1
EXHIBIT 4.2
$100,000,000
WALBRO CORPORATION
10 1/8% SENIOR NOTES DUE 2007
PURCHASE AGREEMENT
December 11, 1997
SALOMON BROTHERS INC
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Walbro Corporation, a Delaware corporation (the "Company"), proposes, upon
the terms and conditions set forth herein, to issue and sell to Salomon
Brothers Inc. (the "Initial Purchaser"), $100,000,000 aggregate principal
amount of its 10 1/8% Senior Notes due 2007 (the "Senior Notes"). The Senior
Notes will be issued pursuant to the provisions of an indenture, to be dated as
of December 15, 1997 (the "Indenture"), among the Company, the Guarantors (as
defined herein) and Bankers Trust Company, as trustee (the "Trustee").
Initially, the Senior Notes will be guaranteed (the "Guarantees" and,
together with the Senior Notes, the "Securities") on a senior unsecured basis
by each of Walbro Automotive Corporation, Walbro Engine Management Corporation,
▇▇▇▇▇▇ Manufacturing Co. and ▇▇▇▇▇▇▇▇▇ Engineering Products, Inc.
(collectively, the "Guarantors" and, together with the Company, the "Issuers").
This Agreement, the Indenture, the Securities and the Registration Rights
Agreement (as defined herein) are herein collectively referred to as the
"Transaction Documents."
The Issuers wish to confirm as follows their agreement with the Initial
Purchaser in connection with the purchase and resale of the Securities.
1. Preliminary Offering Memorandum and Offering Memorandum. The
Securities will be offered and sold to the Initial Purchaser without
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on an exemption pursuant to Section 4(2) under the Act. The Company
has prepared a preliminary offering memorandum, dated November 24,
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1997 (the "Preliminary Offering Memorandum"), and an offering memorandum, dated
December 11, 1997 (the "Offering Memorandum"), setting forth information
regarding the Issuers and the Securities. Unless stated herein to the
contrary, all references herein to the Offering Memorandum are to the Offering
Memorandum at the date hereof and are not meant to include any supplement or
amendment subsequent thereto. The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchaser.
The Issuers understand that the Initial Purchaser proposes to make offers
and sales (the "Exempt Resales") of the Securities purchased by the Initial
Purchaser hereunder only on the terms and in the manner set forth in the
Offering Memorandum and Section 2 hereof, as soon as the Initial Purchaser
deems advisable after this Agreement has been executed and delivered, (i) to
persons in the United States whom the Initial Purchasers reasonably believe to
be qualified institutional buyers ("Qualified Institutional Buyers") as
defined in Rule 144A under the Act, as such rule may be amended from time to
time ("Rule 144A"), in transactions under Rule 144A and (ii) outside the United
States to persons other than U.S. persons in reliance upon Regulation S
("Regulation S") under the Act (such persons specified in clauses (i) and (ii)
being referred to herein as the "Eligible Purchasers"). As used herein the
terms "United States" and "U.S. persons" have the meaning given them in
Regulation S.
It is understood and acknowledged that upon original issuance thereof, and
until such time as the same is no longer required under the applicable
requirements of the Act, each of the Securities (and each security issued in
exchange therefor or in substitution thereof) shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY
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RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES
TO PERSONS OTHER THAN U.S. PERSONS IN OFFSHORE TRANSACTIONS MEETING THE
REQUIREMENTS OF RULE 904 UNDER REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
It is also understood and acknowledged that holders (including subsequent
transferees) of the Securities will have the registration rights set forth in
the registration rights agreement (the "Registration Rights Agreement")
substantially in the form attached hereto as Exhibit A, to be dated the date
hereof by and among the Issuers and the Initial Purchaser.
2. Agreements to Sell, Purchase and Resell.
(a) The Issuers hereby agree, subject to all the terms and conditions set
forth herein, to issue and sell to the Initial Purchaser and, upon the basis of
the representations, warranties and agreements of the Issuers herein contained
and subject to all the terms and conditions set forth herein, the Initial
Purchaser agrees to purchase from the Issuers all of the Senior Notes at a
purchase price of 97.5% of the principal amount thereof.
(b) The Initial Purchaser represents and warrants to the Issuers that it
is a Qualified Institutional Buyer and has advised the Issuers that it proposes
to offer the Securities for sale upon the terms and conditions set forth in
this Agreement and in the Offering Memorandum. The Initial Purchaser hereby
represents and warrants to, and agrees with, the Issuers that the Initial
Purchaser (i) will not solicit offers for, or offer to sell, the Securities by
means of any form of general
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solicitation or general advertising or in any manner involving a public
offering within the meaning of Section 4(2) of the Act (including, but not
limited to, (A) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, or (B) any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising; provided, however,
that such limitation shall not preclude the Initial Purchaser from placing any
tombstone announcement with respect to the resale by the Initial Purchaser of
the Securities, provided that such announcement is not prohibited by Regulation
S), and (ii) will solicit offers for the Securities only from, and will
offer, sell or deliver the Securities as part of its initial offering, only to
(A) persons in the United States whom the Initial Purchaser reasonably
believes to be Qualified Institutional Buyers, 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
Purchaser that each such account is a Qualified Institutional Buyer, to whom
notice has been given that such sale or delivery is being made in reliance on
Rule 144A, in each case, in transactions under Rule 144A and (B) outside the
United States to persons other than U.S. persons in reliance on Regulation S.
