EXHIBIT 10.1
NUMATICS, INCORPORATED
$115,000,000
9-5/8% Senior Subordinated Notes due 2008
Purchase Agreement
March 18, 1998
FIRST CHICAGO CAPITAL MARKETS, INC.
BANCBOSTON SECURITIES INC.
$115,000,000
9-5/8% Senior Subordinated Notes due 2008
of
NUMATICS, INCORPORATED
PURCHASE AGREEMENT
March 18, 1998
FIRST CHICAGO CAPITAL MARKETS, INC.
BANCBOSTON SECURITIES INC.
c/o FIRST CHICAGO CAPITAL MARKETS, INC.
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Dear Sirs:
Numatics, Incorporated, a Michigan corporation (the "Company"),
proposes to issue and sell to First Chicago Capital Markets, Inc. ("First
Chicago") and BancBoston Securities Inc. (each, an "Initial Purchaser" and,
collectively, the "Initial Purchasers") an aggregate of $115,000,000 in
principal amount of its 9-5/8 % Senior Subordinated Notes due 2008 (the "Series
A Notes"), subject to the terms and conditions set forth herein. The Series A
Notes are to be issued pursuant to the provisions of an indenture (the
"Indenture"), to be dated as of the Closing Date (as defined below), among the
Company, the Guarantors (as defined below) and First Trust National Association,
as trustee (the "Trustee"). The Series A Notes and the Series B Notes (as
defined below) issuable in exchange therefor are collectively referred to herein
as the "Notes." The Notes will be guaranteed (the "Subsidiary Guarantees") by
each of the entities listed on Schedule A, hereto (each, a "Guarantor" and
collectively the "Guarantors"). Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Offering Memorandum (as
defined below).
1. OFFERING MEMORANDUM. The Series A Notes will be offered and sold
to the Initial Purchaser pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"Act"). The Company and the Guarantors have prepared a preliminary offering
memorandum, dated March 5, 1998 (the "Preliminary Offering Memorandum") and a
final offering memorandum, dated March 18, 1998 (the "Offering Memorandum"),
relating to the Series A Notes and the Subsidiary Guarantees.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER: REPRESENTS THAT (1) IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) NOT A U.S.
PERSON AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION; (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
NOTE EVIDENCED HEREBY EXCEPT TO (A) THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO FIRST TRUST NATIONAL ASSOCIATION, AS TRUSTEE
(OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF APPLICABLE) OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE
PROPOSED TRANSFER IS PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO FIRST TRUST NATIONAL ASSOCIATION,
AS TRUSTEE (OR AS SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE
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PURSUANT TO AN EXEMPTION FORM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to the terms
and conditions contained herein, the Company agrees to issue and sell to the
Initial Purchasers, and the Initial Purchasers agree, severally and not jointly,
to purchase from the Company, an aggregate principal amount of $115,000,000 of
Series A Notes as set forth in Schedule C hereto at a purchase price equal to
97.25% of the principal amount thereof (the "Purchase Price").
3. TERMS OF OFFERING. The Initial Purchasers have advised the Company that
the Initial Purchasers will make offers (the "Exempt Resales") of the Series A
Notes purchased hereunder on the terms set forth in the Offering Memorandum, as
amended or supplemented, solely to (i) persons whom the Initial Purchasers
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBs"), (ii) a limited number of institutional "accredited
investors," as defined in Rule 501(a)(1), (2), (3) or (7) under the Act that
make certain representations and agreements to the Company and the Initial
Purchasers (each, an "Accredited Institution") and (iii) to persons permitted to
purchase the Series A Notes in offshore transactions in reliance upon Regulation
S under the Act (each, a "Regulation S Purchaser") (such persons specified in
clauses (i), (ii) and (iii) being referred to herein as the "Eligible
Purchasers"). The Initial Purchasers will offer the Series A Notes to Eligible
Purchasers initially at a price equal to 100% of the principal amount thereof.
Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will have
the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Series A Notes constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will agree to file with the Securities and Exchange Commission (the
"Commission") under the circumstances set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration Statement") relating
to the Company's 9-5/8% Series B Senior Subordinated Notes due 2008 (the "Series
B Notes"), to be offered in exchange for the Series A Notes (such offer to
exchange being referred to as the "Exchange Offer") and the Subsidiary
Guarantees thereof and (ii) a shelf registration statement pursuant to Rule 415
under the Act (the "Shelf Registration Statement" and, together with the
Exchange Offer Registration Statement, the "Registration Statements") relating
to the resale by certain holders of the Series A Senior Notes and to use its
best efforts to cause such Registration Statements to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. This Agreement, the Indenture,
the Notes, the Subsidiary
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Guarantees and the Registration Rights Agreement are hereinafter sometimes
referred to collectively as the "Operative Documents."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the Series A
Notes shall be made at the offices of Miller, Canfield, Paddock and Stone,
P.L.C. ("▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇") or such other location as may be mutually
acceptable. Such delivery and payment shall be made at 9:00 a.m., local time,
on March 23, 1998 or at such other time as shall be agreed upon by the Initial
Purchasers and the Company in writing. The time and date of such delivery and
the payment for the Series A Notes are herein called the "Closing Date."
(b) One or more of the Series A Notes in definitive global form,
registered in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"), having a aggregate principal amount corresponding to the aggregate
principal amount of the Series A Notes (collectively, the "Global Note"), shall
be delivered by the Company to the Initial Purchasers (or as the Initial
Purchasers direct) in each case with any transfer taxes thereon duly paid by the
Company against payment by the Initial Purchasers of the Purchase Price thereof
by wire transfer in same day funds to the order of the Company. The Global Note
shall be made available to the Initial Purchasers for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.
5. AGREEMENTS OF THE COMPANY AND THE GUARANTORS. Each of the Company and
the Guarantors hereby agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by
the Initial Purchasers, confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the qualification
or exemption from qualification of any Series A Notes for offering or sale in
any jurisdiction designated by the Initial Purchasers pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose and (ii) of
the happening of any event during the period referred to in Section 5(c) below
that makes any statement of a material fact made in the Preliminary Offering
Memorandum or the Offering Memorandum untrue or that requires any additions to
or changes in the Preliminary Offering Memorandum or the Offering Memorandum in
order to make the statements therein not misleading. The Company and the
Guarantors shall use their best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption of any Series A Notes
under any state securities or Blue Sky laws and, if at any time any state
securities commission or other federal or state regulatory authority shall issue
an order suspending the qualification or exemption of any Series A Notes under
any state securities or Blue Sky laws, the Company and the Guarantors shall use
their best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Company as many copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments or supplements
thereto, as the Initial
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Purchasers may reasonably request for the time period specified in Section
5(c). Subject to the Initial Purchasers' compliance with their representations
and warranties and agreements set forth in Section 7 hereof, the Company
consents to the use of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendments and supplements thereto required pursuant hereto,
by the Initial Purchasers in connection with Exempt Resales.
