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EXHIBIT 10.10
GEO SPECIALTY CHEMICALS, INC.
$120,000,000
10 1/8% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
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July 31, 1998
BT ALEX. BROWN INCORPORATED
Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
GEO Specialty Chemicals, Inc., an Ohio corporation (the
"COMPANY"), hereby confirms its agreement with you (the "INITIAL PURCHASER"), as
set forth below.
1. THE SECURITIES. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchaser
$120,000,000 aggregate principal amount of its 10 1/8% Senior Subordinated Notes
due 2008, Series A (the "NOTES"). The Notes are to be issued under an indenture
(the "INDENTURE") to be dated as of July 31, 1998 by and between the Company and
Chase Manhattan Trust Company, National Association as Trustee (the "TRUSTEE").
The Notes are being offered in connection with the Company's
(i) repayment of indebtedness outstanding under its existing revolving bank loan
facility (the "EXISTING CREDIT FACILITY"), (ii) entering into a new credit
facility with the lenders party thereto in their capacities as lenders
thereunder and Bankers Trust Company, as administrative agent (the "NEW CREDIT
AGREEMENT") and (iii) acquisition (the "ACQUISITION") pursuant to the Asset
Purchase Agreement dated as of June 29, 1998 among the Company, Mallinckrodt
Inc., a Delaware corporation, and Mallinckrodt Inc., a Delaware Corporation (the
"ASSET PURCHASE AGREEMENT") of the Trimet Technical Products Division
("TRIMET").
The Notes will be offered and sold to the Initial Purchaser
without being registered under the Securities Act of 1933, as amended (the
"ACT"), in reliance on exemptions therefrom.
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In connection with the sale of the Notes, the Company has
prepared a preliminary offering memorandum dated July 7, 1998 (the "PRELIMINARY
MEMORANDUM"), and a final offering memorandum dated July 28, 1998 (the "FINAL
MEMORANDUM"; the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "MEMORANDUM") setting forth or including a description of
the terms of the Notes, the terms of the offering of the Notes, a description of
the Company and any material developments relating to the Company occurring
after the date of the most recent historical financial statements included
therein.
The Initial Purchaser and its direct and indirect transferees
of the Notes will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as EXHIBIT A (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company has agreed,
among other things, to file a registration statement (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission (the "COMMISSION")
registering the Notes or the Exchange Notes (as defined in the Registration
Rights Agreement) under the Act.
2. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with the Initial Purchaser that:
(a) Neither the Preliminary Memorandum as of the date thereof
nor the Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date (as defined
in Section 3 below) contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this Section 2(a) do not apply to statements or omissions made in reliance
upon and in conformity with information relating to the Initial Purchaser
furnished to the Company in writing by the Initial Purchaser expressly for use
in the Preliminary Memorandum, the Final Memorandum or any amendment or
supplement thereto.
(b) As of the Closing Date, the Company will have the
authorized, issued and outstanding capitalization set forth in the Final
Memorandum; all of the outstanding shares of capital stock of the Company have
been, and as of the Closing Date will be, duly authorized and validly issued,
are fully paid and nonassessable and were not issued in violation of any
preemptive or similar rights; all of the outstanding shares of capital stock of
the Company will be free and clear of all liens, encumbrances, equities and
claims or restrictions on transferability (other than those imposed by the Act
and the securities or "Blue Sky" laws of certain jurisdictions) or voting;
except as set forth in
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the Final Memorandum, there are no (i) options, warrants or other rights to
purchase, (ii) agreements or other obligations to issue or (iii) other rights to
convert any obligation into, or exchange any securities for, shares of capital
stock of or ownership interests in the Company outstanding, other than pursuant
to certain amended and restated warrant agreements entered into by and between
the Company and Charter Oak Partners and GEO Chemicals, Ltd., respectively, and
an amended and restated shareholders agreement entered into by and between the
Company and each of the Company's shareholders (the "EQUITY AGREEMENTS"). The
Company does not own, directly or indirectly, any shares of capital stock or any
other equity or long-term debt securities or have any equity interest in any
firm, partnership, joint venture or other entity.
