Document:

Exhibit 10.2

 

PURCHASE AGREEMENT

 

June 6, 2012

 

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
      As Representative of the Initial Purchasers
 One Bryant Park
 New York, NY 10036

 

Ladies and Gentlemen:

 

Introductory.  Fifth & Pacific Companies, Inc., a Delaware corporation (formerly known as Liz Claiborne, Inc., a Delaware corporation, the “Company”), proposes to issue and sell to Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and the other several Initial Purchasers named in Schedule A hereto (the “Initial Purchasers”), acting severally and not jointly, the respective amounts set forth in such Schedule A of $152,000,000 aggregate principal amount of the Company’s 10.50% Senior Secured Notes due 2019 (the “Notes”).  Merrill Lynch 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 Notes will be issued under the indenture, dated as of April 7, 2011 (the “Indenture”), 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 (the “DTC Agreement”), among the Company, the Trustee and the Depositary.

 

The Company has previously issued $220.0 million aggregate principal amount of 10.50% Senior Secured Notes due 2019 (the “Existing Notes”) under the Indenture.  The Notes will constitute “Additional Notes” (as such term is defined in the Indenture) under the Indenture. Except as otherwise disclosed in the Pricing Disclosure Package and the Final Offering Memorandum (each as defined below), the Notes will have terms substantially identical to the Existing Notes and will be treated as a single class for all purposes under the Indenture.

 

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 will 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 by certain holders of the Notes, and to use its best efforts to cause such registration statements to be declared effective.

 

The payment of principal of, premium, if any, and interest on the Notes will be fully and unconditionally guaranteed on a senior secured basis, jointly and severally by (i) the Company’s 

 

 

subsidiaries listed on the signature pages hereof as “Guarantors” and (ii) any 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 proceeds of these Securities will be used to (i) repurchase, redeem or otherwise retire all or a portion of the Company’s 5.0% euro notes due July 2013 (the “Euro Notes”) and fees and expenses incurred in connection therewith (or to repay amounts borrowed under the ABL Facility (as defined below) to effect such repurchases, redemptions or retirements); (ii) fund all or a portion of the consideration payable in connection with the buyout of the Company’s joint venture partner with respect to to Kate Spade’s Japanese joint venture; and (iii) fund other general corporate purposes.  Pursuant to a joinder to the Security Documents (as defined below) for the Notes (the “Euro Notes Joinder Agreement”), the Euro Notes will be equally and ratably secured with the Notes on the Closing Date.  The granting of security to the Euro Notes pursuant to the Euro Notes Joinder Agreement, the repurchase, redemption or retirement of all or a portion of the Euro Notes with the proceeds of the Securities, the issuance and sale of the Notes, the issuance of the Guarantees and the payment of transaction costs are referred to herein collectively, as the “Transactions.”

 

The Notes will be secured on a first-priority basis, subject to Permitted Liens (as defined in the Indenture), by first-priority liens on and security interests in the Notes Priority Collateral (as defined in the Indenture, the “Notes Priority Collateral”) and by second-priority liens on and security interests in the ABL Priority Collateral (as defined in the Indenture, the “ABL Priority Collateral” and, together with the Notes Priority Collateral, the “Collateral”) and documented by the Pledge and Security Agreement, dated as of April 7, 2011 and amended to date, among the Company, the Grantors (as defined therein) and the Collateral Agent (as amended, the “Security Agreement”), mortgages and other instruments evidencing or creating or purporting to create a lien or security interest (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, the holders of the Notes and the holders of any Permitted Additional Pari Passu Obligations (as defined in the Indenture) (the “Permitted Additional Pari Passu Obligations”).

 

The liens on the Collateral securing the Notes will be subject to the Intercreditor Agreement, dated as of April 7, 2011 (the “Intercreditor Agreement”), by and between the Collateral Agent and JPMorgan Chase Bank, N.A. as collateral agent (the “ABL Collateral Agent”) under the Company’s Second Amended and Restated Credit Agreement dated as of May 6, 2010, among Liz Claiborne Inc., Mexx Europe B.V., Liz Claiborne Canada Inc., the other Loan Parties from time to time party thereto, the Lenders party thereto, the ABL Collateral Agent, Bank of America, N.A. and SunTrust Bank, as Syndication Agents, and Wachovia Bank, National Association, as Documentation Agent (as amended, restated, supplemented, replaced or otherwise modified from time to time, the “ABL Facility”), and acknowledged by the Company and the Guarantors.  On or prior to the Closing Date, the Company will enter into an amendment to the 

 

 

ABL Facility to, among other things, permit the transactions described above (the “ABL Amendment”).

 

This Agreement, the Registration Rights Agreement, the DTC Agreement, the Securities, the Exchange Securities, the Euro Notes Joinder Agreement, the ABL Amendment, the Security Documents, the Intercreditor Agreement and the Indenture are referred to herein as the “Transaction Documents.”

 

The Company understands that the Initial Purchasers propose to offer 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 Securities shall be deemed to have agreed that 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 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 June 6, 2012 (the “Preliminary Offering Memorandum”), and has prepared and delivered to each Initial Purchaser copies of a Pricing Supplement, dated June 6, 2012 and attached hereto as Schedule B (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”).

 

All references herein to the terms “Pricing Disclosure Package” and “Final Offering Memorandum” shall be deemed to mean and include all information filed under 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) prior to the Time of Sale and incorporated by reference in the Pricing Disclosure Package (including the Preliminary Offering Memorandum) or the Final Offering Memorandum (as the case may be), and all references herein to the terms “amend,” “amendment” or “supplement” with respect to the Final Offering Memorandum shall be deemed to mean and include all information filed under the Exchange Act after the Time of Sale and incorporated by reference in 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 Pricing Disclosure Package and 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 and warranties 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. Neither the Company, the Guarantors nor 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 nor any of their respective Affiliates, or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom the Company and each Guarantor makes 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, its Affiliates or any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes 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 and its Affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company and each Guarantor makes 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 Exchange Act 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 or represents 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 and the Final Offering Memorandum.

 

(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)         Incorporated Documents.  The documents incorporated by reference in the Offering Memorandum at the time they were or hereafter are filed with the Commission (collectively, the “Incorporated Documents”) complied and will comply in all material respects with the requirements of the Exchange Act.

 

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

 

(h)        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 when duly executed and delivered in accordance with its terms by each of the other parties thereto, 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 and except as rights to indemnification may be limited by applicable law.  The DTC Agreement has been duly authorized and, on the Closing Date, will have been duly executed and delivered by, and when duly executed and delivered in accordance with its terms by each of the other parties thereto, 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.

 

(i)         Authorization of the Notes, the Guarantees and the Exchange Securities.  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 the Notes 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 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 and will be entitled to the benefits of the Indenture.  The Guarantees of the Notes on the Closing Date will be in the form contemplated by the Indenture and the Guarantees of the Exchange Notes when issued will be in the form 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 and will be entitled to the benefits of the Indenture.

 

(j)         Authorization of the Indenture.  The Indenture has been duly authorized, executed and delivered by the Company and the Guarantors and constitutes 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.

 

(k)        Authorization of the Intercreditor Agreement.  The Intercreditor Agreement has been duly authorized by the Company and each Guarantor and has been duly executed and delivered by the Company and each Guarantor and constitutes 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, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(l)         Security Documents.  Each of the Security Documents has been or, with respect to the Mortgage Amendment Documentation (as defined below) and the Euro Notes Joinder Agreement, will be duly authorized by the Company and/or the applicable Guarantor, as appropriate, and has been or, with respect to the Mortgage Amendment Documentation and the Euro Notes Joinder Agreement, will be executed and delivered by the Company and/or the applicable Guarantor, and constitutes or, with respect to the Mortgage Amendment Documentation and the Euro Notes Joinder Agreement, will constitute a legal and binding agreement of the Company and/or the applicable Guarantor 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.  The Security Documents create, or with respect to the Euro Notes Joinder Agreement, 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, the holders of the Securities and the holders of any Permitted Additional Pari Passu Obligations, valid and enforceable security interests in and liens on the Collateral and, upon the filing or recordation of mortgage amendments and other documents reasonably required to maintain the Collateral Agent’s security interest in and lien on the Mortgaged Property created by the Mortgages, including the documents listed on Schedule E hereto (collectively, the “Mortgage Amendment Documentation”), 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 ABL Facility and Permitted Liens.