(c) During such period as in the opinion of counsel for the Initial
Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers or during the 360 days
following the Closing Date, whichever is shorter, (i) not to make any amendment
or supplement to the Offering Memorandum of which the Initial Purchasers shall
not previously have been advised or to which the Initial Purchasers shall
reasonably object after being so advised and (ii) to prepare promptly upon the
Initial Purchasers' reasonable request, any amendment or supplement to the
Offering Memorandum which may be necessary or advisable in connection with such
Exempt Resales.
(d) If, during the period referred to in Section 5(c) above, any
event shall occur or condition shall exist as a result of which, in the opinion
of counsel to the Initial Purchasers, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when such Offering Memorandum is delivered to an
Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchasers, it is necessary to amend or supplement the Offering
Memorandum to comply with any applicable law, forthwith to prepare an
appropriate amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such Offering
Memorandum will comply with applicable law, and to furnish to the Initial
Purchasers and such other persons as the Initial Purchasers may designate such
number of copies thereof as the Initial Purchasers may reasonably request.
(e) During the period specified in Section 5(c) hereof, to cooperate
with the Initial Purchasers and counsel to the Initial Purchasers in connection
with the registration or qualification of the Series A Notes for offer and sale
to the Initial Purchasers and pursuant to Exempt Resales under the securities or
Blue Sky laws of such jurisdictions as the Initial Purchasers may request and to
continue such registration or qualification in effect throughout such period and
to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that neither the Company nor any Guarantor shall be required in
connection therewith to qualify as a foreign corporation in any jurisdiction in
which it is now so qualified or to take any action that would subject it to
general consent to service of process or taxation other than as to matters and
transactions relating to the Preliminary Offering Memorandum, the Offering
Memorandum, or Exempt Resales, in any jurisdiction in which it is not now so
subject.
(f) So long as the Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to
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include a consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
the Company's independent public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(g) So long as the Notes are outstanding, to furnish to the Initial
Purchasers as soon as available copies of all reports or other communications
furnished by the Company or any of the Guarantors to its security holders or
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company or any of the Guarantors is listed
and such other publicly available information concerning the Company and/or its
subsidiaries as the Initial Purchasers may reasonably request.
(h) So long as any of the Series A Notes remain outstanding and during
any period in which the Company and the Guarantors are not subject to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to make available to any holder of Series A Notes in connection with any
sale thereof and any prospective purchaser of such Series A Notes from such
holder, the information ("Rule 144A Information") required by Rule 144A(d)(4)
under the Act.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of the Company and the
Guarantors under this Agreement, including: (i) the fees, disbursements and
expenses of counsel to the Company and the Guarantors and accountants of the
Company and the Guarantors in connection with the sale and delivery of the
Series A Notes to the Initial Purchasers and pursuant to Exempt Resales, and all
other fees and expenses in connection with the preparation, printing, filing and
distribution of the Preliminary Offering Memorandum, the Offering Memorandum and
all amendments and supplements to any of the foregoing (including financial
statements), including the mailing and delivering of copies thereof to the
Initial Purchasers and persons designated by it in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Series A Notes to the Initial Purchasers and pursuant to Exempt Resales,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement, the other Operative Documents and any
other agreements or documents in connection with the offering, purchase, sale or
delivery of the Series A Notes, (iv) all expenses in connection with the
registration or qualification of the Series A Notes and the Subsidiary
Guarantees for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any preliminary and
supplemental Blue Sky memoranda in connection therewith (including the filing
fees and fees and disbursements of counsel for the Initial Purchasers in
connection with such registration or qualification and memoranda relating
thereto), (v) the cost of printing certificates
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representing the Series A Notes and the Subsidiary Guarantees, (vi) all expenses
and listing fees in connection with the application for quotation of the Series
A Notes in the National Association of Securities Dealers, Inc. ("NASD")
Automated Quotations System--Portal ("PORTAL") market, (vii) the fees and
expenses of the Trustee and the Trustee's counsel in connection with the
Indenture, the Notes and the Subsidiary Guarantees, (viii) the costs and charges
of any transfer agent, registrar and/or depositary (including DTC), (ix) any
fees charged by rating agencies for the rating of the Notes, (x) all costs and
expenses of the Exchange Offer and any Registration Statement, as set forth in
or contemplated by the Registration Rights Agreement, and (xi) and all other
costs and expenses incident to the performance of the obligations of the Company
and the Guarantors hereunder for which provision is not otherwise made in this
Section.
(j) To use its best efforts to effect the inclusion of the Series A
Notes in PORTAL and to maintain the listing of the Series A Notes on PORTAL for
so long as the Series A Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of the
Notes, and to comply with all of its agreements set forth in the representation
letters of the Company and the Guarantors to DTC relating to the approval of the
Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and continuing to and
including the date that is 180 days after the Closing Date, not to offer, sell,
contract to sell or otherwise transfer or dispose of any debt securities of the
Company or any Guarantor or any warrants, rights or options to purchase or
otherwise acquire debt securities of the Company or any Guarantor substantially
similar to the Notes and the Subsidiary Guarantees (other than (i) the Notes and
the Subsidiary Guarantees and (ii) commercial paper issued in the ordinary
course of business), without the prior written consent of First Chicago.
(m) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Series A Notes to the Initial Purchasers or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Series A Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes and the
related Subsidiary Guarantees.
(o) To cause the Exchange Offer to be made in the appropriate form to
permit Series B Notes and guarantees thereof by the Guarantors registered
pursuant to the Act to be offered in exchange for the Series A Notes and the
Subsidiary Guarantees and to comply with all applicable federal and state
securities laws in connection with the Exchange Offer.
(p) To comply with all of its agreements set forth in the Registration
Rights Agreement.