(c) The Company is duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own its properties and conduct its
business as now conducted and as described in the Final Memorandum; the Company
is duly qualified to do business as a foreign corporation in good standing in
all other jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to
be so qualified would not, individually or in the aggregate, have a material
adverse effect on the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the Company
(both before and after giving effect to the transactions contemplated hereby)
(any such event, a "MATERIAL ADVERSE EFFECT").
(d) The Company has all requisite corporate power and
authority to execute, deliver and perform each of its obligations under the
Notes, the Exchange Notes and the Private Exchange Notes (as defined in the
Registration Rights Agreement). The Notes, when issued, will be in the form
contemplated by the Indenture. The Notes, the Exchange Notes and the Private
Exchange Notes have each been duly and validly authorized by the Company and,
when executed by the Company and authenticated by the Trustee in accordance with
the provisions of the Indenture and, in the case of the Notes, when delivered to
and paid for by the Initial Purchaser in accordance with the terms of this
Agreement, will constitute valid and legally binding obligations of the Company,
entitled to the benefits of the Indenture, and enforceable against the Company
in accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity and the discretion of the court before
which any proceeding therefor may be brought.
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(e) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Indenture.
The Indenture meets the requirements for qualification under the Trust Indenture
Act of 1939, as amended (the "TIA"). The Indenture has been duly and validly
authorized by the Company and, when executed and delivered by the Company
(assuming the due authorization, execution and delivery by the Trustee), will
constitute a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought.
(f) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and validly
authorized by the Company and, when executed and delivered by the Company
(assuming the due authorization and execution by the Initial Purchaser), will
constitute a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
and the discretion of the court before which any proceeding therefor may be
brought and (B) any rights to indemnity or contribution thereunder may be
limited by federal and state securities laws and public policy considerations.
(g) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the Asset Purchase Agreement and to consummate the transactions contemplated
hereby and thereby. This Agreement and the Asset Purchase Agreement and the
consummation by the Company of the transactions contemplated hereby and thereby
have been duly and validly authorized by the Company. This Agreement and the
Asset Purchase Agreement have been duly executed and delivered by the Company.
(h) No consent, approval, authorization or order of any court
or governmental agency or body, or third party is required for the issuance and
sale by the Company of the Notes to the Initial Purchaser or the consummation by
the Company of the other transactions contemplated hereby, except such as have
been obtained and such as may be required under state securities or "Blue Sky"
laws in connection with the purchase and resale of the Notes by the Initial
Purchaser. The Company is not (i) in
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violation of its certificate of incorporation or bylaws, (ii) in breach or
violation of any statute, judgment, decree, order, rule or regulation applicable
to it or any of its properties or assets, except for any such breach or
violation which would not, individually or in the aggregate, have a Material
Adverse Effect, or (iii) in breach of or default under (nor has any event
occurred which, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate, contract or other agreement or
instrument to which it is a party or to which any of its properties or assets is
subject (collectively, "CONTRACTS"), except for any such breach, default,
violation or event which would not, individually or in the aggregate, have a
Material Adverse Effect.
(i) The execution, delivery and performance by the Company of
this Agreement, the Asset Purchase Agreement, the Indenture and the Registration
Rights Agreement and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and
sale of the Notes to the Initial Purchaser) will not conflict with or constitute
or result in a breach of or a default under (or an event which with notice or
passage of time or both would constitute a default under) or violation of any of
(i) the terms or provisions of any Contract, except for any such conflict,
breach, violation, default or event which would not, individually or in the
aggregate, have a Material Adverse Effect, (ii) the certificate of incorporation
or bylaws (or similar organizational document) of the Company, or (iii)
(assuming compliance with all applicable state securities or "Blue Sky" laws and
assuming the accuracy of the representations and warranties of the Initial
Purchaser in Section 8 hereof) any statute, judgment, decree, order, rule or
regulation applicable to the Company or any of its properties or assets, except
for any such conflict, breach or violation which would not, individually or in
the aggregate, have a Material Adverse Effect.