 

(m)       Description of the Transaction Documents.  The Transaction Documents will conform in all material respects to the respective statements relating thereto contained in the Offering Memorandum.

 

(n)        No Material Adverse Change.  Since the date of the most recent financial statements of the Company included or incorporated by reference in the Offering Memorandum (exclusive of any amendment or supplement thereto), (i) there has not been any change in the capital stock, long-term debt, notes payable or current portion of long-

 

 

term debt of the Company or any of its subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, or any material adverse change, or any development that is reasonably likely to result in a prospective material adverse change, in or affecting the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole; and (iii) neither the Company nor any of its subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except, in each case, as otherwise disclosed in the Pricing Disclosure Package and the Final Offering Memorandum.

 

(o)        Independent Accountants.  Deloitte & Touche 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 filed with the Commission and incorporated by reference 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 Deloitte & Touche to the Company or any of the Guarantors have been approved by the Audit Committee of the Board of Directors of the Company.

 

(p)        Preparation of the Financial Statements.  The financial statements and the related notes thereto of the Company and its consolidated subsidiaries included or incorporated by reference in the Offering Memorandum present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with U.S. generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby; and the other financial information included or incorporated by reference in the Offering Memorandum has been derived from the accounting records of the Company and its consolidated subsidiaries and presents fairly in all material respects the information shown thereby.  Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included or incorporated by reference in the Offering Memorandum is not based on or derived from sources that are reliable and accurate in all material respects.

 

(q)        Incorporation and Good Standing of the Company and the Guarantors.  The Company and each of the Guarantors have been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are

 

 

engaged, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, be reasonably expected to have a material adverse effect on the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries taken as a whole or on the performance by the Company of its obligations under the Transaction Documents (a “Material Adverse Effect”).  The jurisdictions in which the Company is required to be qualified to do business, except for those jurisdictions where the failure to be so qualified would not have a Material Adverse Effect, are listed on Schedule C.  The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Schedule D to this Agreement.

 

(r)        Capitalization and Other Capital Stock Matters.  At March 31, 2012, on a consolidated basis, after giving pro forma effect to the issuance and sale of the Securities pursuant hereto, the Company would have had 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 Company’s filings with the Commission or upon exercise of outstanding convertible securities, options or warrants described in the Company’s filings with the Commission).

 

(s)        Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required.  Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect or that is disclosed in the Offering Memorandum.  Assuming the accuracy of, and the compliance with, the representations, warranties and agreements set forth in this Agreement, the execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents, the issuance and sale of the Securities and the consummation of the transactions contemplated by the Transaction Documents or the Offering Memorandum will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject (except as otherwise described in the Offering Memorandum), (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the 

 

 

Company or any of its subsidiaries or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except where such default, violation, lien, charge or encumbrance (in the case of (i) or (iii)) would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.  Assuming the accuracy of, and the compliance with, the representations, warranties and agreements set forth in this Agreement, no consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance of the Transaction Documents by the Company and the Guarantors to the extent a party thereto, 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 Guarantors, as applicable, and are in full force and effect under the Securities Act, applicable securities laws of the several states of the United States or provinces of Canada and except 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 (B) filings of continuation statements under the Uniform Commercial Code (the “UCC”) as from time to time in effect in the relevant jurisdictions and any filing to be made in the United States Patent and Trademark Office or the United States Copyright Office.

 

(t)         Legal Proceedings.  Except as disclosed in the Offering Memorandum, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its subsidiaries is or may be a party or to which any property of the Company or any of its subsidiaries is or may be the subject that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect; no such investigations, actions, suits or proceedings are threatened or, to the knowledge of the Company, contemplated by any governmental or regulatory authority or threatened by others.

 

(u)        Title to Intellectual Property.  Except as disclosed in the Offering Memorandum, (i) the Company and its subsidiaries own or possess adequate rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses; and (ii) the conduct of their respective businesses will not conflict in any material respect with any such rights of others, and the Company and its subsidiaries have not received any notice of any claim of infringement of or conflict with any such rights of others, except, in each case of (i) and (ii), as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Change.

 

(v)        All Necessary Permits, etc.  The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Offering 

 

 

Memorandum, except where the failure to possess or make the same would not, individually or in the aggregate, have a Material Adverse Effect; and except as disclosed in the Offering Memorandum, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course, except as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.

 

(w)       Title to Real and Personal Property.  The Company and its subsidiaries have good and valid title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property that are material to the respective businesses of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

(x)        Tax Law Compliance.  The Company and its subsidiaries have paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date hereof, except where the failure to so pay or so file would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect; and except as otherwise disclosed in the Offering Memorandum or as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their respective properties or assets.

 

(y)        Company and Guarantors Not an “Investment Company.”  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 will be, an “investment company” within the meaning of the Investment Company Act and will conduct its business in a manner so that it will not become subject to the Investment Company Act.

 

(z)        Insurance. The Company and its subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including but not limited to business interruption insurance, which insurance is in amounts and insures against such losses and risks as are adequate to protect the Company and its subsidiaries and their respective businesses, except as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect; and neither the Company nor any of its subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its

 

 

business, except as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.

 

(aa)      No Price Stabilization or Manipulation.  The Company and the Guarantors have not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities.

 

(bb)      Solvency.  (a) The Company is and (b) the Guarantors, on a consolidated basis, are, and immediately after the Closing Date will be, Solvent.  As used herein, the term “Solvent” means, with respect to any person on a particular date, that on such date (i) the fair market value of the assets of such person is greater than the total amount of liabilities (including contingent liabilities) of such person, (ii) the present fair salable value of the assets of such person is greater than the amount that will be required to pay the probable liabilities of such person on its debts as they become absolute and matured, (iii) such person is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (iv) such person does not have unreasonably small capital  As of the date hereof and at the Closing Date, neither the Company nor any of the Guarantors has, and will have, incurred debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it and the timing of the amounts of cash to be payable on or in respect of its indebtedness.

 

(cc)      Compliance with Sarbanes-Oxley.  There is and has been no failure on the part of the Company or (to the knowledge of the Company) any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications.

 

(dd)      Company’s Accounting System.  The Company and its subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule l3a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including, but not limited to policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.  There are no “material weaknesses” (as defined in Rule 1-02(a)(4) of Regulation S-X) in the Company’s

 

 

internal control over financial reporting.  The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of:  (i) all “significant deficiencies” and “material weaknesses” (as defined in Rule 1-02(a)(4) of Regulation S-X) in internal control over financial reporting; and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.  As of March 31, 2012, there has been no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended March 31, 2012 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

 

(ee)      Disclosure Controls and Procedures.  The Company and its subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule l3a-15(e) and 15d-15 of the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information required to be disclosed in such reports is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure.  The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act and as of March 31, 2012, our disclosure controls and procedures were effective to ensure that all information required to be disclosed is recorded, processed, summarized and reported within the time periods specified, and that information required to be filed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosure.

 

(ff)        Regulations T, U, X.  Neither the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Company as described in the Offering Memorandum will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

 

(gg)      Compliance with Environmental Laws.  (i) The Company and its subsidiaries (x) are, and at all prior times were, in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, requirements, decisions and orders relating to the protection of human health or safety, the environment, natural resources, hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”), (y) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses, and (z) have not received notice of any actual or potential liability under or relating to any Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and have no knowledge of any event or condition that would reasonably be expected to result in any such notice, and (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the

 

 

Company or its subsidiaries; except in the case of each of (i) and (ii) above, for any such failure to comply, or failure to receive required permits, licenses or approvals, or cost or liability, as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Change; and (iii) except as disclosed in the Offering Memorandum, (x) there are no proceedings that are pending, or that are known to be contemplated, against the Company or any of its subsidiaries under any Environmental Laws in which a governmental entity is also a party, other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (y) the Company and its subsidiaries are not aware of any issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws or concerning hazardous or toxic substances or wastes, pollutants or contaminants, that would reasonably be expected to have a Material Adverse Change, and (z) none of the Company and its subsidiaries anticipates material capital expenditures relating to any Environmental Laws.

