) the date the Shelf Registration Statement is
declared effective by the Commission; provided further that,
notwithstanding the foregoing proviso, the Company shall be obligated
to deliver, upon request, any information required by Rule
144A(d)(4)(i) under the Act to prospective purchasers of the Securities
during any period during which, pursuant to the Registration Rights
Agreement, the Shelf Registration Statement is required to be
effective, but such effectiveness has been suspended or revoked for any
reason.
(h) Whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, it will pay and be
responsible for all costs, expenses, fees and
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taxes in connection with or incident to (i) the printing, processing
and distribution of the preliminary offering memorandum, the Offering
Memorandum and all amendments or supplements thereto, including such
copies as may be requested for use in connection with resales by you,
(ii) the issuance and delivery of the Securities, (iii) the
registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of the jurisdictions referred to
in paragraph (e) above (including, in each case, any filing fees in
connection therewith and the fees and disbursements of counsel relating
thereto), (iv) the rating of the Securities by investment rating
agencies, (v) the inclusion of the Securities on the National
Association of Securities Dealers, Inc. (the "NASD") Automatic
Quotation System-PORTAL ("PORTAL") and the approval of the Securities
by DTC for "book-entry" transfer and (vi) the performance by each of
the Company and the Guarantors of its other obligations under this
Agreement, including (without limitation) the fees of the Trustee, the
cost of its personnel and other internal costs, the cost of printing
and engraving the certificates representing the Securities, and all
expenses and taxes incident to the sale and delivery of the Securities
to you.
(i) It will use the proceeds from the sale of the
Securities in the manner described in the Offering Memorandum under the
caption "Use of Proceeds."
(j) It will use its reasonable efforts to, and will use
its reasonable efforts to cooperate with you to, cause the Securities
to be designated PORTAL securities in accordance with the rules and
regulations of the NASD.
(k) It will not voluntarily claim, and will actively
resist any attempts to claim, the benefit of any usury laws against the
holders of the Securities.
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(l) It will 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 will use its
reasonable best efforts to satisfy all conditions precedent on its part
to the delivery of the Securities.
(m) Except in connection with the Exchange Offer or the
filing of the Shelf Registration Statement, as the case may be, it will
not, and will not authorize or knowingly permit any person acting on
its behalf to, solicit any offer to buy or offer to sell the Securities
by means of any form of general solicitation or general advertising
(including, without limitation, as such terms are used in Regulation D
under the 1933 Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the 1933 Act.
(n) Neither the Company nor any affiliate (as such term
is defined in Rule 501(b) under the 1933 Act) of the Company will
offer, sell or solicit offers to buy or otherwise negotiate in respect
of any "security" (as defined in the 1933 Act) which could be expected
to be integrated with the sale of the Securities in a manner that would
require the registration of the Securities under the 1933 Act.
(o) It will not, so long as the Securities are
outstanding, be or become an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company Act
of 1940, as amended.
(p) It will, prior to the Closing Date, furnish to the
Initial Purchasers a copy of any unaudited interim combined financial
statements of the Company for any period subsequent to the period
covered by the most recent financial statements appearing in the
Offering Memorandum.
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(q) Each Security will bear the following legend until
such legend shall no longer be necessary or advisable because the
Securities are no longer subject to the restrictions on transfer
described therein:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES
NOT TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") THAT IS THREE YEARS (OR SUCH SHORTER
PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) AS PERMITTING THE RESALE
BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER THE LATER
OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) PURSUANT TO RULE 144A, FOR SO LONG AS IT IS AVAILABLE, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D),(E) OR (F)
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TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."
(r) During the period of three years after the Closing
Date or such shorter period as provided by any amendment to Rule 144
under the 1933 Act, the Company will not, and will not permit any of
its "affiliates" (as defined in Rule 144 under the 1933 Act) to, resell
any of the Securities which constitute "restricted securities" under
Rule 144 that have been reacquired by any of them.
(s) For so long as the Initial Purchasers shall hold any
Securities, but in no event longer than three years from the date
hereof, the Company shall, upon the Company's becoming a party in
interest or disqualified person with respect to any "employee benefit
plan" (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) other than any such plans
described in "Notice to Investors" in the Offering Memorandum, (i)
promptly notify the Initial Purchasers, in writing, of such event, and
(ii) as soon as practicable thereafter, amend the "Notice to Investors"
section of the Offering Memorandum to reflect such event.
5. Representations and Warranties. Each of the Company and the
Guarantors, jointly and severally, represents and warrants to each of you that:
(a) Each of the preliminary offering memorandum and the
Offering Memorandum, as of its date, contains all the information that,
if requested by a prospective purchaser, would be required to be
provided pursuant to Rule 144A(d)(4)(i) under the 1933 Act. The
Offering Memorandum does not, and at the Closing Date, the Offering
Memorandum and any amendment or supplement thereto will not, contain
any untrue
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statement of a material fact or omit to state 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, and the preliminary offering memorandum, at the date
thereof and as of the date hereof, did not contain any untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; except that the representations
and warranties contained in this paragraph (a) shall not apply to
statements in or omissions from the preliminary offering memorandum or
the Offering Memorandum (or any supplement or amendment thereto) based
upon and conforming with information relating to any Initial Purchaser
furnished to the Company in writing by or on behalf of any Initial
Purchaser expressly for use therein. The Company acknowledges for all
purposes under this Agreement that the statements with respect to price
and discount and the last paragraph on the cover page of the Offering
Memorandum, the information contained under the caption "Plan of
Distribution" in the preliminary offering memorandum and the Offering
Memorandum, and the information regarding stabilization on the inside
front cover of the preliminary offering memorandum and the Offering
Memorandum (or any amendment or supplement thereto) constitute the only
written information furnished to the Company by or on behalf of any
Initial Purchaser expressly for use in the preliminary offering
memorandum or the Offering Memorandum (or any amendment or supplement
thereto) and that the Initial Purchasers shall not be deemed to have
provided any other information (and therefore are not responsible for
any such statement or omission) pertaining to any arrangement or
agreement with respect to any party other than the Initial Purchasers.
No contract or document that would be required to be described in the
Offering Memorandum if the Offering Memorandum were contained in a
registration statement on Form S-1 under the 1933 Act is not so
described.
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(b) To the Company's knowledge, no action has been taken
with respect to the Company or any of its Subsidiaries, and no statute,
rule or regulation or order has been enacted, adopted or issued by any
governmental agency which prevents the issuance of the Securities,
prevents or suspends the use of the preliminary offering memorandum or
the Offering Memorandum or suspends the sale of the Securities in any
jurisdiction referred to in Section 4(e) hereof; no injunction,
restraining order or order of any nature by a Federal or state court of
competent jurisdiction has been issued with respect to the Company, the
Holding Company or any of the Affiliated Companies which would prevent
the issuance of the Securities, prevent or suspend the use of the
preliminary offering memorandum or the Offering Memorandum or suspend
the sale of the Securities in any jurisdiction referred to in Section
4(e) hereof; no action, suit or proceeding before any court or
arbitrator or any governmental body, agency or official (domestic or
foreign) is pending against or, to the knowledge of the Company,
threatened against, the Company, the Holding Company or any of the
Affiliated Companies which, if adversely determined, could reasonably
be expected to (a) prevent the issuance of the Securities, (b) prevent
the consummation of the transactions contemplated by the Acquisition
Agreement, or (c) in any manner invalidate this Agreement, the
Acquisition Agreement, the Registration Rights Agreement or the
Indenture; and every request of any securities authority or agency of
any jurisdiction for additional information (to be included in the
preliminary offering memorandum or the Offering Memorandum or
otherwise) that has been communicated to the Company has been complied
with in all material respects or responded to in a manner acceptable to
such securities authority.