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(q) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date and to satisfy all conditions precedent to the delivery of the
Series A Notes and the Subsidiary Guarantees.
6. Representations, Warranties and Agreements of the Company and the
Guarantors. As of the date hereof, each of the Company and the Guarantors,
jointly and severally, represents and warrants to, and agrees with, the Initial
Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering Memorandum do
not, and any supplement or amendment to them will not, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchasers furnished to the Company in
writing by the Initial Purchasers expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(b) Each of the Company and its subsidiaries, has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries taken as a whole, or
draw into question the validity of this Agreement or the other Operative
Documents (a "Material Adverse Effect").
(c) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights.
(d) The entities listed on Schedule B hereto are the only subsidiaries,
direct or indirect, of the Company. All of the outstanding shares of capital
stock of each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, and are owned by the
Company in the percentage set forth on Schedule B directly or indirectly through
one or more subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature (each, a "Lien"), except as
described in the Offering Memorandum.
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(e) This Agreement has been duly authorized, executed and delivered by
the Company and each of the Guarantors.
(f) The Indenture has been duly authorized by the Company and each of
the Guarantors and, on the Closing Date, will have been validly executed and
delivered by the Company and each of the Guarantors. When the Indenture has been
duly executed and delivered by the Company and each of the Guarantors, the
Indenture will be 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 (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Indenture will conform in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the "TIA" or "Trust Indenture Act"), and the
rules and regulations of the Commission applicable to an indenture which is
qualified thereunder.
(g) The Series A Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Series A Notes have been issued, executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Series A Notes
will be entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms except
as (i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the Series A
Notes will conform as to legal matters to the description thereof contained in
the Offering Memorandum.
(h) On the Closing Date, the Series B Notes will have been duly
authorized by the Company. When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applications.
(i) The Subsidiary Guarantee to be endorsed on the Series A Notes by
each Guarantor has been duly authorized by each such Guarantor and, on the
Closing Date, will have been duly executed and delivered by each such Guarantor.
When the Series A Notes have been issued, executed and authenticated in
accordance with the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Subsidiary
Guarantee of each Guarantor endorsed thereon will be entitled to the benefits of
the Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by
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bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability. On the Closing Date,
the Subsidiary Guarantees to be endorsed on the Series A Notes will conform as
to legal matters to the description thereof contained in the Offering
Memorandum.
(j) The Subsidiary Guarantee to be endorsed on the Series B Notes by
each Guarantor has been duly authorized by each such Guarantor and, when issued,
the Series B Notes will have been duly executed and delivered by each such
Guarantor. When the Series B Notes have been issued, executed and authenticated
in accordance with the terms of the Exchange Offer and the Indenture, the
Subsidiary Guarantee of each Guarantor endorsed thereon will be entitled to the
benefits of the Indenture and will be the valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms,
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. When the Series B Notes are
issued, authenticated and delivered, the Subsidiary Guarantees to be endorsed on
the Series B Notes will conform as to legal matters to the description thereof
in the Offering Memorandum.
(k) The Registration Rights Agreement has been duly authorized by the
Company and each of the Guarantors, and, on the Closing Date, will have been
duly executed and delivered by the Company and each of the Guarantors. When the
Registration Rights Agreement has been duly executed and delivered, the
Registration Rights Agreement will be a valid and binding agreement of the
Company and each of the Guarantors, enforceable against the Company and each
Guarantor in accordance with its terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally, (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability, (iii)
rights to indemnity and contribution thereunder may be limited by federal or
state securities laws or principles of public policy. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(l) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiaries taken as a whole, to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound.
(m) The execution, delivery and performance of this Agreement and the
other Operative Documents by the Company and each of the Guarantors, compliance
by the Company and each of the Guarantors with all provisions hereof and
thereof and the consummation of the transactions contemplated hereby and thereby
will not (i) require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as
may be required under the securities or Blue Sky
10
laws of the various states), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or by-laws of the
Company, any of its subsidiaries, or (except as described in the Offering
Memorandum) any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries taken as a
whole, to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or their respective property is bound,
(iii) violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency having
jurisdiction over the Company or any of its subsidiaries or their respective
property, (iv) result in the imposition or creation of (or the obligation to
create or impose) a Lien under, any 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 or their respective property is bound, or (v) result in the
termination, suspension or revocation of any Authorization (as defined below) of
the Company or any of its subsidiaries or result in any other impairment of the
rights of the holder of any such Authorization.
(n) Except as may be described in the Offering Memorandum, there are no
legal or governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is or could be a party or to which any of their
respective property is or could be subject, which might result, singly or in the
aggregate, in a Material Adverse Effect.
(o) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any
provisions of the Foreign Corrupt Practices Act or the rules and regulations
promulgated thereunder, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect.
(p) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any Authorization, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a Material Adverse Effect.
(q) Each of the Company and its subsidiaries has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the
11
receipt of any notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the rights of the holder
of any such Authorization; and such Authorizations contain no restrictions that
are burdensome to the Company or any of its subsidiaries; except where such
failure to be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction would not,
singly or in the aggregate, have a Material Adverse Effect.
(r) The accountants, ▇▇▇▇▇ & Young LLP, that have certified the
financial statements and supporting schedules included in the Preliminary
Offering Memorandum and the Offering Memorandum are independent public
accountants with respect to the Company and the Guarantors, as required by the
Act and the Exchange Act. The historical financial statements, together with
related schedules and notes, set forth in the Preliminary Offering Memorandum
and the Offering Memorandum comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under the Act.
(s) The historical financial statements, together with related schedules
and notes forming part of the Offering Memorandum (and any amendment or
supplement thereto), present fairly the consolidated financial position, results
of operations and changes in financial position of the Company and its
subsidiaries on the basis stated in the Offering Memorandum at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data set forth in the Offering Memorandum (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company and its subsidiaries.
(t) The pro forma financial information included in the Preliminary
Offering Memorandum and the Offering Memorandum have been prepared on a basis
consistent with the historical financial statements of the Company and its
subsidiaries and give effect to assumptions used in the preparation thereof on a
reasonable basis and in good faith and present fairly the historical and
proposed transactions contemplated by the Preliminary Offering Memorandum and
the Offering Memorandum.