 

(hh)      Hazardous Substances.  Except as disclosed in the Offering Memorandum, there has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic wastes or hazardous substances, including, but not limited to, any naturally occurring radioactive materials, brine, drilling mud, crude oil, natural gas liquids and other petroleum materials, by, due to or caused by the Company or any of its subsidiaries (or, to the best of the Company’s knowledge, any other entity (including any predecessor) for whose acts or omissions the Company or any of its subsidiaries is or could reasonably be expected to be liable) upon any of the property now or previously owned or leased by the Company or any of its subsidiaries, or upon any other property, in violation of any Environmental Laws or in a manner or to a location that could reasonably be expected to give rise to any liability under the Environmental Laws, except for any violation or liability which would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.

 

(ii)        Compliance with ERISA.  Except as disclosed in the Offering Memorandum, (i) each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the Company or any member of its “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability (each, a “Plan”) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no failure to satisfy the minimum funding standards of Section 412 of the Code or Section 302 of ERISA, has occurred or is reasonably expected to occur; (iv) the fair market value of the assets of each Plan exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan); (v) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur; and (vi) neither the Company nor any member of the

 

 

Controlled Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC, in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan”, within the meaning of Section 4001(a)(3) of ERISA), except as would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.

 

(jj)        No Labor Disputes.  Except as disclosed in the Offering Memorandum, no labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to the best knowledge of the Company, is contemplated or threatened and the Company is not aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, except as would not be reasonably expected to have a Material Adverse Effect.

 

(kk)      Related Party Transactions.  No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other, that is required by Item 404 of Regulation S-K of the Securities Act to be described in a registration statement to be filed with the Commission and that is not so described in the Offering Memorandum.

 

(ll)        No Unlawful Contributions or Other Payments.  Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, 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, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures 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.

 

(mm)    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 best knowledge of the Company, threatened.

 

(nn)      No Conflict with OFAC Laws.  Neither the Company nor any of its subsidiaries nor, 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.

 

(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 Final Offering Memorandum will contain the disclosure required by Rule 902.  The Company is a “reporting issuer,” as defined in Rule 902 under 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, all of the Securities, and, subject to the conditions set forth herein, 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 their names on Schedule A hereto, at a purchase price for the Notes of 106.625% of the principal amount thereof plus accrued interest from April 15, 2012 to the Closing Date payable on the Closing Date, on the basis of the representations, warranties and agreements herein contained, and upon the terms herein set forth.

 

(b)        The Closing Date.  Delivery of certificates for the Notes in definitive form 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 Merrill Lynch) at 9:00 a.m. New York City time, on June 8, 2012 or such other time and date as Merrill Lynch shall designate by notice to the Company (the time and date of such closing are called the “Closing Date”).

 

(c)        Delivery of the Securities.  The Company shall deliver, or cause to be delivered, to Merrill Lynch 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 Merrill Lynch may designate.  Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Initial Purchasers.

 

(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 will offer and sell Securities only 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 an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act; and

 

(iii)   it will not 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.

 

SECTION 3.   Additional Covenants.  Each of the Company and the Guarantors, jointly and severally, further 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 and in any event not later than the second business day following the date hereof, the Company will prepare and deliver to the Initial Purchasers the Final Offering Memorandum, which shall consist of the Preliminary Offering Memorandum as modified only by the information contained in the Pricing Supplement except in accordance with Section 3(b) hereof.  The Company will not amend or supplement the Preliminary Offering Memorandum or the Pricing Supplement.  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 two business days 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 Pricing Disclosure Package and the Final Offering Memorandum. If at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which 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 the Pricing Disclosure Package to comply with law, the Company 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 the Pricing Disclosure Package as may be necessary so that the statements in 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 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 agrees to promptly prepare (subject to Section 3(a) hereof) and furnish at its 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 the Securities, be misleading or so that the Final Offering Memorandum, as amended or supplemented, will comply with all applicable law.

 

(c)        Copies of the Final 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 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 designated by the Representative, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Securities.  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 as a foreign corporation.  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 its best 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 its best 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 shall file, on a timely basis, with the Commission and the NYSE all reports and documents required to be filed under Section 13 or 15 of the Exchange Act, in accordance with the Indenture.  Additionally, 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), in accordance with the Indenture.

 

(h)        Agreement Not To Offer or Sell Additional Securities.  During the period of 180 days following the date hereof, the Company will not, without the prior written consent of Merrill Lynch (which consent may be withheld at the sole discretion of Merrill Lynch), 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 the Exchange Securities).

 

(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 all reports required under the Indenture to be delivered to holders of the Notes, if 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.

 

(m)       Legended Securities.  Each certificate for a Security 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)       Post-Closing. Notwithstanding anything to the contrary contained in this Agreement, the Indenture or the Security Documents, the Company and the applicable subsidiaries shall take the actions specified in Schedule E within the time period set forth therein.  The provisions of said Schedule E shall be deemed incorporated by reference herein as fully as if set forth herein in their entirety.

 

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, and the Transaction Documents, (v) all filing fees, 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 Indenture, the Mortgage Amendment Documentation, 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 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 and in connection with perfecting the security interests in the Collateral (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 expenses incident to the “road show” for the offering of the Securities (provided that the Initial Purchasers shall be responsible for half of the cost of any chartered aircraft) and (xi) all reasonable out of pocket costs and expenses (including, without limitation, reasonable fees, disbursements and other charges of legal counsel provided that such fees and expenses of Cahill Gordon & Reindel LLP pursuant to this clause (xi) shall not exceed $75,000) incurred in connection with the creation, documentation and perfection of the security interests in the Collateral, the Mortgage Amendment Documentation and the Euro Notes Joinder Agreement.  Except as expressly provided in this Section 4 and Sections 6, 8 and 9 hereof, the Initial Purchasers shall pay their own expenses, including the fees and disbursements of their counsel.

 

SECTION 5.   Conditions of the Obligations of the Initial Purchasers.  The obligations of the several Initial Purchasers to purchase and pay for the Securities as provided herein on the Closing Date shall be subject to the accuracy 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 by the Company of its covenants and other obligations hereunder, and to each of the following additional conditions:

 

(a)        Accountants’ Comfort Letter.  On the date hereof, the Initial Purchasers shall have received from Deloitte & Touche LLP, the independent registered public accounting firm for the Company, 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 3 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)         no event or condition of a type described in Section 1(n) hereof shall have occurred or shall exist, which event or condition is not disclosed in the Pricing Disclosure Package (excluding any amendment or supplement thereto) and the Final Offering Memorandum (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representative makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the Closing Date, on the terms and in the manner contemplated by 

 

 

this Agreement, the Pricing Disclosure Package and the Final Offering Memorandum; 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 their securities or indebtedness by any “nationally recognized statistical rating organization” as such term is defined for purposes of Section 3(a)(62) of the Exchange Act.

 

(c)        Opinion of Counsel for the Company.  On the Closing Date, the Initial Purchasers shall have received an opinion of (i) Paul, Weiss, Rifkind, Wharton & Garrison, counsel for the Company, dated as of such Closing Date, the form of which is attached as Exhibit A-1, (ii) Nicholas Rubino, General Counsel of the Company, the form of which is attached as Exhibit A-2 and (iii) opinions of local counsel in California and Washington, dated as of the Closing Date, substantially consistent with the opinions delivered to the Initial Purchasers on April 7, 2011.

