EXHIBIT 10.21
$53,000,000
12 1/2% SENIOR SUBORDINATED NOTES DUE 2013 OF
H&E EQUIPMENT SERVICES L.L.C.
H&E FINANCE CORP.
AND
219,406.620 LIMITED LIABILITY COMPANY INTERESTS OF
H&E HOLDINGS L.L.C.
PURCHASE AGREEMENT
June 17, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
1. INTRODUCTORY. H&E Equipment Services L.L.C., a Louisiana limited
liability company, ("H&E"), H&E Finance Corp., a Delaware corporation ("H&E
FINANCE" and together with H&E, the "NOTE ISSUERS") and H&E Holdings L.L.C., a
Delaware L.L.C. ("HOLDINGS" and together with the Note Issuers, the "COMPANY"),
propose, subject to the terms and conditions stated herein, to co-issue and sell
to Credit Suisse First Boston Corporation ("CSFBC" or the initial "PURCHASER")
$53,000,000 principal amount of H&E and H&E Finance's 12 1/2% Senior
Subordinated Notes due 2013 (the "SENIOR SUBORDINATED NOTES") and 219,406.620
Limited Liability Company Interests (the "LLC INTERESTS") in Holdings. The
Senior Subordinated Notes are to be issued under an indenture, dated as of June
17, 2002 (the "INDENTURE"), between the Note Issuers, the Guarantors (as defined
below), and The Bank of New York, as Trustee. The Note Issuers' obligations
under the Senior Subordinated Notes, including the due and punctual payment of
interest on the Senior Subordinated Notes, will be unconditionally guaranteed
(the "GUARANTEE") by GNE Investments, Inc. a Washington corporation, Great
Northern Equipment, Inc., a Montana corporation, and each of the Note Issuers'
future domestic subsidiaries (each, a "GUARANTOR" and together, the
"GUARANTORS"). As used herein, the term "NOTES" shall include the Guarantees of
the Senior Subordinated Notes by the Guarantors, unless the context otherwise
requires. The LLC Interests are comprised of 552.632 Series A Preferred Units,
1,475.708 Series B Preferred Units, 4,239.002 Series C Preferred Units,
2,612.962 Series D Preferred Units, 106,842.105 Class A Common Units and
103,684.211 Class B Common Units of Holdings. Prior to the Closing Date (as
defined below) ICM Equipment Company L.L.C. ("ICM") and Head & ▇▇▇▇▇▇▇▇
Equipment, L.L.C., ("HEAD & ▇▇▇▇▇▇▇▇") will be combined and merged with and into
H&E. The Senior Subordinated Notes and the LLC Interests are to be issued on a
private placement basis pursuant to an exemption under Section 4(2) of the
United States Securities Act of 1933 (the "SECURITIES ACT").
1
As used herein, the term "LLC AGREEMENT" refers to that agreement
between Holdings and each Holder of LLC Interests, to be dated June 17, 2002,
and the term "INVESTOR RIGHTS AGREEMENT" refers to that agreement among
Holdings, BRSEC Co-Investment, LLC, BRSEC Co-Investment II, LLC and CSFBC, to be
dated the Closing Date.
Holders (including subsequent transferees) of the Notes will have the
registration rights relating to the Notes set forth in the registration rights
agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated June 17, 2002 (the
"CLOSING DATE") for so long as such Notes constitute "TRANSFER RESTRICTED
SECURITIES" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Note Issuers 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
Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to the
Note Issuers' 12 1/2% Senior Subordinated Notes in the same aggregate principal
amount as the Senior Subordinated Notes, identical in all material respects to
the Senior Subordinated Notes and Guarantees and registered under the Securities
Act (the "EXCHANGE NOTES" and the "EXCHANGE GUARANTEES," together the "EXCHANGE
SECURITIES"), to be offered in exchange for the Senior Subordinated Notes (such
offer to exchange being referred to as the "EXCHANGE OFFER") and the Guarantees
thereof and (ii) a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with the
Exchange Offer Registration Statement, the "REGISTRATION STATEMENTS") relating
to the resale by certain holders of the Notes and to use its commercially
reasonable 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. The Notes and the Exchange
Securities are referred to collectively as the "SECURITIES."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS.
The Company and each of the Guarantors, jointly and severally, represents and
warrants to, and agrees with, the Purchaser that:
(a) A preliminary offering circular and an offering circular
relating to the Notes and the LLC Interests to be offered by the
Company and the Guarantors have been prepared by the Company and the
Guarantors. Such preliminary offering circular (the "PRELIMINARY
OFFERING CIRCULAR") and offering circular (the "OFFERING CIRCULAR"), as
supplemented as of the date of this Agreement, are hereinafter
collectively referred to as the "OFFERING DOCUMENT." On the date of
this Agreement and as of the Closing Date, the Offering Document does
not and will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the Offering
Document based upon written information furnished to the Company by or
through CSFBC specifically for use therein, it being understood and
agreed that the only such information is that described as such in
Section 7(b) hereof.
(b) No order or decree preventing the use of the Offering
Document, or any order asserting that the transactions contemplated by
this Agreement are subject to the registration requirements of the
Securities Act has been issued and no proceeding for that
2
purpose has commenced or is pending or, to the knowledge of the Company
or any of the Guarantors, is contemplated.
(c) The market-related and customer-related data and estimates
included under the captions "Summary" and "Business" in the Offering
Document are based on or derived from sources which the Company
believes to be reliable.
(d) The Senior Subordinated Notes have been duly and validly
authorized by the Note Issuers and when duly executed by the Note
Issuers in accordance with the terms of the Indenture and, assuming due
authentication of the Senior Subordinated Notes by the Trustee, upon
delivery of the Notes to the Purchaser against payment therefor in
accordance with the terms hereof, the Senior Subordinated Notes will
have been validly issued and delivered, and will constitute valid and
binding obligations of the Note Issuers entitled to the benefits of the
Indenture, enforceable against the Note Issuers in accordance with
their terms, subject to the qualification that the enforceability of
the Note Issuers' obligations thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights generally and by
general equitable principles. The Senior Subordinated Notes will
conform in all material respects to the description thereof in the
Offering Document.
(f) The Exchange Notes have been duly and validly authorized
by the Note Issuers and if and when duly issued and authenticated in
accordance with the terms of the Indenture and delivered in accordance
with the Registration Rights Agreement, will constitute valid and
binding obligations of the Note Issuers entitled to the benefits of the
Indenture, enforceable against the Note Issuers in accordance with
their terms, subject to the qualification that the enforceability of
the Note Issuers' obligations thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights generally and by
general equitable principles.
