Exhibit 10.7


 


PURCHASE
AGREEMENT


 


April 1, 2010


 


BANC OF AMERICA SECURITIES LLC


 


As Representative of the Initial Purchasers c/o Banc
of America Securities LLC One Bryant Park New York, New York 10036


 


Ladies and Gentlemen:


 


Introductory. SquareTwo Financial Corporation, a Delaware
corporation (the “Company”),
proposes to issue and sell to the several Initial Purchasers named in Schedule
A (the “Initial Purchasers”),
acting severally and not jointly, the respective amounts set forth in such
Schedule A of a $290,000,000 aggregate principal amount of the Company’s 11
5/8% Senior Secured Second Lien Notes due 2017 (the “Notes”). Banc of America Securities LLC has agreed to act as
the representative of the several Initial Purchasers (the “Representative”) in connection with the
offering and sale of the Notes.


 


The Securities (as defined below) will be issued
pursuant to an indenture (the “Indenture”),
to be dated as of the Closing Date (as defined below), among the Company, the
Guarantors (as defined below) and U.S. Bank National Association, as trustee
(the “Trustee”). The Notes will be
issued only in book-entry form in the name of Cede & Co., as nominee
of The Depository Trust Company (the “Depositary”),
pursuant to a letter of representations, to be dated on or before the Closing
Date (as defined in Section 2 hereof) (the “DTC Agreement”), between the Company and the Depositary.


 


The holders of the Notes will be entitled to the
benefits of a registration rights agreement, to be dated as of the Closing Date
(the “Registration Rights Agreement”),
among the Company, the Guarantors and the Initial Purchasers, pursuant to which
the Company and the Guarantors may be required to file with the Commission (as
defined below), under the circumstances set forth therein, (i) a
registration statement under the Securities Act (as defined below) relating to
another series of debt securities of the Company with terms substantially
identical to the Notes (the “Exchange Notes”)
to be offered in exchange for the Notes (the “Exchange
Offer”) and (ii) a shelf registration statement pursuant to Rule 415
of the Securities Act relating to the resale of the Notes by certain holders of
the Notes, and in each case, to use commercially reasonable efforts to cause
such registration statements to be declared effective. All references herein to
the Exchange Notes and the Exchange Offer are only applicable if the Company
and the Guarantors are in fact required to consummate the Exchange Offer
pursuant to the terms of the Registration Rights Agreement.


 


The payment of principal of, premium, if any, and
interest on the Notes will be fully and unconditionally guaranteed on a senior
secured second lien basis, jointly and severally, by (i) each of the
guarantors named in Schedule B hereto and (ii) any domestic subsidiary of
the Company formed or acquired after the Closing Date that executes an
additional guarantee in accordance with the terms of the Indenture, and their
respective successors and assigns (collectively, the “Guarantors”), pursuant to their guarantees
(the “Guarantees”). The Notes and
the Guarantees attached thereto are herein collectively referred to as the “Securities”; and the Exchange Notes and the
Guarantees attached thereto are herein collectively referred to as the “Exchange Securities.”


 


The Securities will be secured on a second priority
basis, subject to certain exceptions and 


 

















 


Permitted Liens (as defined in the Indenture), by
liens on the assets (the “Collateral”)
of the Company and the Guarantors, as more particularly described in the
Pricing Disclosure Package (as defined herein) and documented by a security
agreement (the “Security Agreement”)
and a pledge agreement (the “Pledge Agreement”),
each substantially in the form attached to the Indenture, to be dated as of the
Closing Date, and other instruments evidencing or creating a security interest
or lien (collectively, the “Security
Documents”) in favor of U.S. Bank National Association, as
collateral agent (in such capacity, the “Collateral
Agent”), for its benefit and the benefit of the Trustee and the
holders of the Securities.


 


The Securities will be subject to an Intercreditor
Agreement, substantially in the form attached to the Indenture, to be dated as
of the Closing Date (the “Intercreditor
Agreement”), by and among the Collateral Agent, the Company, the
Guarantors and GMAC Commercial Finance LLC, as agent and collateral agent under
the Company’s loan agreement, dated as of the Closing Date, among the Company,
the Guarantors, GMAC Commercial Finance LLC, as Agent, and the other lenders
from time to time party thereto (the “Revolving
Credit Facility”).


 


The Company understands that the Initial Purchasers
propose to make an offering of the Securities on the terms and in the manner
set forth herein and in the Pricing Disclosure Package (as defined below) and
agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers (the “Subsequent Purchasers”) on the terms set
forth in the Pricing Disclosure Package (the first time when sales of the
Securities are made is referred to as the “Time
of Sale”). The Securities are to be offered and sold to or through
the Initial Purchasers without being registered with the Securities and
Exchange Commission (the “Commission”)
under the Securities Act of 1933 (as amended, the “Securities Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder), in reliance upon
exemptions therefrom. Pursuant to the terms of the Securities and the
Indenture, investors who acquire the Securities shall be deemed to have agreed
that the Securities may only be resold or otherwise transferred, after the date
hereof, if such Securities are registered for sale under the Securities Act or
if an exemption from the registration requirements of the Securities Act is
available (including, without limitation, the exemptions afforded by Rule 144A
under the Securities Act (“Rule 144A”)
or Regulation S under the Securities Act (“Regulation
S”)).


 


The Company has prepared and delivered to each Initial
Purchaser copies of a Preliminary Offering Memorandum, dated March 23,
2010 (the “Preliminary Offering Memorandum”),
and has prepared and delivered to each Initial Purchaser copies of a Pricing
Supplement, dated April 1, 2010 (the “Pricing
Supplement”), describing the terms of the Securities, each for use
by such Initial Purchaser in connection with its solicitation of offers to
purchase the Securities. The Preliminary Offering Memorandum and the Pricing Supplement
are herein referred to as the “Pricing
Disclosure Package.” Promptly after this Agreement is executed and
delivered, the Company will prepare and deliver to each Initial Purchaser a
final offering memorandum dated the date hereof (the “Final Offering Memorandum”).


 


The Company hereby confirms its agreements with the
Initial Purchasers as follows:


 


SECTION 1. Representations
and Warranties. Each of the Company and the Guarantors, jointly and
severally, hereby represents, warrants and covenants to each Initial Purchaser
that, as of the date hereof and as of the Closing Date (references in this Section 1
to the “Offering Memorandum” are
to (x) the Pricing Disclosure Package in the case of representations and
warranties made as of the date hereof and (y) the Final Offering
Memorandum in the case of representations and warranties made as of the Closing
Date):


 


(a) No
Registration Required. Subject to compliance by the Initial
Purchasers with the


 

















 


representations, warranties and agreements set forth
in Section 2 hereof and with the procedures set forth in Section 7
hereof, it is not necessary in connection with the offer, sale and delivery of
the Securities to the Initial Purchasers and to each Subsequent Purchaser in
the manner contemplated by this Agreement and the Offering Memorandum to
register the Securities under the Securities Act or, until such time as the
Exchange Securities are issued pursuant to an effective registration statement,
to qualify the Indenture under the Trust Indenture Act of 1939 (the “Trust Indenture Act,” which term, as used
herein, includes the rules and regulations of the Commission promulgated
thereunder).


 


(b) No
Integration of Offerings or General Solicitation. None of the
Company, the Guarantors or any of their respective affiliates (as such term is
defined in Rule 501 under the Securities Act) (each, an “Affiliate”) or any person acting on its or
any of their behalf (other than the Initial Purchasers, as to whom the Company
and the Guarantors make no representation or warranty) has, directly or
indirectly, solicited any offer to buy or offered to sell, or will, directly or
indirectly, solicit any offer to buy or offer to sell, in the United States or
to any United States citizen or resident, any security which is or would be
integrated with the sale of the Securities in a manner that would require the
Securities to be registered under the Securities Act. None of the Company, the
Guarantors or any of their respective Affiliates or any person acting on any of
their behalf (other than the Initial Purchasers or any person acting on any of
their behalf, as to whom the Company and the Guarantors make no representation
or warranty) has engaged or will engage, in connection with the offering of the
Securities, in any form of general solicitation or general advertising within
the meaning of Rule 502 under the Securities Act. With respect to those
Securities sold in reliance upon Regulation S, (i) none of the Company,
the Guarantors, or any of their respective Affiliates or any person acting on
their behalf (other than the Initial Purchasers or any person acting on any of
their behalf, as to whom the Company and the Guarantors make no representation
or warranty) has engaged or will engage in any directed selling efforts within
the meaning of Regulation S and (ii) each of the Company, the Guarantors
and their respective Affiliates and any person acting on their behalf (other
than the Initial Purchasers or any person acting on any of their behalf, as to
whom the Company and the Guarantors make no representation or warranty) has
complied and will comply with the offering restrictions set forth in Regulation
S.


 


(c) Eligibility
for Resale Under Rule 144A. The Securities are eligible for
resale pursuant to Rule 144A and will not be, at the Closing Date, of the
same class as securities listed on a national securities exchange registered
under Section 6 of the Securities Exchange Act of 1934 (as amended, the “Exchange Act,” which term, as used herein,
includes the rules and regulations of the Commission promulgated
thereunder) or quoted in a U.S. automated interdealer quotation system.


 


(d) The Pricing
Disclosure Package and Offering Memorandum. Neither the Pricing
Disclosure Package, as of the Time of Sale, nor the Final Offering Memorandum,
as of its date or (as amended or supplemented in accordance with Section 3(a),
as applicable) as of the Closing Date, contains an untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation, warranty and agreement
shall not apply to statements in or omissions from the Pricing Disclosure
Package, the Final Offering Memorandum or any amendment or supplement thereto
made in reliance upon and in conformity with information furnished to the
Company in writing by any Initial Purchaser through the Representative
expressly for use in the Pricing Disclosure Package, the Final Offering
Memorandum or amendment or supplement thereto, as the case may be. The Pricing
Disclosure Package contains, and the Final Offering Memorandum will contain,
all the information specified in, and meeting the requirements of, Rule 144A.
The Company has not distributed and will not distribute, prior to the later of
the Closing Date and the completion of the Initial Purchasers’ distribution of
the Securities, any offering material in connection with the offering and sale
of the Securities other than the Pricing Disclosure Package, the Final Offering
Memorandum and Company Additional Written Communications (as defined below).