 

(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 or President of the Company and each Guarantor and the Chief Financial Officer or Chief Accounting Officer of the Company and each Guarantor, dated as of the Closing Date, to the effect set forth in Section 5(b)(i) and (ii) hereof, and further to the effect that:

 

(iii)       the representations, warranties and covenants of the Company and the Guarantors set forth in Section 1 hereof 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

 

(iv)       the Company and each of the Guarantors have complied with all the agreements and satisfied all the conditions on their part to be performed or satisfied at or prior to the Closing Date.

 

(f)         Registration Rights Agreement.  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)        Euro Notes Joinder Agreement, Security Documents and Intercreditor Agreement.  To the extent a party thereto, the Company, the Guarantors, the Collateral Agent and the collateral trustee for the Euro Notes shall have executed and delivered the Euro Notes Joinder Agreement together with each of the other documents referred to 

 

 

in Article XI of the Security Agreement. The Representative and the Collateral Agent shall have received copies of each of the Security Documents and the Intercreditor Agreement, and all other certificates, agreements or instruments required to confirm the Collateral Agent’s security interest in all of the Collateral (other than the Mortgage Amendment Documentation); each such document executed by the Company and each other party thereto, and each such document shall be in full force and effect and evidence that all of the liens on the Collateral other than Permitted Liens have been released.  The Representative shall also have received (i) certified copies of UCC, tax and judgment lien searches or equivalent reports or searches, each of a recent date listing all effective financing statements, lien notices or comparable documents that name the Company or any Guarantor as debtor that the Representative deems necessary or appropriate, none of which encumber the Notes Priority Collateral covered or intended to be covered by the Security Documents (other than Permitted Liens) and (ii) acceptable evidence of payment or arrangements for payment by the Company and the Guarantors of all applicable recording taxes, fees, charges, costs and expenses required for the recording of the Security Documents (other than the Mortgage Amendment Documentation).

 

(h)        ABL Amendment. At the Closing Date, the ABL Amendment shall have been consummated in all material respects on terms and conditions described in the Pricing Disclosure Package and the Final Offering Memorandum.

 

(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, 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 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 (OR ITS PREDECESSOR) EVIDENCED HEREBY 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.

 

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 reasonable and documented expenses (including the fees and disbursements of one counsel chosen by Merrill Lynch in addition to any local counsel) 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 reasonable and documented 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 fifth, seventh (fourth sentence) and ninth paragraphs 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; provided that the failure to so notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under this Section 8 except to the extent that it has been materially prejudiced by such failure (through the forfeiture of substantive rights and defenses) and shall not relieve the indemnifying party from any liability that the indemnifying party 

 

 

may have to an indemnified party other than under this Section 8.  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, with the advice of counsel, 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)), which shall be selected by Merrill Lynch (in the case of counsel representing the Initial Purchasers or their related persons), representing the indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel 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 of any proceeding 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 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 with 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 or quotation in any of the Company’s securities shall have been suspended or limited by the Commission or by the NYSE, or trading in securities generally on either the Nasdaq Stock Market or the NYSE shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such quotation system or stock exchange by the Commission or FINRA; (ii) a general banking moratorium shall have been declared by any of federal or New York authorities; (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States’ or international political, financial or economic conditions, as in the judgment of the 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 or shall exist an event or condition of a type described in Section 1(n) hereof, which event or condition is not disclosed in the Pricing Disclosure Package (excluding any amendment or supplement thereto) and the Final Offering Memorandum (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representative makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the Closing Date, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Final Offering Memorandum; or (v) the Company shall have sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such character as in the 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 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:

 

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated 
 50 Rockefeller Plaza
 New York, New York  10020 
 Facsimile: (212) 901-7897
 Attention: HY Legal Department

 

with a copy to:

 

Cahill Gordon & Reindel LLP
 80 Pine Street
 New York, New York  10005
 Facsimile:  (212) 701-3849
 Attention:  James J. Clark and Corey Wright

 

If to the Company or the Guarantors:

 

Fifth & Pacific Companies, Inc.
 1441 Broadway
 New York, New York 10018
 Facsimile: (201) 295-6118
 Attention: Nicholas Rubino

 

with a copy to:

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP
 1285 Avenue of the Americas
 New York, New York  10019-6064
 Facsimile:  (212) 373-7550
 Attention:  Lawrence G. Wee

 

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 Merrill Lynch on behalf of the Initial Purchasers, and any such action taken by Merrill Lynch 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.  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.

 

(a)        Consent to Jurisdiction.  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 Specified 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.

 

(b)        Waiver of Immunity.  With respect to any Related Proceeding, each party irrevocably waives, to the fullest extent permitted by applicable law, all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, service of process, attachment (both before and after judgment) and execution to which it might otherwise be entitled in the Specified Courts, and with respect to any Related Judgment, each party waives any such immunity in the Specified Courts or any other court of competent jurisdiction, and will not raise or claim or cause to be pleaded any such immunity at or in respect of any such Related Proceeding or Related Judgment, including, without limitation, any immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976, as amended.

 

(c)        Judgment Currency.  If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than U.S. dollars, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Initial Purchasers could purchase U.S. dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given.

 

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, and 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.

 

[Signature Pages follow]

 

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
FIFTH &   PACIFIC COMPANIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:  /s/ Nicholas Rubino
    
	
 
    	
Name: Nicholas Rubino
    
	
 
    	
Title: SVP, Chief Legal   Officer, General Counsel and Corporate Secretary
    

 

 

	
 
    	
ADELINGTON DESIGN GROUP   INC. (F/K/A Liz Claiborne Accessories, Inc.)
    
	
 
    	
ADELINGTON DESIGN SALES   GROUP INC (F/K/A Liz Claiborne Accessories-Sales, Inc.
    
	
 
    	
BOODLE, INC.   (F/K/A LCI LAUNDRY)
    
	
 
    	
DB NEWCO CORP.
    
	
 
    	
FIFTH &   PACIFIC COMPANIES COSMETICS, INC. (F/K/A Liz Claiborne   Cosmetics, Inc.)
    
	
 
    	
FIFTH &   PACIFIC COMPANIES FOREIGN HOLDINGS, INC. (F/K/A Liz Claiborne Foreign   Holdings, Inc.)
    
	
 
    	
FIFTH & PACIFIC COMPANIES PUERTO RICO, INC. (F/K/A Liz Claiborne Puerto   Rico, Inc.)
    
	
 
    	
FIFTH &   PACIFIC COMPANIES SALES, INC. (F/K/A Liz Claiborne Sales, Inc.)
    
	
 
    	
HAVANA, LLC
    
	
 
    	
JERG, INC. (F/K/A C&C   California, Inc.)
    
	
 
    	
JUICY   COUTURE, INC.
    
	
 
    	
KATE SPADE LLC
    
	
 
    	
KATE SPADE PUERTO   RICO, INC.
    
	
 
    	
L.C. AUGUSTA, INC.
    
	
 
    	
L.C. CARIBBEAN   HOLDINGS, INC.
    
	
 
    	
L.C. LIBRA, LLC
    
	
 
    	
L.C. LICENSING, LLC
    
	
 
    	
L.C. SERVICE   COMPANY, INC.
    
	
 
    	
L.C. SPECIAL   MARKETS, INC.
    
	
 
    	
LCCI HOLDINGS LLC
    
	
 
    	
LCI HOLDINGS, INC.
    
	
 
    	
LCI   INVESTMENTS, INC.
    
	
 
    	
LIZ CLAIBORNE JAPAN, INC.
    
	
 
    	
LIZ CLAIBORNE   SHOES, INC.
    
	
 
    	
LUCKY BRAND   DUNGAREES, INC.
    
	
 
    	
LUCKY BRAND DUNGAREES   STORES, INC.
    
	
 
    	
MONET INTERNATIONAL, INC.
    
	
 
    	
MONET PUERTO RICO, INC.
    
	
 
    	
NONEE I, LLC (F/K/A ENYCE   LLC)
    
	
 
    	
NONEE I HOLDING, LLC   (F/K/A ENYCE HOLDING, LLC)
    
	
 
    	
SEGRETS, INC.
    