(c) The Securities that are being sold by the Company
have been duly authorized for issuance and sale to the Initial
Purchasers pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agr-
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eement against payment of the consideration set forth herein, will have
been duly executed by the Company and the Guarantors; when the
Securities are issued, authenticated and delivered in accordance with
the Indenture and paid for in accordance with the terms of this
Agreement, the Securities issued by the Company or the Guarantors, as
applicable, will constitute valid and legally binding obligations of
the Company and the Guarantors, as applicable, enforceable against the
Company and the Guarantors, as applicable, in accordance with their
terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity); the
Securities and the capital stock of the Company conform in all material
respects to the statements relating thereto in the Offering Memorandum;
and the issuance and sale of the Securities by the Company will not be
subject to preemptive or other similar rights.
(d) Each of the Transaction Agreements has been or, as of
the Closing Date will have been, duly authorized and validly executed
and delivered by the Company, the Affiliated Companies and the
Guarantors (to the extent each is a party thereto), and, assuming due
execution by you and the other parties thereto, constitutes a valid and
legally binding agreement of the Company, the Affiliated Companies and
the Guarantors (to the extent each is a party thereto), enforceable
against the Company, the Affiliated Companies and the Guarantors (to
the extent each is a party thereto) in accordance with its terms
subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other laws affecting creditors'
rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or
in equity).
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(e) The execution and delivery of the Transaction
Agreements and the consummation of the Transactions do not and on the
Closing Date will not (i) conflict with or result in a breach or
violation of any of the respective charter or bylaws of the Company,
the Affiliated Companies or the Holding Company or of any of the terms
or provisions thereof as in effect on such respective dates, or (ii)
constitute a default or cause an acceleration of any obligation under
or result in the imposition or creation of (or the obligation to create
or impose) a Lien (as hereinafter defined) with respect to, any of the
respective charters or by-laws of the Company, the Affiliated Companies
or the Holding Company or any material bond, note, debenture or other
evidence of indebtedness or any indenture, mortgage, deed of trust or
other material contract lease, or other instrument except for any such
bond, note, debenture or other evidence of indebtedness or any
indenture, mortgage, deed of trust or other material contract lease or
other instrument which will be satisfied in full or terminated on or
prior to the Closing Date to which the Company, the Holding Company or
any of the Affiliated Companies is a party or by which any of them is
bound, or to which any of the property or assets of the Company, the
Holding Company or any of the Affiliated Companies is or may be
subject, except for any such violation or default which, individually
or in the aggregate, would not have a material adverse effect on the
financial condition or results of operations or business of the Company
and ARP, taken as a whole (a "Material Adverse Effect") and except for
Liens in respect of the Securities and Liens to secure indebtedness
incurred pursuant to the New Credit Facility, or (iii) contravene any
order of any court or governmental agency or authority having
jurisdiction over the Company, the Holding Company or any of the
Affiliated Companies or any of their respective properties entered in
any proceeding to which the Company, the Holding Company or any of the
Affiliated Companies was or is a party or by which any of them is bound
or vio-
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late or conflict with any applicable Federal, state or local law, rule,
administrative regulation or ordinance or administrative or court
decree applicable to the Company, the Holding Company or any of the
Affiliated Companies or their respective properties except for such
defaults, accelerations or contraventions that individually or in the
aggregate would not have a Material Adverse Effect.
(f) The Company has applied to have the Securities
designated as PORTAL securities in accordance with the rules and
regulations of the NASD.
(g) Upon consummation of the Transactions, except for
interests in Hambrose Leasing - III, Limited Partnership, Hambrose
Leasing IV, Limited Partnership and Charterhouse Capital Associates,
L.P., the only entity in which the Company will have an equity or other
ownership interest will be ARP. The Company and ARP have been duly
organized, each is validly existing as a corporation in good standing
under the laws of its state of incorporation or organization and has
full corporate power and authority to carry on its business as it is
currently being conducted and as it will be conducted after the
Acquisition. Each of the Company and ARP has the requisite corporate
power and authority to own, lease and operate its properties, and each
is duly qualified and is in good standing as a foreign corporation (or
other entity) authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property
requires such qualification except where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse
Effect.
(h) Each of the Company and the Guarantors has the
requisite corporate power and authority to authorize the offering of
the Securities and to execute, deliver and perform its obligations
under each of the Transaction Agreements to which it is a party and to
issue,
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sell and deliver the Securities being issued by such issuer.
(i) All of the issued and outstanding shares of capital
stock of ARP have been duly authorized and validly issued, and, on the
Closing Date and after the Natur-Pharma II Merger, will be owned
directly by the Company. All such shares in ARP are fully paid and
non-assessable, and on the Closing Date, will be owned by the Company
free and clear of any security interest, mortgage, pledge, claim, lien,
encumbrance or adverse interest of any nature (each, a "Lien") other
than Liens securing indebtedness under or granted in connection with
the New Credit Facility. As of the Closing Date, there will be no
outstanding subscriptions, rights, warrants, options, calls,
convertible or exchangeable securities, commitments of sale, or Liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of ARP.
(j) The authorized, issued and outstanding capital stock
of the Company will be, as of the Closing Date, as set forth in the
Offering Memorandum under "Capitalization"; all the shares of issued
and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid, nonassessable and not subject to
any preemptive or similar rights and all of the outstanding shares of
capital stock of, or other ownership interests in, the Company will be
on the Closing Date owned directly by the Holding Company, free and
clear of all Liens other than Liens securing indebtedness to be
incurred under the New Credit Facility.
(k) Other than as disclosed in the Offering Memorandum,
there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, pending against the
Company, the Affiliated Companies or the Holding Company which would be
required to be disclosed in the Offering Memorandum if the Offering
Memorandum were a pro-
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spectus contained in a registration statement on Form S-1 under the
1933 Act, or which could reasonably be expected to have a Material
Adverse Effect, or materially and adversely to affect the performance
of the Company's or the Guarantors' obligations pursuant to this
Agreement, the Registration Rights Agreement or the Indenture or the
Company's obligations pursuant to the transactions contemplated hereby
or thereby and, to the Company's knowledge, no such proceedings are
contemplated or threatened.
