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Exhibit 4.5
$100,000,000 EXECUTION COPY
NATIONAL EQUIPMENT SERVICES, INC.
10% SENIOR SUBORDINATED NOTES DUE 2004
PURCHASE AGREEMENT
November 20, 1997
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
FIRST UNION CAPITAL MARKETS CORP.
SALOMON BROTHERS INC
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
National Equipment Services, Inc., a Delaware corporation (the "Company"),
proposes, upon the terms and conditions set forth herein, to issue and sell to
you, as the initial purchasers (the "Initial Purchasers"), $100,000,000 in
aggregate principal amount of its 10% Senior Subordinated Notes due 2004 (the
"Senior Subordinated Notes"). The Senior Subordinated Notes will (i) have the
terms and provisions which are summarized in the Offering Memorandum (as
defined herein), (ii) be in the forms specified by the Initial Purchasers
pursuant to Section 3 hereof, and (iii) be issued pursuant to the provisions of
an Indenture, to be dated as of November 25, 1997 (the "Indenture"), among the
Company, each of the subsidiaries of the Company noted on Schedule I hereto
(the "Subsidiary Guarantors") and ▇▇▇▇▇▇ Trust and Savings Bank, as trustee
(the "Trustee"). The Senior Subordinated Notes will be guaranteed on a senior
subordinated basis by the Subsidiary Guarantors pursuant to their guarantee
(the "Subsidiary Guarantees").
The Company and the Subsidiary Guarantors wish to confirm as follows their
agreement with the Initial Purchasers in connection with the purchase and
resale of the Senior Subordinated Notes.
1. Preliminary Offering Memorandum and Offering Memorandum. The Senior
Subordinated Notes will be offered and sold to the Initial Purchasers 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 7, 1997, (the
"Preliminary Offering Memorandum"), and an offering memorandum, dated November
20, 1997, (the "Offering Memorandum"), setting forth information regarding the
Company, the Senior Subordinated Notes and the Exchange Notes (as defined
herein). Any references herein to the Preliminary Offering Memorandum and the
Offering Memorandum shall be deemed to include all amendments and supplements
thereto, if any. 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 Senior Subordinated Notes by the Initial
Purchasers.
The Company understands that the Initial Purchasers propose to make offers
and sales (the "Exempt Resales") of the Senior Subordinated Notes purchased by
the Initial Purchasers hereunder only on
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the terms and in the manner set forth in the Offering Memorandum, and Section 2
hereof, as soon as the Initial Purchasers deem advisable after this Agreement
has been executed and delivered, solely to persons 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.
Such Qualified Institutional Buyers are being referred to herein as "Eligible
Purchasers."
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, the Senior Subordinated Notes (and all securities
issued in exchange therefor or in substitution thereof) shall bear the
following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF
THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR")
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
It is also understood and acknowledged that holders (including subsequent
transferees) of the Senior Subordinated Notes will have the registration rights
set forth in the registration rights agreement
(the "Registration Rights Agreement"), to be dated the Closing Date (as defined
herein), in substantially the
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form of Exhibit A hereto, for so long as such Senior Subordinated Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement) and subject to the other terms of the Registration Rights
Agreement. Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "Commission")
under the circumstances set forth therein, (i) a registration statement on the
appropriate form under the Act relating to the Company's 10% Senior
Subordinated Notes due 2004, Series B (the "Exchange Notes") to be offered in
exchange for the Senior Subordinated Notes (the "Registered Exchange Offer")
and (ii) under certain limited circumstances, a shelf registration statement
pursuant to Rule 415 under the Act relating to the resale by certain holders of
the Senior Subordinated Notes, and to use its commercially reasonable best
efforts to cause such registration statements to be declared effective. As
used herein, the Senior Subordinated Notes and the Exchange Notes are
hereinafter referred to collectively as the "Notes." This Agreement, the
Indenture and the Registration Rights Agreement are hereinafter referred to
collectively as the "Operative Documents."
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Indenture or the Offering Memorandum.
2. Agreements to Sell, Purchase and Resell. (a) The Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue and
sell to the Initial Purchasers and, upon the basis of the representations,
warranties and agreements of the Company and the Subsidiary Guarantors herein
contained and subject to all the terms and conditions set forth herein, each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 97% of the principal amount thereof, the
principal amount of Senior Subordinated Notes set forth opposite the name of
such Initial Purchaser in Schedule II hereto.
(b) The Initial Purchasers have advised the Company that they propose to
offer the Senior Subordinated Notes for sale upon the terms and conditions set
forth in this Agreement and in the Offering Memorandum. Each Initial Purchaser
hereby represents and warrants to, and agrees with, the Company that such
Initial Purchaser (i) is purchasing the Senior Subordinated Notes pursuant to a
private sale exempt from registration under the Act, (ii) will not solicit
offers for, or offer or sell, the Senior Subordinated Notes by means of any
form of general solicitation or general advertising or in any manner involving
a public offering within the meaning of Section 4(2) of the Act, and (iii) will
solicit offers for the Senior Subordinated Notes only from, and will offer,
sell or deliver the Senior Subordinated Notes as part of their initial
offering, only to 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, in each case, in transactions under Rule 144A. The Initial
Purchasers have advised the Company that they will offer the Senior
Subordinated Notes to Eligible Purchasers at a price initially equal to 98.767%
of the principal amount thereof, plus accrued interest, if any, from the date
of issuance of the Senior Subordinated Notes. Such price may be changed by the
Initial Purchasers at any time thereafter without notice.
The Initial Purchasers understand that the Company and, for purposes of
the opinions to be delivered to the Initial Purchasers pursuant to Sections
7(c) and 7(d) hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations, warranties and agreements and the Initial Purchasers hereby
consent to such reliance.
3. Delivery of the Senior Subordinated Notes and Payment Therefor.
Delivery to the Initial Purchasers of and payment for the Senior Subordinated
Notes shall be made at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 A.M., New York City time,
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on November 25, 1997 (the "Closing Date"). The place of closing for the Senior
Subordinated Notes and the Closing Date may be varied by agreement between the
Initial Purchasers and the Company.
The Senior Subordinated Notes will be delivered to the Initial Purchasers
against payment of the purchase price therefor in immediately available funds.
The Senior Subordinated Notes will be evidenced by one or more global
securities in definitive form (the "Global Note"), and will be registered in
the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"). The
Senior Subordinated Notes to be delivered to the Initial Purchasers shall be
made available to the Initial Purchasers 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 Company and the Subsidiary Guarantors. The Company
and the Subsidiary Guarantors, jointly and severally, agree with the Initial
Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by
them, will confirm such advice in writing, within the period of time
referred to in paragraph (e) below, of any material change in the
Company's condition (financial or other), business, properties, net worth
or results of operations, or of the happening of any event which makes
any statement made in the Offering Memorandum (as then amended or
supplemented) untrue in any material respect or which requires the making
of any additions to or changes in the Offering Memorandum (as then
amended or supplemented) in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Offering
Memorandum (as then amended or supplemented) to comply with any law.
(b) To furnish to the Initial Purchasers, without charge, as of the
date of the Offering Memorandum, such number of copies of the Offering
Memorandum as may then be amended or supplemented as they may reasonably
request.
(c) Not to make any amendment or supplement to the Preliminary
Offering Memorandum or to the Offering Memorandum of which the Initial
Purchasers shall not previously have been advised or to which they shall
reasonably object after being so advised.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to the Initial Purchasers, without
charge, in such quantities as the Initial Purchasers shall have requested
or may hereafter reasonably request, copies of the Preliminary Offering
Memorandum. The Company consents to the use, in accordance with the
securities or Blue Sky laws of the jurisdictions in which the Senior
Subordinated Notes are offered by the Initial Purchasers and by dealers,
prior to the date of the Offering Memorandum, of each Preliminary
Offering Memorandum so furnished by the Company. The Company consents to
the use of the Offering Memorandum (and of any amendment or supplement
thereto) in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Senior Subordinated Notes are offered by the
Initial Purchasers and by all dealers to whom Senior Subordinated Notes
may be sold, in connection with the offering and sale of the Senior
Subordinated Notes.
(e) If, at any time prior to completion of the distribution of the
Senior Subordinated Notes by the Initial Purchasers to Eligible
Purchasers, any event shall occur that in the judgment of the Company or
in the opinion of counsel for the Initial Purchasers should be set forth
in the Offering Memorandum (as then amended or supplemented) in order to
make the statements therein,
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in the light of the circumstances under which they were made, not
misleading, or if it is necessary
to supplement or amend the Offering Memorandum in order to comply with
any law, the Company will forthwith prepare an appropriate supplement or
amendment thereto or such document, and will expeditiously furnish to the
Initial Purchasers and dealers a reasonable number of copies thereof.
(f) To cooperate with the Initial Purchasers and with their counsel
in connection with the qualification of the Senior Subordinated Notes for
offering and sale by the Initial Purchasers and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers 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 the Company 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 service
of process in suits, other than those arising out of the offering or sale
of the Senior Subordinated Notes, in any jurisdiction where it is not now
so subject.
(g) So long as any of the Senior Subordinated Notes are outstanding,
the Company will furnish to the Initial Purchasers (i) as soon as
available, a copy of each report of the Company mailed to stockholders or
filed with any stock exchange or regulatory body and (ii) from time to
time such other publicly available information concerning the Company as
the Initial Purchasers may reasonably request.
(h) If this Agreement shall terminate or shall be terminated after
execution and delivery pursuant to any provisions hereof (otherwise than
by the Initial Purchasers terminating this Agreement pursuant to Section
10 hereof) or if this Agreement shall be terminated by the Initial
Purchasers because of any failure or refusal on the part of the Company
or the Subsidiary Guarantors to comply with the terms or fulfill any of
the conditions of this Agreement, the Company and the Subsidiary
Guarantors agree to reimburse the Initial Purchasers for all
out-of-pocket expenses (including reasonable fees and expenses of their
counsel) reasonably incurred by them in connection herewith, but without
any further obligation on the part of the Company or the Subsidiary
Guarantors for loss of profits or otherwise.