(u) Neither the Company nor any of its subsidiaries is, nor after giving
effect to the offering and sale of the Series A Notes and the application of the
net proceeds thereof as described in the Offering Memorandum, will be, an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
(v) There are no contracts, agreements or understandings between the
Company or any Guarantor and any person granting such person the right to
require the Company or such Guarantor to file a registration statement under the
Act with respect to any securities of the Company or such Guarantor or to
require the Company or such Guarantor to
12
include such securities with the Notes and Subsidiary Guarantees registered
pursuant to any Registration Statement.
(w) Neither the Company nor any of its subsidiaries, nor any agent
thereof acting on the behalf of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Series A
Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System.
(x) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or
has informed the Company or any Guarantor that it is considering imposing) any
condition (financial or otherwise) on the Company's or any Guarantor's retaining
any rating assigned to the Company or any Guarantor, any securities of the
Company or any Guarantor or (ii) has indicated to the Company or any Guarantor
that it is considering (a) the downgrading, suspension, or withdrawal of, or any
review for a possible change that does not indicate the direction of the
possible change in, any rating so assigned or (b) any change in the outlook for
any rating of the Company, any Guarantor or any securities of the Company or any
Guarantor.
(y) Since the respective dates as of which information is given in the
Offering Memorandum other than as set forth in Offering Memorandum (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement),
(i) there has not occurred any material adverse change or any development
involving a prospective material adverse change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor its subsidiaries have
incurred any material liability or obligation, direct or contingent.
(z) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Act.
(aa) When the Series A Notes and the Subsidiary Guarantees are issued
and delivered pursuant to this Agreement, neither the Series A Notes nor the
Subsidiary Guarantees will be of the same class (within the meaning of Rule 144A
under the Act) as any security of the Company or the Guarantors that is listed
on a national securities exchange registered under Section 6 of the Exchange Act
or that is quoted in a United States automated inter-dealer quotation system.
(bb) No form of general solicitation or general advertising (as defined
in Regulation D under the Act) was used by the Company, the Guarantors or any of
their respective representatives (other than the Initial Purchasers, as to whom
the Company and the Guarantors make no representation) in connection with the
offer and sale of the Series A Notes contemplated hereby, including, but not
limited to, articles, notices or other communications published in any
13
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as the
Series A Notes have been issued and sold by the Company within the six-month
period immediately prior to the date hereof.
(cc) Prior to the effectiveness of any Registration Statement, the
Indenture is not required to be qualified under the TIA.
(dd) None of the Company, the Guarantors nor any of their respective
affiliates or any person acting on its or their behalf (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no representation)
has engaged or will engage in any directed selling efforts within the meaning of
Regulation S under the Act ("Regulation S") with respect to the Series A Notes
or the Subsidiary Guarantees.
(ee) Except for offers and sales you may make on behalf of the Company
as contemplated by this Agreement, none of the Company, the Guarantors nor any
of their respective affiliates or any person acting on its or their behalf has
taken or will take any action with respect to any offer or sale of the Notes to
any non-U.S. Person (as defined in Regulation S).
(ff) The sale of the Series A Notes by the Initial Purchasers pursuant
to Regulation S is not a part of a plan or scheme on the part of the Company or
any of its Subsidiaries to evade the registration provisions of the Act.
(gg) 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 Series A Notes outside the United States
and, in connection therewith, the Offering Memorandum will contain the
disclosure required by Rule 902(h).
(hh) The Series A Notes sold in reliance on Regulation S will be
represented upon issuance by a temporary global security that may not be
exchanged for definitive securities until the expiration of the 40-day
restricted period referred to in Rule 903(c)(3) of the Act and only upon
certification of beneficial ownership of such Series A Notes by non-U.S. persons
or U.S. persons who purchased such Series A Notes in transactions that were
exempt from the regulation requirements of the Act.
(ii) No registration under the Act of the Series A Notes or the
Subsidiary Guarantees is required for the sale of the Series A Notes and the
Subsidiary Guarantees to the Initial Purchasers as contemplated or for the
Exempt Resales assuming the accuracy of the Initial Purchasers' representations
and warranties and agreements set forth in Section 7 hereof.
(jj) The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, all patents, patent rights, licenses, inventions,
copyrights, know-how
14
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names ("intellectual property") currently employed by them in connection
with the business now operated by them except where the failure to own or
possess or otherwise be able to acquire such intellectual property would not,
singly or in the aggregate, have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of infringement of
or conflict with asserted rights of others with respect to any of such
intellectual property which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(kk) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; and neither the Company nor any of its subsidiaries (i) has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other material expenditures will have to be made in order to
continue such insurance or (ii) has 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 from similar insurers at a cost that would not
have a Material Adverse Effect.
(ll) Except as disclosed in the Offering Memorandum, 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
hand, which would be required by the Act to be described in the Offering
Memorandum if the Offering Memorandum were a prospectus included in a
registration statement on Form S-1 filed with the Commission.
(mm) There is no (i) significant unfair labor practice complaint,
grievance or arbitration proceeding pending or threatened against the Company or
any of its subsidiaries before the National Labor Relations Board or any state
or local labor relations board, (ii) strike, labor dispute, slowdown or stoppage
pending or threatened against the Company or any of its subsidiaries or (iii)
union representation question existing with respect to the employees of the
Company or any of its subsidiaries, except in the case of clauses (i), (ii) and
(iii) for such actions which, singly or in the aggregate, would not have a
Material Adverse Effect. To the best knowledge of the Company, no collective
bargaining organizing activities are taking place with respect to the Company
or any of its subsidiaries for any employees not currently covered by a
collective bargaining agreement.
(nn) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
15
(oo) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by the
Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(pp) All indebtedness of the Company and the Guarantors that will be
repaid with the proceeds of the issuance and sale of the Series A Notes was
incurred, and the indebtedness represented by the Series A Notes is being
incurred, for proper purposes and in good faith and each of the Company and the
Guarantors was, at the time of the incurrence of such indebtedness that will be
repaid with the proceeds of the issuance and sale of the Series A Notes, and
will be on the Closing Date (after giving effect to the application of the
proceeds from the issuance of the Series A Notes) solvent, and had at the time
of the incurrence of such indebtedness that will be repaid with the proceeds of
the issuance and sale of the Series A Notes and will have on the Closing Date
(after giving effect to the application of the proceeds from the issuance of the
Series A Notes) sufficient capital for carrying on their respective business and
were, at the time of the incurrence of such indebtedness that will be repaid
with the proceeds of the issuance and sale of the Series A Notes, and will be on
the Closing Date (after giving effect to the application of the proceeds from
the issuance of the Series A Notes) able to pay their respective debts as they
mature.