(l) Except as would not, individually or in the
aggregate, have a Material Adverse Effect, neither the Company, the
Affiliated Companies nor the Holding Company is in violation of any
Federal, state, local and foreign laws and regulations relating to
pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
("Materials of Environmental Concern"), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern
in connection with protection of human health or the environment
(collectively, "Environmental Laws"), which violation includes, but is
not limited to, noncompliance with any permits or other governmental
authorizations required for the operation of the business of the
Company, the Affiliated Companies or the Holding Company under
applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Company, the Affiliated Companies or
the Holding Company received any communication (written or oral),
whether from a governmental authority, citizens group, employee or
otherwise, that alleges that the Company, the Affiliated Companies or
the Holding Company
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is in violation and there are no circumstances, either past, present or
that are reasonably foreseeable, that will or could reasonably be
expected to lead to such violation in the future. In addition, except
as disclosed in the preliminary offering memorandum or the Offering
Memorandum, or as would not, individually or in the aggregate, have a
Material Adverse Effect: there is no claim, action, cause of action,
investigation or notice (written or oral) by any person or entity
alleging potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property
damages, personal injuries, attorneys' fees or penalties arising out
of, based on or resulting from (a) the presence, or release into the
environment, of any Material of Environmental Concern at any location
owned or operated by the Company, the Affiliated Companies or the
Holding Company, now or in the past, or (b) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law
(collectively, "Environmental Claims"), pending or, to the knowledge of
the Company, threatened against the Company, the Affiliated Companies
or the Holding Company or, to the knowledge of the Company, against any
person or entity whose liability for any Environmental Claim the
Company, the Affiliated Companies or the Holding Company has retained
or assumed either contractually or by operation of law; to its
knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that will or could reasonably be
expected to result in a violation of any Environmental Law or form the
basis of any Environmental Claim against the Company, the Affiliated
Companies or the Holding Company or against any person or entity whose
liability for any Environmental Claim the Company, the Affiliated
Companies or the Holding Company has retained or assumed either
contractually or by operation of law.
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(m) None of the Company, the Affiliated Companies or the
Holding Company has any knowledge of any actionable violation of any
Federal, state or local law relating to employment and employment
practices, discrimination in the hiring, promotion or pay of employees
nor any applicable wage or hour laws, except for any such violation
which, individually or in the aggregate, would not result in a Material
Adverse Effect. There is (A) no significant unfair labor practice
complaint pending against the Company, the Affiliated Companies or the
Holding Company or, to the knowledge of the Company, the Affiliated
Companies or the Holding Company, threatened against any of them,
before the National Labor Relations Board or any state or local labor
relations board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective
bargaining agreement is pending against the Company, the Affiliated
Companies or the Guarantors or, to the knowledge of the Company, the
Affiliated Companies or the Holding Company, threatened against any of
them, (B) no labor strike, dispute, slowdown or stoppage ("Labor
Dispute") in which the Company, the Affiliated Companies or the Holding
Company is involved nor, to the knowledge of the Company, the
Affiliated Companies or the Holding Company, is any Labor Dispute
imminent, other than routine disciplinary and grievance matters, each
of the Company, the Affiliated Companies and the Holding Company is not
aware of any existing or imminent Labor Dispute by the employees of any
of its principal suppliers, manufacturers or contractors and (C) no
question concerning union representation within the meaning of the
National Labor Relations Act existing with respect to the employees of
the Company, the Affiliated Companies or the Holding Company and, to
the knowledge of the Company, the Affiliated Companies or the Holding
Company, no union organizing activities are taking place, except (with
respect to any matter specified in clause (A), (B) or (C) above, singly
or in the aggregate) such as would not have a Material Adverse Effect.
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(n) Subject to Liens securing indebtedness to be incurred
under the New Credit Facility or disclosed in the Offering Memorandum,
including capitalized leases, the Company and each of the Affiliated
Companies has good and marketable title, free and clear of all Liens,
to all property and assets described in the Offering Memorandum as
being owned by it excluding any Liens that would not have a Material
Adverse Effect. All leases to which the Company or any of the
Affiliated Companies is a party are valid and binding and no default by
the Company or any Subsidiary or, to the Company's knowledge, any other
party has occurred or is continuing thereunder, except for any such
defaults which, individually or in the aggregate, would not result in a
Material Adverse Effect, and the Company and the Affiliated Companies
enjoy possession under all such leases to which any of them is a party
as lessee with such exceptions as do not materially interfere with the
use made by the Company or the Affiliated Companies.
(o) The Company and each of the Affiliated Companies
maintains insurance covering their properties, operations, personnel
and businesses, including without limitation product liability
insurance. Neither the Company nor any of the Affiliated Companies has
received written notice from any insurer or agent of such insurer that
substantial capital improvements or other similar expenditures will
have to be made in order to continue such insurance. All such insurance
is outstanding and duly in force on the date hereof and will be
outstanding and duly in force on the Closing Date.
(p) The firm of accountants that has certified or shall
certify the applicable combined financial statements of the Company and
the Affiliated Companies included in the preliminary offering
memorandum and the Offering Memorandum are independent public
accountants with respect to the Company and its Subsidiaries, as
required by the 1933 Act and the 1934
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25
Act. The combined financial statements of the Company, together with
related notes, set forth in the preliminary offering memorandum and the
Offering Memorandum (and any amendments or supplements thereto) comply
as to form in all material respects with the requirements of the 1933
Act and the 1934 Act and fairly present the combined financial position
of the Company and the Affiliated Companies at the respective dates
indicated and the results of their operations and their cash flows for
the respective periods indicated, in accordance with generally accepted
accounting principles in the United States of America consistently
applied throughout such periods. The pro forma financial statements,
together with related notes, set forth under the caption "Unaudited Pro
Forma Condensed Consolidated Financial Data" in the preliminary
offering memorandum and the Offering Memorandum have been prepared on a
basis consistent with such historical statements, except for the pro
forma adjustments specified therein, and give effect to assumptions
made on a reasonable basis and present fairly the transactions
reflected thereby as indicated in the preliminary offering memorandum,
the Offering Memorandum and the Transaction Agreements and comply as to
form in all material respects with the applicable accounting
requirements of rule 11-02 of Regulation S-X and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of those statements.
(q) Except as contemplated by the preliminary offering
memorandum and the Offering Memorandum, subsequent to the respective
dates as of which information is given in the preliminary offering
memorandum and the Offering Memorandum, (i) neither the Company nor any
of the Affiliated Companies has incurred any liabilities or
obligations, direct or contingent, which are material to the Company
and the Affiliated Companies, taken as a whole, nor entered into any
transaction not in the ordinary course of business that is material to
the Company and the Affiliated Companies, taken as
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26
a whole, (ii) there has been no decision or judgment in any litigation
to which the Company or any of the Affiliated Companies are a party
materially adverse to the Company and any of the Affiliated Companies,
taken as a whole, and (iii) there has been no material adverse change
in the financial condition or in the results of operations or business
of the Company and the Affiliated Companies, taken as a whole (any of
the items set forth in clauses (i), (ii), or (iii), above, "Material
Adverse Change").
(r) All tax returns required to be filed by the Company
and its Subsidiaries in any jurisdiction have been filed, other than
those filings that are being contested in good faith, except where
failure to so file would not have a Material Adverse Effect, and all
taxes, including withholding taxes, penalties and interest,
assessments, fees and other governmental charges due or claimed to be
due from such entities have been paid other than those being contested
in good faith and for which adequate reserves have been provided,
except where failure to so pay would not have a Material Adverse
Effect.
(s) As of the Closing Date, the Company and the
Guarantors will possess such licenses, certificates, authorizations,
approvals, franchises, permits and other rights issued by local, state,
Federal or foreign regulatory agencies or bodies (collectively,
"Permits") as are necessary to own, lease and operate its respective
properties and to conduct the businesses now conducted by them except
where the failure to possess any such Permit would not have a Material
Adverse Effect; as of the Closing Date, the Company and each of the
Guarantors will have fulfilled and performed all of its material
obligations with respect to such Permits and neither the Company nor
the Guarantors will have received any notice of proceedings relating to
the revocation or modification of any such Permit that is reasonably
likely to have a Material Adverse Effect.