(i) To apply the net proceeds from the sale of the Senior
Subordinated Notes to be sold by the Company hereunder substantially in
accordance with the description set forth in the Offering Memorandum.
(j) Without the prior consent of the Initial Purchasers, prior to
the expiration of 180 days after the date of the Offering Memorandum
neither the Company nor the Subsidiary Guarantors will offer, sell,
contract to sell or otherwise dispose of any fixed income obligation
substantially similar to the Senior Subordinated Notes and having a
maturity of more than one year (other than borrowings under the Credit
Facility).
(k) Except as stated in this Agreement and in the Preliminary
Offering Memorandum and Offering Memorandum neither the Company nor the
Subsidiary Guarantors have taken, nor will any of them take, directly or
indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation (within the meaning
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
of the price of the Senior Subordinated Notes to facilitate the sale or
resale of the Senior Subordinated Notes. Neither the Company nor the
Subsidiary Guarantors will distribute any offering material in connection
with the Exempt Resales in violation of the Act.
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(l) To use their respective commercially reasonable best efforts to
cause the Senior Subordinated Notes to be designated Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market
securities in accordance with the rules and regulations adopted by the
National Association of Securities Dealers, Inc. relating to trading in
the PORTAL Market and to permit the Senior Subordinated Notes to be
eligible for clearance and settlement through DTC.
(m) From and after the Closing Date, so long as any of the Senior
Subordinated Notes are outstanding and are "Restricted Securities" within
the meaning of the 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 Exchange Act, the Company
will furnish to holders of the Senior Subordinated Notes and prospective
purchasers of Senior Subordinated Notes 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 resale of the Senior
Subordinated Notes.
(n) The Company has complied and will comply with all provisions of
Florida Statutes Section 517.075 relating to issuers doing business with
Cuba.
(o) Not to sell, offer for sale or solicit offers to buy any
security (as defined in the Act) that would be integrated with the sale
of the Senior Subordinated Notes in a manner that would require the
registration under the Act of the sale to the Initial Purchasers or the
Eligible Purchasers of the Senior Subordinated Notes.
(p) To comply, in all material respects, to the extent applicable,
with all the terms and conditions of the Registration Rights Agreement
and all agreements set forth in the representation letter of the Company
to DTC relating to the approval of the Senior Subordinated Notes by DTC
for "book entry" transfer.
(q) Concurrently with any registration of the Senior Subordinated
Notes pursuant to the Registration Rights Agreement, or at such earlier
time as may be required, the Indenture shall be qualified under the Trust
Indenture Act of 1939 (the "1939 Act") and any necessary supplemental
indentures will be entered into in connection therewith.
(r) Not to voluntarily claim, and will resist actively all attempts
to claim, the benefit of any usury laws against holders of the Senior
Subordinated Notes.
(s) To do and perform all things reasonably required or necessary to
be done and performed under this Agreement by them prior to the Closing
Date, and to satisfy all conditions precedent to the Initial Purchasers'
obligations hereunder to purchase the Senior Subordinated Notes.
5. Representations and Warranties of the Company and the Subsidiary
Guarantors. The Company and the Subsidiary Guarantors, jointly and severally,
represent and warrant to the Initial Purchasers that:
(a) The Preliminary Offering Memorandum and Offering Memorandum with respect to
the Senior Subordinated Notes have been prepared by the Company for use by the
Initial Purchasers in connection with the Exempt Resales. No order or decree
preventing the use of the Preliminary Offering Memorandum or the
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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 has been issued and no proceeding for
that purpose has commenced or is pending or, to the knowledge of the Company or
the Subsidiary Guarantors, is overtly 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 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 Purchasers furnished to the Company in writing by
or on behalf of the Initial Purchasers expressly for use therein.
(c) The Indenture has been duly and validly authorized by the
Company and the Subsidiary Guarantors and, upon its execution, delivery
and performance by the Company and the Subsidiary Guarantors and assuming
due authorization, execution, delivery and performance by the Trustee,
will be a valid and binding agreement of the Company and the Subsidiary
Guarantors, enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights generally and subject to the
applicability of general principles of equity and conforms in all
material respects to the description thereof in the Offering Memorandum;
no qualification of the Indenture under the 1939 Act is required in
connection with the offer and sale of the Senior Subordinated Notes
contemplated hereby or in connection with the Exempt Resales.
(d) The Senior Subordinated Notes have been duly authorized by the
Company and, when executed by the Company and authenticated by the
Trustee in accordance with the Indenture and delivered to the Initial
Purchasers 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 entitled to 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
description of the Senior Subordinated Notes in the Offering Memorandum
will conform in all material respects to the Senior Subordinated Notes.
(e) The Subsidiary Guarantees to be endorsed on the Senior
Subordinated Notes have been duly authorized by the Subsidiary Guarantors
and, when executed by the Subsidiary Guarantors and when the Senior
Subordinated Notes are issued and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms hereof, such Subsidiary
Guarantees will have been validly issued and delivered and will
constitute valid and binding obligations of the Subsidiary Guarantors
entitled to 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 description of such Subsidiary Guarantees
in the Offering Memorandum will conform in all material respects to such
Subsidiary Guarantees.
(f) The Exchange Notes have been duly authorized by the Company and,
when executed by the Company and authenticated by the Trustee and
delivered in accordance with the Registered
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Exchange Offer and the Indenture, will have been validly issued and
delivered, and will constitute valid and binding obligations of the
Company entitled to 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 description of the Exchange Notes
in the Offering Memorandum will conform in all material respects to the
Exchange Notes.
(g) The Subsidiary Guarantees to be endorsed on the Exchange Notes
have been duly authorized by the Subsidiary Guarantors and, when executed
by the Subsidiary Guarantors and when the Exchange Notes are issued and
authenticated in accordance with the terms of the Registered Exchange
Offer and the Indenture, such Subsidiary Guarantees will have been
validly issued and delivered and will constitute valid and binding
obligations of the Subsidiary Guarantors entitled to 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
description of such Subsidiary Guarantees in the Offering Memorandum will
conform in all material respects to such Subsidiary Guarantees.
(h) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable; the authorized capital stock of the Company conforms to
the description thereof in the Offering Memorandum.
(i) 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 or place 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 does
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 (as hereinafter defined) taken as a
whole (a "Material Adverse Effect").
(j) All the Company's subsidiaries (as defined in the Act) are
referred to herein individually as a "Subsidiary" and collectively as the
"Subsidiaries." Each Subsidiary is a corporation duly organized, validly
existing and in good standing in the jurisdiction of its incorporation,
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 or place 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 does not have a Material Adverse Effect. All the
outstanding shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and nonassessable, and
are wholly owned by the Company directly or indirectly through one of the
other Subsidiaries, free and clear of any lien, adverse claim, security
interest, equity or other encumbrance, except pursuant to and otherwise
permitted by the Credit Facility as described in the Offering Memorandum.
(k) Schedule III hereto lists the only jurisdictions or places where
the nature of the properties or the conduct of the businesses of the
Company and the Subsidiary Guarantors requires the Company and the
Subsidiary Guarantors to be duly registered, qualified and in good
standing,
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except where the failure to so register, qualify or be in good standing
would not have a Material Adverse Effect.
(l) There are no legal or governmental proceedings pending or, to
the knowledge of the Company or the Subsidiary Guarantors, overtly
threatened, against the Company or any of the Subsidiaries or to which
the Company or any of the Subsidiaries or to which any of their
respective properties, is subject, that are not disclosed in the Offering
Memorandum and which are reasonably likely to cause a Material Adverse
Effect or to materially affect the issuance of the Senior Subordinated
Notes or the consummation of the transactions contemplated by this
Agreement. There are no material agreements, contracts, indentures or
leases that should be properly described or disclosed in a summary
fashion in the Offering Memorandum that are not so described or
disclosed. Neither the Company nor any Subsidiary is involved in any
strike, job action or labor dispute with any group of employees, and, to
the Company's and the Subsidiary Guarantors' knowledge, no such action or
dispute is overtly threatened.
(m) 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 would not
have a Material Adverse Effect or (ii) in default in any 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
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
their respective properties may be bound, except as may be disclosed in
the Offering Memorandum or where any such default or defaults in the
aggregate would not have a Material Adverse Effect.
(n) None of the issuance, offer, sale or delivery of the Senior
Subordinated Notes, the execution, delivery or performance of this
Agreement or the Indenture or the Registration Rights Agreement by the
Company or the Subsidiary Guarantors or the consummation by the Company
and the Subsidiary Guarantors 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 be required in connection with the registration under
the Act of the Senior Subordinated Notes in accordance with the
Registration Rights Agreement, qualification of the Indenture under the
1939 Act and 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 Subsidiary Guarantors 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 Subsidiary
Guarantors is a party or by which any of them or any of their respective
properties may be bound, or 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 Subsidiary
Guarantors or any of their respective properties, or will result in the
creation or imposition of any material lien, charge or encumbrance upon
any property or assets of the Company or any of the Subsidiary Guarantors
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.
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(o) The accountants, Price Waterhouse LLP, who have certified or
shall certify the financial statements included as part of the Offering
Memorandum (or any amendment or supplement thereto), are independent
public accountants under Rule 101 of the AICPA's Code of Professional
Conduct, and its interpretation and rulings.
(p) The financial statements (historical and pro forma), together
with related schedules and notes forming part of the Offering Memorandum
(and any amendment or supplement thereto), present fairly in all material
respects the consolidated financial position, results of operations and
changes in stockholders' equity and cash flows of the Company and the
Subsidiaries on the basis stated in the Offering Memorandum at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein; the
assumptions used in preparing the pro forma financial information and
related notes and schedules included in the Offering Memorandum are
reasonable; and the other financial and statistical information and data
set forth in the Offering Memorandum (and any amendment or supplement
thereto) is accurately presented and, to the extent such information and
data is derived from the financial books and records of the Company, is
prepared on a basis consistent with such financial statements and the
books and records of the Company.
(q) The Company has all 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 the Company of its obligations under, this Agreement and
the Registration Rights Agreement have been duly and validly authorized
by the Company, and this Agreement and the Registration Rights Agreement
have been duly executed and delivered by the Company and constitute the
valid and legally binding agreements of the Company, enforceable against
the Company in accordance with their 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.
(r) Each of the Subsidiary Guarantors has all 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 Subsidiary Guarantor of its
obligations under, this Agreement and the Registration Rights Agreement
have been duly and validly authorized by each Subsidiary Guarantor, and
this Agreement and the Registration Rights Agreement have been duly
executed and delivered by each Subsidiary Guarantor and constitute the
valid and legally binding agreements of each Subsidiary Guarantor,
enforceable against each Subsidiary Guarantor in accordance with their
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.
(s) Except as disclosed in the Offering Memorandum (or any amendment
or supplement thereto), subsequent to the date as of which such
information is given in the Offering Memorandum (or any amendment or
supplement thereto), neither the Company nor any of the Subsidiaries has
incurred any liability or obligation, 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
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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 financial condition, business, properties, net
worth or results of operations of the Company and the Subsidiaries taken
as a whole.
(t) Each of the Company and the Subsidiaries has good and marketable
title to all property (real and personal) described in the Offering
Memorandum as being owned by it, free and clear of all liens, claims,
security interests or other encumbrances except pursuant to and otherwise
permitted by the Credit Facility as described in a summary fashion 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.
(u) Neither the Company nor the Subsidiary Guarantors have
distributed and, prior to the later to occur of the Closing Date and
completion of the distribution of the Senior Subordinated Notes, will not
distribute any offering material in violation of the Act in connection
with the offering and sale of the Senior Subordinated Notes.
(v) Each of 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 would 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.
(w) The Company and the Subsidiary Guarantors maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with management's
general or specific authorization; (ii) transactions 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 is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(x) Neither the Company nor any of the Subsidiaries nor, to the
Company's or the Subsidiary Guarantors' knowledge, 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 would have a Material
Adverse Effect.
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(y) 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 would not have a Material Adverse Effect and except for the
payment of any amounts that are being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP have been established.
(z) No holder of any security of the Company has any right to
request or demand registration of shares of Common Stock or any other
security of the Company because of the consummation of the transactions
contemplated by this Agreement or the Registration Rights Agreement,
except as have been waived.
(aa) The Company and each of the Subsidiaries own or possess all
patents, trademarks, trademark registration, 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 neither the Company nor the Subsidiary Guarantors are aware of any
claim to the contrary or any challenge by any other person to the rights
of the Company and the Subsidiaries with respect to the foregoing, except
for such claims or challenges that would not individually or in the
aggregate be reasonably expected to result in a Material Adverse Effect.
(bb) The Company is not and, upon sale of the Senior Subordinated
Notes to be issued and sold thereby in accordance herewith and the
application of the net proceeds to the Company 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.
(cc) When the Senior Subordinated Notes are issued and delivered
pursuant to this Agreement, such Senior Subordinated Notes will not be of
the same class (within the meaning of Rule 144A(d)(3) under the Act) as
any security of the Company 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.
(dd) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D ("Regulation D") under the Act) of the Company has
directly, or through any agent (provided that no representation is made
as to the Initial Purchasers or any person acting on their behalf), (i)
sold, offered for sale, solicited offers to buy, any security (as defined
in the Act) which is or properly would be integrated with the offering
and sale of the Senior Subordinated Notes in a manner that would require
the registration of the Senior Subordinated Notes under the Act or (ii)
engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offering of
the Senior Subordinated Notes.
(ee) Assuming (i) that the representations and warranties in Section
2(b) hereof are true, (ii) the Initial Purchasers comply with the
covenants set forth in Section 2(b) hereof and (iii) that each person to
whom the Initial Purchasers offer, sell or deliver the Senior
Subordinated Notes is a QIB, the purchase and sale of the Senior
Subordinated Notes pursuant hereto (including the Initial Purchasers'
proposed offering of the Senior Subordinated Notes on the terms and in
the manner set
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forth in the Offering Memorandum and Section 2 hereof) is exempt from the
registration requirements of the Act.
(ff) The Company and each of its Subsidiaries have fulfilled their
obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in ERISA and such regulations and
published interpretations) in which employees of the Company and its
Subsidiaries are eligible to participate and each such plan is in
compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations,
and has not incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA.
(gg) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Senior Subordinated Notes to the
Initial Purchasers or by the Initial Purchasers 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 of 1986, as
amended (the "Code"). The representation made by the Company and the
Subsidiary Guarantors 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 "Notice to
Investors."
(hh) (i) The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which
they are engaged; (ii) all policies of insurance insuring the Company or
any of its Subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; (iii) the
Company and its Subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; and (iv) there are no
material claims by the Company or any of its Subsidiaries under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause.
(ii) The Company and each of its Subsidiaries (i) are and at all
times have been, in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection
of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"),
(ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of
any such permit, license or approval, except where such noncompliance
with Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any
of its Subsidiaries has been named as a "potentially responsible party"
under the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended, or any similar state statute.
(jj) In connection with its acquisition of businesses, the Company
typically conducts a review of the effect of Environmental Laws on the
business, operations and properties of the acquired businesses, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws, or any permit, license or approval, any related
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constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a Material Adverse Effect.
(kk) Annex I to Exhibit B hereto contains the only material
agreements, contracts, indentures or leases of the Company and the
Subsidiary Guarantors.
6. Indemnification and Contribution. (a) The Company and the Subsidiary
Guarantors agree jointly and severally 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,
from and 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 not misleading, except 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 such Initial Purchaser furnished in writing to
the Company by or on behalf of such 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 any Initial Purchaser (or to the benefit of any
person controlling such Initial Purchaser) on account of any such loss, claim,
damage, liability or expense arising from the sale of the Senior Subordinated
Notes by such 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 such Initial Purchaser sold Senior Subordinated Notes 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)
if the Company or the Subsidiary Guarantors have previously furnished
sufficient copies thereof to the Initial Purchasers on a timely basis to permit
such sending or giving. The foregoing indemnity agreement shall be in addition
to any liability which the Company or the Subsidiary Guarantors may otherwise
have.
(b) If any action, suit or proceeding shall be brought against an Initial
Purchaser or any person controlling such Initial Purchaser in respect of which
indemnity may be sought against the Company or the Subsidiary Guarantors, the
Initial Purchaser or such controlling person shall promptly notify 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 such controlling person 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 such controlling person unless (i) the
indemnifying parties have agreed in writing to pay such fees and expenses, (ii)
the indemnifying parties have failed to assume the defense and employ counsel,
or (iii) the named parties to any such action, suit or proceeding (including
any impleaded parties) include both the Initial Purchaser or such controlling
person and the indemnifying parties and the Initial Purchaser or such
controlling person shall have been advised by its counsel that representation
of such indemnified party and any 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 such controlling person). It
is understood, however, that the indemnifying parties shall, in connection with
any one such action, suit or proceeding or separate but
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15
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 expenses of only one separate firm of
attorneys (in addition to one separate firm of attorneys per jurisdiction
acting as local counsel) at any time for the Initial Purchasers and controlling
persons not having actual or potential differing interests with the Initial
Purchasers or among themselves, which firm shall be designated in writing by
▇▇▇▇▇ ▇▇▇▇▇▇ Inc., and that all such fees and 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 shall 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 Purchasers, to the extent provided in paragraph (a),
and any such controlling person from and against any loss, claim, damage,
liability or expense by reason of such settlement or judgment.
(c) Each Initial Purchaser, severally and not jointly, agrees to indemnify
and hold harmless the Company and the Subsidiary Guarantors, and their
respective directors and officers, and any person who controls the Company or
any Subsidiary Guarantor within the meaning of Section 15 of the Act or Section
20 of the Exchange Act to the same extent as the indemnity from the Company and
the Subsidiary Guarantors to the Initial Purchasers set forth in paragraph (a)
hereof, but only with respect to information relating to such Initial Purchaser
furnished in writing by or on behalf of such 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 the Company or the Subsidiary Guarantors, 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 Purchasers pursuant to this paragraph (c), the Initial Purchasers shall
have the rights and duties given to the Company by paragraph (b) above (except
that if the Company shall have assumed the defense thereof the Initial
Purchasers 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 Purchasers' expense), and the Company and
the Subsidiary Guarantors, their respective directors and officers, and any
such controlling person shall have the rights and duties given to the Initial
Purchasers by paragraph (b) above. The foregoing indemnity agreement shall be
in addition to any liability which the Initial Purchasers may otherwise have.
(d) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party under paragraph (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 Company and
the Subsidiary Guarantors on the one hand and the Initial Purchasers on the
other hand from the offering of the Senior Subordinated Notes, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Subsidiary Guarantors on the one hand and the Initial Purchasers 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 Company and
the Subsidiary Guarantors on the one hand and the Initial Purchasers on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by the Initial Purchasers, in each
case as set forth in the table on the cover page of the Offering Memorandum.
The relative fault of the Company and the Subsidiary Guarantors on the one hand
and the Initial Purchasers on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state
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a material fact relates to information supplied by the Company and the
Subsidiary Guarantors on the one hand or by the Initial Purchasers on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company, the Subsidiary Guarantors and the Initial Purchasers
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 defending
any such action, suit or proceeding. Notwithstanding the provisions of this
Section 6, no Initial Purchaser shall be required to contribute any amount in
excess of the amount by which the total price of the Senior Subordinated Notes
underwritten by it and distributed to the public exceeds the amount of any
damages which such 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 on a monthly basis, 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 Company and the Subsidiary
Guarantors 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 the
Initial Purchasers or any person controlling the Initial Purchasers, the
Company, any Subsidiary Guarantor, their respective directors or officers or
any person controlling the Company or any Subsidiary Guarantor, (ii) acceptance
of any Senior Subordinated Notes and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to an Initial Purchaser or any
person controlling such Initial Purchaser, or to the Company, any Subsidiary
Guarantor, their respective directors or officers or any person controlling the
Company or any Subsidiary Guarantor, 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 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 Purchasers' Obligation. The obligations of
the Initial Purchasers to purchase the Senior Subordinated Notes hereunder are
subject to 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 Company or the
Subsidiary Guarantors, be overtly contemplated. No stop order suspending the
sale of the Senior Subordinated Notes in any jurisdiction designated by the
Initial
17
Purchasers shall have been issued and no proceedings for that purpose shall
have been commenced or shall be pending or, to the knowledge of the Company or
the Subsidiary Guarantors, shall be contemplated.