(qq) No action has been taken and no law, statute, rule or regulation or
order has been enacted, adopted or issued by any governmental agency or body
which prevents the execution, delivery and performance of any of the Operative
Documents, the issuance of the Series A Notes or the Subsidiary Guarantees, or
suspends the sale of the Series A Notes or the Subsidiary Guarantees in any
jurisdiction referred to in Section 5(e); and no injunction, restraining order
or other order or relief of any nature by a federal or state court or other
tribunal of competent jurisdiction has been issued with respect to the Company
or any of its subsidiaries which would prevent or suspend the issuance or sale
of the Series A Notes or the Subsidiary Guarantees in any jurisdiction referred
to in Section 5(e).
(rr) Each certificate signed by an officer of the Company or any
Guarantor and delivered to the Initial Purchasers or counsel for the Initial
Purchasers shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Initial Purchasers as to the matters covered thereby.
The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Company and the Guarantors and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each Initial
Purchaser, severally and not jointly, represents and warrants to the Company and
the Guarantors, and agrees that:
16
(a) Such Initial Purchaser is either a QIB or an Accredited
Institution, in either case, with such knowledge and experience in financial and
business matters as is necessary in order to evaluate the merits and risks of an
investment in the Series A Notes.
(b) Such Initial Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Series A Notes only to (x) QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A, (y) a limited number
of Accredited Institutions and (z) in offshore transactions in reliance upon
Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Series A Notes
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with
Exempt Resales, such Initial Purchaser will solicit offers to buy the Series A
Notes only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Each of the Initial Purchasers further agrees that it will offer to
sell the Series A Notes only to, and will solicit offers to buy the Series A
Notes only from (A) Eligible Purchasers that the Initial Purchasers reasonably
believe are QIBs (B) a limited number of Accredited Institutions, (C) Regulation
S Purchasers, in each case, that agree that (x) the Series A Notes purchased by
them may be resold, pledged or otherwise transferred within the time period
referred to under Rule 144(k) (taking into account the provisions of Rule 144(d)
under the Act, if applicable) under the Act, as in effect on the date of the
transfer of such Series A Notes, only (i) to the Company or any of its
subsidiaries, (ii) to a person whom the seller reasonably believes is a QIB
purchasing for its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A under the Act, (iii) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the requirements of
Rule 904 of the Act, (iv) in a transaction meeting the requirements of Rule 144
under the Act, (v) to an Accredited Institution that, prior to such transfer,
furnishes the Trustee a signed letter containing certain representations and
agreements relating to the registration of transfer of such Series A Note (the
form of which is attached to the Indenture) and an opinion of counsel
acceptable to the Company that such transfer is in compliance with the Act, (vi)
in accordance with another exemption from the registration requirements of the
Act (and based upon an opinion of counsel acceptable to the Company) or (vii)
pursuant to an effective registration statement and, in each case, in accordance
with the applicable securities laws of any state of the United States or any
other applicable jurisdiction and (y) they will deliver to each person to whom
such Series A Notes or an interest therein is transferred a notice substantially
to the effect of the foregoing.
17
(e) None of such Initial Purchasers nor any of their affiliates
or any person acting on its or their behalf has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Series A Notes or the Subsidiary Guarantees.
(f) The Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S have been and will be
offered and sold only in offshore transactions.
(g) The sale of the Series A Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act. All offers and
sales of the Series A Notes by such Initial Purchaser prior to the expiration of
the restricted period specified in Rule 903(c)(2) of Regulation S will be made
only: (i) in accordance with the provisions of Rule 903 or 904, (ii) pursuant to
registration of the Series A Notes under the Act or (iii) pursuant to an
available exemption from the registration requirements of the Act.
(h) Such Initial Purchaser further represents and agrees that
(i) it has not offered or sold and will not offer or sell any Series A Notes to
persons in the United Kingdom prior to the expiration of the period of six
months from the issue date of the Series A Notes, except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (ii) it has complied and will comply with
all applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Series A Notes in, from or otherwise
involving the United Kingdom and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issuance of the Series A Notes to a person who is of a kind
described in Article 11(3) of the Financial Services Act of 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom the document may
otherwise lawfully be issued or passed on.
(i) Such Initial Purchaser agrees that it will not offer, sell
or deliver any of the Series A Notes in any jurisdiction outside the United
States except under circumstances that will result in compliance with the
applicable laws thereof, and that it will take at its own expense whatever
action is required to permit its purchase and resale of the Series A Notes in
such jurisdictions. Such Initial Purchaser understands that no action has been
taken to permit a public offering in any jurisdiction outside the United States
where action would be required for such purpose.
(j) Such Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Series A Notes 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 under the Act (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 Series A Notes pursuant hereto and the Closing Date,
other
18
than in accordance with Regulation S of the Act or another exemption from the
registration requirements of the Act. Such Initial Purchaser agrees that, during
such 40-day restricted period, it will not cause any advertisement with respect
to the Series A Notes (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 Series A Notes, except such advertisements as
permitted by and include the statements required by Regulation S.
(k) Such Initial Purchaser agrees that, at or prior to confirmation of a
sale of Series A Notes 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(c)(3) under the Act, 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 Series A Notes 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 commencement of
the Offering and the Closing Date, except in either case in
accordance with Regulation S under the Securities Act (or Rule
144A or to Accredited Institutions in transactions that are
exempt from the registration requirements of the Securities
Act), and in connection with any subsequent sale by you of the
Series A Notes covered hereby in reliance on Regulation S 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."
(l) Such Initial Purchaser agrees that the Series A Notes offered and
sold in reliance on Regulation S will be represented upon issuance by a global
security that may not be exchanged for definitive securities until the
expiration of the 40-day restricted period referred to in Rule 903(c)(3) of the
Act and only upon certification of beneficial ownership of such Series A Notes
by non-U.S. persons or U.S. persons who purchased such Series A notes in
transactions that were exempt from the registration requirements of the Act.
The Initial Purchasers acknowledge that the Company and the Guarantors and,
for purposes of the opinions to be delivered to each Initial Purchaser pursuant
to Section 9 hereof, counsel to the Company and the Guarantors and count to the
Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and the Initial Purchasers hereby consent to such reliance.