 

















 


(e) Company
Additional Written Communications. The Company has not prepared,
made, used, authorized, approved or distributed and will not prepare, make, use,
authorize, approve or distribute any written communication that constitutes an
offer to sell or solicitation of an offer to buy the Securities other than (i) the
Pricing Disclosure Package, (ii) the Final Offering Memorandum and (iii) any
electronic road show or other written communications, in each case used in
accordance with Section 3(a). Each such communication by the Company or
its agents and representatives pursuant to clause (iii) of the preceding
sentence (each, a “Company Additional Written
Communication”), when taken together with the Pricing Disclosure
Package, did not as of the Time of Sale, and at the Closing Date will not,
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that this
representation, warranty and agreement shall not apply to statements in or
omissions from each such Company Additional Written Communication made in
reliance upon and in conformity with information furnished to the Company in
writing by any Initial Purchaser through the Representative expressly for use
in any Company Additional Written Communication.


 


(f) The
Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and the Guarantors.


 


(g) The
Registration Rights Agreement and DTC Agreement. The Registration
Rights Agreement has been duly authorized and, on the Closing Date, will have
been duly executed and delivered by, and will constitute a valid and binding
agreement of, the Company and the Guarantors, enforceable in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles (regardless whether such enforceability is considered in a
proceeding in equity or at law), the discretion of the court before which any
proceeding therefor may be brought, and except as rights to indemnification may
be limited by applicable law and public policy considerations. The DTC
Agreement has been duly authorized and, on the Closing Date, will have been
duly executed and delivered by, and will constitute a valid and binding
agreement of, the Company, enforceable in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights
and remedies of creditors or by general equitable principles (regardless
whether such enforceability is considered in a proceeding in equity or at law)
and the discretion of the court before which any proceeding therefor may be
brought.


 


(h) Authorization
of the Notes, the Guarantees and the Exchange Notes. The Notes to be
purchased by the Initial Purchasers from the Company will, on the Closing Date,
be in the form contemplated by the Indenture and, at the Closing Date, will
have been duly authorized for issuance and sale pursuant to this Agreement and
the Indenture and, at the Closing Date, will have been duly executed by the
Company and, when authenticated in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor, will constitute valid
and binding obligations of the Company, enforceable in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles (regardless whether such enforceability is considered in a
proceeding in equity or at law) and the discretion of the court before which
any proceeding therefor may be brought, and will be entitled to the benefits of
the Indenture. The Exchange Notes have been duly and validly authorized for
issuance by the Company and, when issued and authenticated in accordance with
the terms of the Indenture, the Registration Rights Agreement and the Exchange
Offer, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or affecting enforcement of the rights
and remedies of creditors or by general principles of equity (regardless
whether such enforceability is considered in


 

















 


a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be brought, and will be
entitled to the benefits of the Indenture. The Guarantees of the Notes on the
Closing Date and the Guarantees of the Exchange Notes when issued will be in
the respective forms contemplated by the Indenture and have been duly
authorized for issuance pursuant to this Agreement and the Indenture; the
Guarantees of the Notes, at the Closing Date, will have been duly executed by
each of the Guarantors and, when the Notes have been authenticated in the
manner provided for in the Indenture and issued and delivered against payment
of the purchase price therefor, the Guarantees of the Notes will constitute
valid and binding agreements of the Guarantors; and, when the Exchange Notes
have been authenticated in the manner provided for in the Indenture and issued
and delivered in accordance with the Registration Rights Agreement, the
Guarantees of the Exchange Notes will constitute valid and binding agreements
of the Guarantors, in each case, enforceable in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles (regardless
whether such enforceability is considered in a proceeding in equity or at law)
and the discretion of the court before which any proceeding therefor may be
brought, and will be entitled to the benefits of the Indenture.


 


(i) Authorization
of the Indenture. The Indenture has been duly authorized by the
Company and the Guarantors and, at the Closing Date, will have been duly
executed and delivered by the Company and the Guarantors and will constitute a
valid and binding agreement of the Company and the Guarantors, enforceable
against the Company and the Guarantors in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles (regardless
whether such enforceability is considered in a proceeding in equity or at law)
and the discretion of the court before which any proceeding therefor may be
brought.


 


(j) Authorization
of the Intercreditor Agreement. The Intercreditor Agreement has been
duly authorized by the Company and each Guarantor and, at the Closing Date,
will have been duly executed and delivered by the Company and each Guarantor
and will constitute a valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in accordance
with its terms, except as the enforcement thereof may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or other laws
relating to or affecting creditors’ rights generally from time to time in
effect or by general equitable principles (regardless whether such
enforceability is considered in a proceeding in equity or at law) and the
discretion of the court before which any proceeding therefor may be brought.


 


(k) Security
Documents. Each of the Security Documents has been duly authorized
by the Company and/or the applicable Guarantor, as appropriate, and, when
executed and delivered by the Company and/or the applicable Guarantor, will
constitute the legal, valid, binding and enforceable agreement of the Company
and/or the applicable Guarantor (subject, as to the enforcement of remedies, to
applicable bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other laws relating to or affecting creditors’ rights generally
from time to time in effect, by general principles of equity (regardless
whether such enforceability is considered in a proceeding in equity or at law)
and the discretion of the court before which any proceeding therefor may be
brought). The Security Documents, when executed and delivered in connection
with the sale of the Securities, will create in favor of the Collateral Agent,
for the benefit of itself, the Trustee and the holders of the Notes, valid and
enforceable security interests in and liens on the Collateral, which Collateral
will, except as described in the Offering Memorandum, be comprised of the same
collateral securing the Revolving Credit Facility on a first priority basis,
and, upon the filing of appropriate Uniform Commercial Code financing
statements in United States jurisdictions and the taking of the other actions,
in each case as further described in the Security Documents, the security


 

















 


interests in and liens on the rights of the Company or
the applicable Guarantor in such Collateral will be perfected security
interests and liens, superior to and prior to the liens of all third persons
other than the liens securing the Revolving Credit Facility and Permitted
Collateral Liens (as defined in the Indenture).


 


(l) Description
of the Securities and Related Documents. The Securities, the
Exchange Securities, the Indenture, the Security Documents and the
Intercreditor Agreement conform in all material respects to the descriptions
thereof contained in the Offering Memorandum.


 


(m) No Material
Adverse Change. Except as otherwise disclosed in the Offering
Memorandum (exclusive of any amendment or supplement thereto), subsequent to
the respective dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto): (i) there
has been no material adverse change, or any development that could reasonably
be expected to result in a material adverse change, in the condition, financial
or otherwise, or in the earnings, business, operations or prospects, whether or
not arising from transactions in the ordinary course of business, of the
Company and its subsidiaries, considered as one entity (any such change is
called a “Material Adverse Change”);
(ii) the Company and its subsidiaries, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or contingent,
not in the ordinary course of business nor entered into any material
transaction or agreement not in the ordinary course of business; and (iii) there
has been no dividend or distribution of any kind declared, paid or made by the
Company or, except for dividends paid to the Company or other subsidiaries, any
of its subsidiaries on any class of capital stock or repurchase or redemption
by the Company or any of its subsidiaries of any class of capital stock.


 


(n) Independent
Accountants. Ernst & Young LLP, which expressed its opinion
with respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) and supporting schedules included in the
Offering Memorandum, is an independent registered public accounting firm within
the meaning of the Securities Act, the Exchange Act and the rules of the
Public Company Accounting Oversight Board and any non-audit services provided
by Ernst & Young LLP to the Company or any of the Guarantors have been
approved by the Board of Directors of the Company.


 


(o) Preparation
of the Financial Statements. The financial statements, together with
the related schedules and notes, included in the Offering Memorandum present
fairly, in all material respects, the consolidated financial position of the
entities to which they relate as of and at the dates indicated and the results
of their operations and cash flows for the periods specified. Such financial
statements have been prepared in conformity with generally accepted accounting
principles as applied in the United States applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the
related notes thereto. The financial data set forth in the Offering Memorandum
under the captions “Summary—Summary Historical Financial and Operating Data”
and “Selected Consolidated Financial Information” fairly present the
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Offering Memorandum. The statistical and
market-related data and forward-looking statements included in the Offering
Memorandum are based on or derived from sources that the Company and its
subsidiaries believe to be reliable and accurate in all material respects and
represent their good faith estimates that are made on the basis of data derived
from such sources.


 


(p) Incorporation
and Good Standing of the Company and its Subsidiaries. Each of the
Company and its subsidiaries has been duly incorporated or formed, as
applicable, and is validly existing as a corporation, limited partnership or
limited liability company, as applicable, in good standing under the laws of
the jurisdiction of its incorporation or formation (to the extent such status
is recognized in such jurisdiction), as applicable, and has corporate,
partnership or limited liability company, as applicable, power and authority to
own, lease and operate its properties and to conduct its business as described
in the Offering Memorandum and, in the case of the Company and the Guarantors,
to enter into and perform its obligations under each of this Agreement, the
Registration Rights Agreement, the DTC Agreement, the Securities, the Exchange


 

















 


Securities, the Indenture, the Security Documents and
the Intercreditor Agreement. Each of the Company and its subsidiaries is duly
qualified as a foreign corporation, limited partnership or limited liability
company, as applicable, to transact business and is in good standing (to the
extent such status is recognized in such jurisdiction) or equivalent status in
each jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except for
such jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change. All of the issued and outstanding capital stock
or other ownership interest of each subsidiary has been duly authorized and
validly issued, is fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim, except as disclosed in the
Offering Memorandum. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Schedule B hereto.


 


(q) Capitalization
and Other Capital Stock Matters. At December 31, 2009, on a
consolidated basis, after giving pro forma effect to the issuance and sale of
the Securities pursuant hereto, the Company would have an authorized and
outstanding capitalization as set forth in the Offering Memorandum under the
caption “Capitalization” (other than for subsequent issuances of capital stock,
if any, pursuant to employee benefit plans described in the Offering Memorandum
or upon exercise of outstanding options or warrants described in the Offering
Memorandum).