(b) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change, or any development involving a prospective
change, in or affecting the financial condition, business, properties, net
worth, or results of operations of the Company or the Subsidiaries not
contemplated by the Offering Memorandum, which in the opinion of the Initial
Purchasers, would materially adversely affect the market for the Senior
Subordinated Notes, or (ii) any event or development relating to or involving
the Company or any officer or director of the Company which makes any statement
made in the Offering Memorandum untrue in any material respect or which, in the
opinion of the Company and its counsel or the Initial Purchasers and their
counsel, requires the making of any addition to or change in the Offering
Memorandum in order to state a material fact required by any law to be stated
therein or necessary in order to make the statements therein not misleading, if
amending or supplementing the Offering Memorandum to reflect such event or
development would, in the opinion of the Initial Purchasers, materially
adversely affect the market for the Senior Subordinated Notes.
(c) The Initial Purchasers shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Company, dated the Closing Date
and addressed to the Initial Purchasers, in substantially the form of Exhibit B
hereto.
(d) The Initial Purchasers shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchasers, dated the
Closing Date, and addressed to the Initial Purchasers, with respect to the
Offering Memorandum and such other related matters as the Initial Purchasers
may reasonably request, and such counsel shall have received such certificates,
documents and information as they may reasonably request to enable them to pass
upon such matters.
(e) The Initial Purchasers shall have received letters addressed to the
Initial Purchasers, and dated the date hereof and the Closing Date, from Price
Waterhouse LLP, independent certified public accountants, substantially in the
forms heretofore approved by the Initial Purchasers.
(f)(i) There shall not have been any change in the capital stock of the
Company and the Subsidiary Guarantors nor any material increase in the
short-term or long-term debt of the Company and the Subsidiary Guarantors
(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 (or any amendment or
supplement thereto), except as may otherwise be stated in the Offering
Memorandum (or any amendment or supplement thereto), 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 (or any amendment
or supplement thereto); and (iv) all the representations and warranties of the
Company and the Subsidiary Guarantors 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 the Initial
Purchasers shall have received a certificate, dated the Closing Date and signed
by the chief executive officer and the chief accounting officer of the Company
and the Subsidiary Guarantors (or such other officers as are acceptable to the
Initial Purchasers), to the effect set forth in this Section 7(f) and in
Section 7(g) hereof.
(g) The Company and the Subsidiary Guarantors shall not have failed at or
prior to the
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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.
(h) 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.
(i) The Senior Subordinated Notes shall have been approved for trading on
PORTAL.
(k) The Company shall have furnished or caused to be furnished to the
Initial Purchasers such further certificates and documents as the Initial
Purchasers shall have 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 Purchasers and counsel for the Initial
Purchasers.
8. Expenses. The Company and the Subsidiary Guarantors agree to pay the
following costs and expenses and all other costs and expenses incurred by them
incident to the performance by them of any of their obligations hereunder: (i)
the preparation, printing and reproduction of the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation,
financial statements thereto), and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and 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 to any of them as may be reasonably requested for use in connection
with the offering and sale of the Senior Subordinated Notes; (iii) the
preparation, printing, authentication, issuance and delivery of certificates
for the Senior Subordinated Notes, including any stamp taxes in connection with
the original issuance and sale of the Senior Subordinated Notes; (iv) the
printing (or reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda; (v) the application for quotation of the
Senior Subordinated Notes on the PORTAL Market; (vi) the qualification of the
Senior Subordinated Notes 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
Purchasers relating to the preparation, printing or reproduction, and delivery
of the preliminary and supplemental Blue Sky Memoranda and such qualification),
provided that the fees referred to in this clause (vi) shall not exceed
$10,000; (vii) the performance by the Company and the Subsidiary Guarantors of
their obligations under the Registration Rights Agreement; (viii) fees and
expenses of the Trustee and its counsel; (ix) the transportation and other
expenses, if any, incurred by or on behalf of the Company representatives in
connection with presentations to prospective purchasers of the Senior
Subordinated Notes; and (x) the fees and expenses of the Company's accountants
and the fees and expenses of counsel (including local and special counsel, if
any) for the Company. The Company and the Subsidiary Guarantors 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
Purchasers on such date a check payable to such counsel in the requisite
amount.
9. Effective Date of Agreement. This Agreement shall become effective
upon the execution and delivery hereof by all the parties hereto.
10. Termination of Agreement. (a) This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, without
liability on the part of the Initial Purchasers to the
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Company or the Subsidiary Guarantors, by notice to the Company, if prior to the
Closing Date, (i) trading in securities generally on the New York Stock
Exchange, the 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, or (iii) there shall
have occurred any outbreak or escalation of hostilities involving the United
States or other domestic, foreign or international calamity, crisis or change
in political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in the reasonable
judgment of the Initial Purchasers, impracticable or inadvisable to commence or
continue the offering of the Senior Subordinated Notes on the terms set forth
on the cover page of the Offering Memorandum or to enforce contracts for the
resale of the Senior Subordinated Notes by the Initial Purchasers. Notice of
such termination may be given to the Company by telegram, telecopy or telephone
and shall be subsequently confirmed by letter.
(b) If on the Closing Date any one or more of the Initial Purchasers shall
fail or refuse to purchase the Senior Subordinated Notes which it or they have
agreed to purchase hereunder on such date and the amount of Senior Subordinated
Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase is not more than
one-tenth of the total amount of Senior Subordinated Notes to be purchased on
such date by all Initial Purchasers, each non-defaulting Initial Purchaser
shall be obligated severally, in the proportion which the aggregate principal
amount of such securities set forth opposite its name in Schedule II bears to
the total amount of such Senior Subordinated Notes which all the non-defaulting
Initial Purchasers, as the case may be, have agreed to purchase, or in such
other proportion as the Initial Purchasers may specify, to purchase the
securities which such defaulting Initial Purchaser or Initial Purchasers, as
the case may be, agreed but failed or refused to purchase on such date;
provided that in no event shall the aggregate principal amount of such
securities which any Initial Purchaser has agreed to purchase pursuant to
Section 2 hereof be increased pursuant to this Section 10 by an amount in
excess of one-ninth of such aggregate amount of such Senior Subordinated Notes
without the written consent of such Initial Purchaser. If on the Closing Date
any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
such Senior Subordinated Notes and the aggregate amount of Senior Subordinated
Notes with respect to which such default occurs is more than one-tenth of the
total amount of Senior Subordinated Notes to be purchased by all Initial
Purchasers and arrangements satisfactory to the Initial Purchasers and the
Company for the purchase of such securities are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of
any non-defaulting Initial Purchaser and the Company. In any such case which
does not result in termination of this Agreement, either the Initial Purchasers
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any,
in the Offering Memorandum or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of any
such Initial Purchaser under this Agreement.
11. Information Furnished by the Initial Purchasers. The statements set
forth in the last paragraph of the cover page of the Preliminary Offering
Memorandum and the Offering Memorandum and the last paragraph on the inside
cover page of the Preliminary Offering Memorandum and the Offering Memorandum
and the first sentence of the third paragraph under the caption "Plan of
Distribution" in the Preliminary Offering Memorandum and the Offering
Memorandum, constitute the only information furnished by or on behalf of the
Initial Purchasers as such information is referred to in Sections 5(b) and 6
hereof.
12. Miscellaneous. Except as otherwise provided in Sections 4 and 10
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Financial Officer with a copy, which shall not constitute notice, to ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: H. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, or (ii) if to the Initial Purchasers, addressed
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to ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Manager, Investment Banking Division, with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇.
This Agreement has been and is made solely for the benefit of the Initial
Purchasers, the Company, the Subsidiary Guarantors and their respective
directors, officers and 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 term "successors and assigns"
as used in this Agreement shall include a purchaser from the Initial Purchasers
of any of the Senior Subordinated Notes in his status as such purchaser.
13. 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 and without
regard to the conflicts of law principles thereof.
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.
[signature page follows]
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Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Subsidiary Guarantors and the Initial Purchasers.
Very truly yours,
NATIONAL EQUIPMENT SERVICES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and Secretary
AERIAL PLATFORMS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President, Secretary and Treasurer
NES ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President, Secretary and Treasurer
BAT ACQUISITION CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President, Secretary and Treasurer
MST ENTERPRISES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President, Secretary and Treasurer
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Confirmed as of the date first
above mentioned.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
FIRST UNION CAPITAL MARKETS CORP.
SALOMON BROTHERS INC
BY ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
23
SCHEDULE I
SUBSIDIARY GUARANTORS
Aerial Platforms, Inc.
NES Acquisition Corp.
BAT Acquisition Corp.
MST Enterprises, Inc.
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SCHEDULE II
PRINCIPAL AMOUNT OF
SENIOR SUBORDINATED NOTES
INITIAL PURCHASERS TO BE PURCHASED
▇▇▇▇▇ ▇▇▇▇▇▇ Inc................. $ 60,000,000
First Union Capital Markets Corp. $ 20,000,000
Salomon Brothers Inc............. $ 20,000,000
Total............................ $100,000,000
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SCHEDULE III
Jurisdictions Where Qualified to Do Business
National Equipment Services, Inc.
1. Delaware
2. Illinois
Aerial Platforms, Inc.
1. Georgia
NES Acquisition Corp.
1. Delaware
2. Texas
3. Alabama
4. Louisiana
BAT Acquisition Corp.
1. Delaware
2. Nevada
MST Enterprises, Inc. d/b/a Equipco Rentals & Sales
1. Virginia
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Exhibit A
Form of Registration Rights Agreement
27
Exhibit B
Form of Opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