8. Indemnification.
(a) The Company and each Guarantor agree, jointly and severally, to
indemnify and hold harmless the Initial Purchasers, their directors, their
officers and each person,
19
if any, who controls such Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and judgements (including, without limitation, any
legal or other expenses incurred in connection with investigating or defending
any matter, including any action, that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Offering Memorandum
(or any amendment or supplement thereto), the Preliminary Offering Memorandum or
any Rule 144A Information provided by the Company or any Guarantor to any holder
or prospective purchaser of Series A Notes pursuant to Section 5(h) or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to an Initial Purchaser furnished in
writing to the Company by such Initial Purchaser; provided, however, that the
foregoing indemnity agreement with respect to any Preliminary Offering
Memorandum shall not inure to the benefit of any Initial Purchaser who failed to
deliver an Offering Memorandum (as then amended or supplemented, provided by the
Company to the several Initial Purchasers in the requisite quantity and on a
timely basis to permit proper delivery on or prior to the Closing Date) to the
person asserting any losses, claims, damages and liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Offering Memorandum.
(b) The Initial Purchasers agree to indemnify and hold harmless the
Company and the Guarantors, and their respective directors and officers and each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) the Company or the Guarantors, to the same
extent as the foregoing indemnity from the Company and the Guarantors to the
Initial Purchasers but only with reference to information relating to the
Initial Purchasers furnished in writing to the Company by the Initial Purchasers
expressly for use in the Preliminary Offering Memorandum or the Offering
Memorandum.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), the Initial Purchasers shall not be required to
assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Initial Purchasers). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the
20
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to
assume the defense of such action or employ counsel reasonably satisfactory to
the indemnified party or (iii) the named parties to any such action (including
any impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by First Chicago, in
the case of the parties indemnified pursuant to Section 8(a), and by the
Company, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (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 Series A Notes or (ii) if the allocation
provided by clause 8(d)(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 8(d)(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 which resulted in such losses,
claims, damages, liabilities or judgments, 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, shall
be deemed to be in the same
21
proportion as the total net proceeds from the offering of the Series A Notes
(after underwriting discounts and commissions, but before deducting expenses)
received by the Company, and the total discounts and commissions received by the
Initial Purchasers bear to the total price to investors of the Series A Notes,
in each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of the Company and the Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or any Guarantor, on the one
hand, or the Initial Purchasers, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation even if the Initial Purchasers were
treated as one entity for such purpose, or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such indemnified party in connection with investigating or defending any
matter, including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, the Initial Purchasers shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchasers exceeds the amount of any damages which the Initial
Purchasers have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 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 8(d) are several in proportion to the respective
principal amount of Series A Notes purchased by each of the Initial Purchasers
hereunder and not joint.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations of the
Initial Purchasers to purchase the Series A Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date.
22
(b) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Company
or any Guarantor or any securities of the Company or any Guarantor (including,
without limitation, the placing of any of the foregoing ratings on credit watch
with negative or developing implications or under review with an uncertain
direction) by any "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act, (ii) there
shall not have occurred any change, nor shall any notice have been given of any
potential or intended change, in the outlook for any rating of the Company or
any Guarantor or any securities of the Company or any Guarantor by any such
rating organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considered assigning) a lower rating to the
Notes than that on which the Notes were marketed.
(c) Since the respective dates as of which information is given in the
Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there shall not have been any change or any
development involving a prospective change in the capital stock or in the
long-term debt of the Company or any of its subsidiaries and (iii) neither the
Company nor any of its subsidiaries shall have incurred any liability or
obligation, direct or contingent, the effect of which, in any such case
described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in the judgment of First
Chicago, is material and adverse and, in the judgment of First Chicago, makes it
impracticable to market the Series A Notes on the terms and in the manner
contemplated in the Offering Memorandum.
(d) You shall have received on the Closing Date certificates dated the
Closing Date, signed by the President or Chairman and Treasurer or Chief
Financial Officer of the Company and each of the Guarantors, confirming the
matters set forth in Sections 6(y), 9(a) and 9(b) and stating that each of the
Company and the Guarantors has complied with all the agreements and satisfied
all of the conditions herein contained and required to be complied with or
satisfied on or prior to the Closing Date.
(e) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Initial Purchasers), dated the Closing Date, of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, counsel for the Company and the Guarantors, to the effect that:
(i) Each of the Company and the Guarantors has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to
carry on its business and to own, lease and operate its properties as
described in the Offering Memorandum.
23
(ii) Based solely on certificates of public officials, each of the
Company and the Guarantors is duly qualified and is in good standing as a
foreign corporation authorized to do business in the states set forth in
such opinion or an exhibit thereto.
(iii) All of the outstanding shares of capital stock of each of the
Guarantors has been duly authorized and validly issued and are fully paid
and non-assessable, and each Guarantor's stock records, stock certificates
and minute books indicate that such Guarantor is owned by the Company in
the percentage set forth on Schedule A, and to such counsel's knowledge are
free and clear of any Lien, except as described in the Offering Memorandum.
(iv) The Series A Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as (x) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (y) equitable principles of general applicability
(regardless of whether enforceability is considered in a proceeding at law
or in equity).
(v) The Subsidiary Guarantees have been duly authorized by each
Guarantor and will be duly authorized with the Series A Notes are executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, the Subsidiary Guarantees endorsed thereon will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Guarantors, enforceable in accordance with their terms
except as (x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (y)
equitable principles of general applicability (regardless of whether
enforceability is considered in a proceeding at law or in equity).
(vi) The Indenture has been duly authorized, executed and delivered by
the Company and each Guarantor and is 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 (x) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors rights generally and (y) equitable principles of general
applicability regardless of whether enforceability is considered in a
proceeding at law or in equity).
24
(vii) This Agreement has been duly authorized, executed
and delivered by the Company and the Guarantors.
(viii) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and each of
the Guarantors and is 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 (x) the
enforceability thereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (y)
equitable principles of general applicability (regardless of
whether enforceability is considered in a proceeding at law or
in equity).
(ix) The Series B Notes have been duly authorized.
(x) The statements under the captions "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources," "Management and
Directors," "Description of Notes," "Description of Other
Indebtedness" and "Plan of Distribution" in the Offering
Memorandum, insofar as such statements constitute a summary of
the legal matters of documents referred to therein, fairly
present in all material respects such legal matters or
documents.