	
 
    	
SKYLARK SPORT MARKETING   CORPORATION
    
	
 
    	
WCFL HOLDINGS LLC
    
	
 
    	
WESTCOAST CONTEMPO   PROMENADE, INC.
    

 

 

	
 
    	
WESTCOAST CONTEMPO   RETAIL, INC.
    
	
 
    	
WESTCOAST CONTEMPO   USA, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:/s/ Nicholas   Rubino
    
	
 
    	
Name: Nicholas   Rubino
    
	
 
    	
Title:   SVP, Chief Legal Officer, General Counsel and Corproate Secretary
    

 

 

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

 

 

	
MERRILL   LYNCH, PIERCE, FENNER & SMITH INCORPORATED
    
	
Acting on behalf   of itself
    
	
and as the   Representative of
    
	
the several   Initial Purchasers
    
	
 
    	
 
    
	
By:
    	
Merrill Lynch, Pierce,   Fenner & Smith Incorporated
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Matt Curtin
    
	
 
    	
Director
    

 

 

SCHEDULE A

 

	
 
    	
 
    	
Aggregate Principal Amount of
   Notes to be Purchased
    	
 
    
	
Initial Purchasers
    	
 
    	
 
    	
 
    	
 
    
	
Merrill Lynch, Pierce,   Fenner & Smith Incorporated
    	
 
    	
$
    	
60,800,000
    	
 
    	
 
    
	
J.P. Morgan Securities   LLC
    	
 
    	
45,600,000
    	
 
    	
 
    
	
SunTrust Robinson   Humphrey, Inc.
    	
 
    	
22,800,000
    	
 
    	
 
    
	
Wells Fargo Securities,   LLC
    	
 
    	
22,800,000
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
$
    	
152,000,000
    	
 
    	
 
    

 

 

SCHEDULE B

 

PRICING SUPPLEMENT

 

 

	
PRICING SUPPLEMENT
    	
STRICTLY   CONFIDENTIAL
    

 

 

June 6, 2012

 

	
 
    

 

This Pricing Supplement is qualified in its entirety by reference to the Preliminary Offering Memorandum dated June 6, 2012 (the “Preliminary Offering Memorandum”).  The information in this Pricing Supplement supplements the Preliminary Offering Memorandum and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum.  Capitalized terms used in this Pricing Supplement but not defined herein have the meanings given to them in the Preliminary Offering Memorandum.

 

The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are being offered only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and outside the United States to non-U.S. persons in accordance with Regulation S under the Securities Act.

 

Terms Applicable to the 10.50% Senior Secured Notes due 2019

 

	
Issuer:
    	
 
    	
Fifth &   Pacific Companies, Inc. (the “Company”)
    
	
 
    	
 
    	
 
    
	
Title   of Securities:
    	
 
    	
10.50% Senior   Secured Notes due 2019. The 10.50% Senior Secured Notes due 2019 offered   hereby (the “Add-on Notes”) will be issued as “Additional Notes” under the   Indenture governing the Company’s existing 10.50% Senior Secured Notes due   2019 (the “Existing Secured Notes” and, together with the Add-on Notes, the   “Notes”)
    
	
 
    	
 
    	
 
    
	
Aggregate   Principal Amount:
    	
 
    	
$152,000,000,   which reflects an increase of $2,000,000 from the Preliminary Offering   Memorandum
    
	
 
    	
 
    	
 
    
	
Gross   Proceeds:
    	
 
    	
$164,540,000
    
	
 
    	
 
    	
 
    
	
Final   Maturity Date:
    	
 
    	
April 15,   2019
    
	
 
    	
 
    	
 
    
	
Coupon:
    	
 
    	
10.50%
    
	
 
    	
 
    	
 
    
	
Issue   Price:
    	
 
    	
108.250%, plus   accrued interest from April 15, 2012
    
	
 
    	
 
    	
 
    
	
Yield   to Worst:
    	
 
    	
8.273%
    
	
 
    	
 
    	
 
    
	
Record   Dates:
    	
 
    	
April 1 and   October 1 of each year
    
	
 
    	
 
    	
 
    
	
Interest   Payment Dates:
    	
 
    	
April 15   and October 15 of each year
    

 

 

	
First   Interest Payment Date:
    	
 
    	
October 15,   2012
    
	
 
    	
 
    	
 
    
	
Make-Whole   Redemption
    	
 
    	
On or prior to   April 15, 2014, the Company may redeem the Notes, in whole or in part,   at a redemption price equal to the amount of the Notes plus accrued and   unpaid interest plus the “make-whole premium” described in the Preliminary   Offering Memorandum.
    
	
 
    	
 
    	
 
    
	
Optional   Redemption:
    	
 
    	
From and   after April 15, 2014, the Company may redeem the Notes, in whole or   in part, upon not less than 30 nor more than 60 days’ prior notice at the   redemption prices (expressed as percentages of principal amount) set forth   below, plus accrued and unpaid interest if any, to, but not including, the   applicable redemption date, subject to the right of Holders of record on the   relevant record date to receive interest due on the relevant interest payment   date, if redeemed during the twelve-month period beginning on April 15   of each of the years indicated below:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date
    	
Price
    
	
 
    	
 
    	
2014
    	
105.250%
    
	
 
    	
 
    	
2015
    	
103.500%
    
	
 
    	
 
    	
2016
    	
102.625%
    
	
 
    	
 
    	
2017 and   thereafter
    	
100.000%
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Prior to   April 15, 2014, the Company may redeem during each 12-month period   commencing with the date of the Indenture up to 10% of the aggregate   principal amount of the Notes issued under the Indenture, including any   Additional Notes at its option, at a redemption price equal to 103% of the   principal amount of the Notes redeemed, plus accrued and unpaid interest, if   any, to (but not including) the redemption date, subject to the right of   Holders on the relevant record date to receive interest due on the relevant   interest payment date.
    
	
 
    	
 
    	
 
    
	
Optional   Redemption with Equity Proceeds:
    	
 
    	
Prior to   April 15, 2014, the Company may, at its option, with the net proceeds of   one or more Qualified Equity Offerings, redeem up to 35% of the aggregate   principal amount of Notes (and the principal amount of any Additional Notes)   issued under the Indenture at a redemption price equal to 110.50% of the   aggregate principal amount thereof, plus accrued and unpaid interest, if any,   to (but not including) the redemption date, provided   that:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
at least 65% of   the principal amount of Notes (including any Additional Notes) that have been   issued under the Indenture after the Issue Date remain outstanding   immediately after the occurrence of each such redemption; and
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
each such   redemption occurs within 90 days of the date of closing of each such Equity   Offering.
    
					

 

 

	
Changes   from Preliminary Offering Memorandum
    	
 
    	
The total size   of the offering of Add-on Notes has been increased from $150,000,000 to   $152,000,000. Other information (including financial information) is deemed   to have changed to the extent affected by the changes described herein.
    
	
 
    	
 
    	
 
    
	
Initial   Purchasers:
    	
 
    	
Merrill Lynch,   Pierce, Fenner & Smith

Incorporated

J.P. Morgan   Securities LLC

SunTrust   Robinson Humphrey, Inc.

Wells Fargo   Securities, LLC
    
	
 
    	
 
    	
 
    
	
Trade   Date:
    	
 
    	
June 6,   2012
    
	
 
    	
 
    	
 
    
	
Settlement   Date:
    	
 
    	
June 8,   2012 (T+2)
    
	
 
    	
 
    	
 
    
	
CUSIP   and ISIN

Numbers:
    	
 
    	
144A Note:

CUSIP: 316645   AA8

ISIN:   US316645AA82
    	
Reg S Note:

CUSIP: U3166P   AA3

ISIN:   USU3166PAA31
    
	
 
    	
 
    	
 
    
	
Distribution:
    	
 
    	
144A and   Regulation S as set forth in the Preliminary Offering Memorandum. The Notes   will have registration rights as set forth in the Preliminary Offering   Memorandum.
    