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27
(t) As of the Closing Date, each of the Company and the
Guarantors will own or possess all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, the "Intellectual Property") presently employed by it in
connection with the businesses now operated by them, except where the
failure to so own or possess would not, individually or in the
aggregate, have a Material Adverse Effect, and neither the Company nor
the Guarantors will have received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing, except where such infringement or conflict would not
individually, or in the aggregate, have a Material Adverse Effect. To
the Company's knowledge, the use of the Intellectual Property in
connection with the business and operations of the Company and the
Guarantors does not infringe on the rights of any person, except where
such infringement does not individually or in the aggregate have a
Material Adverse Effect. The representations in this clause (t) exclude
Intellectual Property matters with respect to any foreign country that
has not accounted for more than 1% of the sales of the Company and the
Affiliated Companies in either of the last 2 fiscal years.
(u) The Company, the Holding Company and each of the
Affiliated Companies maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (1) transactions are
executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(3) access to assets is permitted only in accordance with management's
general or specific authorization; and (4) the recorded accountability
for inventory assets is compared
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with the existing inventory assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(v) None of the Company, the Holding Company or any of
the Affiliated Companies has, directly or indirectly, paid or delivered
any fee, commission or other sum of money or item of property, however
characterized, to any finder, agent, government official or other
party, in the United States or any other country, which is in any
manner related to the business or operations of the Company, the
Holding Company and the Affiliated Companies which any of such entities
knows or has reason to believe to have been illegal under any Federal,
state or local laws of the United States or any other country having
jurisdiction; and none of the Company, the Holding Company or any of
the Affiliated Companies has participated, directly or indirectly, in
any boycotts or other similar practices in contravention of law
affecting any of its actual or potential customers.
(w) As of the Closing Date, neither the Company nor any
Guarantor is (i) an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, or (ii) a "holding company" or a "subsidiary
company" of a holding company, or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(x) Except as disclosed in the preliminary offering
memorandum or the Offering Memorandum, no holder of any security of the
Company has any right to require registration of the Securities.
(y) Assuming the accuracy of your representations
contained in Section 3 hereof and your compliance with your agreements
therein set forth, it is not necessary, in connection with the sale and
delivery of the Securities to
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you and the offer and resale of the Securities by you, in each case in
the manner contemplated by this Agreement and the Offering Memorandum,
to register the Securities under the 1933 Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended, and the
rules and regulations thereunder (collectively, the "TIA").
(z) None of the Company, the Holding Company, any of the
Affiliated Companies or any affiliate (as such term is defined in Rule
501(b) under the 1933 Act) has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the 1933 Act) which is or will
be integrated with the sale of the Securities in a manner that would
require the registration of the Securities under the 1933 Act.
(aa) None of the Company, the Holding Company or any of
the Affiliated Companies and any officer, director or other person
(other than you, as to whom the Company makes no representation) acting
on its behalf has engaged, in connection with the offering of the
Securities, in any form of general solicitation or general advertising,
including but not limited to the methods described in Rule 502(c) under
the 1933 Act.
(ab) To the knowledge of the Company and the Guarantors,
immediately after and after giving effect to the Offering, the
Acquisition and the New Credit Facility, with respect to the Company on
a consolidated basis, (i) the present fair salable value of its assets
shall be more than the amount that will be required to pay its debts
(including contingent and unliquidated debts) as they become absolute
and matured, (ii) its assets, at a fair valuation, shall be greater
than the sum of its debts (including contingent and unliquidated
debts), (iii) it shall not be engaged in a business or transaction for
which its remaining assets are unreasonably small in relation to such
business or transaction, and (iv) it shall not intend to incur or
believe that
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it will incur debts beyond its ability to pay as such debts become
absolute and matured.
(ac) The Indenture, as of the date hereof and at the
Closing Date, will conform in all material respects to the requirements
of the TIA applicable to an indenture which is qualified under the TIA.
(ad) None of the proceeds of the sale of the Securities
will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security (as that term is defined in Regulations G
and U of the Federal Reserve Board), for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or
carry any margin security or for any other purpose which might cause
any of the Securities to be considered a "purpose credit" within the
meanings of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board").
(ae) Based on the representation of the Initial Purchasers
set forth in Section 3(b)(vi) hereof, the execution and delivery of the
Transaction Agreements and the consummation of the Transactions will
not involve any non-exempt prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended, or the rules, regulations and published
interpretations promulgated thereunder (the "Code"). Neither the
Company nor any of its ERISA Affiliates is a "party in interest" or a
"disqualified person" except with respect to those employee benefit
plans described in "Notice to Investors" in the Offering Memorandum.
Except as disclosed in Schedule XV to the Stock Purchase Agreement, no
condition exists or event or transaction has occurred in connection
with any employee benefit plan that could result in the Company or any
such ERISA Affiliate incurring any liability, fine or penalty that
could, singly or in the aggregate, have a Material Adverse Effect. With
respect to any employee pension benefit plan that is subject to Title
IV of ERISA, except as adequately dis-
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31
closed in the Offering Memorandum, (i) the fair market value of the
assets of such employee pension benefit plan equals or exceeds the
present value of the liabilities of such pension plan (as determined in
accordance with the actuarial methods and assumptions set forth in the
latest actuarial report for such employee pension benefit plan), except
where the failure to so equal or exceed would not, singly or in the
aggregate, have a Material Adverse Effect and (ii) there exists no
accumulated funding deficiency which would have, singly or in the
aggregate, a Material Adverse Effect. The terms "employee benefit
plan," "employee pension benefit plan" and "party in interest" shall
have the meanings assigned to such terms in Section 3 of ERISA, the
term "Affiliate" shall have the meaning assigned to such term in
Section 407(d)(7) of ERISA, and the term "disqualified person" shall
have the meaning assigned to such term in Section 4975 of the Code.
(af) The Company has delivered to the Initial Purchasers
true and correct copies of the Acquisition Agreement, and there have
been no amendments, alterations, modifications or waivers thereto or in
the exhibits or schedules thereto to which the Initial Purchasers shall
have reasonably objected.
(ag) Each certificate signed by any officer of the Company
and delivered to the Initial Purchasers or counsel for the Initial
Purchasers shall be deemed to be a representation and warranty by the
Company to each Initial Purchaser as to the matters covered thereby to
the extent expressly set forth therein.
(ah) To the extent that any representation in Section 5 of
this Agreement is qualified by reference to the preliminary offering
memorandum, no such representation shall be deemed breached by reason
of any misstatement or omission in such preliminary offering memorandum
if and to the extent such misstatement or omission was corrected in the
Offering Memorandum.
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6. Indemnification.