(xi) Such counsel believes the summary contained in the
Offering Memorandum under the caption "Certain Federal Tax
Considerations for Foreign Persons" is an accurate summary of
the issues described therein in all material respects.
(xii) The execution, delivery and performance of this
Agreement and the other Operative Documents by the Company and
each of the Guarantors, the compliance by the Company and each
of the Guarantors with all provisions hereof and thereof and the
consummation of the transactions described herein and therein
will not (i) require any consent, approval, authorization or
other order of, or qualification with, any court or governmental
body or agency (except such as may be required under the
securities or Blue Sky laws of the various states), (ii)
conflict with or constitute a breach of any of the terms or
provisions of, or a default under the charter or by-laws of the
Company or any of the Guarantors or (except as described in the
Offering Memorandum) any indenture, loan agreement, mortgage,
lease or other agreement or instrument, identified to such
counsel as material, to which the Company or any of the
Guarantors is a party or by which the Company or any of the
Guarantors or their respective property is bound (any of the
foregoing, an "Other Contract", (iii) violate or conflict with
any applicable law, rule, or regulation, or any judgment, order
or decree known to such counsel of any court or any
25
governmental body or agency having jurisdiction over the Company
or any of its subsidiaries or their respective property, (iv)
result in the imposition or creation of (or the obligation to
create or impose) a Lien under any Other Contract.
(xiii) Such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is or could be a party or to
which any of their respective property is or could be subject,
other than any disclosed in the Offering Memorandum (it being
understood that such counsel has not conducted any search of any
court docket or other governmental records in connection
therewith).
(xiv) Neither the Company nor any of its subsidiaries is
nor, after giving effect to the offering and sale of the Series
A Notes and the application of the net proceeds thereof as
described in the Offering Memorandum, will be, an "investment
company" as such term is defined in the Investment Company Act
of 1940, as amended.
(xv) To the best of such counsel's knowledge, other than
the rights granted to Harvard Private Capital Holdings, Inc.
with respect to the Company's capital stock, there are no
contracts, agreements or understandings between the Company or
any Guarantor and any person granting such person the right to
require the Company or such Guarantor to file a registration
statement under the Act with respect to any securities of the
Company or such Guarantor or to require the Company or such
Guarantor to include such securities with the Notes and
Subsidiary Guarantees registered pursuant to any Registration
Statement.
(xvi) The Indenture complies as to form in all material
respects with the requirements of the TIA, and the rules and
regulations of the Commission applicable to an indenture which
is qualified thereunder. It is not necessary in connection with
the offer, sale and delivery of the Series A Notes to the
Initial Purchasers in the manner contemplated by this Agreement
or in connection with the Exempt Resales to qualify the
Indenture under the TIA.
(xvii) No registration under the Act of the Series A
Notes is required for the sale of the Series A Notes to the
Initial Purchasers as contemplated by this Agreement or for the
Exempt Resales assuming that (i) each Initial Purchaser is a QIB
or an Accredited Institution, (ii) the accuracy of, and
compliance with, the Initial Purchasers' representations and
agreements contained in Section 7 of this Agreement, and (iii)
the accuracy of the representations of the Company and the
Guarantors set
26
forth in Sections 5(h) and 6(bb), (dd) (ee), (gg) and (hh) of
this Agreement.
(xviii) Such counsel has no reason to believe that, as
of the date of the Offering Memorandum or as of the Closing
Date, the Offering Memorandum, as amended or supplemented, if
applicable (except for the financial statements and other
financial data included therein, as to which such counsel need
not express any belief) contains any 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.
The opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ described in Section 9(e) above shall be
rendered to you at the request of the Company and the Guarantors and shall so
state therein. Such opinion may be limited to the laws of the State of Michigan
and United States federal law, for purposes of the enforceability opinion, may
assume that New York law is identical to Michigan law and may assume that the
Arizona business corporation law is identical to the Michigan Business
Corporation Act. In giving such opinion with respect to the matters covered by
Section 9(e)(xviii), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ may state that their opinion and belief are
based upon their participation in the preparation of the Offering Memorandum and
any amendments or supplements thereto and review and discussion of the contents
thereof, but are without independent check or verification except as specified.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the
Initial Purchasers, in form and substance reasonably satisfactory to the Initial
Purchasers.
(g) The Initial Purchasers shall have received, at the time
this Agreement is executed and at the Closing Date, letters dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers from Ernst & Young LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to the Initial Purchasers
with respect to the financial statements and certain financial information
contained in the Offering Memorandum.
(h) The Series A Notes shall have been approved by the NASD for
trading and duly listed in PORTAL.
(i) The initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company, the Guarantors and the Trustee.
(j) The Company and the Guarantors shall have executed the
Registration Rights Agreement and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company and the Guarantors.
27
(k) Neither the Company nor the Guarantors shall have failed at or prior
to the Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company or the
Guarantors, as the case may be, at or prior to the Closing Date.
(l) The Company and the Guarantors shall have executed this Agreement
and the Initial Purchasers shall have received an original copy thereof, duly
executed by the Company and the Guarantors.
(m) On or prior to the Closing Date, the Company, and the Company's
subsidiaries that are party thereto, shall have executed and delivered the New
Credit Facility (as defined in the Offering Memorandum), and the New Credit
Facility shall be in full force and effect on terms substantially as described
in the Offering Memorandum and no default or event of default shall have
occurred thereunder.
(n) On or prior to the Closing Date, the Company and Harvard Private
Capital Holdings, Inc. shall have executed and delivered an amendment to that
certain Securities Purchase Agreement dated as of January 3, 1996 and certain
agreements contemplated in the exhibits thereto (including without limitation
the agreement contemplated by Exhibit 7 thereto), each in form and substance
reasonably satisfactory to the Initial Purchasers.
(o) You shall have received on the Closing Date an opinion (satisfactory
to you and counsel for the Initial Purchasers), dated the Closing Date, of
Canadian counsel for the Company and Numatics, Ltd., to the effect that:
(i) Numatics, Ltd. has been duly incorporated, is validly existing
as a corporation in good standing under the laws of Canada and has the
corporate power and authority to carry on its business and to own, lease
and operate its properties as described in the Offering Memorandum.