 


(r) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals Required. None
of the Company or any of its subsidiaries is (i) in violation of its
charter, bylaws or other constitutive document or (ii) in default (or,
with the giving of notice or lapse of time, would be in default) (“Default”) under any indenture, mortgage,
loan or credit agreement, note, contract, franchise, lease or other instrument
to which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound (including, without limitation, the Revolving Credit
Facility), or to which any of the property or assets of the Company or any of
its subsidiaries is subject (each, an “Existing
Instrument”), except, in the case of clause


 


(ii) above, for such Defaults as would not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change. The Company’s and the Guarantors’ execution, delivery
and performance of this Agreement, the Registration Rights Agreement, the DTC
Agreement, the Indenture, the Security Documents and the Intercreditor
Agreement, as the case may be, and the issuance and delivery of the Securities
and the Exchange Securities, and consummation of the transactions contemplated
hereby and thereby and by the Offering Memorandum (i) have been duly
authorized by all necessary corporate, partnership or limited liability company
action, as applicable, and will not result in any violation of the provisions
of the charter, bylaws or other constitutive document of the Company or any of
its subsidiaries, (ii) will not conflict with or constitute a breach of,
or Default or a Debt Repayment Triggering Event (as defined below) under, or result
in the creation or imposition of any lien (other than the liens securing the
obligations under the Revolving Credit Facility and the liens on the Collateral
in favor of the holders of the Notes), charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to, or require the
consent of any other party to, any Existing Instrument, other than the Existing
Credit Agreement and the Existing Subordinated Notes (each as defined in the
Offering Memorandum) each of which will be repaid in full on the Closing Date
and except for such conflicts, breaches, Defaults, liens, charges or
encumbrances as would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change and (iii) will not result
in any violation of any law, administrative regulation or administrative or
court decree applicable the Company or any of its subsidiaries. No consent,
approval, authorization or other order of, or registration or filing with, any
court or other governmental or regulatory authority or agency is required for
the Company’s or any Guarantor’s execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the DTC Agreement, the Indenture,
the Security Documents or the Intercreditor Agreement, or the issuance and
delivery of the Securities or


 

















 


the Exchange Securities, or consummation of the
transactions contemplated hereby and thereby and by the Offering Memorandum,
except (A) such as have been obtained or made by the Company and the
applicable Guarantor, (B) such as may be required by the securities laws
of the several states of the United States or provinces of Canada with respect
to the Company’s obligations under the Registration Rights Agreement, and (C) such
as the failure of which to make or obtain would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change. As
used herein, a “Debt Repayment Triggering
Event” means any event or condition which gives, or with the giving
of notice or lapse of time would give, the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of its subsidiaries.


 


(s) No Material
Actions or Proceedings. Except as otherwise disclosed in the
Offering Memorandum, there are no legal or governmental actions, suits or
proceedings pending or, to the Company’s or any Guarantor’s knowledge,
threatened (i) against or affecting the Company or any of its subsidiaries
or (ii) which has as the subject thereof any property owned or leased by
the Company or any of its subsidiaries and, in each case, which, if determined
adversely to the Company or such subsidiary, would reasonably be expected to
result in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. Except as otherwise disclosed in
the Offering Memorandum, no material labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the Company’s or any Guarantor’s
knowledge, is threatened or imminent.


 


(t) Intellectual
Property Rights. The Company and its subsidiaries own or possess
sufficient trademarks, trade names, patent rights, copyrights, licenses,
approvals, trade secrets and other similar rights (collectively, “Intellectual Property Rights”) reasonably
necessary to conduct their businesses as now conducted. None of the Company or
any of its subsidiaries has received any notice of infringement or conflict
with asserted Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would reasonably be
expected to result in a Material Adverse Change.


 


(u) All
Necessary Permits, etc. Except as would not reasonably be
expected to result in a Material Adverse Change, the Company and each of its
subsidiaries possess such valid and current certificates, authorizations or
permits issued by the appropriate state, federal or foreign regulatory agencies
or bodies necessary to own, lease and operate their properties and to conduct
their respective businesses, and none of the Company or any of its subsidiaries
has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or
permit.


 


(v) Title to
Properties. The Company and each of its subsidiaries, taken as a
whole, has good and marketable title to all the material properties and material
assets reflected as owned in the financial statements referred to in Section 1(o) hereof
(or elsewhere in the Offering Memorandum), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other
defects, except as disclosed in the Offering Memorandum and except such as do
not materially and adversely affect the value of such property and do not
materially interfere with the use made or proposed to be made of such property
by the Company or such subsidiary. The real property, improvements, equipment
and personal property held under lease by the Company or any subsidiary are
held under valid and enforceable leases, with such exceptions as are not
material and do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal property by the
Company or such subsidiary.


 


(w) Tax Law
Compliance. The Company and its subsidiaries have caused all
necessary federal, state and foreign income and franchise tax returns to be
filed and have caused all taxes required to be paid by any of them, and, if due
and payable, any related or similar assessment, fine or penalty levied against
any of them, to be paid, except any such taxes, assessments, fines or penalties
currently being contested in good faith and with respect to which the failure
to pay or to


 

















 


file would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change. The Company has
made adequate charges, accruals and reserves in accordance with GAAP in the
applicable financial statements referred to in Section 1(o) hereof in
respect of all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its subsidiaries
has not been finally determined.


 


(x) Company and
Guarantors Not “Investment Companies”. The Company has been advised
of the rules and requirements under the Investment Company Act of 1940, as
amended (the “Investment Company Act,”
which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder). Neither the Company nor any Guarantor is,
or after receipt of payment for the Securities and the application of proceeds
thereof as described in the Offering Memorandum will be, an “investment company”
within the meaning of the Investment Company Act and each of the Company and
the Guarantors will conduct its business in a manner so that it will not become
subject to the Investment Company Act.


 


(y) Insurance.
To the knowledge of the Company and its subsidiaries, each is insured by
recognized, financially sound institutions with policies in such amounts and
with such deductibles and covering such risks as are generally deemed adequate
and customary for their businesses including, without limitation, policies
covering real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes. The Company has no reason to believe that it or any subsidiary
will not be able


 


(i) to renew its existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct its business
as now conducted and at a cost that would not reasonably be expected to result
in a Material Adverse Change. None of the Company or any subsidiary has been
denied any insurance coverage which it has sought or for which it has applied.


 


(z) No Price
Stabilization or Manipulation. None of the Company or any of the
Guarantors has taken or will take, directly or indirectly, any action designed
to or that might be reasonably expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.


 


(aa) Solvency. The
Company and its subsidiaries on a consolidated basis are, and immediately after
the Closing Date will be, Solvent. As used herein, the term “Solvent” means that on such date (i) the
fair market value of the assets of the Company and its subsidiaries on a
consolidated basis are greater than the total amount of liabilities (including
contingent liabilities) of such persons, (ii) the present fair salable
value of the assets of the Company and its subsidiaries on a consolidated basis
are greater than the amount that will be required to pay the probable
liabilities of such persons on their debts as they become absolute and matured,
(iii) the Company and its subsidiaries on a consolidated basis are able to
realize upon their assets and pay their debts and other liabilities, including
contingent obligations, as they mature and (iv) the Company and its
subsidiaries on a consolidated basis do not have unreasonably small capital for
the businesses in which they are engaged.


 


(bb) Reserved.


 


(cc) Company’s
Accounting System. The Company and its subsidiaries maintain a
system of accounting controls that is sufficient to provide reasonable
assurances that: (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles as applied in the United States and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management’s general or specific


 

















 


authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.


 


(dd) Regulations T,
U and X. Neither the Company nor any Guarantor nor any of their
respective subsidiaries nor any agent thereof acting on their behalf has taken,
and none of them will take, any action that might cause the issuance or sale of
the Securities to violate Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System.


 


(ee) Compliance with
and Liability under Environmental Laws. Except as would not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change: (i) each of the Company and its subsidiaries and
their respective operations and, to the Company’s knowledge, facilities are in
compliance with, and not subject to any known liabilities under, applicable
Environmental Laws, which compliance includes, without limitation, having
obtained and being in compliance with any permits, licenses or other
governmental authorizations or approvals, and having made all filings and
provided all financial assurances and notices, required for the ownership and
operation of the business, properties and facilities of the Company and its
subsidiaries under applicable Environmental Laws, and compliance with the terms
and conditions thereof; (ii) none of the Company or any of its
subsidiaries has received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that alleges
that the Company or any of its subsidiaries is in violation of any Environmental
Law; (iii) there is no claim, action or cause of action filed with a court
or governmental authority, no investigation with respect to which the Company
has received written notice, and no written notice by any person or entity
alleging actual or potential liability on the part of the Company or any of its
subsidiaries based on or pursuant to any Environmental Law pending or, to the
Company’s or any Guarantor’s knowledge, threatened against the Company or any
of its subsidiaries or, to the Company’s knowledge, any person or entity whose
liability under or pursuant to any Environmental Law the Company or any of its
subsidiaries has retained or assumed either contractually or by operation of
law; (iv) none of the Company or any of its subsidiaries is conducting or
paying for, in whole or in part, any investigation, response or other
corrective action pursuant to any Environmental Law at any site or facility,
nor is any of them subject or a party to any order, judgment, decree, contract
or agreement which imposes any obligation or liability under any Environmental
Law; (v) to the Company’s knowledge, no lien, charge, encumbrance or
restriction has been recorded pursuant to any Environmental Law with respect to
any assets, facility or property owned, operated or leased by the Company or
any of its subsidiaries; and (vi) to the Company’s knowledge, there are no
past or present actions, activities, circumstances, conditions or occurrences,
including, without limitation, the Release or threatened Release of any Material
of Environmental Concern, that could reasonably be expected to result in a
violation of or liability under any Environmental Law on the part of the
Company or any of its subsidiaries, including without limitation, any such
liability which the Company or any of its subsidiaries has retained or assumed
either contractually or by operation of law.