(g) The Guarantees have been duly and validly authorized by
the Guarantors and when duly executed and delivered by the Guarantors
in accordance with the terms of the Indenture and upon the due
execution, authentication and delivery of the Senior Subordinated Notes
in accordance with the Indenture and the issuance of the Senior
Subordinated Notes in the sale to the Purchaser contemplated by this
Agreement, will constitute valid and binding obligations of the
Guarantors, enforceable against the Guarantors in accordance with their
terms, subject to the qualification that the enforceability of the
Guarantors' obligations thereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights generally and by
general equitable principles. The Guarantees will conform to the
description thereof in the Offering Document.
(h) The Exchange Guarantees have been duly and validly
authorized by the Guarantors and if and when duly executed and
delivered by the Guarantors in accordance with the terms of the
Indenture and upon the due execution and authentication of the Exchange
Notes in accordance with the Indenture and the issuance and delivery of
the Exchange Notes contemplated by the Registration Rights Agreement,
will constitute
3
valid and binding obligations of the Guarantors, entitled to the
benefits of the Indenture, enforceable against the Guarantors in
accordance with their terms, subject to the qualification that the
enforceability of the Guarantors' obligations thereunder may be limited
by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights
generally and by general equitable principles.
(i) The Company and each of the Guarantors has been duly
incorporated or formed and is an existing corporation or limited
liability company in good standing under the laws of its jurisdiction
of organization, with power and authority to own its properties and
conduct its business as described in the Offering Document; and the
Company and each of the Guarantors is duly qualified to do business as
a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to so qualify
would not have a Material Adverse Effect (as such term is defined
herein).
(j) Each subsidiary of the Company and the Guarantors has been
duly incorporated and is an existing corporation in good standing under
the laws of the jurisdiction of its incorporation, with power and
authority to own its properties and conduct its business as described
in the Offering Document; and each subsidiary of the Company and the
Guarantors is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
Material Adverse Effect; all of the issued and outstanding capital
stock of each subsidiary of the Company and the Guarantors has been
duly authorized and validly issued and is fully paid and nonassessable;
and the capital stock of each subsidiary owned by the Company and the
Guarantors, directly or through subsidiaries, is owned free from
material liens, encumbrances and defects.
(k) The entities listed on Schedule I hereto are the only
subsidiaries, direct or indirect, of the Company.
(l) The Indenture has been duly and validly authorized by the
Note Issuers and the Guarantors, and upon its execution and delivery
and, assuming due authorization, execution and delivery by the Trustee,
will constitute the valid and binding agreement of the Note Issuers and
the Guarantors, enforceable against the Note Issuers and the Guarantors
in accordance with its terms, subject to the qualification that the
enforceability of the Note Issuers' and the Guarantors' obligations
thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other laws relating to or
affecting creditors' rights generally and by general equitable
principles; no qualification of the Indenture under the Trust Indenture
Act of 1939 (the "1939 ACT") is required in connection with the offer
and sale of the Notes contemplated hereby. The Indenture will conform
in all material respects to the description thereof in the Offering
Document.
4
(m) On the Closing Date, the Indenture will conform in all
material respects to the requirements of the 1939 Act, and the rules
and regulations of the Commission applicable to an indenture which is
qualified thereunder.
(n) The LLC Interests have been duly authorized and, when the
LLC Interests have been delivered and paid for in accordance with this
Agreement, such LLC Interests will have been validly issued, fully paid
and non-assessable and will conform to the description thereof
contained in the Offering Document and there will be no pre-emptive
rights attached thereto except those preemptive rights set forth in the
Stockholders Agreement and the Investor Rights Agreement.
(o) The LLC Interests are free and clear of any and all any
and all claims, liens, pledges, options, charges, encumbrances or other
rights or interests of third parties of any and every kind, other than
pledges to the lenders under the Credit Agreement (as defined in the
Offering Document) and to The Bank of New York, as collateral agent,
for the holders of the Note Issuers' 11 1/8% Senior Secured Notes due
2012.
(p) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between the Company or any of
the Guarantors and any person that would give rise to a valid claim
against the Company, any Guarantor or any Purchaser for a brokerage
commission, finder's fee or other like payment.
(q) The Note Issuers, Holdings and the Guarantors each have
all requisite corporate power and authority to enter into the
Registration Rights Agreement, the LLC Agreement and the Investor
Rights Agreement, as the case may be. The Registration Rights
Agreement, the LLC Agreement and the Investor Rights Agreement have
each been duly authorized by the Note Issuers and Holdings and the
Guarantors, as the case may be, and, when executed by the Note Issuers,
Holdings and the Guarantors, as the case may be, in accordance with the
terms hereof and thereof, will each be validly executed and delivered
and (assuming the due execution and delivery thereof by you), will each
be a legally valid and binding obligation of the Note Issuers, Holdings
and the Guarantors, as the case may be, in accordance with the terms
hereof and thereof, enforceable against the Note Issuers, Holdings and
the Guarantors, as the case may, be in accordance with their terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditor's rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law), and, as to rights of indemnification
and contribution, by principles of public policy.
(r) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this
Agreement, the Indenture, the Registration Rights Agreement, the LLC
Agreement or the Investor Rights Agreement in connection with the
issuance and sale of the Notes and the LLC Interests by the Note
Issuers and Holdings, respectively or the Guarantors except, in
connection with the Senior Subordinated Notes, for the order of the
Commission declaring the Exchange Offer Registration Statement or the
Shelf Registration Statement (each as defined in the Registration
Rights Agreement)
5
effective and such consents, approvals, authorizations, orders or
filings under state securities or Blue Sky laws.
(s) The execution, delivery and performance of the Indenture,
this Agreement, the LLC Agreement, the Investor Rights Agreement and
the Registration Rights Agreement, and the issuance and sale of the
Notes and the LLC Interests and compliance with the terms and
provisions thereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, any applicable rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction
over the Company, the Guarantors, or any of their respective
subsidiaries or any of their properties, or any agreement or instrument
to which the Company, the Guarantors, or any of their respective
subsidiaries is a party or by which the Company, the Guarantors, or any
of their respective subsidiaries is bound or to which any of the
properties of the Company, the Guarantors, or any of their respective
subsidiaries is subject, or the charter or by-laws of the Company, the
Guarantors, or any of their respective subsidiaries, and the Company
and each of the Guarantors has full power and authority to authorize,
issue and sell the Notes and the LLC Interests as contemplated by this
Agreement.