(ii) All of the outstanding shares of capital stock of Numatics,
Ltd. have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company in the percentage set forth
on Schedule B. To such counsel's knowledge, all shares owned by the
Company are owned free and clear of any Lien, except as described in the
Offering Memorandum.
10. Effectiveness of Agreement and Termination. This Agreement shall become
effective upon the execution and delivery of this Agreement by the parties
hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by the Initial Purchasers by written notice to the Company if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in the Initial
Purchasers' judgment, is material and adverse and, in the Initial Purchasers'
judgment, makes it impracticable to market the Series A Notes on the terms and
in the manner
28
contemplated in the Offering Memorandum, (ii) the suspension or material
limitation of trading in securities or other instruments on the New York Stock
Exchange, the American Stock Exchange, the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange, the Chicago Board of Trade or the NASDAQ
National Market or limitation on prices for securities or other instruments on
any such exchange or the NASDAQ National Market, (iii) the suspension of trading
of any securities of the Company or any Guarantor on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date any one or more of the Initial Purchasers shall
fail or refuse to purchase the Series A Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of the Series
A Notes which such defaulting Initial Purchasers or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased on such
date by all Initial Purchasers, each non-defaulting Initial Purchasers shall be
obligated severally, in the proportion which the principal amount of the Series
A Notes set forth opposite its name in Schedule B bears to the aggregate
principal amount of the Series A Notes which all the non-defaulting Initial
Purchasers, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Series A Notes which such
defaulting Initial Purchasers or Initial Purchasers, as the case may be, agreed
but failed or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of the Series A Notes which any Initial
Purchasers has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 10 by an amount in excess of one-ninth of such
principal amount of the Series A Notes without the written consent of such
Initial Purchasers. If on the Closing Date any Initial Purchasers or Initial
Purchasers shall fail or refuse to purchase the Series A Notes and the aggregate
principal amount of the Series A Notes with respect to which such default occurs
is more than one-tenth of the aggregate principal amount of the Series A Notes
to be purchased by all Initial Purchasers and arrangements satisfactory to the
Initial Purchasers and the Company for purchase of such the Series A Notes are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Initial Purchasers and the
Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes if any, in the Offering Memorandum or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Initial Purchasers from liability in respect of any
default of any such Initial Purchasers under this Agreement.
11. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company or any Guarantor,
to Numatics,
29
Incorporated, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: President, and (ii) if to the Initial Purchasers, c/o First Chicago
Capital Markets, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (▇▇▇) ▇▇▇-▇▇▇▇, Attention: High Yield Capital Markets, or in any
case to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Guarantors and the Initial
Purchasers set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Series A Notes, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of the Initial Purchasers, the
officers or directors of the Initial Purchasers, any person controlling the
Initial Purchasers, the Company, any Guarantor, the officers or directors of the
Company or any Guarantor, or any person controlling the Company or any
Guarantor, (ii) acceptance of the Series A Notes and payment for them hereunder
and (iii) termination of this Agreement.
If for any reason the Series A Notes are not delivered by or on behalf
of the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Company and each Guarantor, jointly
and severally, agree to reimburse the Initial Purchasers for all out-of-pocket
expenses (including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Company shall be liable
for all expenses which it has agreed to pay pursuant to Section 5(i) hereof. The
Company and each Guarantor also agree, jointly and severally, to reimburse the
Initial Purchasers and its officers, directors and each person, if any, who
controls such Initial Purchasers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act for any and all fees and expenses (including
without limitation the fees and expenses of counsel) incurred by them in
connection with enforcing their rights under this Agreement (including without
limitation its rights under this Section 8).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Guarantors, the
Initial Purchasers, the Initial Purchasers' directors and officers, any
controlling persons referred to herein, the directors of the Company and the
Guarantors and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include a purchaser of any of the Series A Notes from the Initial Purchasers
merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
30
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
NUMATICS, INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
NUMATION, INC. NUMATECH, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ --------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman Title: Chairman
MICRO-FILTRATION, INC. ULTRA AIR PRODUCTS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ --------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman Title: Chairman
MICROSMITH, INC. I.A.E. INCORPORATED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ --------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman Title: President
S-1
Acknowledged and Agreed:
FIRST CHICAGO CAPITAL MARKETS, INC.
BANCBOSTON SECURITIES INC.
By: FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
S-2
SCHEDULE A
GUARANTORS
NUMATION, INC., a Michigan corporation (90% owned by the Company)
NUMATECH, INC., a Michigan corporation (88% owned by the Company)
MICRO-FILTRATION, INC., a Michigan corporation (80% owned by the Company)
ULTRA AIR PRODUCTS, INC., a Michigan corporation (80% owned by the Company)
MICROSMITH, INC., an Arizona corporation (80% owned by the Company)
I.A.E. INCORPORATED, a Michigan corporation (100% owned by the Company)
SCHEDULE B
SUBSIDIARIES
NUMATION, INC., a Michigan corporation (90% owned by the Company)
NUMATECH, INC., a Michigan corporation (88% owned by the Company)
MICRO-FILTRATION, INC., a Michigan corporation (80% owned by the Company)
ULTRA AIR PRODUCTS, INC., a Michigan corporation (80% owned by the Company)
MICROSMITH, INC., an Arizona corporation (80% owned by the Company)
I.A.E. INCORPORATED, a Michigan corporation (100% owned by the Company)
NUMATICS B.V., organized in the Netherlands (100% owned by the Company)
NUMATICS S.A. DE C.V., organized in Mexico (100% owned by the Company)
NUMATICS S.A.R.L., organized in France (100% owned by the Company)
NUMATICS LTD., organized in the United Kingdom (100% owned by the Company)
NUMATICS, LTD., organized in Canada (100% owned by the Company)
NAC BETEILINGUNGE GMBH, organized in Germany (100% owned by the Company)
NUMATICS, GMBH, organized in Germany (100% owned by the Company)
NUMATICS, K.F.T., organized in Hungary (100% owned by the Company)
NUMATICS LTD, organized in Taiwan (95% owned by the Company)
NUMATICS S.R.L., organized in Italy (100% owned by the Company)
UNIVER GMBH, organized in Germany (100% owned by the Company)
SCHEDULE C
Principal Amount
Initial Purchaser of Notes
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First Chicago Capital Markets, Inc.................... $ 80,500,000
BancBoston Securities Inc............................. $ 34,500,000
Total......................................... $115,000,000
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT