EXHIBIT 4.16
ERICO INTERNATIONAL CORPORATION
$121,500,000
8 7/8% SENIOR SUBORDINATED NOTES DUE 2012
PURCHASE AGREEMENT
February 12, 2004
DEUTSCHE BANK SECURITIES INC.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
ABN AMRO INCORPORATED
NATCITY INVESTMENTS, INC.
MCDONALD INVESTMENTS INC.
c/o Deutsche Bank Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
ERICO International Corporation, an Ohio corporation (the
"Company"), and the Company's subsidiary listed on the signature pages hereto
(the "Subsidiary Guarantor" and, together with the Company, the "Issuers")
hereby confirm their agreement with you (the "Initial Purchasers"), as set forth
below.
1. The Securities. Subject to the terms and conditions
herein contained, the Company proposes to issue and sell to the Initial
Purchasers $121,500,000 aggregate principal amount of its 8 7/8% Senior
Subordinated Notes due 2012, Series A (the "Notes"). The Notes will be
guaranteed (the "Guarantee") on a senior subordinated basis by the Guarantor.
The Notes and the Guarantee are collectively referred to herein as the
"Securities." The Securities are to be issued under an indenture (the
"Indenture") to be dated as of February 20, 2004 by and among the Company, the
Guarantor and ▇▇▇▇▇ Fargo Bank, N.A., as Trustee (the "Trustee").
The Notes will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Act"), in reliance on exemptions therefrom; provided that the representations
and warranties of the Initial Purchasers contained in Section 8 hereof are true,
accurate and complete and the offer and sale of the Securities is conducted in
the manner set forth in the Final Memorandum.
In connection with the sale of the Securities, the Issuers
have prepared a preliminary offering memorandum dated February 2, 2004 (the
"Preliminary Memorandum") and a final offering memorandum dated February 12,
2004 (the "Final Memorandum"; the Preliminary Memorandum and the Final
Memorandum each herein being referred to as a "Memorandum")
setting forth or including, among other things, a description of the terms of
the Securities, the terms of the offering of the Securities, and a description
of the Company and the Guarantor.
In connection with the offering of the Securities, the
Company, the Guarantor and certain other Subsidiaries (as defined below),
LaSalle Bank N.A., as agent and the lenders thereunder will enter into an
amendment to the Company's existing revolving credit agreement (the "Credit
Agreement"). Concurrently with the offering of the Securities, the Company will
sell (the "CVC Sale") $19,400,000 aggregate principal amount of its 8% Senior
Subordinated Notes due 2012, Series A (the "CVC Notes"), issued under the
Indenture, to CVC Capital Funding, LLC.
The Initial Purchasers and their direct and indirect
transferees of the Securities will be entitled to the benefits of the
Registration Rights Agreement to be dated as of the Closing Date (as defined in
Section 3 below) (the "Registration Rights Agreement"), pursuant to which the
Issuers will agree, among other things, 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 notes (the "Exchange Notes," which term includes the
related guarantee of the Subsidiary Guarantor) to be offered in exchange (the
"Exchange Offer") for the Notes and (ii) as and to the extent required by the
Registration Rights Agreement, to file with the Commission 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 Notes, and to use
their best efforts to cause such Registration Statements to be declared
effective in accordance with the provisions of the Registration Rights
Agreement. This Purchase Agreement (this "Agreement"), the Notes, the Guarantee,
the Exchange Notes and related guarantee, the Private Exchange Notes (as defined
in the Registration Rights Agreement) and related guarantee, the Indenture and
the Registration Rights Agreement are hereinafter referred to collectively as
the "Operative Documents."
2. Representations and Warranties. The Company
represents and warrants to and agrees with each of the Initial Purchasers as
follows:
(a) Neither the Preliminary Memorandum as of the date
thereof nor the Final Memorandum nor any amendment or supplement
thereto as of the date thereof and at the Closing Date (as defined in
Section 3 below) (it being understood that references to the Final
Memorandum herein, to the extent deemed made after the date of the
Final Memorandum, are to the Final Memorandum, as supplemented as of
the date of such reference, only) contained or will contain any untrue
statement of a material fact or omitted or omits to state a material
fact 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 set forth in this Section 2(a) do
not apply to statements or omissions made in reliance upon and in
conformity with information relating to either of the Initial
Purchasers furnished to the Company in writing by the Initial
Purchasers expressly for use in the Preliminary Memorandum, the Final
Memorandum or any amendment or supplement thereto.
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(b) All of the subsidiaries of the Company are listed in
Schedule 2 attached hereto (each, a "Subsidiary" and collectively, the
"Subsidiaries"); all of the outstanding shares of capital stock of the
Company and the Subsidiaries have been, and as of the Closing Date will
be, duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights; except as set forth in the Final Memorandum, there are
no (i) options, warrants or other rights to purchase, (ii) agreements
or other obligations to issue or (iii) other rights to convert any
obligation into, or exchange any securities for, shares of capital
stock of or ownership interests in the Company or any of the
Subsidiaries outstanding. Except for immaterial holdings of less than
one percent of such other entities that had an aggregate market value
as of February 11, 2004, of less than $75,000, and for the Subsidiaries
or as disclosed in the Final Memorandum, the Company does not own,
directly or indirectly, any shares of capital stock or any other equity
or long-term debt securities or have any equity interest in any firm,
partnership, joint venture or other entity.
(c) Each of the Company and the Subsidiaries is duly
incorporated or otherwise organized, validly existing and in good
standing under the laws of its respective jurisdiction of organization
and has all requisite corporate or other organizational power and
authority to own or lease its properties and conduct its business as
now conducted and as described in the Final Memorandum; each of the
Company and the Subsidiaries is duly qualified to do business as a
foreign corporation or entity in good standing in all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified or in good standing could not, individually
or in the aggregate, reasonably be expected to result in a material
adverse effect on the business, condition (financial or otherwise), or
results of operations of the Company and the Subsidiaries, taken as a
whole, whether or not arising in the ordinary course of business (any
such event, a "Material Adverse Effect").
(d) The Company has all requisite corporate power and
authority to execute, deliver and perform each of its obligations under
the Operative Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby, including, without
limitation, the power and authority to issue, sell and deliver the
Securities as contemplated by this Agreement. The Notes, when issued,
will be in the form contemplated by the Indenture. The Notes, the
Exchange Notes and the Private Exchange Notes have each been duly
authorized by the Company and, when executed by the Company and
authenticated by the Trustee in accordance with the provisions of the
Indenture and, in the case of the Notes, when delivered to and paid for
by the Initial Purchasers in accordance with the terms of this
Agreement, will constitute valid and binding obligations of the
Company, entitled to the benefits of the Indenture, and enforceable
against the Company in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent transfer, conveyance, voidable preference,
moratorium or other similar laws, regulations or judicial opinions of
general applicability now or hereafter in effect relating to or
affecting creditors' rights and remedies generally, and (ii) general
principles of equity (whether such principals are consid-
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ered in a proceeding at law or equity) and the discretion of the court
before which any proceeding therefor may be brought.
(e) The Guarantor has all requisite corporate power and
authority to execute, deliver and perform each of its obligations under
the Operative Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby, including, without
limitation, the power and authority to issue, sell and deliver the
Guarantee as contemplated by this Agreement. The Guarantee, when
issued, will be in the form contemplated by the Indenture. The
Guarantee and the guarantees of the Exchange Notes and the Private
Exchange Notes have each been duly authorized by the Guarantor and,
when executed by the Guarantor and authenticated by the Trustee in
accordance with the provisions of the Indenture and, in the case of the
Guarantee, when delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, will constitute valid and
binding obligations of the Guarantor, entitled to the benefits of the
Indenture, and enforceable against the Guarantor in accordance with
their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent transfer,
conveyance, voidable preference, moratorium or other similar laws,
regulations or judicial opinions of general applicability now or
hereafter in effect relating to or affecting creditors' rights and
remedies generally, and (ii) general principles of equity (whether such
principals are considered in a proceeding at law or equity) and the
discretion of the court before which any proceeding therefor may be
brought.
(f) The Issuers have all requisite corporate power and
authority to execute, deliver and perform their obligations under the
Indenture. The Indenture meets the requirements for qualification under
the Trust Indenture Act of 1939, as amended (the "TIA"). The Indenture
has been duly authorized by the Issuers and, when executed and
delivered by the Issuers (assuming the due authorization, execution and
delivery by the Trustee), will constitute a valid and binding agreement
of the Issuers, enforceable against the Issuers in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent transfer,
conveyance, voidable preference, moratorium or other similar laws,
regulations or judicial opinions of general applicability now or
hereafter in effect relating to or affecting creditors' rights and
remedies generally, and (ii) general principles of equity (whether such
principals are considered in a proceeding at law or equity) and the
discretion of the court before which any proceeding therefor may be
brought.
(g) The Issuers have all requisite corporate power and
authority to execute, deliver and perform their obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly authorized by the Issuers and, when executed and delivered by
the Issuers (assuming the due authorization, execution and delivery by
the Initial Purchasers), will constitute a valid and binding agreement
of the Issuers, enforceable against the Issuers in accordance with its
terms, except that (A) the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent transfer,
conveyance, voidable preference, moratorium or other similar laws,
regulations or judicial opinions of general applicability now or
hereafter in effect relating to or af-
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fecting creditors' rights and remedies generally, and (ii) general
principles of equity (whether such principals are considered in a
proceeding at law or equity) and the discretion of the court before
which any proceeding therefor may be brought and (B) any rights to
indemnity or contribution thereunder may be limited by federal and
state securities laws and public policy considerations.
(h) The Issuers have all requisite corporate power and
authority to execute, deliver and perform their obligations under this
Agreement and to consummate the transactions contemplated hereby. This
Agreement and the consummation by the Issuers of the transactions
contemplated hereby have been duly authorized by the Issuers. This
Agreement has been duly executed and delivered by the Issuers.
(i) The Credit Agreement, substantially in the form most
recently delivered to the Initial Purchasers prior to the date of this
Agreement, has been duly authorized by the Company, the Guarantor and
the other Subsidiaries party thereto and, when duly executed and
delivered by the Company, the Guarantor and the other Subsidiaries
party thereto, will be the valid and binding obligation of the Company,
the Guarantors and other Subsidiaries party thereto, enforceable
against each of them in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought.
(j) No consent, approval, authorization or order of any
court or governmental agency or body, or third party is required for
(i) the issuance and sale by the Company of the Notes to the Initial
Purchasers or the consummation by the Company of the other transactions
contemplated hereby or by any of the other Operative Documents or (ii)
the issuance by the Guarantor of the Guarantee or the consummation by
the Guarantor of the other transactions contemplated hereby or by any
of the Operative Documents, except with respect to both (i) and (ii)
(a) such as may be required under state securities or "Blue Sky" laws
in connection with the purchase and resale of the Notes and Guarantee
by the Initial Purchasers in the manner contemplated herein and in the
Final Memorandum and in the Registration Rights Agreement, (b) with
respect to the registration of the Notes or Exchange Notes under the
Act pursuant to the Registration Rights Agreement (including any order
by the Commission declaring any Registration Statement under the
Registration Rights Agreement effective), (c) the qualification of the
Indenture under the Trust Indenture Act of 1939, as amended (the "TIA")
and (d) for the failure to receive any consent, approval, authorization
or order, which failure could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. None of
the Company or the Guarantor is (i) in violation of its certificate of
incorporation or bylaws (or similar organizational document), (ii) in
breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their respective
properties or assets, except for any such breach or violation that
would not, individually or in the aggregate, have a Material Adverse
Effect, or (iii) in breach of or default under (nor has any event
occurred that, with notice or passage of time or both, would constitute
a de-
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fault under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, permit, certificate, contract or other
agreement or instrument to which any of them is a party or to which any
of them or their respective properties or assets is subject
(collectively, "Contracts"), except for any such breach, default,
violation or event that would not, individually or in the aggregate,
have a Material Adverse Effect.
(k) The execution, delivery and performance by each of
the Issuers of this Agreement and each of the other Operative Documents
(to the extent such Issuer is a party thereto) and the consummation by
each of the Issuers of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of the Securities
to the Initial Purchasers and the issuance of the Exchange Notes or
Private Exchange Notes in the Exchange Offer or the Private Exchange,
as the case may be) will not conflict with or constitute or result in a
breach of or a default under (or an event that with notice or passage
of time or both would constitute a default under) or violation of any
of (i) the terms or provisions of any Contracts, except for any such
conflict, breach, default, violation or event that could not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, (ii) the articles of incorporation or code of
regulations (or similar organizational document) of the Company or any
of the Subsidiaries or (iii) (assuming compliance with all applicable
state securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section 8
hereof) any statute, judgment, decree, order, rule or regulation
applicable to the Company or any of the Subsidiaries or any of their
respective properties or assets, except for any such conflict, breach
or violation that could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(l) The audited consolidated financial statements of
ERICO Global Company included in the Final Memorandum present fairly in
all material respects the financial position, results of operations and
cash flows of ERICO Global Company at the dates and for the periods to
which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except as
otherwise stated therein. The summary and selected financial and
statistical data in the Final Memorandum present fairly in all material
respects the information shown therein and have been prepared and
compiled on a basis consistent with the audited financial statements
included therein, except as otherwise stated therein. Ernst & Young LLP
(the "Independent Accountants") is an independent public accounting
firm within the meaning of the Act and the rules and regulations
promulgated thereunder.
(m) Except as set forth in the Final Memorandum, there is
not pending or, to the knowledge of the Company or the Guarantor,
threatened any action, suit, proceeding, inquiry or investigation to
which the Company or any of the Subsidiaries is a party, or to which
the property or assets of the Company or any of the Subsidiaries are
subject, before or brought by any court, arbitrator or governmental
agency or body that, if determined adversely to the Company or any of
the Subsidiaries, could, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect or that seeks to
re-
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strain, enjoin, prevent the consummation of or otherwise challenge the
issuance or sale of the Securities to be sold hereunder or the
consummation of the transactions described in the Final Memorandum.
(n) Each of the Company and the Subsidiaries possesses
all licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities, and
all courts and other tribunals, presently required or necessary to own
or lease, as the case may be, and to operate its respective properties
and to carry on its respective businesses as now or proposed to be
conducted as set forth in the Final Memorandum ("Permits"), except
where the failure to possess such Permits could not reasonably be
expected, individually or in the aggregate, to result in a Material
Adverse Effect; each of the Company and the Subsidiaries has fulfilled
and performed all of its obligations with respect to such Permits and
no event has occurred that allows, or after notice or lapse of time
would allow, revocation, termination or termination thereof or results
in any other material impairment of the rights of the holder of any
such Permit and none of the Company or the Subsidiaries has received
any notice of any proceeding relating to revocation or modification of
any such Permit, except as described in the Final Memorandum and except
where such failure to perform, revocation or modification could not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
(o) Since the date of the most recent historical
financial statements appearing in the Final Memorandum, except as
described therein or contemplated thereby (including the $25.0 million
dividend described therein), (i) none of the Company or the
Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into or agreed to enter into any transactions or
contracts (written or oral) not in the ordinary course of business,
which liabilities, obligations, transactions or contracts would,
individually or in the aggregate, be material to the business,
condition (financial or otherwise), or results of operations of the
Company and its Subsidiaries, taken as a whole, (ii) none of the
Company or the Subsidiaries has purchased any of its outstanding
capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock (other than with respect
to any of such Subsidiaries, the purchase of, or dividend or
distribution on, capital stock owned by the Company); (iii) there shall
not have been any material change in the capital stock or long-term
indebtedness of the Company or the Subsidiaries; and (iv) there has not
been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth in the Offering
Memorandum..
(p) Each of the Company and the Subsidiaries has filed
all necessary federal, state and foreign income and franchise tax
returns, except where the failure to so file such returns could not
reasonably be expected to result in a Material Adverse Effect, and has
paid all taxes shown as due thereon, other than taxes that the Company
or any Subsidiary is contesting in good faith and for which the Company
or such Subsidiary has provided adequate reserves, to the knowledge of
the Company and the subsidiaries, no tax defi-
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ciency has been asserted against the Company or any of the Subsidiaries
that could reasonably be expected to result in a Material Adverse
Effect.
(q) The statistical and market-related data included in
the Final Memorandum are based on or derived from sources that the
Company and the Subsidiaries believe to be reliable and accurate or
represent the Company's good faith estimates that are made on the basis
of data derived from such sources.
(r) None of the Company, the Subsidiaries or any agent
acting on their behalf has taken or will take any action that might
cause this Agreement or the sale of the Securities to violate
Regulation T, U or X of the Board of Governors of the Federal Reserve
System, in each case as in effect, or as the same may hereafter be in
effect, on the Closing Date.
(s) Each of the Company and the Subsidiaries has good and
marketable title to all real property and rights in all personal
property described in the Final Memorandum as being owned by it and
good and marketable title to a leasehold estate in the real property
described in the Final Memorandum as being leased by it free and clear
of all liens, charges, encumbrances or restrictions, except (i) for
liens, charges, encumbrances or restrictions under the Company's
existing and amended senior credit facilities as described in the Final
Memorandum, (ii) as would be permitted by the Indenture, (iii) as
described in the Final Memorandum or (iv) to the extent the failure to
have such title or rights or the existence of such liens, charges,
encumbrances or restrictions could not reasonably be expected to result
in, individually or in the aggregate, a Material Adverse Effect. The
Company and the Subsidiaries own or possess adequate licenses or other
rights to use all patents, trademarks, service marks, trade names,
copyrights and know-how necessary to conduct the businesses now or
proposed to be operated by them as described in the Final Memorandum,
and none of the Company or the Subsidiaries has received any notice of
infringement of or conflict with (or knows of any such infringement of
or conflict with) asserted rights of others with respect to any
patents, trademarks, service marks, trade names, copyrights or know-how
that, if such assertion of infringement or conflict were sustained,
could reasonably be expected to result in a Material Adverse Effect.
(t) There are no legal or governmental proceedings
involving or affecting the Company or any Subsidiary or any of their
respective properties or assets that would be required to be described
in a prospectus pursuant to the Act that are not described in the Final
Memorandum.
(u) Except as could not reasonably be expected to result
in, individually or in the aggregate, a Material Adverse Effect (A)
each of the Company and the Subsidiaries is in compliance with and not
subject to liability under applicable Environmental Laws (as defined
below), (B) each of the Company and the Subsidiaries has made all
filings and provided all notices required under any applicable
Environmental Law, and has and is in compliance with all Permits
required under any applicable Environmental Laws and each of them is in
full force and effect, (C) except as described in the Final Memorandum,
there is no unresolved civil, criminal or administrative action, suit,
demand, claim, hear-
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ing, notice of violation, investigation, proceeding, notice or demand
letter or request for information pending or, to the knowledge of the
Company or any of the Subsidiaries, threatened against the Company or
any of the Subsidiaries under any Environmental Law, (D) no lien,
charge, encumbrance or restriction (which would limit industrial or
present uses) has been recorded under any Environmental Law with
respect to any assets, facility or property owned, operated, leased or
controlled by the Company or any of the Subsidiaries, (E) none of the
Company or the Subsidiaries has received notice that it has been
identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), or any comparable state law and (F) no property or
facility of the Company or any of the Subsidiaries is (i) listed or
proposed for listing on the National Priorities List under CERCLA or
(ii) listed in the Comprehensive Environmental Response, Compensation,
Liability Information System List promulgated pursuant to CERCLA, or on
any comparable list maintained by any state or local governmental
authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, laws relating to (i) emissions,
discharges, releases or threatened releases of hazardous materials into
the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport or handling of hazardous materials, and
(iii) underground and aboveground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom.
(v) There is no strike, labor dispute, slowdown or work
stoppage with the employees of the Company or any of the Subsidiaries
that is pending or, to the knowledge of the Company or any of the
Subsidiaries, threatened that could reasonably be expected to result in
a Material Adverse Effect.
(w) Each of the Company and the Subsidiaries carries
insurance in such amounts and covering such risks as it reasonably
believes is adequate for the conduct of its business and the value of
its properties.
(x) Except for the $6.3 million liability related to the
termination of a pension plan as described in the Offering Memorandum,
none of the Company or the Subsidiaries has any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or
other plan that is subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), to which the Company or any of the
Subsidiaries makes or ever has made a contribution and in which any
employee of the Company or of any Subsidiary is or has ever been a
participant except as could not be reasonably expected to result in a
Material Adverse Effect. With respect to such plans, the Company and
each Subsidiary is in compliance in all material respects with all
applicable provisions of ERISA.
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(y) Each of the Company and the Subsidiaries (i) makes
and keeps accurate books and records and (ii) maintains internal
accounting controls that 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 its assets is permitted only in
accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(z) None of the Company or the Subsidiaries will be an
"investment company" or "promoter" or "principal underwriter" for an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder.
(aa) The Notes, the Guarantee, the Indenture, the
Registration Rights Agreement and this Agreement will conform in all
material respects to the descriptions thereof in the Final Memorandum.
(bb) No holder of securities of the Company or any
Subsidiary will be entitled to have such securities registered under
the registration statements required to be filed by the Company
pursuant to the Registration Rights Agreement other than as expressly
permitted thereby.
(cc) Immediately after the consummation of the
transactions contemplated by this Agreement and the Indenture, the fair
value and present fair saleable value of the assets of each of the
Company and the Guarantor (each on a consolidated basis) will exceed
the sum of its stated liabilities and identified contingent
liabilities; none of the Company or the Guarantor (each on a
consolidated basis) is, nor will any of the Company or the Guarantor
(each on a consolidated basis) be, after giving effect to the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, (a) left with
unreasonably small capital with which to carry on its business as it is
proposed to be conducted, (b) unable to pay its debts (contingent or
otherwise) as they mature or (c) otherwise insolvent.
(dd) None of the Company, the Subsidiaries or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under
the Act) has directly, or through any agent (other than through the
Initial Purchasers to which neither the Company nor any of the
Subsidiaries makes any representation or warranty), (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of
any "security" (as defined in the Act) that is or could be integrated
with the sale of the Securities in a manner that would require the
registration under the Act of the Securities or (ii) engaged in any
form of general solicitation or general advertising (as those terms are
used in Regulation D under the Act) in connection with the offering of
the Securities or in any manner involving a public offering within the
meaning of Section 4(2) of the Act. Assuming the accuracy of the
representations and warranties of the Initial Purchasers in Section 8
hereof, it is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Pur-
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chasers in the manner contemplated by this Agreement to register any of
the Securities under the Act or to qualify the Indenture under the TIA.
(ee) No securities of the Company or any Subsidiary are of
the same class (within the meaning of Rule 144A under the Act) as the
Securities and listed on a national securities exchange registered
under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system.
(ff) None of the Company or the Subsidiaries has taken,
nor will any of them take, directly or indirectly (other than through
the Initial Purchasers to which neither the Company nor any of the
Subsidiaries makes any representation or warranty), any action designed
to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Securities.
(gg) None of the Company, the Subsidiaries, any of their
respective Affiliates or any person acting on its or their behalf
(other than the Initial Purchasers to which neither the Company nor any
Subsidiary makes any representation or warranty) has engaged in any
directed selling efforts (as that term is defined in Regulation S under
the Act ("Regulation S")) with respect to the Securities; the Company,
the Subsidiaries and their respective Affiliates and any person acting
on its or their behalf (other than the Initial Purchasers to which
neither the Company nor any Subsidiary makes any representation or
warranty) have complied with the offering restrictions requirement of
Regulation S.
Any certificate signed by any officer of the Company or any
Subsidiary and delivered to any Initial Purchaser or to counsel for the Initial
Purchasers shall be deemed a joint and several representation and warranty by
the Company and each of the Subsidiaries to each Initial Purchaser as to the
matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
and the Guarantor agree to issue and sell to the Initial Purchasers, and the
Initial Purchasers, acting severally and not jointly, agree to purchase the
Notes (including the related Guarantee) in the respective amounts set forth on
Schedule 1 hereto from the Company at 97.0% of their principal amount. One or
more certificates in definitive form for the Notes and the Guarantee that the
Initial Purchasers have agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the Initial Purchasers
request upon notice to the Company at least 36 hours prior to the Closing Date,
shall be delivered by or on behalf of the Company to the Initial Purchasers,
against payment by or on behalf of the Initial Purchasers of the purchase price
therefor by wire transfer (same day funds), to such account or accounts as the
Company shall specify prior to the Closing Date, or by such means as the parties
hereto shall agree prior to the Closing Date. Delivery of the Notes shall be
made through the facilities of The Depository Trust Company, or its designated
custodian, unless the Initial Purchasers shall otherwise instruct. Payment for
the Notes shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 A.M., New York time, on February 20, 2004,
or at such other place, time or date as the Initial Purchasers, on the
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one hand, and the Company, on the other hand, may agree upon, such time and date
of delivery against payment being herein referred to as the "Closing Date."
4. Offering by the Initial Purchasers. The Initial
Purchasers propose to make an offering of the Notes at the price and upon the
terms set forth in the Final Memorandum as soon as practicable after this
Agreement is entered into and as in the judgment of the Initial Purchasers is
advisable.
5. Covenants of the Company. The Company covenants and
agrees with each of the Initial Purchasers as follows:
(a) The Company will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers shall not previously have been advised and furnished a copy
for a reasonable period of time prior to the proposed amendment or
supplement and as to which the Initial Purchasers shall not have given
their consent, which consent shall not be unreasonably withheld. The
Company will promptly, upon the reasonable request of the Initial
Purchasers or counsel for the Initial Purchasers, make any amendments
or supplements to the Preliminary Memorandum or the Final Memorandum
that may be necessary or advisable in connection with the resale of the
Securities by the Initial Purchasers.
(b) The Company and the Guarantor will cooperate with the
Initial Purchasers in arranging for the qualification of the Securities
for offering and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Initial Purchasers may designate and will continue
such qualifications in effect for as long as may be necessary to
complete the resale of the Notes by the Initial Purchasers; provided,
however, that in connection therewith, neither the Company nor the
Guarantor shall be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction or
subject itself to taxation in excess of $1,000 in any such jurisdiction
where it is not then so subject.
(c) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Notes, the Exchange Notes
or the Private Exchange Notes, any event occurs or information becomes
known as a result of which the Final Memorandum as then amended or
supplemented would include any untrue statement of a material fact, or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or if for any other reason it is necessary at any time to
amend or supplement the Final Memorandum to comply with applicable law,
the Company and the Guarantor will promptly notify the Initial
Purchasers thereof and will prepare, at the expense of the Company, an
amendment or supplement to the Final Memorandum that corrects such
statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the
Initial Purchasers and to counsel for the Initial Purchasers as many
copies of the Preliminary Memorandum and
-12-
the Final Memorandum or any amendment or supplement thereto as the
Initial Purchasers may reasonably request.
(e) The Company will apply the net proceeds from the sale
of the Notes as set forth under "Use of Proceeds" in the Final
Memorandum.
(f) For so long as any of the Securities remain
outstanding, the Company will furnish to the Initial Purchasers copies
of all reports and other communications (financial or otherwise)
furnished by the Company to the Trustee or to the holders of the
Securities and, as soon as available, copies of any reports or
financial statements furnished to or filed by the Company with the
Commission or any national securities exchange on which any class of
securities of the Company may be listed, except to the extent such
reports or financial statements are available on the Commission's
website or, if the Company has advised the Initial Purchasers of the
website where available, otherwise through the Internet free of charge.
(g) Prior to the Closing Date, the Company will furnish
to the Initial Purchasers at their request, as soon as they have been
completed, a copy of any unaudited interim financial statements of the
Company for any period subsequent to the period covered by the most
recent financial statements appearing in the Final Memorandum.
(h) None of the Issuers or any of their Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) that could be
integrated with the sale of the Securities in a manner which would
require the registration under the Act of the Securities.
(i) The Issuers will not, and will not permit any of the
Subsidiaries to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) in
connection with the offering of the Securities or in any manner
involving a public offering within the meaning of Section 4(2) of the
Act.
(j) For so long as any of the Securities remain
outstanding, the Company will make available at its expense, upon
request, to any holder of such Securities and any prospective
purchasers thereof the information specified in Rule 144A(d)(4) under
the Act, unless the Company is then subject to Section 13 or 15(d) of
the Exchange Act.
(k) The Issuers will use their reasonable best efforts to
(i) permit the Securities to be designated as PORTAL-eligible
securities in accordance with the rules and regulations adopted by the
NASD relating to trading in the NASD's Portal Market (the "Portal
Market") and (ii) permit the Securities to be eligible for clearance
and settlement through The Depository Trust Company.
(l) In connection with Securities offered and sold in an
offshore transaction (as defined in Regulation S) the Company will not
register any transfer of such Securities not made in accordance with
the provisions of Regulation S and will not, except in accor-
-13-
dance with the provisions of Regulation S, if applicable, issue any
such Securities in the form of definitive securities.
(m) None of the Issuers or any of their Affiliates will
engage in any directed selling efforts (as that term is defined in
Regulation S) with respect to the Securities.
(n) For a period ending the earlier of completion of the
Exchange Offer under the Registration Rights Agreement or two years
(calculated in accordance with paragraphs (d) of Rule 144 under the
Act) following the date any Securities are acquired from the Issuers or
any of their Affiliates, none of the Issuers or any of their Affiliates
will sell any such Securities that were issued on the Closing Date.
6. Expenses. The Company and the Guarantor agree to pay
all costs and expenses incident to the performance of their obligations under
this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses incident to (i) the printing, word processing
or other production of documents with respect to the transactions contemplated
hereby, including any costs of printing the Preliminary Memorandum and the Final
Memorandum and any amendment or supplement thereto, and any "Blue Sky"
memoranda, (ii) all arrangements relating to the delivery to the Initial
Purchasers of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company or the Guarantor, (iv) preparation (including printing),
issuance and delivery to the Initial Purchasers of the Securities, (v) the
qualification of the Securities under state securities and "Blue Sky" laws,
including filing fees and reasonable fees and disbursements of counsel for the
Initial Purchasers relating thereto; provided, that such fees and expenses of
counsel shall not exceed $5,000, (vi) expenses in connection with the "roadshow"
and any other meetings with prospective investors in the Securities (provided
that the expense of any private aircraft chartered with respect to such
"roadshow" meetings shall be borne 50% by the Company and 50% by the Initial
Purchasers), (vii) fees and expenses of the Trustee including fees and expenses
of counsel for the Trustee, (viii) all expenses and listing fees incurred in
connection with the application for quotation of the Securities on the Portal
Market and (ix) any fees charged by investment rating agencies for the rating of
the Securities. If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated or because of any failure, refusal or inability on the part of the
Company or the Guarantor to perform all obligations and satisfy all conditions
on its part to be performed or satisfied hereunder (other than solely by reason
of a default by the Initial Purchasers of their obligations hereunder after all
conditions hereunder have been satisfied in accordance herewith), the Company
and the Guarantor agree to promptly reimburse the Initial Purchasers upon demand
for all out-of-pocket expenses (including reasonable fees, disbursements and
charges of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Initial Purchasers) that
shall have been incurred by the Initial Purchasers in connection with the
proposed purchase and sale of the Securities. It is understood, however, that
except as provided herein, the Initial Purchasers will pay for their own
expenses, including the fees of their counsel, any transfer taxes on the resale
of any Notes by them and any expenses connected with any offers they may make.
-14-
7. Conditions of the Initial Purchasers' Obligations.
The obligation of the Initial Purchasers to purchase and pay for the Securities
shall, in their sole discretion, be subject to the satisfaction or waiver of the
following conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall
have received the opinions, dated as of the Closing Date and addressed
to the Initial Purchasers, of (i) ▇▇▇▇▇ Day, counsel for the Company
and the Guarantor in substantially the form of Exhibit A attached
hereto and (ii) the General Counsel or Associate General Counsel of the
Company and the Guarantor, in form and substance satisfactory to
counsel for the Initial Purchasers.
(b) On the Closing Date, the Initial Purchasers shall
have received the opinion, in form and substance reasonably
satisfactory to the Initial Purchasers, dated as of the Closing Date
and addressed to the Initial Purchasers, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, counsel for the Initial Purchasers, with respect to certain legal
matters relating to this Agreement and such other related matters as
the Initial Purchasers may reasonably require. In rendering such
opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP shall have received and may rely
upon such certificates and other documents and information as it may
reasonably request to pass upon such matters.
(c) The Initial Purchasers shall have received from the
Independent Accountants a comfort letter or letters dated the date
hereof and the Closing Date, in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
(d) The representations and warranties of the Issuers
contained in this Agreement shall be true and correct on and as of the
date hereof and on and as of the Closing Date as if made on and as of
the Closing Date; the statements of the Issuers' officers made pursuant
to any certificate delivered in accordance with the provisions hereof
shall be true and correct in all material respects on and as of the
date made and on and as of the Closing Date; the Company and the
Guarantor shall have performed in all material respects all covenants
and agreements and satisfied all conditions in all material respects on
their part to be performed or satisfied hereunder at or prior to the
Closing Date; and, except as described in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), subsequent to the date of the most recent financial statements
in such Final Memorandum, there shall have been no event or
development, and no information shall have become known with respect to
the business condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries, taken as a whole, that
has or could reasonably be expected to result in a Material Adverse
Effect.
(e) The sale of the Securities hereunder shall not be
enjoined (temporarily or permanently) on the Closing Date.
(f) Subsequent to the date of the most recent historical
financial statements in the Final Memorandum (exclusive of any
amendment or supplement thereto after the date hereof), none of the
Company or any of the Subsidiaries shall have sustained any loss or
interference with respect to its business or properties from fire,
flood, hurricane, accident
-15-
or other calamity, whether or not covered by insurance, or from any
strike, labor dispute, slowdown or work stoppage or from any legal or
governmental proceeding, order or decree, which loss or interference
has or could reasonably be expected to result in, individually or in
the aggregate, a Material Adverse Effect.
(g) The Initial Purchasers shall have received a
certificate from each of the Issuers, dated the Closing Date, signed on
behalf of the Company and the Guarantor by its Chairman of the Board,
President, General Counsel or any Vice President and the Chief
Financial Officer, to the effect that:
(i) The representations and warranties of the
Issuers contained in this Agreement are true and correct in
all material respects on and as of the date hereof and on and
as of the Closing Date, and the Issuers have performed in all
material respects all covenants and agreements and satisfied
all conditions in all material respects on their part to be
performed or satisfied hereunder at or prior to the Closing
Date;
(ii) At the Closing Date, since the date hereof
or since the date of the most recent historical financial
statements in the Final Memorandum (exclusive of any amendment
or supplement thereto after the date hereof), no event or
development has occurred, and no information has become known,
that has or could reasonably be expected to result in a
Material Adverse Effect; and
(iii) The sale of the Securities hereunder has not
been enjoined (temporarily or permanently).
(h) On the Closing Date, the Initial Purchasers shall
have received the Registration Rights Agreement executed by each of the
Issuers and such agreement shall be in full force and effect.
(i) The Company shall have delivered to the Initial
Purchasers a true, correct and complete copy of the Credit Agreement;
the Company, the Guarantor, the other Subsidiaries party thereto and
the other parties thereto shall have executed and delivered the Credit
Agreement, and the Credit Agreement shall be in full force and effect,
subject only to the Closing hereunder and the closing of the CVC Sale.
(j) The Company shall have delivered to the Initial
Purchasers a true, correct and complete copy of the documents governing
the CVC Sale; such documents shall be in full force and effect and the
CVC sale shall have occurred but for the release of the CVC Notes in
the systems of The Depository Trust Company, which shall occur
concurrently with the Closing hereunder (for the avoidance of doubt,
the concurrent issuance of the CVC Notes is a condition to the Initial
Purchasers' obligations hereunder).
(k) The Securities shall be eligible for clearance and
settlement through The Depository Trust Company.
-16-
(l) The Securities shall be designated Portal-eligible
securities in accordance with the rules and regulations of the NASD.
On or before the Closing Date, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such further documents,
opinions, certificates, letters and schedules or instruments relating to the
business, corporate, legal and financial affairs of the Company and the
Subsidiaries as they shall have heretofore reasonably requested from the
Company.
All such documents, opinions, certificates, letters, schedules
or instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchasers and counsel for the Initial Purchasers. The
Issuers shall furnish to the Initial Purchasers conformed copies of such
documents, opinions, certificates, letters, schedules and instruments in such
reasonable quantities as the Initial Purchasers shall reasonably request.
8. Offering of Securities; Restrictions on Transfer. (a)
Each of the Initial Purchasers represents and warrants and agrees with the
Issuers (in each case, as to itself only) that (i) it has not and will not
solicit offers for, or offer or sell, the Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act; and (ii) it has and will solicit offers for the
Securities only from, and will offer the Securities only to, (A) in the case of
offers inside the United States, persons whom the Initial Purchasers reasonably
believe to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchasers that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A and (B) in the case of offers outside the United States, to persons
other than U.S. persons ("non-U.S. purchasers," which term shall include dealers
or other professional fiduciaries in the United States acting on a discretionary
basis for non-U.S. beneficial owners (other than an estate or trust)); provided,
however, that, in the case of this clause (B), in purchasing such Securities
such non-U.S. purchasers are deemed to have represented and agreed as provided
under the caption "Transfer Restrictions" contained in the Final Memorandum (or,
if the Final Memorandum is not in existence, in the most recent Memorandum).
(b) Each of the Initial Purchasers represents and
warrants and agrees (as to itself only) with respect to offers and sales outside
the United States that (i) it has and will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells or delivers
Securities or has in its possession or distributes any Memorandum or any such
other material, in all cases at its own expense; (ii) the Securities have not
been and will 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 under
the Act or pursuant to an exemption from the registration requirements of the
Act; and (iii) it has offered the Securities and will offer and sell the
Securities (A) as part of its distribution at any time and (B) otherwise until
40 days after the later of the commencement of the offering and the Closing
Date, only in accordance with Rule 903 of Regulation S and, accordingly, neither
it nor any persons acting on its behalf have engaged or
-17-
will engage in any directed selling efforts (within the meaning of Regulation S)
with respect to the Securities, and any such persons have complied and will
comply with the offering restrictions requirement of Regulation S.
(c) Each of the Initial Purchasers represents and
warrants (as to itself only) that is a "qualified institutional buyer" within
the meaning of Rule 144A.
Terms used in this Section 8 and not defined in this Agreement
have the meanings given to them in Regulation S.
9. Indemnification and Contribution. (a) The Issuers,
jointly and severally, agree to indemnify and hold harmless each Initial
Purchaser and each person, if any, who controls any Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to which any Initial Purchaser or such
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise in connection with third party claims that
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of
any material fact contained in any Memorandum or any amendment or
supplement thereto; or
(ii) the omission or alleged omission to state, in any
Memorandum or any amendment or supplement thereto, a material fact
necessary to make the statements therein in light of the circumstances
under which they were made, not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any reasonable legal or other expenses incurred by the
Initial Purchasers or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, that the
Issuers will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Memorandum or any amendment or supplement thereto in reliance upon and in
conformity with written information concerning the Initial Purchasers furnished
to the Issuers by the Initial Purchasers through Deutsche Bank Securities Inc.
specifically for use therein; and provided, further, that the Issuers will not
be liable to any Initial Purchaser or any person controlling such Initial
Purchaser with respect to any such untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Memorandum that is
corrected in the Final Memorandum (or any amendment or supplement thereto) if
the person asserting any such loss, claim, damage or liability purchased Notes
from such Initial Purchaser but was not sent or given a copy of the Final
Memorandum (as amended or supplemented), unless such failure to deliver the
Final Memorandum (as amended or supplemented) was a result of noncompliance by
the Issuers with Section 5 hereof. The indemnity provided for in this Section 9
will be in addition to any liability that the Issuers may otherwise have to the
indemnified parties. The Issuers shall not be liable under this Section 9 for
any settlement of any claim or action effected without their prior written
consent, which shall not be unreasonably withheld.
-18-
(b) Each Initial Purchaser, severally and not jointly,
agrees to indemnify and hold harmless the Issuers, their respective directors,
their officers and each person, if any, who controls the Issuers within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to which the Issuers or any such
director, officer or controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise in connection with third party
claims that arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any Memorandum or any
amendment or supplement thereto, or (ii) the omission or the alleged omission to
state in any Memorandum or any amendment or supplement thereto a material fact
necessary to make the statements therein in 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 concerning such Initial Purchaser furnished to the Issuers by such
Initial Purchaser through Deutsche Bank Securities Inc. specifically for use
therein; and subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any reasonable legal or other expenses
incurred by such Issuer or any such director, officer or controlling person in
connection with investigating or defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action in
respect thereof. The indemnity provided for in this Section 9 will be in
addition to any liability that the Initial Purchasers may otherwise have to the
indemnified parties. The Initial Purchasers shall not be liable under this
Section 9 for any settlement of any claim or action effected without their
consent, which shall not be unreasonably withheld.
(c) Promptly after receipt by an indemnified party under
this Section 9 of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section 9, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party of the
commencement thereof in writing; but the omission to so notify the indemnifying
party (i) will not relieve it from any liability under paragraph (a) or (b)
above unless and to the extent such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraphs (a) and
(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 reasonably satisfactory to such indemnified
party; provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then,
-19-
in each such case, the indemnifying party shall not have the right to direct the
defense of such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate counsel to
defend such action on behalf of such indemnified party or parties. After notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable to
such indemnified party under this Section 9 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchasers in the case of paragraph (a) of this
Section 9 or the Issuers in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph (b),
as the case may be, who are parties to such action or actions) or (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. All fees and
expenses reimbursed pursuant to this paragraph (c) shall be reimbursed as they
are incurred. After such notice from the indemnifying party to such indemnified
party, the indemnifying party will not be liable for the costs and expenses of
any settlement of such action effected by such indemnified party without the
prior written consent of the indemnifying party (which consent shall not be
unreasonably withheld), unless such indemnified party waived in writing its
rights under this Section 9, in which case the indemnified party may effect such
a settlement without such consent. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party, or indemnity could have been
sought hereunder by any indemnified party, unless such settlement (A) includes
an unconditional written release of the indemnified party, in form and substance
reasonably satisfactory to the indemnified party, from all liability on claims
that are the subject matter of such proceeding and (B) does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of any indemnified party.
(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 9 is unavailable to, or
insufficient to hold harmless, an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by the Issuers on
the one hand and any Initial Pur-
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chaser on the other shall be deemed to be in the same proportion as the total
proceeds from the offering (before deducting expenses) received by the Issuers
bear to the total discounts and commissions received by such Initial Purchaser.