(t) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors.
(u) Except as disclosed in the Offering Document, the Company,
the Guarantors, or any of their respective subsidiaries have good and
marketable title to all real properties and all other properties and
assets owned by them, in each case free from liens, encumbrances and
defects that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by them; and except
as disclosed in the Offering Document, the Company, the Guarantors, or
any of their respective subsidiaries hold any leased real or personal
property under valid and enforceable leases with no exceptions that
would materially interfere with the use made or to be made thereof by
them.
(v) The Company, the Guarantors, and their respective
subsidiaries possess adequate certificates, authorities or permits
issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any
such certificate, authority or permit that, if determined adversely to
the Company, the Guarantors, or any of their respective subsidiaries,
would individually or in the aggregate have a material adverse effect
on the condition (financial or other), business, properties or results
of operations of the Company, the Guarantors, or any of their
respective subsidiaries taken as a whole ("MATERIAL ADVERSE EFFECT").
(w) No labor dispute with the employees of the Company, the
Guarantors, or any of their respective subsidiaries, to the knowledge
of the Company or any of the Guarantors, is imminent that might have a
Material Adverse Effect.
6
(x) The Company, the Guarantors, or any of their respective
subsidiaries own, possess or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other intellectual
property (collectively, "INTELLECTUAL PROPERTY RIGHTS") necessary to
conduct the business now operated by them, or presently employed by
them, and have not received any notice of infringement of or conflict
with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company, the
Guarantors, or any of their respective subsidiaries, would individually
or in the aggregate have a Material Adverse Effect.
(y) Except as disclosed in the Offering Document, neither the
Company, the Guarantors, nor any of their respective subsidiaries is in
violation of any statute, any rule, regulation, decision or order of
any governmental agency or body or any court, domestic or foreign
having jurisdiction over the Company, the Guarantors or any of their
respective subsidiaries or any of their respective properties, relating
to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human
exposure to hazardous or toxic substances (collectively, "ENVIRONMENTAL
LAWS"), owns or operates any real property contaminated with any
substance that is subject to any environmental laws, is liable for any
off-site disposal or contamination pursuant to any environmental laws,
or is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in
the aggregate have a Material Adverse Effect; and neither the Company
nor any Guarantor is aware of any pending investigation which might
lead to such a claim.
(z) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Company,
the Guarantors, any of their respective subsidiaries, or any of their
respective properties that, if determined adversely to the Company, the
Guarantors, or any of their respective subsidiaries, would individually
or in the aggregate have a Material Adverse Effect, or would materially
and adversely affect the ability of Note Issuers, Holdings or the
Guarantors to perform their respective obligations under the Indenture,
this Agreement, the LLC Agreement, the Investor Rights Agreement or the
Registration Rights Agreement, or which are otherwise material in the
context of the sale of the Notes and the LLC Interests; and no such
actions, suits or proceedings are threatened or, to the Company's or
any Guarantor's knowledge, contemplated.
(aa) The financial statements included in the Offering
Document present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in all material respects in conformity
with the generally accepted accounting principles in the United States
applied on a consistent basis; and the assumptions used in preparing
the pro forma financial statements included in the Offering Document
provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described therein,
the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns
7
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(bb) Except as disclosed in the Offering Document, since the
date of the latest audited financial statements included in the
Offering Document, neither the Company, any Guarantor nor any of their
respective subsidiaries has sustained any material loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree and there has been no material
adverse change, nor to the knowledge of the Company any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company, the Guarantors and their respective subsidiaries, and,
except as disclosed in or contemplated by the Offering Document, there
has been no dividend or distribution of any kind declared, paid or made
by the Company or each of the Guarantors on any class of its capital
stock.
(cc) The Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the United States
Investment Company Act of 1940, as amended and the rules and
regulations of the Commission thereunder (the "INVESTMENT COMPANY
ACT"); and the Company is not and, after giving effect to the offering
and sale of the Notes and the LLC Interests and the application of the
proceeds thereof as described in the Offering Document, will not be an
"investment company" as defined in the Investment Company Act.
(dd) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Notes or the LLC
Interests are listed on any national securities exchange registered
under Section 6 of the United States Securities Exchange Act of 1934
("EXCHANGE ACT") or quoted in a U.S. automated inter-dealer quotation
system.
(ee) The offer and sale and resale of the Notes and the LLC
Interests to the Purchaser in the manner contemplated by this Agreement
will be exempt from the registration requirements of the Securities Act
by reason of Section 4(2) thereof, Regulation D thereunder and
Regulation S thereunder.
(ff) Neither the Company, the Guarantors nor any of their
respective affiliates, nor any person acting on its or their behalf (i)
has, within the six-month period prior to the date hereof, offered or
sold in the United States or to any U.S. person (as such terms are
defined in Regulation S under the Securities Act), the Notes, the LLC
Interests or any security of the same class or series as the Notes or
the LLC Interests or (ii) has offered or will offer or sell the Notes
or the LLC Interests (A) in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act or (B) with respect to any such
securities sold in reliance on Rule 903 of Regulation S ("REGULATION
S") under the Securities Act, by means of any directed selling efforts
within the meaning of Rule 902(c) of Regulation S. The Company, the
Guarantors, its affiliates and any person acting on its or their behalf
have complied and
8
will comply with the offering restrictions requirement of Regulation S
and the sale of Notes and the LLC Interests pursuant to Regulation S is
not part of a plan or scheme to evade the registration provisions of
the Securities Act. The Company and each of the Guarantors has not
entered and will not enter into any contractual arrangement with
respect to the distribution of the Notes and the LLC Interests except
for this Agreement.
(gg) The Offering Document contains all the information
specified in, and meeting the requirements of, Rule 144A(d)(4) under
the Securities Act.
(hh) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to Registration Rights
Agreement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(ii) The Company, the Guarantors and each of their respective
subsidiaries carry, or are covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of their respective
businesses and the value of their respective properties and as is
customary for companies engaged in similar businesses in similar
industries.
(jj) No relationship, direct or indirect, required to be
described under Item 404 of Regulation S-K, exists between or among the
Company on the one hand, and the directors, officers or stockholders of
the Company on the other hand, which is not described in the Offering
Document.
(kk) The Company is in compliance in all material respects
with all presently applicable provisions of ERISA; no "reportable
event" (as defined in ERISA), has occurred with respect to any "pension
plan" (as defined in ERISA), for which the Company would have any
liability; the Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "CODE"); and
each "pension plan" for which the Company would have any liability that
is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification.
(ll) The Company and the Guarantors have filed all material
federal, state and local income and franchise tax returns required to
be filed through the date hereof and have paid all taxes due thereon,
and no tax deficiency has been determined adversely to the Company, the
Guarantors or any of their respective subsidiaries which has had (nor
does the Company or the Guarantors have any knowledge of any tax
deficiency which, if determined adversely to the Company, the
Guarantors or any of their respective subsidiaries, might have) a
Material Adverse Effect on the Company, the Guarantors and their
respective subsidiaries.
9
(mm) Since the date as of which information is given in the
Preliminary Offering Memorandum through the date hereof, and except as
may otherwise be disclosed or contemplated in the Offering Document,
neither the Company nor the Guarantors have (i) issued or granted any
securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred
in the ordinary course of business, (iii) entered into any transaction
not in the ordinary course of business or (iv) declared or paid any
dividend on its capital stock, other than in connection with the
issuance by the Note Issuers and the Guarantors of the 11 1/8% Senior
Secured Notes due 2012 (the "SECURED NOTES").
(nn) The Company and the Guarantors (i) make and keep accurate
books and records and (ii) maintain internal accounting controls which
provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are
recorded as necessary to permit preparation of its financial statements
and to maintain accountability for its assets, (C) access to their
respective assets is permitted only in accordance with management's
authorization and (D) the reported accountability for their respective
assets is compared with existing assets at reasonable intervals.
(oo) Neither the Company, the Guarantors nor any of their
respective subsidiaries (i) is in violation of its charter or by-laws,
(ii) is in default in any respect, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default,
in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject or (iii)
is in violation in any respect of any applicable law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any license,
permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of
its business, except, with regard to (ii) and (iii) of this paragraph,
for such defaults, violations or failures that would not reasonably be
expected to have a Material Adverse Effect on the Company, the
Guarantors or any of their respective subsidiaries.
(pp) Neither the Company, the Guarantors nor any of their
respective subsidiaries, nor to the knowledge of the Company, the
Guarantors or any of their respective subsidiaries, any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company, the Guarantors or any of their respective
subsidiaries, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(qq) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Notes), will violate or result in a violation of Section 7 of
the Exchange Act, or any regulation promulgated
10
thereunder, including, without limitation, Regulations T, U, and X of
the Board of Governors of the Federal Reserve System.
(rr) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2)
under the Securities 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.
(ss) The LLC Interests being sold to the Purchasers represent
5% of each outstanding series of limited liability company interests in
H&E Holdings as of the date hereof (calculated on a fully-diluted
basis).
3. PURCHASE, SALE AND DELIVERY OF NOTES AND LLC INTERESTS. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to sell to the
Purchaser, and the Purchaser agrees to purchase from the Company, (i) the
$7,650,546 principal amount of Notes to be sold to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
Co., Inc. ("BRS") and ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Co., L.L.C. ("BRS LLC") at a
purchase price of 94.356%, (ii) the remaining $45,349,454 principal amount of
Notes at a purchase price of 91.9976% (iii) all of LLC Interests to be sold with
the Notes on a pro rata basis based on the principal amount of the Notes sold.
The Purchaser has advised the Company that it will make offers (the
"EXEMPT RESALES") of the Notes and the LLC Interests purchased hereunder on the
terms set forth in the Offering Document, as amended or supplemented, solely to
(i) persons whom the Purchaser reasonably believe to be "qualified institutional
buyers" as defined in Rule 144A under the Securities Act ("QIBs"), (ii) BRS and
BRS LLC, who have represented to the Company and the Purchaser that each of them
is an institutional "Accredited Investor" referred to in Rule 501(a)(1), (2),
(3) or (7) under the Act (together the "ACCREDITED INVESTORS"), that each has
represented to the Purchasers that it is purchasing the Notes and the LLC
Interests for investment purposes only and with no present intention to resell
the Notes and the LLC Interests and executed and returned to CSFBC a certificate
in the form of Annex A hereto and (iii) persons permitted to purchase the Notes
and the LLC Interests in offshore transactions in reliance upon Regulation S
under the Securities Act (each, a "REGULATION S PURCHASER") (such persons
specified in clauses (i), (ii) and (iii) being referred to herein as the
"ELIGIBLE PURCHASERS").
Delivery to the Purchaser of and payment for Notes and the LLC
Interests shall be made at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (the "CLOSING LOCATION") at 9:00 A.M., New York
City time, on the Closing Date. The Closing Location and the Closing Date may be
varied by agreement between CSFBC and the Company. A meeting will be held at the
Closing Location on the New York Business Day next preceding the Closing Date,
at which meeting the final drafts of the documents to be delivered will be
11
available for review by the parties hereto. For the purposes of this Section 3,
"NEW YORK BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
The Notes to be purchased by the Purchaser hereunder will be
represented by one or more definitive global notes in book-entry form, which
will be deposited by or on behalf of the Note Issuers with The Depository Trust
Company ("DTC") or its designated custodian. The Note Issuers and the Guarantors
will deliver the Notes to the Purchaser, for the account of the Purchaser,
against payment by or on behalf of the Purchaser of the purchase price therefor
by wire transfer in immediately available funds, by causing DTC to credit the
Notes to the account of the Purchaser at DTC. The Company will cause the
certificates representing the Notes to be made available to the Purchaser for
checking at least 24 hours prior to the Closing Date at the office of DTC or its
designated custodian.
The LLC Interests to be purchased by the Purchaser hereunder will be
represented by definitive certificates which will be delivered to the Purchasers
on the Closing Date. Holdings will deliver the LLC Interests to the Purchaser
against payment by or on behalf of the Purchaser of the purchase price therefore
by wire transfer in immediately available funds. Holdings will cause the
certificates representing the LLC Interests to be made available to the
Purchaser for checking at least 24 hours prior to the Closing Date.
4. REPRESENTATIONS BY PURCHASER; RESALE BY PURCHASER
(a) The Purchaser represents and warrants to the Company and
the Guarantors that it is an "accredited investor" within the meaning
of Regulation D under the Securities Act.
(b) The Purchaser acknowledges that the Notes and the LLC
Interests have not been registered under the Securities Act and may not
be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons except in accordance with Regulation S or
pursuant to an exemption from the registration requirements of the
Securities Act. The Purchaser represents and agrees that it has offered
and sold the Notes and the LLC Interests, and will offer and sell the
Notes and the LLC Interests (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of
the offering and the Closing Date, only in accordance with Rule 903,
Rule 144A under the Securities Act ("RULE 144A") or to Accredited
Investors who make the representations contained in, and execute and
return to the Initial Purchaser, a certificate in the form of Annex A
attached hereto. Accordingly, neither such Purchaser nor its
affiliates, nor any persons acting on its or their behalf, have engaged
or will engage in any directed selling efforts with respect to the
Notes and the LLC Interests, and such Purchaser, its affiliates and all
persons acting on its or their behalf have complied and will comply
with the offering restrictions requirement of Regulation S. The
Purchaser agrees that, at or prior to confirmation of sale of the Notes
and the LLC Interests, other than a sale pursuant to Rule 144A or to
the Accredited Investors, such Purchaser will have sent to each
distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases the Notes and the LLC Interests
12
from it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933
(the "Securities Act") and may not be offered or
sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of
their distribution at any time or (ii) otherwise
until 40 days after the later of the date of the
commencement of the offering and the closing date,
except in either case in accordance with Regulation S
(or Rule 144A if available) under the Securities
Act. Terms used above have the meanings given to
them by Regulation S."
Terms used in this subsection (b) have the meanings given to them by
Regulation S.
(c) The Purchaser agrees that it and each of its affiliates
has not entered and will not enter into any contractual arrangement
with respect to the distribution of the Notes and the LLC Interests
except with the prior written consent of the Company.
(d) The Purchase agrees that it and each of its affiliates
will not offer or sell the Notes and the LLC Interests in the United
States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation
or general advertising. The Purchaser agrees, with respect to resales
made in reliance on Rule 144A of any of the Notes and the LLC
Interests, to deliver either with the confirmation of such resale or
otherwise prior to settlement of such resale a notice to the effect
that the resale of such Notes and LLC Interests has been made in
reliance upon the exemption from the registration requirements of the
Securities Act provided by Rule 144A.
(e) The Purchaser represents and agrees that (i) it has not
authorized the notes to be offered to the public in the United Kingdom,
within the meaning of the Public Offers of Securities Regulations 1995,
as amended, and no Offering Document may be passed on to any person in
the United Kingdom unless that person is of a kind described in Article
19 of the Financial Services and Markets Act 2000 (Financial Promotion)
Order 2001 or is a person to whom the document may otherwise lawfully
be issued or passed on. The Offering Document is only directed at
persons having professional experience in matters relating to
investments and the offering described in the Offering Document is only
available to such persons and only such persons will be permitted to
participate in the offering. Persons who do not have professional
experience in matters relating to investments should not rely on the
Offering Document. All applicable provisions of the Financial Services
and Markets Act 2000, as amended, must be complied with in respect of
anything done in relation to the notes in, from or otherwise involving
the United Kingdom.
5. CERTAIN AGREEMENTS OF THE COMPANY, THE GUARANTORS, ICM AND HEAD &
▇▇▇▇▇▇▇▇. The Company and each of the Guarantors, jointly and severally, agrees
with the Purchaser that:
13
(a) The Company will advise CSFBC promptly of any proposal to
amend or supplement the Offering Document and will not effect such
amendment or supplementation without CSFBC's consent. If, at any time
prior to the completion of the resale of the Notes and the LLC
Interests by the Purchaser, any event occurs as a result of which the
Offering Document as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any such time to amend or supplement the Offering Document
to comply with any applicable law, the Company promptly will notify
CSFBC of such event and promptly will prepare, at its own expense, an
amendment or supplement which will correct such statement or omission
or effect such compliance. Neither CSFBC's consent to, nor the
Purchaser's delivery to offerees or investors of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth
in Section 6.
(b) The Company will furnish to CSFBC copies of any
preliminary offering circular, the Offering Document and all amendments
and supplements to such documents, in each case as soon as available
and in such quantities as CSFBC reasonably requests. At any time when
the Company is not subject to Section 13 or 15(d) of the Exchange Act,
the Company will promptly furnish or cause to be furnished to CSFBC
and, upon request of holders and prospective purchasers of the Notes
and the LLC Interests, to such holders and purchasers, copies of the
information required to be delivered to holders and prospective
purchasers of the Notes and the LLC Interests pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision
thereto) in order to permit compliance with Rule 144A in connection
with resales by such holders of the Notes and the LLC Interests. The
Company will pay the expenses of printing and distributing to the
Purchaser all such documents.
(c) The Company and the Guarantors will arrange for the
qualification of the Notes and the LLC Interests for sale and the
determination of their eligibility for investment under the laws of
such jurisdictions in the United States and Canada as CSFBC designates
and will continue such qualifications in effect so long as required for
the resale of the Notes and the LLC Interests by the Purchaser,
PROVIDED that neither the Company nor any Guarantor will be required to
qualify as a foreign corporation or to file a general consent to
service of process in any such state.
(d) During the period of five years hereafter, the Company and
the Guarantors will furnish to CSFBC, as soon as practicable after the
end of each fiscal year, a copy of its annual report to stockholders
for such year; and the Company and the Guarantors will furnish to CSFBC
(i) as soon as available, a copy of each report and any definitive
proxy statement of the Company and the Guarantors mailed to
stockholders, and (ii) the information required to be provided to the
trustee for the Notes pursuant to the Indenture.
(e) During the period of two years after the Closing Date, the
Company will, upon reasonable request, furnish to CSFBC and any holder
of Notes or LLC Interests a copy of the restrictions on transfer
applicable to the Notes or LLC Interests.
14
(f) During the period of two years after the Closing Date, the
Company will not resell any of the Notes or LLC Interests that are
restricted securities (as defined in Rule 144 under the Securities Act)
that have been reacquired by it.
(g) During the period of two years after the Closing Date, the
Company will not be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act.
(h) To furnish the Purchaser and those persons identified by
the Purchaser to the Company as many copies of the Offering Document,
and any amendments or supplements thereto, as the Purchaser may
reasonably request for the time period specified in Section 5(i).
Subject to the Purchaser's compliance with its representations and
warranties and agreements set forth in Section 4 hereof, the Company
and the Guarantors consent to the use of the Offering Document, and any
amendments and supplements thereto required pursuant hereto, by the
Purchaser in connection with Exempt Resales.
(i) During such period as, in the reasonable opinion of ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, an Offering Document is required by law to be delivered in
connection with Exempt Resales by the Purchaser and in connection with
market-making activities of the Purchaser for so long as any Notes or
LLC Interests are outstanding, (i) not to make any amendment or
supplement to the Offering Document of which the Purchaser shall not
previously have been advised or to which the Purchaser shall reasonably
object after being so advised unless such amendment or supplement is,
in the opinion of the Company or its advisors, necessary of advisable
and (ii) to prepare promptly, upon the Purchaser's reasonable request,
any amendment or supplement to the Offering Document which may be
necessary or advisable in connection with such Exempt Resales or such
market-making activities.
(j) If, during the period referred to in Section 5(i) above,
any event shall occur or condition shall exist as a result of which, in
the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, it becomes necessary to amend or
supplement the Offering Document in order to make the statements
therein, in the light of the circumstances when such Offering Document
is delivered to an Eligible Purchaser, not misleading, or if, in the
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, it is necessary to amend or supplement the
Offering Document to comply with any applicable law, forthwith to
prepare an appropriate amendment or supplement to such Offering
Document 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 Document will comply with
applicable law, and to furnish to the Purchaser and such other persons
as the Purchaser may designate such number of copies thereof as the
Purchaser may reasonably request
(k) Each of the Company and the Guarantors jointly and
severally agree to pay all expenses incidental to the performance of
its obligations under this Agreement, the Indenture, the Registration
Rights Agreement, the LLC Agreement and the Investor
15
Rights Agreement, including: (i) the fees and expenses of the Trustee
and its professional advisers; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the
Notes and the LLC Interests and, as applicable, the Exchange Securities
(as defined in the Registration Rights Agreement), the preparation and
printing of this Agreement, the Registration Rights Agreement the
Notes, the LLC Interests, the Indenture, the Offering Document, the LLC
Agreement and the Investor Rights Agreement and amendments and
supplements thereto, and any other document relating to the issuance,
offer, sale and delivery of the Notes and the LLC Interests and as
applicable, the Exchange Securities; (iii) the cost of qualifying the
Notes for trading in The Private Offering, Resales and Trading
Automatic Linkages (PORTAL) Market(SM) ("PORTAL") and any expenses
incidental thereto; (iv) the cost of any advertising approved by the
Company in connection with the issue of the Notes and the LLC
Interests; (v) for any expenses (including fees and disbursements of
counsel) incurred in connection with qualification of the Notes, the
LLC Interests or the Exchange Securities for sale under the laws of
such jurisdictions in the United States and Canada as CSFBC designates
and the printing of memoranda relating thereto; (vi) for any fees
charged by investment rating agencies for the rating of the Securities
or the Exchange Securities; and (vii) for expenses incurred in
distributing preliminary offering circulars and the Offering Document
(including any amendments and supplements thereto) to the Purchaser;
PROVIDED, HOWEVER, that other than as set forth in clause (v), the
Company shall not be required to pay any fees or disbursals of the
Purchaser's professional advisors. The Company and the Guarantors will
also pay or reimburse the Purchaser (to the extent incurred by them)
for all reasonable travel expenses of the Purchaser and the Company's
officers and employees and any other expenses of the Purchaser and the
Company in connection with attending or hosting meetings with
prospective purchasers of the Notes and the LLC Interests from the
Purchaser.
(l) In connection with the offering, until CSFBC shall have
notified the Company of the completion of the resale of the Notes and
the LLC Interests, neither the Company nor any of its affiliates has or
will, either alone or with one or more other persons, bid for or
purchased for any account in which it or any of its affiliates has a
beneficial interest any Notes or LLC Interests or attempt to induce any
person to purchase any Notes or LLC Interests; and neither it nor any
of its affiliates will make bids or purchases for the purpose of
creating actual, or apparent, active trading in, or of raising the
price of, the Notes or LLC Interests.
(m) For a period of 180 days after the date of the initial
offering of the Notes and the LLC Interests by the Purchaser, the
Company and each of the Guarantors will not offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any
United States dollar-denominated debt securities issued or guaranteed
by the Company or any Guarantor and having a maturity of more than one
year from the date of issue except issuances of (i) the Secured Notes,
(ii) Notes or LLC Interests pursuant to the conversion or exchange of
convertible or exchangeable securities or the exercise of warrants or
options, in each case outstanding on the date hereof, grants of
employee stock options pursuant to the terms of a plan in effect on the
date hereof or (iii) Notes or LLC Interests pursuant to the exercise of
such options or the exercise of any other employee stock options
outstanding on the date hereof. Neither the Company nor any Guarantor
will at
16
any time offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any securities under circumstances where such
offer, sale, pledge, contract or disposition would cause the exemption
afforded by Section 4(2) of the Securities Act or the safe harbor of
Regulation S thereunder to cease to be applicable to the offer and sale
of the Notes and the LLC Interests.
(n) The Company will apply the net proceeds from the sale of
the Notes and the LLC Interests to be sold by it hereunder
substantially in accordance with the description set forth in the
Offering Document under the caption "Use of Proceeds."
(o) Except as stated in this Agreement and in the Offering
Document, neither the Company, the Guarantors nor any of their
respective affiliates have taken, nor will any of them take, directly
or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company or any of the Guarantors to
facilitate the sale or resale of the Notes or the LLC Interests. Except
as permitted by the Securities Act, the Company and the Guarantors will
not distribute any offering material in connection with resales of the
Notes and the LLC Interests.
(p) The Company and the Guarantors will use their commercially
reasonable efforts to permit the Notes to be designated PORTAL
securities in accordance with the rules and regulations adopted by the
National Association of Securities Dealers, Inc. relating to trading in
PORTAL and to permit the Notes to be eligible for clearance and
settlement through DTC.
(q) The Company and the Guarantors have complied and will
comply with all provisions of Florida Statutes Section 517.075 relating
to issuers doing business with Cuba.
(r) The Company and the Guarantors agree not to sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in the Securities Act), that would be
integrated with the sale of the Notes and the LLC Interests in a manner
that would require the registration under the Securities Act of the
sale to the Purchaser or the resale of the Notes and the LLC Interests.
(s) The Company and the Guarantors agree to comply with all
the terms and conditions of the Registration Rights Agreement, LLC
Agreement, the Investor Rights Agreement and all agreements set forth
in the representation letters of the Company and the Guarantors to DTC
relating to the approval of Notes by DTC for "book entry" transfer;
PROVIDED, that this agreement to so comply shall remain in effect only
until the Registration Rights Agreement, the LLC Agreement, the
Investor Rights Agreement and the representation letters have been
executed by all parties thereto and have each become a binding
agreement enforceable against each party thereto.
(t) The Company and the Guarantors agree that prior to any
registration of the Notes pursuant to the Registration Rights
Agreement, or at such earlier time as may be required, the Indenture
shall be qualified under the 1939 Act and any necessary
17
supplemental indentures will be entered into in connection therewith,
PROVIDED that the agreement set forth in this paragraph shall remain in
effect until the Registration Rights Agreement has been executed by all
parties thereto and has become a binding agreement enforceable against
each party thereto.
(u) The Company and the Guarantors will do and perform all
things required or necessary to be done and performed under this
Agreement by them prior to the Closing Date, and to satisfy all
conditions precedent to the Purchaser's obligations hereunder to
purchase the Notes and the LLC Interests.
(v) The Company shall have furnished or caused to be furnished
to you on the Closing Date a certificate of an officer of the Company
satisfactory to you as to the authorization, execution and delivery of
each of the agreements listed in the Offering Document in the section
entitled "Certain Relationships and Related Transactions." Such
certificate shall also have execution copies of all such agreements
attached to it.
6. CONDITIONS OF THE OBLIGATIONS OF THE PURCHASER. The obligations of
the Purchaser to purchase and pay for the Notes and the LLC Interests will be
subject to the accuracy of the representations and warranties on the part of the
Company and the Guarantors herein, to the accuracy of the statements of officers
of the Company and the Guarantors made pursuant to the provisions hereof, to the
performance by the Company and the Guarantors of their respective obligations
hereunder and to the following additional conditions precedent:
(a) The Purchaser shall have received a letter, dated the date
of this Agreement, of each of KPMG LLP ("KPMG") and Hawthorn, Waymouth
& ▇▇▇▇▇▇▇ L.L.P. ("HAWTHORN") in form and substance reasonably
satisfactory to the Purchaser concerning the financial information set
forth in the Offering Document.
(b) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company, the Guarantors and their respective subsidiaries which, in
the reasonable judgment of CSFBC, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Notes and the LLC
Interests; (ii) any downgrading in the rating of any debt securities of
the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the
Securities Act), or any public announcement that any such organization
has under surveillance or review its rating of any debt securities of
the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of
such rating) or any announcement that the Company has been placed on
negative outlook; (iii) any change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange
controls as would, in the reasonable judgment of CSFBC, be likely to
prejudice materially the success of the proposed issue, sale or
distribution of the Notes and the LLC Interests, whether in the primary
market or in respect of dealings in the secondary market; (iv) any
material suspension or material limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices
18
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (v) any banking moratorium declared by U.S. Federal or New York
authorities; (vi) any major disruption of settlements of securities or
(vii) any attack on, outbreak or escalation of hostilities or acts of
terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency
if, in the reasonable judgment of CSFBC, the effect of any such attack,
outbreak, escalation, act, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Notes and the LLC
Interests.
(c) The Purchaser shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company and the
Guarantors, addressed to the Purchaser and dated the Closing Date, in a
form reasonably acceptable to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and the Purchaser.
(d) The Purchaser shall have received opinions, dated the
Closing Date, of local counsel for the Company in the states of
Louisiana, Washington and Montana, each in a form reasonably acceptable
to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and the Purchaser.
(e) The Purchaser shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Purchaser, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of
the Notes and the LLC Interests, the Offering Document, the exemption
from registration for the offer and sale of the Notes and the LLC
Interests by the Company to the Purchaser and the resales by the
Purchaser as contemplated hereby and other related matters as CSFBC may
require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them
to pass upon such matters, with reference to same in the Offering
Circular.
(f) The Purchaser shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company and each Guarantor in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that as of the Closing Date: (i) the
representations and warranties of the Company and each Guarantor in
this Agreement are true and correct in all material respects; (ii) the
Company and each Guarantor has complied with all agreements in all
material respects and satisfied all conditions on its part to be
performed or satisfied hereunder in all material respects at or prior
to the Closing Date; (iii) subsequent to the respective dates of the
most recent financial statements in the Offering Document there has
been no material adverse change, nor any development or event that
would constitute a Material Adverse Effect except as set forth in or
contemplated by the Offering Document or as described in such
certificate; and (iv) such other matters as CSFBC may reasonably
require.
(g) The Purchaser shall have received letters, dated the
Closing Date, of each of KPMG and Hawthorn which meet the requirements
of subsection (a) of this Section, except that the specified date
referred to in such subsection will be a date not more than three days
prior to the Closing Date for the purposes of this subsection.
19
(h) All transactions listed in the section entitled "The
Transactions" shall be consummated prior to the Closing Date in a
manner reasonably satisfactory to the Purchaser.
(i) The Purchaser shall have received an executed certificate
in the form attached hereto as Annex A from BRS.
The Company and each Guarantor will furnish the Purchaser with such
conformed copies of such opinions, certificates, letters and documents as the
Purchaser reasonably request. CSFBC may in its sole discretion waive on behalf
of the Purchaser compliance with any conditions to the obligations of the
Purchaser hereunder.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and each
Guarantor, jointly and severally, shall indemnify and hold harmless the
Purchaser, its partners, directors and officers and each person, if any, who
controls such Purchaser within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Securities Act or the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any breach of any of the
representations and warranties of the Company or any Guarantor contained herein
or any untrue statement or alleged untrue statement of any material fact
contained in the Offering Document, or any amendment or supplement thereto, or
any related preliminary offering circular, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, including any
losses, claims, damages or liabilities arising out of or based upon the
Company's or any Guarantor's failure to perform its obligations under Section
5(a) of this Agreement, and will reimburse the Purchaser for legal or other
expenses reasonably incurred by such Purchaser in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred; PROVIDED, HOWEVER, that neither the Company nor any Guarantor will
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by CSFBC, it being understood and agreed that the only such information
consists of the information described as such in subsection (b) below.
(b) The Purchaser will indemnify and hold harmless the Company, each
Guarantor and their respective directors and officers and each person, if any,
who controls the Company and each Guarantor within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages or liabilities to which
the Company or any Guarantor may become subject, under the Securities Act or the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Offering Document, or any amendment or supplement thereto, or any related
preliminary offering circular, or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company
20
by CSFBC, and will reimburse legal or other expenses reasonably incurred by the
Company and any Guarantor in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by the Purchaser
consists of the following information in the Offering Document furnished on
behalf of the Purchaser: the third, fourth, ninth, tenth, eleventh, twelfth,
thirteenth and fourteenth paragraphs in the Offering Document under the section
entitled "Plan of Distribution" (the "PURCHASER INFORMATION"); PROVIDED,
HOWEVER, if the Purchaser delivered to the Company or any Guarantor corrected
Purchaser Information, the Purchaser shall not be liable for any losses, claims,
damages or liabilities arising out of or based upon the Company's or any
Guarantor's failure to perform its obligations under Section 5(a) of this
Agreement.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action and does not include a statement as to or an admission of
fault, culpability or failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (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 Purchaser on the other from the offering of
the Notes and the LLC Interests or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Guarantors on the one hand and
the Purchaser on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Guarantors on the one hand and the Purchaser on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Guarantors bear to
the
21
total discounts and commissions received by the Purchaser from the Company and
the Guarantors under this Agreement. The relative fault 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, any Guarantor or the Purchaser
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), the Purchaser shall not be required to
contribute any amount in excess of the amount by which the total discounts, fees
and commissions received by the Purchaser exceeds the amount of any damages
which the Purchaser has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.