The Initial Purchaser has advised the Issuers that it will offer the Securities
to Eligible Purchasers at a price initially equal to 100% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance of the
Securities.
(c) The Initial Purchaser represents and warrants that (i) it has not
offered or sold, and will not offer or sell, directly or indirectly, any of the
Securities in the United Kingdom by means of any document, other than to
persons whose ordinary business it is to buy or sell shares or debentures
whether as principal or agent (except in circumstances which do not constitute
an offer to the public within the meaning of the Companies Act of 1985), (ii)
it has complied with and will comply with all applicable provisions of the
Financial Services Act of 1986 with respect to anything done by the Initial
Purchaser in relation to the Securities in, from or otherwise involving the
United Kingdom and (iii) it has only issued or passed on and will only issue or
pass on in or from the United Kingdom to any persons any document received by
the Initial Purchaser in connection with the issue of the Securities if the
recipient is of a kind described in Article 9(3) of the Financial Services Act
of 1986 (Investment Advertisements) (Exemptions) Order 1988, as amended.
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(d) The Initial Purchaser represents and warrants that with respect to
Securities offered and sold or to be offered and sold pursuant to Regulation S
it has offered and sold the Securities and agrees that it will offer and sell
the Securities (i) as part of its initial distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering of
the Securities and the Closing Date (as defined herein), only in accordance
with Rule 903 of Regulation S or as otherwise permitted pursuant to paragraph
(c) above. Accordingly, the Initial Purchaser represents and agrees that with
respect to Securities offered and sold or to be offered and sold pursuant to
Regulation S none of the Initial Purchaser, its affiliates or any persons
acting on its behalf or on behalf of its affiliates has engaged or will engage
in any directed selling efforts in the United States with respect to the
Securities, and it and its affiliates have complied and will comply with the
offering restrictions requirements of Regulation S. The Initial Purchaser
agrees that, at or prior to confirmation of any sale of Securities pursuant to
Regulation S, it will have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases such Securities
from the Initial Purchaser 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, as amended (the "Act"), and
may not be offered and sold within the United States or to, or
for the account or benefit of, U.S. persons (i) as part of
their initial distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering
and the Closing Date, except in either case in accordance with
Regulation S or Rule 144A under the Act. Terms used above
have the respective meanings given to them in Regulation S
under the Act."
The Initial Purchaser understands that the Issuers and, for the purposes
of the opinions to be delivered to the Initial Purchaser pursuant to Section
7(d) and 7(e) hereof, counsel to the Issuers and counsel to the Initial
Purchaser, will rely upon the accuracy and truth of the foregoing
representations and agreements and the Initial Purchaser hereby consents to
such reliance.
3. Delivery of the Securities and Payment Therefor. Delivery to the
Initial Purchaser of and payment for the Secu-
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rities shall be made at the office of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, at 9:00 A.M.,
New York City time, on December 16, 1997 (the "Closing Date"). The place of
closing for the Securities and the Closing Date may be varied by agreement
between the Initial Purchaser and the Issuers.
The Securities will be delivered to the Initial Purchaser against payment
of the purchase price therefor by federal funds certified check of immediately
available funds payable in accordance with written instructions from the
Company. The Securities will be evidenced by a single global security (the
"Global Security") and/or by additional certificated securities, and will be
registered, in the case of a Global Security, in the name of Cede & Co. as
nominee of The Depository Trust Company ("DTC"), and in the other cases, in
such names and in such denominations as the Initial Purchaser shall request
prior to 1:00 p.m., New York City time, on the third business day preceding the
Closing Date. The Securities to be delivered to the Initial Purchaser shall be
made available to the Initial Purchaser in New York City for inspection and
packaging not later than 9:30 a.m., New York City time, on the business day
next preceding the Closing Date.
4. Agreements of the Issuers. The Issuers agree with the Initial
Purchaser as follows:
(a) Until the completion of the distribution of the Securities by
the Initial Purchaser to Eligible Purchasers, the Issuers will advise the
Initial Purchaser promptly and, if requested by it, will confirm such
advice in writing, of any change in the condition (financial or other),
business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries (as defined herein), taken as a whole,
or of the happening of any event or the existence of any condition which
requires any amendment or supplement to the Offering Memorandum (as then
amended or supplemented) so that the Offering Memorandum (x) will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or (y) will comply with applicable law.
(b) The Issuers will furnish to the Initial Purchaser, without
charge, such number of copies of the Offering Memorandum, as may then be
amended or supplemented, as it may reasonably request.
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(c) The Issuers will not make any amendment or supplement to the
Preliminary Offering Memorandum or to the Offering Memorandum of which
the Initial Purchaser shall not previously have been advised or to which
it shall object after being so advised.
(d) Prior to the execution and delivery of this Agreement, the
Issuers have delivered or will deliver to the Initial Purchaser, without
charge, in such reasonable quantities as the Initial Purchaser shall have
requested or may hereafter request, copies of the Preliminary Offering
Memorandum. The Issuers consent to the use, in accordance with the
securities or Blue Sky laws of the jurisdictions in which the Securities
are offered by the Initial Purchaser and by dealers, prior to the date of
the Offering Memorandum, of each Preliminary Offering Memorandum so
furnished by the Issuers. The Issuers consent to the use of the Offering
Memorandum (and of any amendment or supplement thereto prepared in
accordance with Section 4(c)) in accordance with the securities or Blue
Sky laws of the jurisdictions in which the Securities are offered by the
Initial Purchaser and by all dealers to whom Securities may be sold, in
connection with the offering and sale of the Securities.
(e) If, at any time prior to completion of the distribution of the
Securities by the Initial Purchaser to Eligible Purchasers, any event
shall occur or condition shall exist that in the judgment of the Issuers
or in the opinion of the Initial Purchaser requires any amendment or
supplement to the Offering Memorandum (as then amended or supplemented)
so that the Offering Memorandum (x) will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (y) will
comply with applicable law, the Issuers will, in each such case subject
to Section 4(c), forthwith prepare an appropriate supplement or amendment
thereto, and will expeditiously furnish to the Initial Purchaser and
dealers that number of copies thereof as they shall reasonably request.
(f) The Issuers will cooperate with the Initial Purchaser and with
its counsel in connection with the qualification of the Securities for
offering and sale by the Initial Pur-
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chaser and by dealers under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchaser may designate and will file such
consents to service of process or other documents necessary or
appropriate in order to effect such qualification; provided that in no
event shall any of the Issuers be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action
which would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) So long as any of the Securities are outstanding, the Issuers
will furnish to the Initial Purchaser (i) as soon as available, a copy of
each report of the Issuers mailed to stockholders or filed with the
Securities and Exchange Commission (the "Commission"), and (ii) from time
to time such other information concerning the Issuers as the Initial
Purchaser may reasonably request.
(h) The Issuers will apply the net proceeds from the sale of the
Securities to be sold by them hereunder in accordance with the
description set forth under "Use of Proceeds" in the Offering Memorandum.
(i) Except as stated in this Agreement and in the Offering
Memorandum, the Issuers have not taken, nor will they 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 the
Securities to facilitate the sale or resale of the Securities. Except as
permitted by the Act, the Issuers will not distribute any offering
material in connection with the Exempt Resales. The Issuers will not
solicit any offers to buy and will not offer to sell the Securities by
means of any form of general solicitation or general advertising (within
the meaning of Regulation D) or by means of any directed selling efforts
(as defined under Regulation S and the Commission's releases related
thereto).
(j) The Issuers will use their best efforts to cause the Securities
to be eligible for trading on The PORTAL Market.
(k) From and after the Closing Date, so long as any of the
Securities are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act or, if earlier, until two years
after the Closing Date, and during any period in which the Company is not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Company
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will furnish to holders of the Securities and prospective purchasers of
Securities designated by such holders, upon request of such holders or
such prospective purchasers, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Act to permit compliance with Rule
144A in connection with resales of the Securities.
(l) The Issuers agree not to sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in
the Act) that would be integrated with the sale of the Securities in a
manner that would require the registration under the Act of the sale by
the Issuers to the Initial Purchaser or by the Initial Purchaser to the
Eligible Purchasers of the Securities.
(m) The Issuers agree to comply with all of the terms and
conditions of the Registration Rights Agreement, and all agreements set
forth in the representation letters of the Issuers to DTC relating to the
approval of the Securities by DTC for "book entry" transfer.
(n) The Issuers agree that prior to any registration of the
Securities pursuant to the Registration Rights Agreement, or at such
earlier time as may be so required, the Indenture shall be qualified
under the Trust Indenture Act of 1939 (the "1939 Act") and will cause to
be entered into any necessary supplemental indentures in connection
therewith.
(o) The Issuers shall not, and shall not permit any of their
respective affiliates to, resell any Securities that have been acquired
by any of them.
(p) Prior to the Closing Date, the Issuers will furnish to the
Initial Purchaser, as soon as they have been prepared by the Company, a
copy of any unaudited interim consolidated financial statements of the
Company for any period subsequent to the period covered by the most
recent consolidated financial statements of the Company appearing in the
Offering Memorandum.
5. Representations and Warranties of the Issuers. The Issuers,
jointly and severally, represent and warrant to the Initial Purchaser that:
(a) No order or decree preventing the use of the Preliminary
Offering Memorandum or the Offering Memorandum or any amendment or
supplement thereto, or any order as-
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serting that the transactions contemplated by this Agreement are subject
to the registration requirements of the Act has been issued and no
proceeding for that purpose has commenced or is pending or, to the
knowledge of the Issuers, is contemplated.
(b) The Preliminary Offering Memorandum and the Offering Memorandum
as of their respective dates and the Offering Memorandum as of the
Closing Date, did not or will not at any time contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except that this representation and warranty does not apply to statements
in or omissions from the Preliminary Offering Memorandum and Offering
Memorandum made in reliance upon and in conformity with information
relating to the Initial Purchaser furnished to the Issuers in writing by
or on behalf of the Initial Purchaser expressly for use therein.
(c) [Intentionally Omitted]
(d) The Indenture has been duly and validly authorized by each of
the Issuers and, upon its execution, delivery and performance by each of
the Issuers and assuming due authorization, execution, delivery and
performance by the Trustee, will be a valid and binding agreement of each
of the Issuers, enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and
subject to the applicability of general principles of equity; the
Indenture conforms in all material respects to the description thereof in
the Offering Memorandum; and no qualification of the Indenture under the
1939 Act is required in connection with the offer and sale of the
Securities contemplated hereby or in connection with the Exempt Resales.
(e) The Senior Notes and the Guarantees have been duly authorized
by the Company and each of the Guarantors, respectively, and, when
executed by the Company and each of the Guarantors, respectively, and, in
the case of the Senior Notes, authenticated by the Trustee in accordance
with the Indenture and delivered to the Initial Purchaser against payment
therefor in accordance with the terms hereof, will have been validly
issued and delivered, and will constitute valid and binding obligations
of the Company and each of the Guarantors, respectively, entitled to
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the benefits of the Indenture and enforceable in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors'
rights generally and subject to the applicability of general principles of
equity, and the Securities conform in all material respects to the
description thereof in the Offering Memorandum.
(f) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights.
(g) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum, and
is duly registered and qualified to conduct its business and is in good
standing in each jurisdiction where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure so to register or qualify would not have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole (a "Material Adverse Effect").
(h) All of the Company's "significant subsidiaries" (as defined in
the Act) are referred to herein individually as a "Subsidiary" and
collectively as the "Subsidiaries." Each Subsidiary is a corporation or
partnership duly organized, validly existing and in good standing in the
jurisdiction of its incorporation or formation, with full corporate or
partnership power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Memorandum, and
is duly registered and qualified to conduct its business and is in good
standing in each jurisdiction where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure so to register or qualify or be in good standing
could not have a Material Adverse Effect. All of the outstanding shares
of capital stock or partnership interests of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and nonas
sessable, and are wholly owned by the Company directly or
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indirectly through one of the other Subsidiaries, free and clear of any
lien, adverse claim, security interest, equity or other encumbrance,
except as described in the Offering Memorandum.
(i) There are no legal or governmental proceedings pending or, to
the knowledge of the Issuers, threatened, against the Company or any of
the Subsidiaries, or to which the Company or any of the Subsidiaries, or
to which any of the respective properties of the Company or any of the
Subsidiaries, is subject, that are not disclosed in the Offering
Memorandum and which, if adversely decided, could cause a Material
Adverse Effect or materially affect the issuance of the Securities or the
consummation of any of the transactions contemplated by the Transaction
Documents. There are no agreements, contracts, indentures, leases or
other instruments of the Company or any of the Subsidiaries that are
material to the Company and the Subsidiaries, taken as a whole, which are
not described in the Offering Memorandum. Neither the Company nor any
Subsidiary is involved in any strike, job action or labor dispute with
any group of employees, and, to the knowledge of the Issuers, no such
action or dispute is threatened.
(j) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate or articles of incorporation or by laws or
other organizational documents, or of any law, ordinance, administrative
or governmental rule or regulation applicable to the Company or any of
the Subsidiaries, or of any decree of any court or governmental agency or
body having jurisdiction over the Company or any of the Subsidiaries,
except where any such violation or violations in the aggregate could not
have a Material Adverse Effect or (ii) in default in any material
respect in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or
by which any of the Company and the Subsidiaries or any of their
respective properties may be bound, except as may be disclosed in the
Offering Memorandum and except where any such default or defaults in the
aggregate would not have a Material Adverse Effect.
(k) Neither the issuance, offer, sale or delivery of the
Securities, the execution, delivery or performance of the Transaction
Documents by the Company or the Subsidiar-
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ies a party thereto nor the consummation by the Company and such
Subsidiaries of the transactions contemplated hereby or thereby (i)
requires any consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as may
have been obtained or may be required in connection with the registration
under the Act of the Securities in accordance with the Registration
Rights Agreement, the qualification of the Indenture under the 1939 Act
and except for compliance with the securities or Blue Sky laws of various
jurisdictions) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles
of incorporation or bylaws, or other organizational documents, of the
Company or any of the Subsidiaries, except any such conflicts and
breaches that in the aggregate would not have a Material Adverse Effect,
or (ii) conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, in any material respect, any material
agreement, indenture, lease or other instrument to which the Company or
any of the Subsidiaries is a party or by which any of them or any of the
respective properties of the Company or any of the Subsidiaries may be
bound, except any such conflict or conflicts that in the aggregate could
not have a Material Adverse Effect, or (iii) violates or will violate in
any material respect any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any of the
Subsidiaries or any of the respective properties of the Company or any of
the Subsidiaries, except any such violation or violations that in the
aggregate could not have a Material Adverse Effect, or (iv) will result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant to
the terms of any agreement or instrument to which any of them is a party
or by which any of them may be bound or to which any of the property or
assets of any of them is subject.
(l) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who has certified or shall certify the
consolidated financial statements of the Company included as part of the
Offering Memorandum, is an independent public accountant under Rule 101
of the AICPA's Code of Professional Conduct, and its interpretation and
rulings.
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(m) The consolidated financial statements of the Company included
in the Offering Memorandum, together with the related notes thereto,
present fairly the financial position, results of operations and cash
flows of the 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 ("GAAP").
(n) Each of the Company and the Guarantors has all the requisite
power and authority to execute, deliver and perform its obligations under
this Agreement and the Registration Rights Agreement; the execution and
delivery of, and the performance by each of the Company and the
Guarantors of its obligations under, this Agreement and the Registration
Rights Agreement have been duly and validly authorized by each of the
Company and the Guarantors, and each of this Agreement and the
Registration Rights Agreement has been duly executed and delivered by
each of the Company and the Guarantors and constitutes the valid and
legally binding agreement of each of the Company and the Guarantors,
enforceable against each of the Company and the Guarantors in accordance
with its terms, except as the enforcement hereof and thereof may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and subject to the
applicability of general principles of equity, and except as rights to
indemnity and contribution hereunder and thereunder may be limited by
Federal or state securities laws or principles of public policy.
(o) Except as disclosed in the Offering Memorandum, subsequent to
the date as of which such information is given in the Offering
Memorandum, none of the Company or any of the Subsidiaries has incurred
any liability or obligation, direct or contingent, or entered into any
transaction, not in the ordinary course of business, that is material to
the Company and the Subsidiaries taken as a whole, and there has not been
any material change in the capital stock, or material increase in the
short-term or long-term debt, of the Company or any of the Subsidiaries,
or any material adverse change, or any development involving or which
could reasonably be expected to involve a prospective material adverse
change, in the condition (financial or other), business, properties, net
worth or results of operations of the Company and the Subsidiaries, taken
as a whole.
15
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(p) The Company and the Subsidiaries have good and marketable title
to all property (real and personal) described in the Offering Memorandum
as being owned by them, free and clear of all material liens, claims,
security interests or other encumbrances except such as are described in
the Offering Memorandum, and all the property described in the Offering
Memorandum as being held under lease by each of the Company and the
Subsidiaries, is held by it under valid, subsisting and enforceable
leases, with only such exceptions as in the aggregate are not materially
burdensome and do not interfere in any material respect with the conduct
of the business of the Company and the Subsidiaries taken as a whole.
(q) Except as permitted by the Act, the Issuers have not
distributed and, prior to the later to occur of the Closing Date and
completion of the distribution of the Securities, will not distribute any
offering material in connection with the offering and sale of the
Securities other than the Offering Memorandum and Offering Memorandum
(and any amendment or supplement thereto in accordance with Section 4(c)
hereof).
(r) The Company and the Subsidiaries have such permits, licenses,
franchises, certificates of need and other approvals or authorizations of
governmental or regulatory authorities ("Permits") as are necessary under
applicable law to own their respective properties and to conduct their
respective businesses in the manner described in the Offering Memorandum
except to the extent that the failure to have such Permits could not have
a Material Adverse Effect; the Company and each of the Subsidiaries have
fulfilled and performed in all material respects, all their respective
material obligations with respect to the Permits, and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit, subject in
each case to such qualification as may be set forth in the Offering
Memorandum and except to the extent that any such revocation or
termination would not have a Material Adverse Effect; and, except as
described in the Offering Memorandum, none of the Permits contains any
restriction that is materially burdensome to the Company or any of the
Subsidiaries.
(s) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assur-
16
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ances that (i) transactions of the Company and the Subsidiaries are
executed in accordance with management's general or specific
authorization; (ii) transactions of the Company and the Subsidiaries are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets of the Company and the
Subsidiaries is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets
of the Company and the Subsidiaries is compared with existing assets of
the Company and the Subsidiaries at reasonable intervals and appropriate
action is taken with respect to any differences.
(t) Neither the Company nor any of the Subsidiaries, nor to the
knowledge of the Issuers, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary
or received or retained any funds in violation of any law, rule or
regulation, which violation could have a Material Adverse Effect.
(u) Except as disclosed in the Offering Memorandum, the Company and
each of the Subsidiaries have filed all tax returns required to be filed,
which returns are true and correct in all material respects, and neither
the Company nor any Subsidiary is in default in the payment of any taxes
which were payable pursuant to said returns or any assessments with
respect thereto, except where the failure to file such returns and make
such payments could not have a Material Adverse Effect.
(v) No holder of any security of the Issuers (other than holders of
the Securities) has any right to request or demand registration of any
security of the Issuers because of the consummation of the transactions
contemplated by the Transaction Documents. Except as described in the
Offering Memorandum, there are no outstanding options, warrants or other
rights calling for the issuance of, and there are no commitments, plans
or arrangements to issue, any shares of capital stock of the Company or
any of the Subsidiaries or any security convertible into or exchangeable
or exercisable for capital stock of the Company or any of the
Subsidiaries.
(w) The Company and the Subsidiaries own or possess adequate
rights to use all patents, trademarks, trademark
17
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registrations, service marks, service ▇▇▇▇ registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in
the Offering Memorandum as being owned by any of them or necessary for
the conduct of their respective businesses, and the Issuers are not aware
of any claim to the contrary or any challenge by any other person to the
rights of the Company or the Subsidiaries with respect to the foregoing.
(x) The Issuers are not and, upon sale of the Securities to be
issued and sold thereby in accordance herewith and the application of the
net proceeds to the Issuers of such sale as described in the Offering
Memorandum under the caption "Use of Proceeds," will not be an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(y) When the Securities are issued and delivered pursuant to this
Agreement, such Securities will not be of the same class (within the
meaning of Rule 144A(d)(3) under the Act) as any security of the Issuers
that is listed on a national securities exchange registered under Section
6 of the Exchange Act or that is quoted in a United States automated
interdealer quotation system.
(z) None of the Issuers nor any of their respective affiliates (as
defined in Rule 501(b) of Regulation D under the Act) has directly, or
through any agent (provided that no representation is made as to the
Initial Purchaser or any person acting on its behalf), (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Act) which is or will be integrated with
the offering and sale of the Securities in a manner that would require
the registration of the Securities under the Act or (ii) engaged in any
form of general solicitation or general advertising (within the meaning
of Regulation D under the Act) in connection with the offering of the
Securities.
(aa) The Issuers are not required to deliver the information
specified in Rule 144A(d)(4) in connection with the offering and resale
of the Securities by the Initial Purchaser.
(bb) Assuming (i) that the representations and warranties of the
Initial Purchaser in Section 2 hereof are true and correct in all
material respects, (ii) the Initial Purchaser complies with the covenants
set forth in
18
-18-
Section 2 hereof (iii) compliance by the Initial Purchaser with the
offering and transfer procedures and restrictions described in the
Offering Memorandum, (iv) the accuracy of the representations and
warranties made in accordance with this Agreement and the Offering
Memorandum by purchasers to whom the Initial Purchaser initially resells
Securities and (v) purchasers to whom the Initial Purchaser initially
resells Securities receive a copy of the Offering Memorandum prior to
such sale, the purchase and sale of the Securities pursuant hereto
(including the Initial Purchaser's proposed offering of the Securities on
the terms and in the manner set forth in the Offering Memorandum and
Section 2 hereof) do not require registration under the Act.
(cc) The execution and delivery of this Agreement and the other
Transaction Documents and the sale of the Securities to the Initial
Purchaser by the Issuers or by the Initial Purchaser to Eligible
Purchasers will not involve any prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Internal Revenue Code.
The representations made by the Issuers in the preceding sentence is made
in reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the Eligible
Purchasers as set forth in the Offering Memorandum under the section
entitled "Transfer Restrictions."
(dd) The Company and the Subsidiaries will be in compliance with,
and not subject to any liability under, the common law and all applicable
federal, state, local and foreign laws, regulations, rules, codes,
ordinances, directives, and orders relating to pollution or to protection
of public or employee health or safety or to the environment, including,
without limitation, those that relate to any Hazardous Material (as
defined herein) ("Environmental Laws"), except, in each case, where non
compliance or liability, individually or in the aggregate, could not be
have a Material Adverse Effect. The term "Hazardous Material" means any
pollutant, contaminant or waste, or any hazardous, dangerous, or toxic
chemical, material, waste, substance or constituent subject to regulation
under any Environmental Law.
6. Indemnification and Contribution. (a) Each of the Issuers,
jointly and severally, agrees to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from
and
19
-19-
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Offering Memorandum or Offering Memorandum or in any amendment
or supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except, with respect to the Initial
Purchaser, insofar as such losses, claims, damages, liabilities or expenses
arise out of or are based upon any untrue statement or omission or alleged
untrue statement or omission which has been made therein or omitted therefrom
in reliance upon and in conformity with the information relating to the Initial
Purchaser furnished in writing to the Issuers by or on behalf of the Initial
Purchaser expressly for use in connection therewith; provided, however, that
the indemnification contained in this paragraph (a) with respect to the
Preliminary Offering Memorandum shall not inure to the benefit of the Initial
Purchaser (or to the benefit of person controlling the Initial Purchaser) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Securities by the Initial Purchaser to any person if the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in the Preliminary Offering Memorandum was corrected in
the Offering Memorandum and the Initial Purchaser sold Securities to that
person without sending or giving at or prior to the written confirmation of
such sale, a copy of the Offering Memorandum (as then amended or supplemented).
The foregoing indemnity agreement shall be in addition to any liability which
the Issuers may otherwise have.
(b) If any action, suit or proceeding shall be brought against the
Initial Purchaser or any person who controls the Initial Purchaser in respect
of which indemnity may be sought against the Issuers, the Initial Purchaser or
any such person who controls the Initial Purchaser shall promptly notify in
writing the parties against whom indemnification is being sought (the
"indemnifying parties"), and such indemnifying parties shall assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. The Initial Purchaser or any person who controls the Initial
Purchaser shall have the right to employ separate counsel in any such action,
suit or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Initial Purchaser or
any person who controls the Initial Purchaser unless (i) the indemnifying
par-
20
-20-
ties have agreed in writing to pay such fees and expenses, (ii) the
indemnifying parties have failed to assume the defense and employ counsel on a
timely basis and such failure to assume the defense is reasonably likely to
adversely affect the preparation for or conduct of such action, suit or
proceeding, or (iii) the named parties to any such action, suit or proceeding
(including any impleaded parties) include both the Initial Purchaser or any
such person who controls the Initial Purchaser and any of the indemnifying
parties and the Initial Purchaser or any such person who controls the Initial
Purchaser shall have been advised by its counsel that representation of such
indemnified party and any such indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or
not such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party shall not have the right to assume the defense of such action, suit or
proceeding on behalf of the Initial Purchaser or any such person who controls
the Initial Purchaser). It is understood, however, that the indemnifying
parties shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and reasonable expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time for the Initial Purchaser and any such person who controls the Initial
Purchaser not having actual or potential differing interests with such
indemnifying parties, which firm shall be designated in writing by the Initial
Purchaser, and that all such reasonable fees and reasonable expenses shall be
reimbursed on a monthly basis as provided in paragraph (a) hereof. The
indemnifying parties shall not be liable for any settlement of any such action,
suit or proceeding effected without their written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify
and hold harmless the Initial Purchaser, to the extent provided in paragraph
(a), and any person who controls the Initial Purchaser from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) The Initial Purchaser agrees to indemnify and hold harmless the
Issuers, and their respective directors and officers, and any person who
controls an Issuer within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act to the same extent as the indemnity from an Issuer to the
Initial Purchaser set forth in paragraph (a) hereof, but only
21
-21-
with respect to information relating to the Initial Purchaser furnished in
writing by or on behalf of the Initial Purchaser expressly for use in the
Preliminary Offering Memorandum or Offering Memorandum or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
any of the Issuers, any of their respective directors or officers, or any such
controlling person based on the Preliminary Offering Memorandum or Offering
Memorandum, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against the Initial Purchaser pursuant to this
paragraph (c), the Initial Purchaser shall have the rights and duties given to
the Issuers by paragraph (b) above (except that if the Issuers shall have
assumed the defense thereof the Initial Purchaser shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the Initial
Purchaser's expense), and the Issuers, their respective directors and officers,
and any such controlling person shall have the rights and duties given to the
Initial Purchaser by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Initial Purchaser may otherwise
have.
(d) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Issuers on
the one hand and the Initial Purchaser on the other hand from the offering of
the Securities, 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 Issuers on the one hand and the Initial Purchaser on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Issuers on the
one hand and the Initial 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 Issuers bear to the total discounts and commissions
received by the Initial Purchaser, in each case as set forth in the table on
the cover page of the Offering Memorandum. The relative
22
-22-
fault of the Issuers on the one hand and the Initial Purchaser on the other
hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Issuers on the one hand or by the Initial Purchaser on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(e) The Issuers and the Initial Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 6 were determined by a
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or depending on any such action, suit
or proceeding. Notwithstanding the provisions of this Section 6, the Initial
Purchaser shall not be required to contribute any amount in excess of the
amount by which the total price of the Securities purchased by it exceeds the
amount of any damages which the Initial Purchaser has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 6 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 6 and the
representations and warranties of the Issuers set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any of the Initial Purchaser or any
person who controls the Initial Purchaser, the Issuers, their respective
directors or officers or any person controlling the Issuers, (ii) acceptance of
any Securities and payment therefor hereunder, and (iii) any termination of
this Agreement. A successor to the Initial Purchaser or any person who
controls the Initial
23
-23-
Purchaser, or to an Issuer, their respective directors or officers or any
person controlling an Issuer, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
6.
(g) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding 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 claims that are the subject matter of
such action, suit or proceeding.
7. Conditions of the Initial Purchaser's Obligations. The obligations of
the Initial Purchaser to purchase and pay for the Securities on the Closing
Date hereunder is subject to the fulfillment, in the Initial Purchaser's sole
discretion, of the following conditions:
(a) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Offering Memorandum or
any amendment or supplement thereto, or any order asserting that the
transactions contemplated by this Agreement are subject to the
registration requirements of the Act shall have been issued and no
proceedings for that purpose shall have been commenced or shall be
pending or, to the knowledge of the Issuers, be contemplated. No order
suspending the sale of the Securities in any jurisdiction shall have been
issued and no proceedings for that purpose shall have been commenced or
shall be pending or, to the knowledge of the Issuers, shall be
contemplated.
(b) [Intentionally Omitted]
(c) Subsequent to the date hereof, (i) there shall not have
occurred any change, or any development involving a prospective change,
in or affecting the condition (financial or otherwise), business,
properties, assets, net worth or results of operations of the Company and
the Subsidiaries which, in the opinion of the Initial Purchaser, would
materially adversely affect the market for the Securities, or (ii) the
Offering Memorandum shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the
24
-24-
light of the circumstances under which they were made, not misleading if
amending or supplementing the Offering Memorandum to correct such
misstatement or omission would, in the sole discretion of the Initial
Purchaser, materially adversely affect the marketability of the
Securities.
(d) The Initial Purchaser shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Issuers, dated the
Closing Date and addressed to the Initial Purchaser, in the form of
Exhibit B hereto.
(e) The Initial Purchaser shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial
Purchaser, dated the Closing Date, and addressed to the Initial
Purchaser, with respect to such matters as the Initial Purchaser may
request.
(f) The Initial Purchaser shall have received letters addressed to
the Initial Purchaser, and dated the date hereof and the Closing Date,
from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent certified public accountants,
substantially in the forms heretofore approved by the Initial Purchaser.
(g) (i) There shall not have been any change in the capital stock
of the Company nor any material increase in the consolidated short-term
or consolidated long-term debt of the Company (other than in the ordinary
course of business) from that set forth or contemplated in the Offering
Memorandum (or any amendment or supplement thereto); (ii) there shall not
have been, since the respective dates as of which information is given in
the Offering Memorandum, except as may otherwise be stated in the
Offering Memorandum, any material adverse change in the condition
(financial or other), business, prospects, properties, net worth or
results of operations of the Company and the Subsidiaries, taken as a
whole; (iii) the Company and the Subsidiaries shall not have any
liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the
Offering Memorandum; (iv) all the representations and warranties of the
Company contained in this Agreement shall be true and correct in all
material respects 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; and (v) the
Initial Purchaser shall have received a certificate, dated the Closing
Date and signed by the chief ex-
25
-25-
ecutive officer and the chief accounting officer of the Company (or
such other officers as are acceptable to the Initial Purchaser), to the
effect set forth in this Section 7(g) and in Section 7(h) hereof.
(h) The Issuers shall not have failed at or prior to the Closing
Date to have performed or complied with any of their agreements herein
contained and required to be performed or complied with by them hereunder
at or prior to the Closing Date.