 

 

 

 

Other information (including financial information) presented in the Preliminary Offering Memorandum is deemed to have changed to the extent affected by the changes described herein.

 

This material is confidential and is for your information only and is not intended to be used by anyone other than you.  This information does not purport to be a complete description of these Notes or the offering.  Please refer to the Preliminary Offering Memorandum for a complete description.

 

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.

 

Any disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such disclaimers or other notices were automatically generated as a result of this communication being sent via Bloomberg email or another communication system.

 

 

SCHEDULE C

 

LIST OF JURISDICTIONS IN WHICH THE COMPANY
 IS REQUIRED TO BE QUALIFIED TO DO BUSINESS

 

Alabama

New Jersey

New York

Ohio

Pennsylvania

Rhode Island

 

 

SCHEDULE D

 

LIST OF SUBSIDIARIES OF FIFTH & PACIFIC COMPANIES, INC.

 

 

	
Boodle, Inc.   (f/k/a LCI Laundry)
    	
 
    	
Delaware
    
	
Claiborne   Limited
    	
 
    	
Hong Kong
    
	
DB Newco Corp.
    	
 
    	
Delaware
    
	
Handycell Ltd.
    	
 
    	
United Kingdom
    
	
Havana, LLC
    	
 
    	
Delaware
    
	
High Mallow   Company N.V.
    	
 
    	
Netherlands
    
	
Jerg, Inc.
    	
 
    	
California
    
	
Juicy Couture   Canada, Inc.
    	
 
    	
Canada
    
	
Juicy Couture   Europe Limited
    	
 
    	
United Kingdom
    
	
Juicy   Couture, Inc.
    	
 
    	
California
    
	
Kate Spade LLC
    	
 
    	
Delaware
    
	
Kate Spade U.K.   Limited
    	
 
    	
United Kingdom
    
	
L.C.   Augusta, Inc.
    	
 
    	
Delaware
    
	
L.C. Caribbean   Holdings, Inc.
    	
 
    	
Delaware
    
	
L.C. Libra, LLC
    	
 
    	
Delaware
    
	
L.C. Licensing,   LLC
    	
 
    	
Delaware
    
	
L.C. Service   Company, Inc.
    	
 
    	
Delaware
    
	
L.C. Special   Markets, Inc.
    	
 
    	
Delaware
    
	
LCI Acquisition U.S., Inc.
    	
 
    	
Delaware
    
	
LCI   Holdings, Inc.
    	
 
    	
Delaware
    
	
LCI   Investments, Inc.
    	
 
    	
Delaware
    
	
Liz Claiborne 2   B.V.
    	
 
    	
Netherlands
    
	
Liz Claiborne 3   B.V.
    	
 
    	
Netherlands
    
	
Liz Claiborne   Accessories, Inc.
    	
 
    	
Delaware
    
	
Liz Claiborne   Accessories-Sales, Inc.
    	
 
    	
Delaware
    
	
Liz Claiborne   Canada Inc.
    	
 
    	
Canada
    
	
Liz Claiborne   Colombia, Ltda.
    	
 
    	
Colombia
    
	
Liz Claiborne   Cosmetics, Inc.
    	
 
    	
Delaware
    
	
Liz Claiborne De El Salvador, S.A., de C.V.
    	
 
    	
El Salvador
    
	
Liz Claiborne de Mexico, S.A. de C.V.
    	
 
    	
Mexico
    
	
Liz Claiborne do Brasil Industria E Comercio Ltda.
    	
 
    	
Brazil
    
	
Liz Claiborne   Europe
    	
 
    	
United Kingdom
    
	
Liz Claiborne   Export, Inc.
    	
 
    	
Delaware
    
	
Liz Claiborne   Foreign Holdings, Inc.
    	
 
    	
Delaware
    
	
Liz Claiborne   International Limited
    	
 
    	
Hong Kong
    
	
Liz Claiborne   (Israel) Ltd.
    	
 
    	
Israel
    
	
Liz Claiborne   Japan, Inc.
    	
 
    	
Delaware
    
	
Liz Claiborne   (Malaysia) SDN.BHD
    	
 
    	
Malaysia
    
	
Liz Claiborne   Operations (Israel) 1993 Limited
    	
 
    	
Israel
    
	
Liz Claiborne Puerto Rico, Inc.
    	
 
    	
Delaware
    
	
Liz Claiborne   Sales, Inc.
    	
 
    	
Delaware
    

 

 

	
Liz Claiborne,   S.A.
    	
 
    	
Costa Rica
    
	
Liz Claiborne Servicios de Mexico, S.A. de C.V.
    	
 
    	
Mexico
    
	
Liz Claiborne   Shoes, Inc.
    	
 
    	
Delaware
    
	
Lucky Brand   Dungarees, Inc.
    	
 
    	
Delaware
    
	
Lucky Brand   Dungarees Stores, Inc.
    	
 
    	
Delaware
    
	
Mexx Asia   Pacific Limited
    	
 
    	
Hong Kong
    
	
Mexx Austria   GmbH
    	
 
    	
Austria
    
	
Mexx Belgium   N.V.
    	
 
    	
Belgium
    
	
Mexx Boutique   SARL
    	
 
    	
France
    
	
Mexx Czech   Republic s.r.o.
    	
 
    	
Czech Republic
    
	
Mexx Deutschland   GmbH
    	
 
    	
Germany
    
	
Mexx Direct   GmbH & Co KG
    	
 
    	
Germany
    
	
Mexx Direct   Holding B.V.
    	
 
    	
Netherlands
    
	
Mexx Europe B.V.
    	
 
    	
Netherlands
    
	
Mexx Europe   Holding B.V.
    	
 
    	
Netherlands
    
	
Mexx Europe International B.V.
    	
 
    	
Netherlands
    
	
Mexx   Europroduction B.V.
    	
 
    	
Netherlands
    
	
Mexx Far East   Limited
    	
 
    	
Hong Kong
    
	
Mexx France
    	
 
    	
France
    
	
Mexx France   International SAS
    	
 
    	
France
    
	
Mexx Group B.V.
    	
 
    	
Netherlands
    
	
Mexx Hellas EPE
    	
 
    	
Greece
    
	
Mexx Holding   GmbH
    	
 
    	
Germany
    
	
Mexx Holding   International B.V.
    	
 
    	
Netherlands
    
	
Mexx Holding   Netherlands B.V.
    	
 
    	
Netherlands
    
	
Mexx Hungary   Ltd.
    	
 
    	
Hungary
    
	
Mexx Ireland   Ltd.
    	
 
    	
Ireland
    
	
Mexx Italy   S.r.l.
    	
 
    	
Italy
    
	
Mexx Ltd.
    	
 
    	
United Kingdom
    
	
Mexx Luxembourg   S.a.r.l.
    	
 
    	
Luxembourg
    
	
Mexx Middle East   Center FZE
    	
 
    	
Dubai, UAE
    
	
Mexx Modehandels   AG
    	
 
    	
Switzerland
    
	
Mexx Modehandels   GmbH
    	
 
    	
Germany
    
	
Mexx Nederland   B.V.
    	
 
    	
Netherlands
    
	
Mexx Nederland   Retail B.V.
    	
 
    	
Netherlands
    
	
Mexx Poland Sp.   z.o.o.
    	
 
    	
Poland
    
	
Mexx Portugal,   Unnipessoal, LDA
    	
 
    	
Portugal
    
	
Mexx Scandinavia   AB
    	
 
    	
Sweden
    
	
Mexx Scandinavia   AS
    	
 
    	
Norway
    
	
Mexx Scandinavia   Finland Oy
    	
 
    	
Finland
    
	
Mexx Southern   Europe S.R.L.
    	
 
    	
Spain
    
	
Mexx Sport Benelux B.V.
    	
 
    	
Netherlands
    
	
Mexx Switzerland   GmbH
    	
 
    	
Switzerland
    
	
Monet   International, Inc.
    	
 
    	
Delaware
    
	
Monet Puerto   Rico, Inc.
    	