(a) Each of the Company and the Guarantors, jointly and
severally, agrees to indemnify and hold harmless (i) each of the
Initial Purchasers and (ii) each person, if any, who controls (within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act) any of the Initial Purchasers (any of the persons referred to in
this clause (ii) being hereinafter referred to as a "controlling
person"), and (iii) the respective officers, directors, partners,
employees, representatives and agents of any of the Initial Purchasers
or any controlling person (any person referred to in clause (i), (ii)
or (iii) may hereinafter be referred to as an "Indemnified Person") to
the fullest extent lawful, from and against any and all losses, claims,
damages, judgments, actions, costs, assessments, expenses and other
liabilities (collectively, "Liabilities"), including, without
limitation, and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing or defending any claim or action, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, including the reasonable fees and expenses of
counsel to any Indemnified Person directly or indirectly caused by,
related to, based upon, arising out of or in connection with any untrue
statement or alleged untrue statement of a material fact contained in
the Offering Memorandum (or any amendment or supplement thereto), or
any preliminary offering memorandum, or any omission or alleged
omission to state therein 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, except
insofar as such Liabilities are caused by (i) an untrue statement or
omission or alleged untrue statement or omission that is made in
reliance upon and in conformity with information relating to any of the
Initial Purchasers furnished in writing to the Company by any of the
Initial Purchasers expressly for use in the Offering Memorandum (or any
amendment or supplement thereto) or any preliminary offering memorandum
or (ii) an untrue or
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33
alleged untrue statement contained in or omission or alleged omission
from the preliminary offering memorandum if a copy of the Offering
Memorandum (as then amended or supplemented) was not delivered by or on
behalf of the Initial Purchasers to the person asserting the claim or
action, if required by law to have been so delivered by the Initial
Purchasers seeking indemnification and the untrue statement or alleged
statement or omission or alleged omission from such preliminary
offering memorandum was corrected in the Offering Memorandum.
Notwithstanding the foregoing, in the event that it is finally
determined by a court of competent jurisdiction that indemnification
under this Section 6(a) is not available to an Indemnified Person,
expenses paid in advance of the final disposition of such claim,
action, investigation or proceeding shall be repaid to the Company by
such Indemnified Person. The Company and the Guarantors shall notify
you promptly of the institution, threat or assertion of any claim,
proceeding (including any governmental investigation) or litigation in
connection with the matters addressed by this Agreement which involves
the Company, the Guarantors or an Indemnified Person.
(b) In case any action or proceeding (for all purposes of
this Section 6 including any governmental investigation) shall be
brought or asserted against any of the Indemnified Persons with respect
to which indemnity may be sought against the Company or any of the
Guarantors, the applicable Initial Purchaser with respect to such
Indemnified Person shall promptly notify the Company in writing
(provided, that the failure to give such notice shall not relieve the
Company or such Guarantor of its obligations pursuant to this Agreement
except to the extent that the Company or any Guarantor is materially
prejudiced or forfeits rights or defenses by reason of such failure).
Upon receiving such notice, the Company or such Guarantor shall be
entitled to participate in any such action or proceeding and to assume,
at its sole expense, the defense thereof, with counsel reasonably
satisfactory to such Indemnified Person (who shall not, except with
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34
the consent of the Indemnified Person, be counsel to the Company or to
the Guarantors or any affiliate thereof) and, after written notice from
the Company to such Indemnified Person of its election to so assume the
defense thereof reasonably promptly after receipt of the notice from
the Indemnified Person of such action or proceeding, the Company and
such Guarantor shall not be liable to such Indemnified Person hereunder
for legal expenses of other counsel subsequently incurred by such
Indemnified Person in connection with the defense thereof, other than
costs of investigation, unless (i) the Company and such Guarantor agree
to pay such fees and expenses, or (ii) the Company fails promptly to
assume such defense or fails to employ counsel reasonably satisfactory
to such Indemnified Person, or (iii) the named parties to any such
action or proceeding (including any impleaded parties) include both
such Indemnified Person and the Company or such Guarantor or any
affiliate of the Company or such Guarantor, and either (x) there may be
one or more legal defenses available to such Indemnified Person that
are different from or additional to those available to the Company or
such Guarantor or such affiliate of the Company or such Guarantor or
(y) the Indemnified Person shall have been advised by counsel that a
conflict may exist between such Indemnified Person and the Company or
such Guarantor or such affiliate of the Company or such Guarantor. In
the event of any of clause (i), (ii) or (iii) of the immediately
preceding sentence, if such Indemnified Person notifies the Company in
writing, the Company shall not have the right to assume the defense
thereof and such Indemnified Person shall have the right to employ its
own counsel in any such action and the fees and expenses of such
counsel shall be paid, as incurred, by the Company, subject to the
provisions hereof, it being understood, however, that the Company shall
not, in connection with any one such action or proceeding or separate
but substantially similar or related actions or proceedings arising out
of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in
addition to any
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local counsel) at any time for the Indemnified Persons. The Company and
the Guarantors shall be liable for any settlement of any such action or
proceeding effected with the Company's prior written consent, which
consent will not be unreasonably withheld, and the Company and each
Guarantor agrees to indemnify and hold harmless any Indemnified Person
from and against any Liabilities by reason of any settlement of any
action effected with the prior written consent of the Company. The
Company and the Guarantors agree to be liable for any settlement of any
proceeding effected without the Company's prior written consent if (i)
such settlement is entered into more than 10 business days after
receipt by the Company of the aforesaid request for payment in respect
of an indemnification obligation pursuant hereto and (ii) the Company
shall not have reimbursed the Indemnified Person in accordance with
such request prior to the date of such settlement. The Company and the
Guarantors shall not, without the prior written consent of each
Indemnified Person, settle or compromise or consent to the entry of any
judgment in or otherwise seek to terminate any pending or threatened
action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought pursuant hereto (whether
or not any Indemnified Person is a party thereto), unless such
settlement, compromise, consent or termination includes an
unconditional release of each Indemnified Person from all Liabilities
arising out of such action, claim, litigation or proceeding.
(c) Each of the Initial Purchasers agrees, severally and
not jointly, to indemnify and hold harmless the Company and the
Guarantors and their respective directors, officers and any person
controlling (within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act) the Company or the Guarantors and the
officers, directors, partners, employees, representatives and agents of
each such person, to the same extent as the foregoing indemnity from
the Company and the Guarantors to each of the Indemnified Persons, but
only with respect to claims and actions based on information relating
to such Ini-
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tial Purchaser in the Offering Memorandum that is in conformity with
information furnished in writing by such Initial Purchaser expressly
for use in the Offering Memorandum. In case any action or proceeding
(including any governmental investigation) shall be brought or asserted
against the Company, the Guarantors or any of their respective
directors or officers, or any such controlling person based on any
preliminary offering memorandum or the Offering Memorandum in respect
of which indemnity may be sought against any Initial Purchaser pursuant
to the foregoing sentence, such Initial Purchaser shall have the rights
and duties given to the Company and the Guarantors by Section 6(b)
hereof (except that if the Company shall have assumed the defense
thereof, such Initial Purchaser may but shall not be required to employ
separate counsel therein and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such
Initial Purchaser), and the Company and the Guarantors, their
respective directors or officers, and each such controlling person
shall have the rights and duties given to the Indemnified Person by
Section 6(b) hereof.
(d) If the indemnification provided for in this Section 6
is finally determined by a court of competent jurisdiction to be
unavailable to an indemnified party in respect of any Liabilities
referred to herein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such
Liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand
and the indemnified party on the other hand from the offering of the
Securities 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 indemnifying parties and the
indemnified party, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
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Guarantors, on the one hand, and any of the Initial Purchasers, on the
other hand, shall be deemed to be in the same proportion as the total
proceeds from the offering (net of discounts and commissions but before
deducting expenses) received by the Company bear to the total discounts
and commissions received by such Initial Purchaser, in each case as set
forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company and the Guarantors, and the Initial
Purchasers, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact related to
information supplied by the Company, the Guarantors or the Initial
Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The indemnity and contribution obligations set forth herein
shall be in addition to any liability or obligation such party may
otherwise have to any indemnified party.