 


For purposes of this Agreement, “Environment” means ambient air, indoor air,
surface water, groundwater, drinking water, soil, surface and subsurface
strata, and natural resources such as wetlands, flora and fauna. “Environmental Laws” means the common law
and all federal, state, local and foreign laws or regulations, ordinances,
codes, orders, decrees, judgments and injunctions issued, promulgated or
entered thereunder, relating to pollution or protection of the Environment or
human health, including without limitation, those relating to (i) the
Release or threatened Release of Materials of Environmental Concern; and (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
transport, handling or recycling of Materials of Environmental


 














 


Concern. “Materials
of Environmental Concern” means any substance, material, pollutant,
contaminant, chemical, waste, compound, or constituent, in any form, including
without limitation, petroleum and petroleum products, subject to regulation or
which can give rise to liability under any Environmental Law. “Release” means any release, spill,
emission, discharge, deposit, disposal, leaking, pumping, pouring, dumping,
emptying, injection or leaching into the Environment, or into, from or through
any building, structure or facility.


 


(ff) Reserved.


 


(gg) ERISA
Compliance. Except as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change, the Company and
its subsidiaries and any “employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, “ERISA,” which term, as used herein, includes the regulations
and published interpretations thereunder) established or maintained by the
Company or its subsidiaries are in compliance with ERISA. No “reportable event”
(as defined under ERISA) has occurred or is reasonably expected to occur with
respect to any “employee benefit plan” established or maintained by the
Company, its subsidiaries or, except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change, any
of their ERISA Affiliates (as defined below). None of the Company, its
subsidiaries or any of their ERISA Affiliates (as defined below) has incurred
or reasonably expects to incur any liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any “employee benefit plan”
or


 


(ii) Sections 412, 4971, 4975 or 4980B of the
Code. Each “employee benefit plan” established or maintained by the Company or
its subsidiaries that is intended to be qualified under Section 401 of the
Code is so qualified, and, to the Company’s knowledge, nothing has occurred,
whether by action or failure to act, which would cause the loss of such
qualification. “ERISA Affiliate”
means, with respect to the Company or a subsidiary, any member of any group of
organizations described in Section 414 of the Internal Revenue Code of
1986 (as amended, the “Code,”
which term, as used herein, includes the regulations and published interpretations
thereunder) of which the Company or such subsidiary is a member.


 


(hh) Compliance with
Labor Laws. Except as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change, (i) there
is (A) no unfair labor practice complaint pending or, to the Company’s
knowledge, threatened against the Company or any of its subsidiaries before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements pending, or to the
Company’s knowledge, threatened, against the Company or any of its
subsidiaries, (B) no strike, labor dispute, slowdown or stoppage pending
or, to the Company’s knowledge, threatened against the Company or any of its
subsidiaries and (C) no union representation question existing with
respect to the employees of the Company or any of its subsidiaries and, to the
Company’s knowledge, no union organizing activities taking place and (ii) there
has been no violation of any federal, state or local law relating to
discrimination in hiring, promotion or pay of employees or of any applicable
wage or hour laws.


 


(ii) Related
Party Transactions. Except as disclosed in the Offering Memorandum,
no relationship, direct or indirect, exists between or among any of the Company
or any affiliate of the Company, on the one hand, and any director, officer,
member, stockholder, customer or supplier of the Company or any affiliate of
the Company, on the other hand, which would be required by the Securities Act
to be disclosed in a registration statement on Form S-1 which is not so
disclosed in the Offering Memorandum. Except as disclosed in the Offering
Memorandum, there are no


 

















 


outstanding loans, advances (except advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company or any affiliate of the Company to or for the
benefit of any of the officers or directors of the Company or any affiliate of
the Company or any of their respective family members.


 


(jj) No Unlawful
Contributions or Other Payments. None of the Company or any of its
subsidiaries or, to the knowledge of the Company or any Guarantor, any
director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is aware of or has taken any action, directly or indirectly, that
would result in a violation by such persons of the FCPA, including, without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign
official” (as such term is defined in the FCPA) or any foreign political party
or official thereof or any candidate for foreign political office, in
contravention of the FCPA and the Company, its subsidiaries and, to the
knowledge of the Company, or any Guarantors or their respective affiliates have
conducted their businesses in compliance with the FCPA and have instituted and
maintain policies and procedures generally designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.


 


“FCPA”
means Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.


 


(kk) No Conflict
with Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company or any Guarantor, threatened.


 


(ll) No Conflict
with OFAC Laws. None of the Company or any of its subsidiaries or,
to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the offering,
or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.


 


(mm) Collateral. The
Company and the Guarantors collectively own, have rights in or have the power
to transfer rights in the Collateral, free and clear of any Liens (as defined
under the caption “Description of Notes” in the Prospectus) other than
Permitted Collateral Liens.


 


(nn) Revolving
Credit Facility. The Revolving Credit Facility (as defined in the
Offering Memorandum) has been duly and validly authorized by the Company and,
when duly executed and delivered by the Company and the Guarantors, will be the
valid and legally binding obligation of the Company and the Guarantors,
enforceable in accordance with its terms, except as the


 

















 


enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles (regardless whether such enforceability is considered in a
proceeding in equity or at law) and the discretion of the court before which
any proceeding therefor may be brought.


 


(oo) Regulation S. The
Company, the Guarantors and their respective affiliates and all persons acting
on their behalf (other than the Initial Purchasers, as to whom the Company and
the Guarantors make no representation) have complied with and will comply with
the offering restrictions requirements of Regulation S in connection with the
offering of the Securities outside the United States and, in connection
therewith, the Offering Memorandum will contain the disclosure required by Rule 902
of the Securities Act. The Securities sold in reliance on Regulation S will be
represented upon issuance by a temporary global security that may not be
exchanged for definitive securities until the expiration of the 40-day
restricted period referred to in Rule 903 of the Securities Act and only
upon certification of beneficial ownership of such Securities by non-U.S.
persons or U.S. persons who purchased such Securities in transactions that were
exempt from the registration requirements of the Securities Act.


 


Any certificate signed by an officer of the Company or
any Guarantor and delivered to the Initial Purchasers or to counsel for the
Initial Purchasers shall be deemed to be a representation and warranty by the
Company or such Guarantor to each Initial Purchaser as to the matters set forth
therein.


 


SECTION 2. Purchase,
Sale and Delivery of the Securities.


 


(a) The
Securities. Each of the Company and the Guarantors agrees to issue
and sell to the Initial Purchasers, severally and not jointly, and the Initial
Purchasers agree, severally and not jointly, to purchase from the Company and
the Guarantors, the aggregate principal amount of Securities set forth opposite
the Initial Purchasers’ respective names on Schedule A, at a purchase price of
96.015% of the principal amount thereof payable on the Closing Date, in each
case, on the basis of the representations, warranties and agreements herein
contained, and upon the terms and subject to the conditions herein set forth.


 


(b) The Closing
Date. Delivery of certificates in definitive form for the Securities
to be purchased by the Initial Purchasers and payment therefor shall be made at
the offices of Cahill Gordon & Reindel LLP, 80 Pine Street, New York,
New York 10005 (or such other place as may be agreed to by the Company and the
Representative) at 9:00 a.m. New York City time, on April 7, 2010, or
such other time and date as the Representative shall designate by notice to the
Company (the time and date of such closing are called the “Closing Date”). The Company hereby
acknowledges that circumstances under which the Representative may provide
notice to postpone the Closing Date as originally scheduled include, but are in
no way limited to, any determination by the Company or the Initial Purchasers
to recirculate to investors copies of an amended or supplemented Offering
Memorandum or a delay as contemplated by the provisions of Section 17
hereof.


 


(c) Delivery of
the Securities. The Company shall deliver, or cause to be delivered,
to the Representative for the accounts of the several Initial Purchasers
certificates for the Notes at the Closing Date against the irrevocable release
of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The certificates for the Notes shall be in such
denominations and registered in the name of Cede & Co., as nominee of
the Depositary, pursuant to the DTC Agreement, and shall be made available for
inspection on the business day preceding the Closing Date at a location in New
York City, as the Representative may designate.


 

















 


(d) Initial
Purchasers as Qualified Institutional Buyers. Each Initial Purchaser
severally and not jointly represents and warrants to, and agrees with, the
Company that:


 


(i) it has not solicited offers for, or offered
or sold, and will not solicit offers for, or offer or sell Securities except
to: (a) persons who it reasonably believes are “qualified institutional
buyers” within the meaning of Rule 144A (“Qualified Institutional Buyers”) in transactions meeting the
requirements of Rule 144A or (b) upon the terms and conditions set
forth in Annex I to this Agreement;


 


(ii) it is a Qualified Institutional Buyer and an
institutional “accredited investor” within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act;


 


(iii) it has not
solicited offers for, or offered or sold, and will not solicit offers for, or
offer or sell, Securities by any form of general solicitation or general
advertising, including but not limited to the methods described in Rule 502(c) under
the Securities Act, or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; and


 


(iv) the Company and
the Guarantors and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 5(c) and 5(d), counsel for the Company and
the Guarantors and counsel for the Initial Purchasers may rely upon the
accuracy of the representations and warranties of the Initial Purchasers, and
compliance by the Initial Purchasers with the agreements, set forth in this Section 2
(including Annex I hereto), and it hereby consents to such reliance.


 


SECTION 3. Additional
Covenants. Each of the Company and the Guarantors further, jointly
and severally, covenants and agrees with each Initial Purchaser as follows:


 


(a) Preparation
of Final Offering Memorandum; Initial Purchasers’ Review of Proposed Amendments
and Supplements and Company Additional Written Communications. As
promptly as practicable following the Time of Sale, the Company will prepare
and deliver to the Initial Purchasers the Final Offering Memorandum. The
Company will not amend or supplement the Final Offering Memorandum prior to the
Closing Date unless the Representative shall previously have been furnished a
copy of the proposed amendment or supplement at least one business day prior to
the proposed use or filing, and shall not have objected to such amendment or
supplement. Before making, preparing, using, authorizing, approving or
distributing any Company Additional Written Communication, the Company will
furnish to the Representative a copy of such written communication for review
and will not make, prepare, use, authorize, approve or distribute any such
written communication to which the Representative reasonably objects.