 
    	
Delaware
    
	
Nonee I, LLC   (f/k/a Enyce LLC)
    	
 
    	
Delaware
    

 

 

	
Nonee I Holding,   LLC (f/k/a Enyce Holding, LLC)
    	
 
    	
Delaware
    
	
Retrain N.V.
    	
 
    	
Belgium
    
	
Segrets, Inc.
    	
 
    	
Delaware
    
	
Shenghui Fashion   (Shenzhen) Company Limited
    	
 
    	
China
    
	
Skylark Sport   Marketing Corporation
    	
 
    	
California
    
	
Verwaltungsgesellschaft   Mexx Direct mbh
    	
 
    	
Germany
    
	
Westcoast   Contempo Fashions Limited
    	
 
    	
Canada
    
	
Westcoast   Contempo Promenade, Inc.
    	
 
    	
Washington
    
	
Westcoast   Contempo Retail, Inc.
    	
 
    	
Washington
    
	
Westcoast   Contempo USA, Inc.
    	
 
    	
Washington
    

 

 

SCHEDULE E

 

 

Post-Closing Requirements Relating to Collateral

 

 

(a)        Real Property Collateral Documents.  Within 90 days after the Closing Date, the Representative and the Collateral Agent shall have received a mortgage, deed of trust, assignment of leases and rents, security agreement, fixture filing and financing statement from the owner or holder of each interest in real property that is part of the Collateral (each a “Mortgage”) encumbering each real property that is part of the Collateral (each a “Mortgaged Property”) in favor of the Collateral Agent for its benefit and for the benefit of the other Secured Parties (as defined in the Security Agreement) executed by the Company and the appropriate Guarantors, the following:

 

(b)        Mortgage Amendments.  With respect to each Mortgage encumbering Mortgaged Property, an amendment thereof (each a “Mortgage Amendment”) duly executed and acknowledged by the Company and/or the applicable Guarantor, as appropriate, and in form for recording in the recording office where each Mortgage was recorded, together with such certificates, affidavits, questionnaires or returns as shall be required in connection with the recording or filing thereof under applicable law, in each case in form and substance reasonably satisfactory to the Initial Purchasers;

 

(c)        Date-Down Endorsements.  With respect to each Mortgage Amendment, a copy of the existing mortgage title insurance policy and a “date-down” endorsement with respect thereto (each, a “Mortgage Policy,” collectively, the “Mortgage Policies”) relating to the Mortgage encumbering the Mortgaged Property subject to such Mortgage assuring the Collateral Agent that such Mortgage, as amended by such Mortgage Amendment, is a valid and enforceable lien on such Mortgaged Property in favor of the Collateral Agent for the benefit of the Secured Parties (as defined in the Security Agreement) free and clear of all defects, encumbrances and liens except (i) those liens, encumbrances, hypothecations and other matters affecting title to such Mortgaged Property and found reasonably acceptable to the Initial Purchasers, (ii) Permitted Liens (as defined in the Indenture) and (iii) such other similar items as the Initial Purchasers may consent to (such consent not to be unreasonably withheld) (the liens described in subclauses (i) through (iii) of this sentence, collectively, “Permitted Encumbrances”), and such Mortgage Policy shall otherwise be in form and substance reasonably satisfactory to the Initial Purchasers;

 

(d)        Surveys.  To the extent required by the title company in order to provide the “date-down” coverage contemplated by (c) above with respect to each Mortgage Policy (including with respect to any survey-related endorsements contained in such Mortgage Policy), an updated survey depicting the Mortgaged Property covered by such Mortgage Policy in form and substance reasonably satisfactory to the Initial Purchasers;

 

(e)        Opinions.  With respect to each Mortgage Amendment, opinions of local counsel to the Company and/or the applicable Guarantors, as appropriate, which opinions (x) shall be addressed to the Initial Purchasers, the Collateral Agent, the Trustee and the other Secured Parties (as defined in the Security Agreement), (y) shall cover the enforceability of the respective 

 

 

Mortgage as amended by such Mortgage Amendment and such other matters incident to the transactions contemplated herein as the Initial Purchasers may reasonably request and (z) shall be in form and substance reasonably satisfactory to the Initial Purchasers;

 

(f)         Insurance.  Updated policies or certificates of insurance covering the property and assets of the Company and the Guarantors, which policies or certificates shall be in form and substance reasonably acceptable to the Initial Purchasers and reflect the Collateral Agent, for its benefit and the benefit of the other Secured Parties (as defined in the Security Agreement), as additional insured and loss payee and mortgagee and shall otherwise bear endorsements of the character reasonably acceptable to the Initial Purchasers;

 

(g)        Mortgaged Property Indemnification.  With respect to each Mortgaged Property, such affidavits, certificates, information (including financial data) and instruments of indemnification (including without limitation, a so-called “gap” indemnification) as shall be required to induce the title company to issue the Mortgage Policies; and

 

(h)        Collateral Fees and Expenses.  Evidence acceptable to the Initial Purchasers of payment by the Company of all applicable title insurance premiums, search and examination charges, survey costs and related charges, mortgage recording taxes, fees, charges, costs and expenses required for the recording of the Mortgages and issuance of the Mortgage Policies.

 

 

EXHIBIT A-1

 

FORM OF OPINION OF PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP

 

 

EXHIBIT A-2

 

FORM OF OPINION OF COMPANY’S GENERAL COUNSEL

 

1

 

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 are 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 upon 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.”

 

Annex I-1Exhibit 10.1

 

AMENDMENT No. 4

 

MAYO FOUNDATION FOR MEDICAL EDUCATION AND RESEARCH LICENSE AGREEMENT

 

This Amendment No. 4 (this “Amendment”) to the Mayo Foundation for Medical Education and Research License Agreement dated June 12, 2009 (“Agreement”), is entered into between MAYO Foundation for Medical Education and Research, a Minnesota charitable corporation, located at 200 First Street SW, Rochester, Minnesota 55905-0001 (“MAYO”) and Exact Sciences Corporation, a for-profit company located at 441 Charmany Drive, Madison, WI 53719 (“EXACT”). This Amendment is effective as of May 15, 2012 (“Amendment Effective Date”).

 

WHEREAS, MAYO and EXACT desire to amend the Agreement to expand the field of use in the Agreement and provide license rights for identified unencumbered markers;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants contained in this Amendment and the Agreement, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties agree as follows:

 

AGREEMENT

 

A.                                    Effect of Amendment. This Amendment amends the Agreement. Except as provided in this Amendment, all of the terms and conditions of the Agreement remain in full force and effect; however, if there is a conflict between the terms of this Amendment and the Agreement, the terms of this Amendment will govern. Capitalized terms not defined in this Amendment will have the meanings assigned to them in the Agreement.

 

B.                                    Section 1.04 “Field” The definition of “Field” in Section 1.04 is amended to read as follows:

 

1.04. “Field”:

 

(a)                                 stool or blood based cancer screening, excluding use of a proteomic target (Mayo files #2007-207 and 2007-212 and patent applications “Removing Polypeptides from Stool”, U.S. application # 60/989,578 and PCT application # PCT/US2008/084278);

 

(b)                                 gastrointestinal (“GI”) cancers and/or disease, including but not limited to colorectal cancer, pancreas, esophagus, stomach, biliary tree, and other GI diseases utilizing any sample type on which the parties collaborate (including without limitation Mayo file #2012-130), but excluding GI cancer and/or disease tests using blood or urine sample types that MAYO is currently developing as of the Amendment Effective Date;

 

(c)                                  stool test for detection of dysplasia and/or cancer in inflammatory bowel disease (including without limitation Mayo files #2010-046 and 2011-066) and ulcerative colitis patients (including without limitation colorectum and bile duct);

 

(d)                                 pan-GI and aerodigestive cancer and/or dysplasia screening test (including without limitation Mayo file #2012-130); and

 

(e)                                  other diagnostic tests that the parties jointly work on during the Term (including without limitation Mayo file #2012-130).