The Company, the Guarantors and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to Section 6(d)
hereof were determined by pro rata allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, judgments,
liabilities or expenses referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, 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 6, none of the Initial Purchasers (and its related
Indemnified Persons) shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the total underwriting discount
applicable to the Securities purchased by such Initial Purchaser exceeds the
amount of any damages or liabilities which such Initial Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or al-
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leged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute pursuant to Section 6(d) hereof are
several in proportion to the respective principal amount of Securities purchased
by each of the Initial Purchasers hereunder and not joint.
7. Conditions of Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase the Securities under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
and the Guarantors contained in this Agreement shall be true and
correct in all material respects on the Closing Date with the same
force and effect as if made on and as of the Closing Date. The Company
and the Guarantors shall have performed or complied in all material
respects with all of their obligations and agreements herein contained
and required to be performed or complied with at or prior to the
Closing Date.
(b) The Offering Memorandum shall have been printed and
copies distributed to the Initial Purchasers as promptly as reasonably
practicable following the date of this Agreement or at such other date
and time as to which you may agree.
(c) No action shall have been taken, and no statute,
rule, regulation or order shall have been enacted, adopted or issued,
by any governmental agency which would, as of the Closing Date, prevent
the issuance of the Securities; and no injunction, restraining order or
order of any nature by a Federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance of the Securities, and on the Closing Date no
action, suit or proceeding shall be pending against, or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries before any court or arbitrator or any
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39
governmental body, agency or official which, if adversely determined,
would prevent the issuance of the Securities or would have a Material
Adverse Effect; and no stop order suspending the sale of the Securities
in any jurisdiction referred to in Section 4(e) hereof shall have been
issued and no proceeding for that purpose shall have been commenced or
shall be pending or, to the knowledge of the Company, threatened.
(d) (i) Except as otherwise specifically contemplated in
the Offering Memorandum, since the date hereof, there shall not have
been any Material Adverse Change; (ii) since the date of the latest
balance sheet included in the Offering Memorandum, there shall not have
been any material change in the capital stock or long-term debt, or
material increase in short-term debt, of the Company or any of its
consolidated Subsidiaries taken as a whole (excluding the repayment of
certain indebtedness to David and Jean Blechman); and (iii) the Company
and its Subsidiaries shall have no liability or obligation, direct or
contingent, which is material to the Company and its Subsidiaries,
taken as a whole, in each case other than those reflected in the
Offering Memorandum.
(e) The Company, the Guarantors and the Trustee shall
have entered into the Indenture and you shall have received
counterparts, conformed as executed, thereof.
(f) The Company and the Guarantors shall have entered
into the Registration Rights Agreement and you shall have received
counterparts, conformed as executed, thereof.
(g) The Securities shall have been designated PORTAL
securities in accordance with the rules and regulations adopted by the
NASD relating to trading in the PORTAL market.
(h) You shall have received a certificate of the Company,
dated the Closing Date, executed on behalf of the Company by the
President or any Vice President, and a principal financial
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40
or accounting officer of the Company, confirming, as of the Closing
Date, the matters set forth in paragraphs (a), (c) and (d) of this
Section 7.
(i) On or prior to the Closing Date, (i)(A) the
Acquisition and the transactions contemplated thereby shall have been
consummated, and (b) the Company shall have entered into the Bank
Agreements and all conditions precedent to the effectiveness thereof
shall have been satisfied or waived, (ii) such transactions described
in the foregoing clause (i) shall continue to be in full force and
effect in accordance with the terms thereof, and (iii) the Company
shall have provided to each of the Initial Purchasers and counsel to
the Initial Purchasers copies of all material closing documents
delivered to the parties relating to the Acquisition and the Bank
Agreements (including but not limited to legal opinions relating
thereto).
(j) On the Closing Date, you shall have received:
i) an opinion (in a form reasonably
satisfactory to you and your counsel), dated the Closing Date, of Kramer, Levin,
Naftalis & Frankel ("Kramer, Levin"), counsel for the Company and the
Guarantors, to the effect that:
a) assuming the accuracy of the
representations and warranties of the Company
contained in Section 5 and your representations and
warranties and assuming compliance by you with your
covenants contained in Section 4 of this Agreement,
the offering of the Securities by you and the
issuance and sale of the Securities to you, in each
case in the manner contemplated in the Offering
Memorandum and as provided in this Agreement, are
exempt from the registration requirements of the 1933
Act and it is not necessary to qualify the Indenture
under the TIA;
b) the Notes, when executed by the
Company and authenticated by the
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41
Trustee in accordance with the terms of the
Indenture, and delivered to and paid for in
accordance with the terms of this Agreement, will
constitute legal, valid and binding obligations of
the Company, enforceable against the Company in
accordance with their terms and entitled to the
benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to
general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in
equity) and except to the extent that a waiver of
rights under any usury laws may be unenforceable;
c) the Guarantees, when executed by
the Guarantors in accordance with the terms of the
Indenture, will constitute legal, valid and binding
obligations of the Guarantors, enforceable against
the Guarantors in accordance with their terms and
entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies
generally and to general principles of equity
(regardless of whether enforcement is sought in a
proceeding at law or in equity) and except to the
extent that a waiver of rights under any usury laws
may be unenforceable;
d) the Securities and the Indenture
conform as to legal matters, in all material respects
to the descriptions thereof contained in the Offering
Memorandum; and
e) neither the Company nor any of the
Guarantors is an "investment company" or, to the
knowledge of such counsel after reasonable inquiry a
compa-
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42
ny "controlled" by an investment company within the
meaning of the Investment Company Act of 1940, as
amended.
ii) an opinion (in a form
reasonably satisfactory to you and your counsel), dated the
Closing Date, of Ray, Quinney & Nebeker, counsel for the
Company, to the effect that:
a) (A) the Company is a validly
existing corporation in good standing under the
laws of the State of Utah and (B) the Company has
the requisite corporate power and corporate
authority to own, lease and operate its
properties and to conduct its business as
described in the Offering Memorandum;
b) the Company has the
corporate power and corporate authority to
execute, deliver and perform its obliga-
tions under this Agreement, the Registra-
tion Rights Agreement, the Indenture and
the Securities and to consummate the
transactions contemplated hereby and
thereby; and
c) each of this Agreement, the
Registration Rights Agreement, the Indenture and
the Securities has been duly authorized, executed
and delivered by the Company and constitutes a
valid and legally binding agreement of the
Company.
iii) an opinion (in a form
reasonably satisfactory to you and your counsel), dated the Closing
Date, of Kelley Drye & Warren ("Kelley Drye"), counsel for the Company
and the Guarantors, to the effect that:
a) the Company is duly
qualified as a foreign corporation and in
good standing in each jurisdiction identified in
a schedule to such opinion;
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43
b) (A) each of the Holding
Company and ARP is a validly existing corporation in
good standing under the laws of the State of its
incorporation and (B) each of the Holding Company and
ARP has the requisite corporate power and corporate
authority to own, lease and operate its properties
and to conduct its business as described in the
Offering Memorandum and is duly qualified as a
foreign corporation and in good standing in each
jurisdiction identified in a schedule to such
opinion;
c) each of the Holding Company and ARP
has the corporate power and corporate authority to
execute, deliver and perform its obligations under
this Agreement, the Registration Rights Agreement,
the Indenture and the Securities and to consummate
the transactions contemplated hereby and thereby;
d) all of the issued and outstanding
shares of capital stock of ARP have been duly and
validly authorized and issued, and to the knowledge
of such counsel are fully paid and nonassessable.