 


(b) Amendments
and Supplements to the Final Offering Memorandum and Other Securities Act
Matters. If at any time prior to the Closing Date (i) any event
shall occur or condition shall exist as a result of which any of the Pricing
Disclosure Package as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (ii) it is necessary to amend or
supplement any of the Pricing Disclosure Package to comply with law, the
Company and the Guarantors will immediately notify the Initial Purchasers
thereof and forthwith prepare and (subject to Section 3(a) hereof) furnish
to the Initial Purchasers such amendments or supplements to any of the Pricing
Disclosure Package as may be necessary so that the statements in any of the
Pricing Disclosure Package as so amended or supplemented will not, in the light
of the circumstances under which they were made, be misleading or so that any
of the Pricing Disclosure Package will comply with all applicable law. If,
prior to the


 

















 


completion of the placement of the Securities by the
Initial Purchasers with the Subsequent Purchasers, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Final Offering Memorandum, as then amended or supplemented, in order to make
the statements therein, in the light of the circumstances when the Final
Offering Memorandum is delivered to a Subsequent Purchaser, not misleading, or
if in the judgment of the Representative or counsel for the Initial Purchasers
it is otherwise necessary to amend or supplement the Final Offering Memorandum
to comply with law, the Company and the Guarantors agree to promptly prepare,
and (subject to Section 3 hereof) furnish at their own expense to the
Initial Purchasers, amendments or supplements to the Final Offering Memorandum
so that the statements in the Final Offering Memorandum as so amended or
supplemented will not, in the light of the circumstances at the Closing Date
and at the time of sale of Securities, be misleading or so that the Final
Offering Memorandum, as amended or supplemented, will comply with all applicable
law.


 


Following the consummation of the Exchange Offer or
the effectiveness of an applicable shelf registration statement and for so long
as the Securities are outstanding, if in the reasonable judgment of the
Representative, the Initial Purchasers or any of their affiliates (as such term
is defined in the Securities Act) are required to deliver a prospectus in
connection with sales of, or market-making activities with respect to, the
Securities, the Company and the Guarantors agree to periodically amend the
applicable registration statement so that the information contained therein
complies with the requirements of Section 10 of the Securities Act, to
amend the applicable registration statement or supplement the related
prospectus or the documents incorporated therein when necessary to reflect any
material changes in the information provided therein so that the registration
statement and the prospectus will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing as of the date
the prospectus is so delivered, not misleading and to provide the Initial
Purchasers with copies of each amendment or supplement filed and such other
documents as the Initial Purchasers may reasonably request.


 


The Company hereby expressly acknowledges that the
indemnification and contribution provisions of Sections 8 and 9 hereof are
specifically applicable and relate to each offering memorandum, registration statement,
prospectus, amendment or supplement referred to in this Section 3.


 


(c) Copies of
the Offering Memorandum. The Company agrees to furnish the Initial
Purchasers, without charge, as many copies of the Pricing Disclosure Package
and the Final Offering Memorandum and any amendments and supplements thereto as
they shall reasonably request.


 


(d) Blue Sky
Compliance. Each of the Company and the Guarantors shall cooperate
with the Representative and counsel for the Initial Purchasers and use
commercially reasonable efforts to qualify or register (or to obtain exemptions
from qualifying or registering) all or any part of the Securities for offer and
sale under the securities laws of the several states of the United States, the
provinces of Canada or any other jurisdictions reasonably designated by the
Representative, to comply with such laws and to continue such qualifications,
registrations and exemptions in effect so long as required for the distribution
of the Securities; provided that none of the Company or any of the Guarantors
shall be required to qualify as a foreign corporation or to take any action
that would subject it to general service of process in any such jurisdiction
where it is not presently qualified or where it would be subject to taxation if
it is not otherwise so subject. The Company will advise the


 

















 


Representative promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the
Securities for offering, sale or trading in any jurisdiction or any initiation
or threat of any proceeding for any such purpose, and in the event of the
issuance of any order suspending such qualification, registration or exemption,
each of the Company and the Guarantors shall use commercially reasonable
efforts to obtain the withdrawal thereof at the earliest possible moment.


 


(e) Use of
Proceeds. The Company shall apply the net proceeds from the sale of
the Securities sold by it in the manner described under the caption “Use of
Proceeds” in the Pricing Disclosure Package.


 


(f) The
Depositary. The Company will cooperate with the Initial Purchasers
and use commercially reasonable efforts to permit the Securities to be eligible
for clearance and settlement through the facilities of the Depositary.


 


(g) Additional
Issuer Information. Prior to the completion of the placement of the Securities
by the Initial Purchasers with the Subsequent Purchasers, the Company will, at
any time when the Company is not subject to Section 13 or 15 of the
Exchange Act, for the benefit of holders and beneficial owners from time to
time of the Securities, the Company shall furnish, at its expense, upon
request, to holders and beneficial owners of Securities and prospective
purchasers of Securities information (“Additional
Issuer Information”) satisfying the requirements of Rule 144A(d) under
the Securities Act.


 


(h) Agreement
Not To Offer or Sell Additional Securities. During the period of 90
days following the date hereof, the Company will not, without the prior written
consent of Banc of America Securities LLC (which consent may be withheld at the
sole discretion of Banc of America Securities LLC), directly or indirectly,
sell, offer, contract or grant any option to sell, pledge, transfer or
establish an open “put equivalent position” within the meaning of Rule 16a-1
under the Exchange Act, or otherwise dispose of or transfer, or announce the
offering of, or file any registration statement under the Securities Act in
respect of, any debt securities of the Company or securities exchangeable for
or convertible into debt securities of the Company (other than as contemplated
by this Agreement and to register the Exchange Securities). Notwithstanding the
foregoing, the parties agree that this Section 3(h) shall not
prohibit the Company or any Guarantor from (1) entering into any bank
loans or lines of credit (including the Revolving Credit Facility), (2) issuing
commercial paper in the ordinary course of business, (3) entering into
capital or operating leases or (5) entering into interest rate swap
agreements.


 


(i) Future
Reports to the Initial Purchasers. At any time when the Company is
not subject to Section 13 or 15 of the Exchange Act and any Securities or
Exchange Securities remain outstanding, the Company will furnish to the
Representative and, upon request, to each of the other Initial Purchasers: (i) as
soon as practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheets of the Company as of the
close of such fiscal year and statements of income, stockholders’ equity and
cash flows for the year then ended and the opinion thereon of the Company’s
independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on
Form 8-K or other report filed by the Company with the Commission, the
Financial Industry Regulatory Authority (“FINRA”)
or any securities exchange; and (iii) as soon as available, copies of any
report or communication of the Company mailed generally to holders of its
capital stock or debt securities (including the holders of the Securities), if,
in each case, such documents are not filed with the Commission within the time
periods specified by the Commission’s rules and regulations under Section 13
or 15 of the Exchange Act.


 


(j) No
Integration. The Company agrees that it will not and will cause its
Affiliates not to make any offer or sale of securities of the Company of any
class if, as a result of the doctrine of


 

















 


“integration” referred to in Rule 502 under the
Securities Act, such offer or sale would render invalid (for the purpose of (i) the
sale of the Securities by the Company to the Initial Purchasers, (ii) the
resale of the Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the
resale of the Securities by such Subsequent Purchasers to others) the exemption
from the registration requirements of the Securities Act provided by Section 4(2) thereof
or by Rule 144A or by Regulation S thereunder or otherwise.


 


(k) No General
Solicitation or Directed Selling Efforts. The Company agrees that it
will not and will not permit any of its Affiliates or any other person acting
on its or their behalf (other than the Initial Purchasers, as to which no
covenant is given) to (i) solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act or (ii) engage in any directed selling efforts with respect
to the Securities within the meaning of Regulation S, and the Company will and
will cause all such persons to comply with the offering restrictions
requirement of Regulation S with respect to the Securities.


 


(l) No
Restricted Resales. The Company will not, and will not permit any of
its affiliates (as defined in Rule 144 under the Securities Act) to resell
any of the Notes that have been reacquired by any of them, except for Notes
resold in a transaction registered under the Securities Act.


 


(m) Legended
Securities. Each certificate for a Note will bear the legend
contained in “Transfer Restrictions” in the Preliminary Offering Memorandum for
the time period and upon the other terms stated in the Preliminary Offering
Memorandum.


 


(n) The Liens. The
Company and the Guarantors shall cause the Securities to be secured by
perfected second priority liens on the Collateral (it being understood that the
Revolving Credit Facility shall be secured by perfected first priority liens on
the Collateral) to the extent and in the manner provided for in the Indenture
and the Security Documents and as described in the Offering Memorandum, in each
case, subject to no Liens except Permitted Collateral Liens.


 


The Representative on behalf of the several Initial
Purchasers, may, in its sole discretion, waive in writing the performance by
the Company or any Guarantor of any one or more of the foregoing covenants or
extend the time for their performance.