The relative fault of the parties 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 Issuers on the one hand, or such Initial Purchaser
on the other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Issuers and the Initial Purchasers agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the first sentence of this
paragraph (d). Notwithstanding any other provision of this paragraph (d), no
Initial Purchaser shall be obligated to make contributions hereunder that in the
aggregate exceed the total discounts, commissions and other compensation
received by such Initial Purchaser under this Agreement, less the aggregate
amount of any damages that such Initial Purchaser has otherwise been required to
pay by reason of the untrue or alleged untrue statements or the omissions or
alleged omissions to state a material fact, and 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. For purposes of this paragraph (d), each person, if any, who
controls an Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial Purchasers, and each director of either of the Issuers, each officer of
either of the Issuers and each person, if any, who controls either of the
Issuers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as either the Issuers.
10. Survival Clause. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Issuers, their officers and the Initial Purchasers set forth in this Agreement
or made by or on behalf of them pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Issuers, any of their officers or directors, the Initial Purchasers or any
controlling person referred to in Section 9 hereof and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 6, 9, 10 and 15 hereof shall remain
in full force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination. (a) This Agreement may be terminated in
the reasonable discretion of the Initial Purchasers by notice to the Issuers
given prior to the Closing Date in the event that the Issuers shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
their part to be performed or satisfied hereunder at or prior thereto or, if at
or prior to the Closing Date:
(i) any of the Company or the Subsidiaries shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor
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dispute, slowdown or work stoppage or any legal or governmental
proceeding, which loss or interference, in the reasonable judgment of
the Initial Purchasers, has had or has a Material Adverse Effect, or
there shall have been, in the reasonable judgment of the Initial
Purchasers, any event or development that, individually or in the
aggregate, has or could be reasonably likely to have a Material Adverse
Effect (including without limitation a change in control of the Company
or the Subsidiaries), except in each case as described in the Final
Memorandum (exclusive of any amendment or supplement thereto);
(ii) a banking moratorium shall have been declared by New
York or United States authorities or a material disruption in
commercial banking or securities settlement or clearance services in
the United States;
(iii) there shall have been (A) an outbreak of hostilities
or escalation of existing hostilities between the United States and any
foreign power, or (B) an outbreak of insurrection or armed conflict or
escalation of any other existing insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States which, in the case of (A), (B) or (C)
above and in the reasonable judgment of the Initial Purchasers, makes
it impracticable or inadvisable to proceed with the offering or the
delivery of the Notes as contemplated by the Final Memorandum; or
(iv) any securities of the Company shall have been
downgraded by any nationally recognized statistical rating organization
or any such organization shall have publicly announced that it has
under surveillance or review, or has changed its outlook with respect
to, its ratings of any securities of the Company (other than an
announcement with positive implications of a possible upgrading).
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other party except as
provided in Section 10 hereof.
12. Information Supplied by the Initial Purchasers. The
statements set forth in the last paragraph on the front cover page and in the
second, third and fourth sentences of the sixth paragraph under the heading
"Private Placement" in the Final Memorandum (to the extent such statements
relate to the Initial Purchasers) constitute the only information furnished by
the Initial Purchasers to the Company for the purposes of Sections 2(a) and 9
hereof.
13. Notices. All communications hereunder shall be in
writing and, if sent to the Initial Purchasers, shall be mailed or delivered to
Deutsche Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Finance Department; if sent to the Company, shall be mailed
or delivered to the Company at ERICO International Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel; with a copy to
▇▇▇▇▇ Day, North Point, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the
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mail, postage prepaid, if mailed; and one business day after being timely
delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the benefit
of and be binding upon the Initial Purchasers, the Issuers and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Issuers contained in Section 9 of this Agreement shall
also be for the benefit of any person or persons who control the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Issuers, their respective officers and any person or persons who control
either of the Issuers within the meaning of Section 15 of the Act or Section 20
of the Exchange Act. No purchaser of Securities from the Initial Purchasers will
be deemed a successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF
THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO
ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and the Initial Purchasers.
Very truly yours,
ERICO INTERNATIONAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Counsel and Secretary
ERICO PRODUCTS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Counsel and Secretary
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
DEUTSCHE BANK SECURITIES INC.
On behalf of the several Initial Purchasers
listed on Schedule 1 hereto.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
SCHEDULE 1
Principal
Amount
Initial Purchaser of Securities
----------------- -------------
Deutsche Bank Securities Inc. ......................... $ 70,275,600
▇.▇. ▇▇▇▇▇▇ Securities Inc............................. $ 46,850,400
ABN AMRO Incorporated.................................. $ 2,053,350
NatCity Investments, Inc............................... $ 1,287,900
McDonald Investments Inc............................... $ 1,032,750
-------------
Total........................................ $ 121,500,000
SCHEDULE 2
SUBSIDIARIES OF THE COMPANY
NAME JURISDICTION OF INCORPORATION
ERICO Global Company Delaware
ERICO Holding Company Ohio
ERICO International Corporation Ohio
ERICO Products, Inc. Ohio
ERICO Mexico, S.A. Mexico
ERICO Canada Inc. Canada
ERICO do Brasil Commercio E. Industrial Ltda. Brazil
ERICO Chile Commercial Industrial Ltda. Chile
ERICO del Pacifico Ltda. Chile
ERICO Products Australia Pty. Limited Australia
ERICO Cadweld (Asia) Ltd. Hong Kong
ERICO Lightning Technologies Pty. Ltd. Australia
ERICO Lightning Technology Kowloon Limited Hong Kong
ERICO Pacific Ltd. Taiwan
ERICO Europe Holding B.V. Netherlands
ERICO GmbH Germany
ERICO Italia S.r.l. Italy
ERICO B.V. Netherlands
ERICO Europe B.V. Netherlands
Productos ERICO S.A. Spain
ERICO Eruopa Ltd. (G.B.) United Kingdom
ERICO France SARL France
ERICO SARL France
ERICO Benelux B.v.b.a. Belgium
ERICO Products A.G. Switzerland
ERIFIX B.V.* (Inactive) Netherlands
Netherlandse Aardelektroden Netherlands
ERICO Poland SP. Z.O.O. Poland
EUROSTRUT B.V. Netherlands
ERICO Lightning Protection (G.B.) Limited United Kingdom
Beta Earthing (Pty) Limited South Africa
ERICO Technologies Africa (Pty) Limited South Africa
CADWELD (Pty) Ltd. South Africa