(i) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of
Rule 436(g) under the Act, that (i) it is downgrading its rating
assigned to any class of securities of the Company, or (ii) it is
reviewing its ratings assigned to any class of securities of the Company
with a view to possible downgrading, or with negative implications, or
direction not determined.
(j) The Securities shall have been approved for trading on PORTAL.
(k) The Issuers shall have furnished or caused to be furnished to
the Initial Purchaser such further certificates and documents as the
Initial Purchaser shall have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchaser and counsel for the
Initial Purchaser.
Any certificate or document signed by any officer of an Issuer and
delivered to the Initial Purchaser, or to counsel for the Initial Purchaser,
shall be deemed a representation and warranty by the Issuers to the Initial
Purchaser as to the statements made therein.
8. Expenses. (a) Whether or not the purchase and sale of the
Securities hereunder is consummated or this Agreement is terminated pursuant to
Section 9 hereof, the Issuers agree, jointly and severally, to pay the
following costs and expenses and all other costs and expenses incident to the
performance by them of their obligations hereunder: (i) the preparation,
printing or reproduction of the Preliminary Offering Memorandum and the
Offering Memorandum (including financial statements thereto), and each
amendment or supplement to any of
26
-26-
them, this Agreement, the Registration Rights Agreement and the Indenture; (ii)
the delivery (including postage, air freight charges and charges for counting
and packaging) of such copies of the Offering Memorandum, the Preliminary
Offering Memorandum and all amendments or supplements as may be reasonably
requested for use in connection with the offering and sale of the Securities;
(iii) the preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp taxes in connection with
the original issuance and sale of the Securities; (iv) the printing (or
reproduction) and delivery of the preliminary and supplemental Blue Sky
Memoranda and all other agreements and documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (v) the
application for quotation of the Securities on PORTAL; (vi) the qualification
of the Securities for offer and sale under the securities or Blue Sky laws of
the several states as provided in Section 4(f) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Initial Purchaser relating
to the preparation, printing or reproduction, and delivery of the preliminary
and supplemental Blue Sky Memoranda and such qualification); (vii) the
performance by the Issuers of their obligations under the Registration Rights
Agreement; and (viii) the fees and expenses of the Issuers' accountants and the
fees and expenses of counsel (including local and special counsel) for the
Issuers. The Issuers hereby agree that they will pay in full on the Closing
Date the fees and expenses referred to in clause (vi) of this Section 8 by
delivering to counsel for the Initial Purchaser on such date a check payable to
such counsel in the requisite amount.
(b) If the purchase and sale of the Securities hereunder is not
consummated because any condition to the obligations of the Initial Purchaser
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated pursuant to Section 9 hereof or because of any failure, refusal or
inability on the part of the Issuers to perform all obligations and satisfy all
conditions on their part to be performed or satisfied hereunder other than by
reason of a default by the Initial Purchaser in payment for the Securities on
the Closing Date, the Issuers shall reimburse the Initial Purchaser promptly
upon demand for all out-of-pocket expenses (including fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities and the other transactions contemplated
hereby.
9. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the
27
-27-
Initial Purchaser, without liability on the part of the Initial Purchaser to
the Issuers, by notice to the Issuers, if prior to the Closing Date, (i)
trading in securities generally on the New York Stock Exchange, American Stock
Exchange or the Nasdaq National Market shall have been suspended or materially
limited, (ii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or state authorities, or (iii)
there shall have occurred any out break or escalation of hostilities or other
international or domestic calamity, crisis or change in political, financial
or economic conditions, the effect of which on the financial markets of the
United States or the market for the Securities is such as to make it, in the
sole judgment of the Initial Purchaser, impracticable or inadvisable to
commence or continue the offering of the Securities on the terms set forth on
the cover page of the Offering Memorandum or to enforce contracts for the
resale of the Securities by the Initial Purchaser. Notice of such termination
may be given to the Issuers by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
10. Information Furnished by the Initial Purchaser. The statements set
forth in the stabilization legend on the inside front cover, the last paragraph
on the cover page and in the third paragraph under the caption "Private
Placement" in the Preliminary Offering Memorandum and Offering Memorandum,
constitute the only information furnished by or on behalf of the Initial
Purchaser as such information is referred to in Sections 5(b) and 6 hereof.
11. Miscellaneous. Except as otherwise provided in Sections 4 and 9
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Issuers, at the office of the
Company at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (with a copy to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
60661), Attention: L.E. Althaver, Chief Executive Officer, or (ii) if to the
Initial Purchaser, to Salomon Brothers Inc, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the Initial
Purchaser and the Issuers, and their respective directors, officers and the
controlling persons referred to in Section 6 hereof and their respective
successors and assigns, to the extent provided herein, and no other person
shall acquire or have any right under or by virtue of this Agreement. Neither
the term "successor" nor the terms
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"successors and assigns" as used in this Agreement shall include a purchaser
from the Initial Purchaser of any of the Securities in its status as such
purchaser.
12. Applicable Law; Counterparts. This Agreement 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 within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
between the Issuers and the Initial Purchaser.
Very truly yours,
WALBRO CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
WALBRO AUTOMOTIVE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
WALBRO ENGINE MANAGEMENT CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
▇▇▇▇▇▇ MANUFACTURING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
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▇▇▇▇▇▇▇▇▇ ENGINEERED PRODUCTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
Confirmed as of the date first
above mentioned.
SALOMON BROTHERS INC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President