(e) The obligations of the Company and each Guarantor under this
Section shall be in addition to any liability which the Company and each
Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Purchaser within the
meaning of the Securities Act or the Exchange Act; and the obligations of the
Purchaser under this Section shall be in addition to any liability which the
Purchaser may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Company within the meaning
of the Securities Act or the Exchange Act.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, the Guarantors or their respective officers and of the Purchaser set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Purchaser, the Company, the Guarantors or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Notes and the LLC
Interests. If this Agreement is terminated pursuant to Section 8 or if for any
reason the purchase of the Notes and the LLC Interests by the Purchaser is not
consummated, the Company and the Guarantors shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5(k) and the
respective obligations of the Company, the Guarantors and the Purchaser pursuant
to Section 7 shall remain in effect. If the purchase of the Notes and the LLC
Interests by the Purchaser is not consummated for any reason other than because
of the occurrence of any event specified in Section 6(b)(iv), (v), (vi) or
(vii), the Company and the Guarantors will reimburse the Purchaser for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Notes and the LLC
Interests.
9. NOTICES. All communications hereunder will be in writing and, if
sent to the Purchaser will be mailed, delivered or telegraphed and confirmed to
Credit Suisse First Boston Corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇.
10010-3629, Attention: Investment Banking Department - Transactions Advisory
Group, or, if sent to the Company or any Guarantor, will be mailed, delivered or
telegraphed and confirmed to it at H&E Equipment Services L.L.C. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial
Officer;
22
PROVIDED, HOWEVER, that any notice to a Purchaser pursuant to Section 7 will be
mailed, delivered or telegraphed and confirmed to such Purchaser.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of the Notes and the LLC
Interests shall be entitled to enforce the agreements for their benefit
contained in the second and third sentences of Section 5(b) hereof against the
Company and the Guarantors as if such holders were parties thereto.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company and each Guarantor hereby submits to the non-exclusive
jurisdiction of the Federal and State courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
23
If the foregoing is in accordance with the Purchaser's understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company, the Guarantors
and the Purchaser in accordance with its terms.
Very truly yours,
H&E EQUIPMENT SERVICES L.L.C.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive
Officer and President
H&E FINANCE CORP.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive
Officer and President
H&E HOLDINGS L.L.C.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive
Officer and President
HEAD & ▇▇▇▇▇▇▇▇ EQUIPMENT, L.L.C.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive
Officer and President
ICM EQUIPMENT COMPANY L.L.C.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
24
GNE INVESTMENTS, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
GREAT NORTHERN EQUIPMENT, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
25
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
26
SCHEDULE I
LIST OF SUBSIDIARIES
H&E HOLDINGS L.L.C.:
H&E Equipment Services L.L.C.
H&E Finance Corp.
GNE Investments, Inc.
Great Northern Equipment, Inc.
H&E EQUIPMENT SERVICES L.L.C.:
H&E Finance Corp.
GNE Investments, Inc.
Great Northern Equipment, Inc.
H&E FINANCE CORP.:
None
27
ANNEX A
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Credit Suisse First Boston Corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Investment Banking Department - Transactions Advisory Group
Re: H&E EQUIPMENT SERVICES L.L.C., H&E FINANCE CORP.
AND H&E HOLDINGS L.L.C.
Reference is hereby made to (i) the Purchase Agreement, dated
June 14, 2002 (the "PURCHASE AGREEMENT") among H&E Equipment Services
L.L.C., H&E Finance Corp., H&E Holdings L.L.C. together as issuer (the
"COMPANY"), the Guarantors named on the signature pages thereto and you and
(ii) the Indenture to be dated as of June 17, 2002 (the "INDENTURE")
relating to the __% Senior Subordinated Notes due 2013, among H&E Equipment
Services L.L.C., H&E Finance Corp., the Guarantors named on the signature
pages thereto and The Bank of New York, as Trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the
Indenture or the Purchase Agreement.
In connection with our proposed purchase of $____________ aggregate principal
amount of a beneficial interest in a Global Notes and $_______ of limited
liability company interests, we confirm that:
1. We understand that any subsequent transfer of the Notes, the LLC
Interests or any interest therein is subject to certain restrictions and
conditions set forth in the Indenture, the LLC Agreement and the Investor Rights
Agreement and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes, LLC Interests or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes and the LLC
Interests has not been registered under the Securities Act, and that the Notes
and the LLC Interests and any interest therein may not be offered or sold except
as permitted in the following sentence. We agree, on our own behalf and on
behalf of any accounts for which we are acting as hereinafter stated, that if we
should sell the Notes, LLC Interests or any interest therein, we will do so only
(A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A
under the Securities Act to a "qualified institutional buyer" (as defined
therein), (C) to an institutional "accredited investor" (as defined below) that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you and to the Company a signed letter substantially in the
form of this letter and, if such transfer is in respect of a principal amount of
Notes or LLC Interests, as the case may be, at the time of transfer of less than
$250,000, an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such transfer is in compliance with the Securities Act, (D)
outside the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the provisions of Rule 144(k) under the
Securities Act or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any Person purchasing the
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or LLC
Interests or beneficial interest therein, we will be required to furnish to you
and the Company such certifications, legal opinions and other information as you
and the Company may reasonably require to confirm that
28
the proposed sale complies with the foregoing restrictions. We further
understand that the Notes and LLC Interests purchased by us will bear a legend
to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes and the LLC
Interests, and we and any accounts for which we are acting are each able to bear
the economic risk of our or its investment.
5. We are acquiring the Notes and the LLC Interests or beneficial interest
therein purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we exercise
sole investment discretion.
6. We are acquiring the Notes and the LLC Interests for investment
purposes only with no present intention to resell the Notes and the LLC
Interests.
You and the Company are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
-------------------------------------------
[Insert Name of Accredited Investor]
By:
----------------------------------------
Name:
Title:
Dated:
-----------------------
29