 


SECTION 4. Payment
of Expenses. Each of the Company and the Guarantors, jointly and
severally, agrees to pay all costs, fees and expenses incurred in connection
with the performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including, without limitation, (i) all
expenses incident to the issuance and delivery of the Securities (including all
printing and engraving costs), (ii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Securities to
the Initial Purchasers, (iii) all fees and expenses of the Company’s and
the Guarantors’ counsel, independent public or certified public accountants and
other advisors, (iv) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of the Pricing
Disclosure Package and the Final Offering Memorandum (including financial
statements and exhibits), and all amendments and supplements thereto, this
Agreement, the Registration Rights Agreement, the Indenture, the Security
Documents, the Intercreditor Agreement, the DTC Agreement and the Notes and
Guarantees, (v) all filing fees, reasonable attorneys’ fees and expenses
incurred by the Company, the Guarantors or the Initial Purchasers in connection
with qualifying or registering (or obtaining exemptions from the qualification
or registration of) all or any part of the Securities for offer and sale under
the securities laws of the several states of the United States, the provinces
of Canada or other jurisdictions designated by the Initial Purchasers
(including, without limitation, the


 

















 


cost of preparing, printing and mailing preliminary
and final blue sky or legal investment memoranda and any related supplements to
the Pricing Disclosure Package or the Final Offering Memorandum), (vi) the
fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Security Documents, the
Intercreditor Agreement, the Indenture, the Securities and the Exchange
Securities, (vii) any fees payable in connection with the rating of the
Securities or the Exchange Securities with the ratings agencies, (viii) any
filing fees incident to, and any reasonable and documented fees and
disbursements of counsel to the Initial Purchasers in connection with the
review by FINRA, if any, of the terms of the sale of the Securities or the
Exchange Securities, (ix) all fees and expenses (including reasonable fees
and expenses of counsel) of the Company and the Guarantors in connection with
approval of the Securities by the Depositary for “book-entry” transfer, and the
performance by the Company and the Guarantors of their respective other
obligations under this Agreement,


 


(x) all fees, costs and expenses (including the
reasonable expenses of counsel for the Initial Purchasers related thereto) of
creating and perfecting security in interests in the Collateral, including all
filing, recording and post-closing fees and expenses and related taxes with
respect thereto, as set forth in the Security Documents and (xi) all
expenses of the Company incident to the “road show” for the offering of the
Securities (except that the Initial Purchasers shall pay their own costs
relating to any chartered airplane or other chartered transportation). Except
as provided in this Section 4 and Sections 6, 8 and 9 hereof, the Initial
Purchasers shall pay their own costs and expenses, including their costs and
expenses related to travel in connection with the “road show” or otherwise and
the fees, disbursements and expenses of their counsel and other advisors.


 


SECTION 5. Conditions
of the Obligations of the Initial Purchasers. The obligations of the
several Initial Purchasers to purchase and pay for the Securities as provided
herein on the Closing Date shall be subject to the accuracy in all material
respects of the representations and warranties on the part of the Company and
the Guarantors set forth in Section 1 hereof as of the date hereof and as
of the Closing Date as though then made and to the timely performance in all
material respects by the Company of its covenants and other obligations
hereunder (provided that representations and warranties that are qualified by
Material Adverse Change or materiality or similar language shall be true and
correct in all respects), and to each of the following additional conditions:


 


(a) Accountants’
Comfort Letter. On the date hereof, the Initial Purchasers shall
have received from Ernst & Young LLP, the independent registered
public accounting firm for the Company and the Guarantors, a “comfort letter”
dated the date hereof addressed to the Initial Purchasers, in form and
substance satisfactory to the Representative, covering the financial
information in the Pricing Disclosure Package and other customary matters. In
addition, on the Closing Date, the Initial Purchasers shall have received from
such accountants a “bring-down comfort letter” dated the Closing Date addressed
to the Initial Purchasers, in form and substance satisfactory to the
Representative, in the form of the “comfort letter” delivered on the date
hereof, except that (i) it shall cover the financial information in the
Final Offering Memorandum and any amendment or supplement thereto and (ii) procedures
shall be brought down to a date no more than 5 calendar days prior to the
Closing Date.


 


(b) No Material
Adverse Change or Ratings Agency Change. For the period from and
after the date of this Agreement and prior to the Closing Date:


 


(i) in the judgment of the Representative there
shall not have occurred any Material Adverse Change; and


 


(ii) there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded the Company or any of
its subsidiaries or any of its securities or indebtedness by any “nationally
recognized statistical rating organization”


 

















 


as such term is defined for purposes of Rule 436
under the Securities Act.


 


(c) Opinion of
Counsel for the Company. On the Closing Date the Initial Purchasers
shall have received the favorable opinion of Hogan & Hartson LLP,
counsel for the Company, dated as of such Closing Date, in form and substance
reasonably satisfactory to the Representative.


 


(d) Opinion of
Counsel for the Initial Purchasers. On the Closing Date the Initial
Purchasers shall have received the favorable opinion of Cahill Gordon &
Reindel LLP, counsel for the Initial Purchasers, dated as of such Closing Date,
with respect to such matters as may be reasonably requested by the Initial
Purchasers.


 


(e) Officers’
Certificate. On the Closing Date the Initial Purchasers shall have
received a written certificate executed by the Chairman of the Board, Chief
Executive Officer, President, or General Counsel of the Company and the Chief
Financial Officer or Chief Accounting Officer of the Company and the Secretary
or Manager of each Guarantor, dated as of the Closing Date, to the effect set
forth in Section 5(b)(ii) hereof, and further to the effect that:


 


(i) for the period from and after the date of
this Agreement and prior to the Closing Date there has not occurred any
Material Adverse Change;


 


(ii) the representations and warranties of the
Company and the Guarantors set forth in Section 1 hereof that are qualified by
Material Adverse Change, materiality or similar language were true and correct
as of the date hereof and are true and correct as of the Closing Date with the
same force and effect as though expressly made on and as of the Closing Date,
and the representations and warranties of the Company and the Guarantors set
forth in Section 1 hereof that are not so qualified were true and correct
in all material respects as of the date hereof and are true and correct in all
material respects as of the Closing Date with the same force and effect as
though expressly made on and as of the Closing Date; and


 


(iii) the Company has complied in all material
respects with all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to the Closing Date.


 


(f) Indenture;
Registration Rights Agreement. The Company and the Guarantors shall
have executed and delivered the Indenture, in form and substance reasonably
satisfactory to the Initial Purchasers, and the Initial Purchasers shall have
received executed copies thereof. The Company and the Guarantors shall have
executed and delivered the Registration Rights Agreement, in form and substance
reasonably satisfactory to the Initial Purchasers, and the Initial Purchasers
shall have received such executed counterparts.


 


(g) Security
Documents and Intercreditor Agreement. Except as otherwise provided
for in this Agreement, the Security Agreement, the Pledge Agreement or the
Indenture, the Representative and the Collateral Agent shall have received each
of the Security Documents (including the schedules thereto) and the
Intercreditor Agreement, in form and substance reasonably satisfactory to the
Initial Purchasers, and all other certificates, agreements or instruments
necessary to perfect the Collateral Agent’s security interest in and liens on
all of the Collateral to the extent required as described in the Prospectus and
pursuant to the Security Documents, and each such document shall be in full
force and effect and evidence that all of the liens on the Collateral other
than Permitted Collateral Liens have been released. The Representative shall
also have received (i) copies of Uniform Commercial Code searches for the
Company and each Guarantor and (ii) tax and judgment lien searches or
equivalent reports or searches, and a copy of searches at the United States
Patent and Trademark Office for the Company and each Guarantor to the extent
reasonably requested by the Representative, in each case (i) and (ii), as
of a recent date listing all effective financing statements, lien notices or
comparable documents that name the Company or any Guarantor as debtor and that
are required by the Security Documents or that the Representative deems
reasonably necessary or appropriate, none of which encumber in any material
respect the Collateral covered or intended to be covered by the Security
Documents (other than Permitted


 

















 


Liens (as defined in the Indenture)).


 


(h) Revolving
Credit Facility; Release of Collateral; Use of Proceeds. (1) The
Revolving Credit Facility shall be in full force and effect, and (2) after
giving effect to the borrowings made thereunder on the Closing Date and the use
of proceeds as described in the Pricing Disclosure Package, the Company shall
have not less than $55,000,000 in availability under the Revolving Credit
Facility. The Company shall have applied a portion of the proceeds from the
Securities and drawings under the Revolving Credit Facility to repay amounts
outstanding under the Existing Credit Agreement and the Existing Subordinated
Notes (as such terms are defined in the Offering Memorandum), which shall be
terminated, and all security interests in collateral securing amounts outstanding
thereunder shall have been released pursuant to documentation satisfactory to
the Representative (or arrangements for such release satisfactory to the
Representative shall have been made).


 


(i) Additional
Documents. On or before the Closing Date, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such information,
documents and opinions as they may reasonably require for the purposes of
enabling them to pass upon the issuance and sale of the Securities as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.


 


If any condition specified in this Section 5 is
not satisfied when and as required to be satisfied, this Agreement may be
terminated by the Representative by notice to the Company at any time on or
prior to the Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Sections 4, 6, 8 and 9 hereof
shall at all times be effective and shall survive such termination.


 


SECTION 6. Reimbursement
of Initial Purchasers’ Expenses. If this Agreement is terminated by
the Representative pursuant to Section 5 or 10 hereof, including if the
sale to the Initial Purchasers of the Securities on the Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof,
the Company agrees to reimburse the Initial Purchasers, severally, upon demand
for all out-of-pocket expenses that shall have been reasonably incurred and
documented by the Initial Purchasers in connection with the proposed purchase
and the offering and sale of the Securities, including, without limitation,
fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.


 


SECTION 7. Offer,
Sale and Resale Procedures. Each of the Initial Purchasers, on the
one hand, and the Company and each of the Guarantors, on the other hand, hereby
agree to observe the following procedures in connection with the offer and sale
of the Securities:


 


(a) Offers and sales of the Securities will be
made only by the Initial Purchasers or Affiliates thereof qualified to do so in
the jurisdictions in which such offers or sales are made. Each such offer or
sale shall only be made to persons whom the offeror or seller reasonably
believes to be Qualified Institutional Buyers or non-U.S. persons outside the
United States to whom the offeror or seller reasonably believes offers and
sales of the Securities may be made in reliance upon Regulation S upon the
terms and conditions set forth in Annex I hereto, which Annex I is hereby
expressly made a part hereof.


 


(b) The Securities will be offered by approaching
prospective Subsequent Purchasers on an individual basis. No general
solicitation or general advertising (within the meaning of Rule 502 under
the Securities Act) will be used in the United States in connection with the
offering of the


 














 


Securities.


 


(c) Upon original issuance by the Company, and
until such time as the same is no longer required under the applicable
requirements of the Securities Act, the Notes (and all securities issued in
exchange therefor or in substitution thereof, other than the Exchange Notes)
shall bear the following legend:


 


“THE SECURITY EVIDENCED HEREBY (OR ITS PREDECESSOR)
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5
OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE
THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE
SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION
CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR
RESALE OF THE SECURITY EVIDENCED HEREBY.”


 

















 


Following the sale of the Securities by the Initial
Purchasers to Subsequent Purchasers pursuant to the terms hereof, the Initial
Purchasers shall not be liable or responsible to the Company for any losses,
damages or liabilities suffered or incurred by the Company, including any losses,
damages or liabilities under the Securities Act, arising from or relating to
any resale or transfer of any Security by any other Person.


 


SECTION 8. Indemnification.


 


(a) Indemnification
of the Initial Purchasers. Each of the Company and the Guarantors,
jointly and severally, agrees to indemnify and hold harmless each Initial
Purchaser, its affiliates, directors, officers and employees, and each person,
if any, who controls any Initial Purchaser within the meaning of the Securities
Act and the Exchange Act against any loss, claim, damage, liability or expense,
as incurred, to which such Initial Purchaser, affiliate, director, officer,
employee or controlling person may become subject, under the Securities Act,
the Exchange Act or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof
as contemplated below) arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum, the Pricing Supplement, any Company Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and to reimburse each
Initial Purchaser and each such affiliate, director, officer, employee or
controlling person for any and all expenses (including the fees and
disbursements of one separate counsel chosen by Banc of America Securities LLC
and one additional local counsel in each applicable jurisdiction, to the extent
necessary) as such expenses are reasonably incurred by such Initial Purchaser
or such affiliate, director, officer, employee or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that
the foregoing indemnity agreement shall not apply, with respect to an Initial
Purchaser, to any loss, claim, damage, liability or expense to the extent, but
only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by such
Initial Purchaser through the Representative expressly for use in the
Preliminary Offering Memorandum, the Pricing Supplement, any Company Additional
Written Communication or the Final Offering Memorandum (or any amendment or
supplement thereto). The indemnity agreement set forth in this Section 8(a) shall
be in addition to any liabilities that the Company may otherwise have.


 


(b) Indemnification
of the Company and the Guarantors. Each Initial Purchaser agrees,
severally and not jointly, to indemnify and hold harmless the Company, each
Guarantor, each of their respective directors and each person, if any, who
controls the Company or any Guarantor within the meaning of the Securities Act
or the Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, any Guarantor or any such director or
controlling person may become subject, under the Securities Act, the Exchange
Act, or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Initial Purchaser), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum, the Pricing Supplement, any Company Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of 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
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Preliminary Offering Memorandum, the Pricing Supplement, any Company Additional
Written Communication or the Final Offering Memorandum (or any amendment or
supplement thereto), in reliance upon and in conformity with written
information furnished to the Company by such Initial Purchaser through the
Representative expressly for use therein; and to reimburse the Company, any
Guarantor and each such director or controlling person for any and all expenses
(including the fees and disbursements of counsel) as such expenses are
reasonably incurred by the Company, any Guarantor or such director or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. Each of the Company and the Guarantors hereby acknowledges that the
only information that the Initial Purchasers through the Representative have
furnished to the Company expressly for use in the Preliminary Offering
Memorandum, the Pricing Supplement, any Company Additional Written
Communication or the Final Offering Memorandum (or any amendment or supplement
thereto) are the statements set forth in the third paragraph, the second and
third sentences of the sixth paragraph and the tenth paragraph under the
caption “Plan of Distribution” in the Preliminary Offering Memorandum and the
Final Offering Memorandum. The indemnity agreement set forth in this Section 8(b) shall
be in addition to any liabilities that each Initial Purchaser may otherwise
have.


 


(c) Notifications
and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 8 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof, but the failure so
to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party hereunder for contribution or otherwise
than under the indemnity agreement contained in this Section 8 or to the
extent it is not prejudiced (through the forfeiture of substantive rights and
defenses) as a result of such failure and shall not relieve the indemnifying
party from any liability that the indemnifying party may have to an indemnified
party otherwise than under the provisions of this Section 8 and Section 9.
In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in and, to the
extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that a conflict may arise between the
positions of the indemnifying party and the indemnified party in conducting the
defense of any such action or that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party’s election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that the


 

















 


indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with local counsel (in
each jurisdiction)), approved by the indemnifying party (Banc of America
Securities LLC in the case of Sections 8(b) and 9 hereof), representing
the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action, in each of which cases the
fees and expenses of counsel shall be at the expense of the indemnifying party.


 


(d) Settlements.
The indemnifying party under this Section 8 shall not be liable
for any settlement effected without its written consent, which will not be
unreasonably withheld, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought hereunder
by such indemnified party, unless such settlement, compromise or consent (i) includes
an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (ii) does
not include any statements as to or any findings of fault, culpability or
failure to act by or on behalf of any indemnified party.


 


SECTION 9. Contribution.
If the indemnification provided for in Section 8 hereof is for
any reason held to be unavailable to or otherwise insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors, on the one hand, and the
Initial Purchasers, on the other hand, from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Guarantors, on the one hand, and
the Initial Purchasers, on the other hand, in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Guarantors, on the one hand, and the Initial Purchasers, on
the other hand, in connection with the offering of the Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by the Company, and the total discount
received by the Initial Purchasers bear to the aggregate initial offering price
of the Securities. The relative fault of the Company and the Guarantors, on the
one hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact or any such inaccurate or alleged inaccurate representation or
warranty relates to information supplied by the Company and the Guarantors, on
the one hand, or the Initial Purchasers, on the other hand, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission or inaccuracy.


 


The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall
be deemed to include, subject to the limitations set forth in


 

















 


Section 8 hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 8
hereof with respect to notice of commencement of any action shall apply if a
claim for contribution is to be made under this Section 9; provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under Section 8 hereof for purposes of
indemnification.


 


The Company, the Guarantors and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to this Section 9
were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 9.


 


Notwithstanding the provisions of this Section 9,
no Initial Purchaser shall be required to contribute any amount in excess of
the discount received by such Initial Purchaser in connection with the
Securities distributed by it. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11 of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers’ obligations to contribute pursuant
to this Section 9 are several, and not joint, in proportion to their
respective commitments as set forth opposite their names in Schedule A. For
purposes of this Section 9, each director, officer and employee of an
Initial Purchaser and each person, if any, who controls an Initial Purchaser
within the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as such Initial Purchaser, and each director of the
Company or any Guarantor, and each person, if any, who controls the Company or
any Guarantor within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Company and the Guarantors.


 


SECTION 10. Termination
of this Agreement. Prior to the Closing Date, this Agreement may be
terminated by the Representative by notice given to the Company if at any time:
(i) trading in securities generally on either the Nasdaq Stock Market or
the New York Stock Exchange shall have been suspended or materially limited; (ii) a
general banking moratorium shall have been declared by any of federal, New York
or Delaware authorities; (iii) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any substantial change in the United States or international financial
markets, or any substantial change or development involving a prospective
substantial change in United States’ or international political, financial or
economic conditions, that in each case, in the judgment of the Representative,
is material and adverse and makes it impracticable or inadvisable to proceed
with the offering sale or delivery of the Securities in the manner and on the
terms described in the Pricing Disclosure Package or to enforce contracts for
the sale of securities; (iv) in the judgment of the Representative there
shall have occurred any Material Adverse Change; or (v) the Company shall
have sustained a loss by strike, fire, flood, earthquake, accident or other
calamity of such character as in the reasonable judgment of the Representative
may interfere materially with the conduct of the business and operations of the
Company regardless of whether or not such loss shall have been insured. Any
termination pursuant to this Section 10 shall be without liability on the
part of (i) the Company or any Guarantor to any Initial Purchaser, except
that the Company and the Guarantors shall be obligated to reimburse the
expenses of the Initial Purchasers pursuant to Sections 4 and 6 hereof, (ii) any
Initial Purchaser to the Company, or (iii) any party hereto to any other
party except that the provisions of Sections 8 and 9 hereof shall at all times
be effective and shall survive such termination.


 

















 


SECTION 11. Representations
and Indemnities to Survive Delivery. The respective indemnities,
agreements, representations, warranties and other statements of the Company,
the Guarantors, their respective officers and the several Initial Purchasers
set forth in or made pursuant to Sections 1, 2, 3, 4, 6, 7, 8, 9, 13, 15, 16
and 18 of this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Initial Purchaser, the Company,
any Guarantor or any of their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and
payment for the Securities sold hereunder and any termination of this
Agreement.


 


SECTION 12. Notices.
All communications hereunder shall be in writing and shall be
mailed, hand delivered, couriered or facsimiled and confirmed to the parties
hereto as follows:


 


If to the Initial Purchasers:


 


Banc of America Securities LLC

One Bryant Park

New York, New York 10036

Facsimile: (212) 901-7897

Attention: Legal Department


 


with a copy to:


 


Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

Facsimile: (212) 269-5420

Attention: James J. Clark, Esq.


 


Noah B. Newitz, Esq.


 


If to the Company or the Guarantors:


 


SquareTwo Financial Corporation

4340 S. Monaco, Second Floor

Denver, Colorado 80237

Facsimile: (303) 713-2509

Attention: L. Heath Sampson, CFO


 


with a copy to:


 


SquareTwo Financial Corporation

4340 S. Monaco, Second Floor

Denver, Colorado 80237

Facsimile: (303) 713-2509

Attention: Thomas Good, General Counsel


 

















 


with a copy to:


 


KRG Capital Partners

1515 Arapahoe Street

Tower One Suite 1500

Denver, Colorado 80202

Facsimile: (303) 390-5015

Attention: Mark King and Chris Bock


 


Any party hereto may change the address or facsimile
number for receipt of communications by giving written notice to the others.


 


SECTION 13. Successors.
This Agreement will inure to the benefit of and be binding upon the
parties hereto, and to the benefit of the indemnified parties referred to in
Sections 8 and 9 hereof, and in each case their respective successors, and no
other person will have any right or obligation hereunder. The term “successors”
shall not include any Subsequent Purchaser or other purchaser of the Securities
as such from any of the Initial Purchasers merely by reason of such purchase.


 


SECTION 14. Authority
of the Representative. Any action by the Initial Purchasers
hereunder may be taken by Banc of America Securities LLC on behalf of the Initial
Purchasers, and any such action taken by Banc of America Securities LLC shall
be binding upon the Initial Purchasers.


 


SECTION 15. Partial
Unenforceability. The invalidity or unenforceability of any section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other section, paragraph or provision hereof. If any
section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.


 


SECTION 16. Governing
Law Provisions; Consent to Jurisdiction. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.


 


Any legal suit, action or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in
the federal courts of the United States of America located in the City and
County of New York or the courts of the State of New York in each case located
in the City and County of New York (collectively, the “Specified Courts”), and each party
irrevocably submits to the exclusive jurisdiction (except for suits, actions,
or proceedings instituted in regard to the enforcement of a judgment of any
Specified Court in a Related Proceeding, as to which such jurisdiction is
non-exclusive) of the Specified Courts in any Related Proceeding. Service of
any process, summons, notice or document by mail to such party’s address set
forth above shall be effective service of process for any Related Proceeding
brought in any Specified Court. The parties irrevocably and unconditionally
waive any objection to the laying of venue of any Related Proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any Specified Court that any Related Proceeding brought in
any Specified Court has been brought in an inconvenient forum. Each party not
located in the United States irrevocably appoints CT Corporation System as its
agent to receive service of process or other legal summons for purposes of any
Related Proceeding that may be


 

















 


instituted in any Specified Court.


 


SECTION 17. Default
of One or More of the Several Initial Purchasers. If any one or more
of the several Initial Purchasers shall fail or refuse to purchase Securities
that it or they have agreed to purchase hereunder on the Closing Date, and the
aggregate number of Securities which such defaulting Initial Purchaser or
Initial Purchasers agreed but failed or refused to purchase does not exceed 10%
of the aggregate number of the Securities to be purchased on such date, the
other Initial Purchasers shall be obligated, severally, in the proportions that
the number of Securities set forth opposite their respective names on Schedule
A bears to the aggregate number of Securities set forth opposite the names of
all such non-defaulting Initial Purchasers, or in such other proportions as may
be specified by the Initial Purchasers with the consent of the non-defaulting
Initial Purchasers, to purchase the Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase on the
Closing Date. If any one or more of the Initial Purchasers shall fail or refuse
to purchase Securities and the aggregate number of Securities with respect to
which such default occurs exceeds 10% of the aggregate number of Securities to
be purchased on the Closing Date, and arrangements satisfactory to the Initial
Purchasers and the Company for the purchase of such Securities are not made
within 48 hours after such default, this Agreement shall terminate without
liability of any party to any other party except that the provisions of
Sections 4, 6, 8 and 9 hereof shall at all times be effective and shall survive
such termination. In any such case either the Initial Purchasers or the Company
shall have the right to postpone the Closing Date, as the case may be, but in
no event for longer than seven days in order that the required changes, if any,
to the Final Offering Memorandum or any other documents or arrangements may be
effected.


 


As used in this Agreement, the term “Initial Purchaser” shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this Section 17.
Any action taken under this Section 17 shall not relieve any defaulting
Initial Purchaser from liability in respect of any default of such Initial
Purchaser under this Agreement.


 


SECTION 18. No
Advisory or Fiduciary Responsibility. Each of the Company and the
Guarantors acknowledges and agrees that: (i) the purchase and sale of the
Securities pursuant to this Agreement, including the determination of the
offering price of the Securities and any related discounts and commissions, is
an arm’s-length commercial transaction between the Company and the Guarantors,
on the one hand, and the several Initial Purchasers, on the other hand, and the
Company and the Guarantors are capable of evaluating and understanding and
understand and accept the terms, risks and conditions of the transactions
contemplated by this Agreement; (ii) in connection with each transaction
contemplated hereby and the process leading to such transaction each Initial
Purchaser is and has been acting solely as a principal and is not the agent or
fiduciary of the Company, the Guarantors or their respective affiliates,
stockholders, creditors or employees or any other party; (iii) no Initial
Purchaser has assumed or will assume an advisory or fiduciary responsibility in
favor of the Company and the Guarantors with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether
such Initial Purchaser has advised or is currently advising the Company and the
Guarantors on other matters) or any other obligation to the Company and the
Guarantors except the obligations expressly set forth in this Agreement; (iv) the
several Initial Purchasers and their respective affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of
the Company and the Guarantors and the several Initial Purchasers have no obligation
to disclose any of such interests by virtue of any fiduciary or advisory
relationship; and (v) the Initial Purchasers have not provided any legal,
accounting, regulatory or tax advice with


 

















 


respect to the offering contemplated hereby, and the
Company and the Guarantors have consulted their own legal, accounting,
regulatory and tax advisors to the extent they deemed appropriate.


 


This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company, the Guarantors
and the several Initial Purchasers, or any of them, with respect to the subject
matter hereof. The Company and the Guarantors hereby waive and release, to the
fullest extent permitted by law, any claims that the Company and the Guarantors
may have against the several Initial Purchasers with respect to any breach or
alleged breach of fiduciary duty.


 


SECTION 19. General
Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect
to the subject matter hereof. This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument. Delivery of
an executed counterpart of a signature page to this Agreement by
telecopier, facsimile or other electronic transmission (i.e., a “pdf” or “tif”)
shall be effective as delivery of a manually executed counterpart thereof. This
Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.


 

















 


If the foregoing is in accordance with your
understanding of our agreement, kindly sign and return to the Company the
enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its terms.


 


Very truly yours,


 


	
   

  	
  SQUARETWO FINANCIAL
  CORPORATION, as Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
   

  	
  Name: Paul A. Larkins

  
	
   

  	
   

  	
  Title: President and Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
  HEALTHCARE FUNDING
  SOLUTIONS, LLC

  
	
   

  	
  CACH, LLC

  
	
   

  	
  CACV OF COLORADO, LLC

  
	
   

  	
  ORSA, LLC

  
	
   

  	
  CANDEO, LLC

  
	
   

  	
  AUTUS, LLC

  
	
   

  	
  CACH OF NJ, LLC

  
	
   

  	
  CACV OF NEW JERSEY, LLC

  
	
   

  	
  COLLECT AMERICA OF CANADA,
  LLC, as Grantors

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul A. Larkins

  
	
   

  	
   

  	
  Name: Paul A. Larkins

  
	
   

  	
   

  	
  Title:   Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SQUARETWO FINANCIAL COMMERCIAL FUNDING CORPORATION

  
	
   

  	
  REFINANCE
  AMERICA, LTD., as Grantors

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas G. Good

  
	
   

  	
   

  	
  Name: Thomas G. Good

  
	
   

  	
   

  	
  Title:   Secretary

  



 

















 


The foregoing Purchase Agreement is hereby confirmed
and accepted by the Initial Purchasers as of the date first above written.


 


 


BANC OF AMERICA SECURITIES
LLC


Acting on behalf of itself

and as the Representative of

the several Initial Purchasers


 


By:  Banc of America Securities LLC


 


 


	
  By:

  	
   /s/ Illegible

  	
   

  
	
   

  	
  Managing Director

  	
   

  



 

















 


SCHEDULE A


 


	
  Initial Purchasers

  	
   

  	
  Aggregate Principal Amount

  of Securities to be Purchased

  	
   

  
	
  Banc
  of America Securities LLC

  	
   

  	
  $

  	
  174,000,000

  	
   

  
	
  BMO
  Capital Markets Corp.

  	
   

  	
  65,250,000

  	
   

  
	
  Fifth
  Third Securities, Inc.

  	
   

  	
  25,375,000

  	
   

  
	
  U.S.
  Bancorp Investments, Inc.

  	
   

  	
  25,375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  290,000,000

  	
   

  



 

















 


SCHEDULE B


 


Guarantors


 


Square Two Financial Commercial Funding Corporation


Health Care Funding Solutions, LLC


CACH, LLC


CACV of Colorado, LLC


Refinance America, Ltd.


Orsa, LLC


Candeo, LLC


Autus, LLC


CACH of NJ, LLC


CACV of New Jersey, LLC


Collect America of Canada, LLC


 

















 


ANNEX
I


 


Resale Pursuant to Regulation S or Rule 144A.
Each Initial
Purchaser understands that:


 


Such Initial Purchaser agrees that it has not offered
or sold and will not offer or sell the Securities in the United States or to,
or for the benefit or account of, a U.S. Person (other than a distributor), in
each case, as defined in Rule 902 of Regulation S (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later
of the commencement of the offering of the Securities pursuant hereto and the
Closing Date, other than in accordance with Regulation S or another exemption
from the registration requirements of the Securities Act. Such Initial
Purchaser agrees that, during such 40-day restricted period, it will not cause
any advertisement with respect to the Securities (including any “tombstone”
advertisement) to be published in any newspaper or periodical or posted in any
public place and will not issue any circular relating to the Securities, except
such advertisements as permitted by and include the statements required by
Regulation S.


 


Such Initial Purchaser
agrees that, at or prior to confirmation of a sale of Securities by it to any
distributor, dealer or person receiving a selling concession, fee or other
remuneration during the 40-day restricted period referred to in Rule 903
of Regulation S, it will send to such distributor, dealer or person receiving a
selling concession, fee or other remuneration a confirmation or notice to
substantially the following effect:


 


“The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933, as amended (the “Securities
Act”), and may not be offered and sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of your distribution
at any time or (ii) otherwise until 40 days after the later of the date
the Securities were first offered to persons other than distributors in
reliance on Regulation S and the Closing Date, except in either case in
accordance with Regulation S under the Securities Act (or in accordance with Rule 144A
under the Securities Act or to accredited investors in transactions that are
exempt from the registration requirements of the Securities Act), and in
connection with any subsequent sale by you of the Securities covered hereby in
reliance on Regulation S under the Securities Act during the period referred to
above to any distributor, dealer or person receiving a selling concession, fee
or other remuneration, you must deliver a notice to substantially the foregoing
effect. Terms used above have the meanings assigned to them in Regulation S under
the Securities Act.”


 


Such Initial Purchaser agrees that the Securities
offered and sold in reliance on Regulation S will be represented upon issuance
by a global security that may not be exchanged for definitive securities until
the expiration of the 40-day restricted period referred to in Rule 903 of
Regulation S and only upon certification of beneficial ownership of such
Securities by non-U.S. persons or U.S. persons who purchased such Securities in
transactions that were exempt from the registration requirements of the
Securities Act.