 

 

C.                                    Section 2.06 is amended to read as follows:

 

2.06                        MAYO AND AHLQUIST COMMITMENT TO CONFER.

 

(a)                                 MAYO will collaborate with EXACT on the development of the Licensed Products, including sharing Know-How and providing access to MAYO Materials and laboratory equipment, conducting scientific studies, providing biostatistical support, and making submissions for peer-reviewed publications.

 

(b)                                 For so long as Dr. Ahlquist is an employee of MAYO, Dr. Ahlquist will consult on, collaborate with, and oversee EXACT on product development efforts, as a special advisor to the EXACT board of directors and senior management.  EXACT will confer with Dr. Ahlquist in person in Rochester, MN, Madison, WI or as mutually agreed, or by telephone.  All travel expenses incurred by Dr. Ahlquist in this role as advisor shall be paid by EXACT.  EXACT anticipates Dr. Ahlquist will contribute at least 50% of his time to services for EXACT.  Except as provided in Section 3.01, MAYO shall be solely responsible for compensating Dr. Ahlquist and his staff, provided, however, that in consideration of the services provided under this Section 2.06(b), EXACT shall pay MAYO the amounts set forth in Section 3.05.

 

(c)                                  Notwithstanding EXACT’s rights to sublicense pursuant to Section 2.01 hereto, EXACT shall not have the right to sublicense any obligation of Dr. Ahlquist to confer.

 

D.                                    Section 2.07.  The following is added as Section 2.07:

 

2.07                        LICENSE GRANT FOR NEW MARKERS: During the Term of this Agreement and two (2) years thereafter (the “Development Period”), MAYO grants to EXACT an exclusive license with the right to sublicense, to make, have made, use, offer for sale, sell, and import Licensed Products that incorporate, use, or derive from any unencumbered markers identified by MAYO during the four (4) year period commencing on the Amendment Effective Date, whether such markers are patented or unpatented (the “Unencumbered Markers”).  MAYO reserves the right to use the Unencumbered Markers in research and MAYO’s reference laboratory, Mayo Collaborative Services, reserves the right to use Unencumbered Markers to develop esoteric tests.  If at the end of the Development Period, Exact is not using a particular Unencumbered Marker in a product on the market or in development, then Exact’s exclusive license rights to that Unencumbered Marker granted pursuant to this Section 2.07 will expire and return to Mayo with no further obligation to Exact with respect to that Unencumbered Marker.  If at the end of the Development Period, Exact is using a particular Unencumbered Marker in a product on the market or in development, then Exact’s exclusive license rights to that Unencumbered Marker granted pursuant to this Section 2.07 will continue until the end of the Term.

 

2

 

E.                                    Section 3.06 is amended to read as follows:

 

3.06                        FUNDING SUPPORT.  EXACT funding support of research expenses for EXACT-MAYO collaborations hereunder will be based on mutually agreed upon protocols/budgets with costs to be billed monthly or quarterly to EXACT, as mutually agreed by the parties consistent with the parties’ practices under the Agreement from the Effective Date through the Amendment Effective Date.

 

F.                                     Consideration. EXACT will provide MAYO with the following consideration in connection with this Amendment:

 

(i)                                     $1,000,000 in restricted stock to be granted on the Amendment Effective Date.  Such restricted stock shall vest over four (4) years from the Amendment Effective Date (with 1⁄4 to vest on the Amendment Effective Date and 1⁄4 to vest on each of the next 3 anniversary dates, subject to MAYO’s continued compliance with its obligations under the Agreement).  The number of shares of restricted stock shall be determined based on the closing price of EXACT’s common stock on The Nasdaq Stock Market on the Amendment Effective Date.  The grant described in this subsection (i), as well as the grants described in subsections (ii) and (iii) below, shall be effected through customary restricted stock agreements reasonably satisfactory to the parties.

 

(ii)                                  $200,000 in immediately-vested restricted stock to be granted on the mutually-agreed date of the commercial launch of EXACT’s second Licensed Product.  The number of shares of restricted stock shall be determined based on the closing price of EXACT’s common stock on The Nasdaq Stock Market on the date of the second Licensed Product commercial launch;

 

(iii)                               $200,000 in immediately-vested restricted stock to be granted on the mutually-agreed date of the commercial launch of EXACT’s third Licensed Product.  The number of shares of restricted stock shall be determined based on the closing price of EXACT’s common stock on The Nasdaq Stock Market on the date of the third Licensed Product commercial launch;

 

(iv)                              $200,000 cash payment, paid in monthly installments, over a two (2) year period, upon each Licensed Product reaching $5,000,000 in cumulative Net Sales;

 

(v)                                 $750,000 cash payment, paid in monthly installments, over a two (2) year period, upon each Licensed Product reaching $20,000,000 in cumulative Net Sales;

 

(vi)                              $2,000,000 cash payment, paid in monthly installments, over a two (2) year period, upon each Licensed Product reaching $50,000,000 in cumulative Net Sales.

 

(vii)                           MAYO understands that the securities hereunder are and will be “restricted” under applicable U.S. federal and state securities laws inasmuch as they are being acquired from Exact in a transaction not involving a public offering and that, pursuant to these laws and applicable regulations, MAYO must hold the securities indefinitely unless they are registered with the Securities and Exchange Commission (the “SEC”), and qualified by state authorities, or an exemption from such registration and qualification requirements is available.  MAYO represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.  All securities issued pursuant to this Amendment will bear a customary restrictive legend regarding their restricted status under applicable securities laws and the vesting requirements of this Amendment.

 

(viii)                        The stock to be provided in accordance with Sections G(i)-(iii) shall be issued to MAYO and, subject to compliance with applicable federal and state securities laws, to MAYO investigators, as directed by MAYO.

 

3

 

G.                                   Pursuant to the terms of Section 1.09(a) of the Agreement, MAYO’s rights in Mayo file #2007-312 are hereby included and incorporated under the Patent Rights, and the information in said file is included in patent applications PCT/US2009/033793, 09711056.3 (Europe), 11189541.3 (Europe) and 12/866,558 (US).  Such patent applications are hereby deemed added to and incorporated by reference into Exhibit A of the Agreement.

 

H.                                   Pursuant to the terms of Section 1.09(a) of the Agreement, MAYO’s rights in Mayo file #2012-085 are hereby included and incorporated under the Patent Rights, and the information in said file is included in US provisional patent application 61/613,252.  Such patent application is hereby deemed added to and incorporated by reference into Exhibit A of the Agreement.

 

I.                                        Entire Amendment. This Amendment and the Agreement (as previously amended) together constitute the entire agreement between the parties with respect to the subject matter hereof and merge all prior and contemporaneous communications regarding the same subject matter. They may not be further modified except by a written agreement dated subsequent to the Amendment Effective Date and signed on behalf of MAYO and EXACT.

 

J.                                      Counterparts. This Amendment may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Electronic transmission of a signed counterpart of this Amendment will constitute due and sufficient delivery of such counterpart.

 

IN WITNESS WHEREOF, the parties, intending to be legally bound thereby, have executed this Amendment as of the signature dates indicated below and intend it to be effective as of the Amendment Effective Date.

 

	
MAYO FOUNDATION FOR MEDICAL EDUCATION AND   RESEARCH
    	
 
    	
EXACT SCIENCES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
BY:
    	
/s/   Steven P. VanNurden
    	
 
    	
BY:
    	
/s/   Maneesh Arora
    
	
(Authorized Signature)
    	
 
    	
(Authorized Signature)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
NAME:
    	
Steven   P. VanNurden
    	
 
    	
NAME:
    	
Maneesh   Arora
    
	
(Print or Type Name of Signatory)
    	
 
    	
(Print or Type Name of Signatory)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TITLE:
    	
Assistant   Treasurer
    	
 
    	
TITLE:
    	
Chief   Operating Officer
    
	
(Title)
    	
 
    	
(Title)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
DATE:
    	
May 15,   2012
    	
 
    	
DATE:
    	
May 15,   2012
    
	
(Execution Date)
    	
 
    	
(Execution Date)
    

 

4

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