Based solely on a review of the stock record books of
ARP, an inquiry of certain officers of ARP and a
review of certain resolutions, the shares of capital
stock of ARP are owned directly by the Company free
and clear of any Lien except with respect to Liens
incurred to secure indebtedness to be incurred under
the New Credit Facility;
e) each of this Agreement, the
Registration Rights Agreement, the Indenture and the
Securities has been duly authorized, executed and
delivered by ARP and the Holding Company and
constitutes a valid and legally binding agreement of
the Holding Company and APR, enforceable against each
of them in accordance with its terms subject to
appli-
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44
cable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to
general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in
equity) and except to the extent that a waiver of
rights under any usury laws may be unenforceable;
f) no authorization, approval, consent
or order of, or filing with, any court or
governmental body or agency is required under the
Applicable Laws (as defined below) for the issuance
and sale of the Securities pursuant to this
Agreement, (except with respect to state securities
or Blue Sky laws or regulations as to which such
counsel need express no opinion); the execution and
delivery of this Agreement, the Registration Rights
Agreement, the Indenture and the Securities and the
consummation of the transactions contemplated hereby
and thereby will not (A) result in a breach or
violation of the certificate of incorporation or
bylaws or any material agreement or instrument known
to such counsel to which the Company or either of the
Guarantors is a party or by which any of them is
bound of the Company or the Guarantors or (B)
constitute a default under statutes, rules or
regulations of the State of New York, the federal
laws of the United States or the General Corporation
Law of the State of Delaware which in such counsel's
experience are normally applicable to the
transactions contemplated by such agreements (other
than state securities or blue sky laws as to which
such counsel need express no opinion) (collectively,
"Applicable Laws") to which the Company or the
Guarantors is bound or to which any of their
properties is subject, which default would have a
Material Adverse Effect;
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45
g) to the knowledge of such counsel
based upon an officer's certificate as to material
agreements and instruments, there are no material
agreements or instruments to which the Company or any
of the Guarantors is a party or by which any of them
may be bound that is not described in the Offering
Memorandum and which would be required to be
described if the Offering Memorandum were a
prospectus included in a registration statement or
Form S-1;
h) the statements in the Offering
Memorandum under the captions "Risk Factors - Legal
Matters" and "Business - Legal Matters" insofar as
such statements constitute a summary of legal
matters, documents or proceedings referred to
therein, are accurate in all material respects and
provide a fair summary of such matters;
i) neither the Company nor any of the
Guarantors is in violation of its respective charter
or bylaws; and
j) to the best knowledge of such
counsel based on a review of auditors' response
letters and inquiry of responsible Officers of the
Company, there are no material current or pending
legal or governmental actions, suits or proceedings
which would be required to be described in the
Offering Memorandum if the Offering Memorandum were a
prospectus included in a registration statement on
Form S-1 and are not so described.
iv) an opinion (in a form reasonably
satisfactory to you and your counsel), dated the Closing Date, of Piper
& Marbury, regulatory counsel for the Company and the Guarantors, to
the effect that:
a) to such counsel's knowledge,
there are no material legal or governmental
proceedings by the U.S. Food
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46
and Drug Administration ("FDA") or similar federal or
state regulatory officials and bodies pending that
are not described or referred to in the Offering
Memorandum;
b) to such counsel's knowledge, the
Company has, and maintains in full force and effect,
all necessary licenses, permits, approvals,
certificates, consents, orders and other
authorizations of and from the FDA and similar
federal or state governmental regulatory officials
and bodies necessary to conduct its business as
described in the Offering Memorandum; and
c) to the best of such counsel's
knowledge, the statements in the Offering Memorandum
under the captions "Risk Factors -- Governmental
Regulation" and "Business -- Regulatory Matters" that
relate to matters of food and drug law insofar as
such statements constitute a summary of legal
matters, documents or proceedings referred to
therein, are accurate in all material respects and
provide a fair summary of such matters;
d) the Company has certified to such
counsel that it is in substantial compliance with
applicable decrees of the FDA, the Federal Trade
Commission and other state or local regulatory
agencies that have been brought to such counsel's
attention and such counsel does not know of any facts
that contradict such representation; and
e) the product labeling, advertising
and other promotional materials that the Company has
submitted to such counsel for review do not give rise
to a substantial expectation that enforcement action
would be initiated against those products.
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47
In addition, Kramer, Levin and Kelley Drye shall state that
although such counsel has not undertaken to investigate or verify independently,
and is not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Offering Memorandum
(except to the extent expressly referred to in clauses (i)(d) and (iii)(h)
above), during the course of such counsel's participation in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company and you, at which the contents of
the Offering Memorandum were discussed, no facts have come to the attention of
such counsel which cause it to believe that (except for financial statements,
notes thereto, financial statements schedules, other financial data included
therein or information derived therefrom as to which such counsel need not
express any belief) the Offering Memorandum, as of the date thereof and as of
the date hereof, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
In rendering such opinions, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers and other representatives of the Company, certificates of
public officials, and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and the Guarantors provided
that copies of any such statements or certificates shall be delivered or
otherwise made available to your counsel.
(k) You shall have received an opinion,
as to certain of the matters set forth above, dated
the Closing Date, of Skadden, Arps, Slate, Meagher &
Flom ("Skadden Arps"), counsel for the Initial
Purchasers, in form and substance reasonably
satisfactory to you. In rendering such opinion,
Skadden Arps may rely, as to matters of Utah law, to
the extent such counsel deems proper on the opinions
set forth in paragraph (j)(ii) above.
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48
(l) You shall have received an opinion
from Murray, Devine & Co., Inc. in form and substance
satisfactory to the Initial Purchases that the
Transactions will not render the Company insolvent,
leave the Company with inadequate or unreasonably
small capital or result in the Company incurring
indebtedness beyond its ability to repay as such
indebtedness matures.
(m) You shall have received letters on
and as of the date hereof as well as on and as of the
Closing Date (in the latter case constituting an
affirmation of the statements set forth in the
former, based on limited procedures), in form and
substance reasonably satisfactory to you, from
Deloitte & Touche LLP, Held, Kranzler and Company,
and Dodge Evans & Co., independent public
accountants, with respect to the financial statements
and certain financial information contained in the
Offering Memorandum.
(n) Skadden Arps shall have been
furnished with such 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 Section 7 and in order to evidence the accuracy,
completeness or satisfaction in all material respects
of any of the representations, warranties or
conditions herein contained.
(o) Prior to the Closing Date, the
Company shall have furnished to you such further
information, certificates and documents as you may
reasonably request.
(p) The Initial Purchasers shall have
been furnished with a copy of the opinions delivered
on behalf of GEI, the Company, ARP and the Holding
Company in connection with the Acquisition and the
Bank Agreements, which opinions shall expressly state
that the Initial Purchasers are justified in relying
upon the opinions therein.
All opinions, certificates, letters and other documents
required by this Section 7 to be delivered by the
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49
Company and the Guarantors will be in compliance with the provisions hereof only
if they are reasonably satisfactory in form and substance to you. The Company
will furnish the Initial Purchasers with such conformed copies of such opinions,
certificates, letters and other documents as they shall reasonably request.
8. Defaults. If on the Closing Date, any of the Initial
Purchasers shall fail or refuse to purchase Securities which it has agreed to
purchase hereunder on such date, and the aggregate principal amount of such
Securities that such defaulting Initial Purchaser(s) agreed but failed or
refused to purchase does not exceed 10% of the total principal amount of such
Securities that all of the Initial Purchasers are obligated to purchase on such
Closing Date, each non-defaulting Initial Purchaser shall be obligated to
purchase the amount of the Securities that such defaulting Initial Purchaser(s)
agreed but failed or refused to purchase on such date; provided that in no event
shall the number of Securities that any Initial Purchaser has agreed to purchase
pursuant to Section 1 hereof be increased pursuant to this Section 8 by an
amount in excess of one-ninth of such number of Securities, without the written
consent of such Initial Purchaser. If, on the Closing Date, any of the Initial
Purchasers shall fail or refuse to purchase Securities in an aggregate principal
amount that exceeds 10% of such total principal amount of the Securities and
arrangements satisfactory to the other Initial Purchaser(s) and the Company for
the purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability on the part of the
non-defaulting Initial Purchaser(s), the Company or the Guarantors, except as
otherwise provided in Section 9 hereof. In any such case that does not result in
termination of this Agreement, the Initial Purchasers and the Company may agree
to postpone the Closing Date for not longer than seven days, in order that the
required changes, if any, in the Offering Memorandum or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve a defaulting Initial Purchaser from liability in respect of any default
by such Initial Purchaser under this Agreement.
9. Effective Date of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
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This Agreement may be terminated at any time on or prior to
the Closing Date by you by notice to the Company if any of the following has
occurred: (i) subsequent to the date of this Agreement, any Material Adverse
Change occurs, which, in your judgment, makes it impracticable or inadvisable to
market the Securities in the manner contemplated in the Offering Memorandum or
to enforce contracts for sale of the Securities, (ii) any outbreak or escalation
of hostilities or other national or international calamity or crisis or material
adverse change in the financial markets of the United States or elsewhere, or
any other substantial national or international calamity or emergency if the
effect of such outbreak, escalation, calamity, crisis or emergency would, in
your judgment, make it impracticable or inadvisable to market the Securities or
to enforce contracts for the sale of the Securities, (iii) any suspension or
limitation of trading generally in securities on the New York Stock Exchange,
the American Stock Exchange, the Nasdaq National Market System or in the
over-the-counter markets or any setting of minimum prices for trading on such
exchange or markets, (iv) any declaration of a general banking moratorium by
either Federal or New York authorities, (v) the taking of any action by any
Federal, state or local government or agency in respect of its monetary or
fiscal affairs that in your judgment has a material adverse effect on the
financial markets in the United States, and would, in your judgment, make it
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, (vi) the enactment, publication, decree, or
other promulgation of any Federal or state statute, regulation, rule or order of
any court or other governmental authority which would, in your judgment, have a
Material Adverse Effect, or (vii) the Securities or any securities of the
Company shall have been downgraded or placed on any "watch list" for possible
downgrading by any nationally recognized statistical rating organization,
provided, that in the case of such "watch list" placement, termination shall be
permitted only if such placement would, in the judgment of any Initial
Purchaser, make it impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities or materially impair the
investment quality of the Securities.
The indemnities and contribution provisions and the other
agreements, representations and warranties of the Company, the Guarantors, their
respective officers and directors and the Initial Purchasers set forth in or
made
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pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Securities, regardless of (i)
any investigation, or statement as to the results thereof, made by or on behalf
of any of the Initial Purchasers or by or on behalf of the Company or the
Guarantors, its officers or directors or any controlling person thereof, (ii)
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If this Agreement shall be terminated by the Initial
Purchasers pursuant to clause (i) or (vii) of the second paragraph of this
Section 9 or because of the failure or refusal on the part of the Company or the
Guarantors to comply with the terms or to fulfill any of the conditions of this
Agreement, the Company and the Guarantors agree to reimburse you for all
out-of-pocket expenses incurred by you. Notwithstanding any termination of this
Agreement, the Company shall be liable for all expenses which it has agreed to
pay pursuant to Section 4(h) hereof.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Guarantors, the Initial Purchasers, any Indemnified Person referred to herein
and their respective successors and assigns, all as and to the extent provided
in this Agreement, and no other person shall acquire or have any right under or
by virtue of this Agreement. The terms "successors and assigns" shall not
include a purchaser of any of the Securities from any of the Initial Purchasers
merely because of such purchase. Notwithstanding the foregoing, it is expressly
understood and agreed that each purchaser of the Securities from you is intended
to be a beneficiary of the Company's covenants contained in the Registration
Rights Agreement to the same extent as if the Securities were sold and those
covenants were made directly to such purchaser by the Company, and each such
purchaser shall have the right to take action against the Company to enforce,
and obtain damages for any breach of, those covenants.
10. Notices. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company or the
Guarantors, at 2120 Smithtown Avenue, Ronkonkoma, New York 11779, Attention:
Philip M. Kazin, Esq., with copies to Kelley Drye & Warren, Two Stamford
Plaza-281 Tresser Boulevard, Stamford, Connecticut
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06901, Attention: John T. Capetta, Esq. and Kramer, Levin, Naftalis & Frankel,
919 Third Avenue, 40th Floor, New York, New York 10022, Attention: Howard A.
Sobel, Esq., (b) if to any Initial Purchaser, to Donaldson, Lufkin & Jenrette
Securities Corporation, 140 Broadway, New York, New York 10005, Attention:
Syndicate Department, with a copy to Skadden, Arps, Slate, Meagher & Flom, 919
Third Avenue, New York, New York 10022, Attention: Mark C. Smith, Esq., or in
any case to such other address as the person to be noti- fied may have requested
in writing.
11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE COMPANY AND THE GUARANTORS HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE COMPANY
AND THE GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and other persons referred to in Section 6 hereof, and no other
person will have any right or obligation hereunder.
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This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument. Please confirm that the foregoing
correctly sets forth the agreement among the Company, the Guarantors and you.
Very truly yours,
NATUR-PHARMA INC.
By: /s/ Brian Blechman
--------------------------
Name: Brian Blechman
Title: Vice President
ADVANCED RESEARCH PRESS, INC.
By: /s/ David Blechman
--------------------------
Name: David Blechman
Title: President
TLG LABORATORIES HOLDING CORP.
By: /s/ Jennifer Holden Dunbar
--------------------------
Name: Jennifer Holden Dunbar
Title: President
The foregoing Purchase Agreement is hereby confirmed and accepted as of the
date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CHASE SECURITIES INC.
By: Donaldson, Lufkin & Jenrette
Securities Corporation
By: /s/ Donald S. Kinsey
---------------------------
Name: Donald S. Kinsey
Title: Vice President
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SCHEDULE A
Principal Amount
of Securities
----------------
Donaldson, Lufkin & Jenrette
Securities Corporation............................... $ 60,000,000
Chase Securities Inc. ................................. $ 40,000,000
Total.......................................... $100,000,000
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