(j) The audited financial statements of the Company and Trimet
included in the Final Memorandum present fairly in all material respects the
financial position, results of operations and cash flows of the Company and
Trimet, respectively, at the dates and for the periods to which they relate and
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated therein. The summary
and selected financial and statistical data in the Final Memorandum present
fairly in all material respects the information shown therein and have been
prepared and compiled on a basis consistent with the audited financial
statements included therein, except as otherwise stated therein. ▇▇▇▇▇ ▇▇▇▇▇▇
and Company LLP (the "INDEPENDENT
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ACCOUNTANTS") is an independent public accounting firm within the meaning of the
Act and the rules and regulations promulgated thereunder.
(k) The pro forma financial statements (including the notes
thereto) and the other pro forma financial information included in the Final
Memorandum (i) comply as to form in all material respects with the applicable
requirements of Regulation S-X promulgated under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), (ii) have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma financial
statements, and (iii) have been properly computed on the bases described
therein; the assumptions used in the preparation of the pro forma financial data
and other pro forma financial information included in the Final Memorandum are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein.
(l) There is not pending or, to the knowledge of the Company,
threatened any action, suit, proceeding, inquiry or investigation to which the
Company or Trimet is a party, or to which any of their respective property or
assets are subject, before or brought by any court, arbitrator or governmental
agency or body which, if determined adversely to the Company or Trimet, would,
individually or in the aggregate, have a Material Adverse Effect or which seeks
to restrain, enjoin, prevent the consummation of or otherwise challenge the
issuance or sale of the Notes to be sold hereunder or the consummation of the
other transactions described in the Final Memorandum.
(m) Each of the Company and Trimet possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, presently required or necessary to own or lease, as
the case may be, and to operate its respective properties and to carry on its
respective business as now or proposed to be conducted as set forth in the Final
Memorandum ("PERMITS"), except where the failure to obtain such Permits would
not, individually or in the aggregate, have a Material Adverse Effect; each of
the Company and Trimet has fulfilled and performed all of its obligations with
respect to such 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;
and none of the Company or Trimet has received any notice of any proceeding
relating to revocation or modification of any such Permit, except as described
in the Final Memorandum and
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except where such revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect.
(n) Since the date of the most recent financial statements
appearing in the Final Memorandum, except as described therein, (i) none of the
Company or Trimet has incurred any liabilities or obligations, direct or
contingent, or entered into or agreed to enter into any transactions or
contracts (written or oral) not in the ordinary course of business which
liabilities, obligations, transactions or contracts would, individually or in
the aggregate, be material to the general affairs, management, business,
condition (financial or otherwise), prospects or results of operations of the
Company or Trimet, as the case may be, other than the execution of the Equity
Agreements, (ii) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock and (iii) there has not been any change in the capital
stock or long-term indebtedness of the Company.
(o) Each of the Company and Trimet has filed all necessary
federal, state and foreign income and franchise tax returns, except where the
failure to so file such returns would not, individually or in the aggregate,
have a Material Adverse Effect, and has paid all taxes shown as due thereon; and
other than tax deficiencies which the Company is contesting in good faith and
for which the Company has provided adequate reserves, there is no tax deficiency
that has been asserted against the Company that would have, individually or in
the aggregate, a Material Adverse Effect.
(p) The statistical and market-related data included in the
Final Memorandum are based on or derived from sources which the Company believes
to be reliable and accurate.
(q) None of the Company or any agent acting on its behalf has
taken or will take any action that might cause this Agreement or the sale of the
Notes to violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System, in each case as in effect, or as the same may hereafter be in
effect, on the Closing Date.
(r) Each of the Company and Trimet has good and marketable
title to all real property and good title to all personal property described in
the Final Memorandum as being owned by it and good and marketable title to a
leasehold estate in the real and personal property described in the Final
Memorandum as being leased by it free and clear of all liens, charges,
encumbrances or restrictions, except as described in the Final Memorandum or to
the extent the failure to have such title or the existence of such liens,
charges, encumbrances or
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restrictions would not, individually or in the aggregate, have a Material
Adverse Effect. All leases, contracts and agreements to which the Company or
Trimet is a party or by which it is bound are valid and enforceable against the
Company or Trimet, as the case may be, and, to the knowledge of the Company, are
valid and enforceable against the other party or parties thereto and are in full
force and effect with only such exceptions as would not, individually or in the
aggregate, have a Material Adverse Effect. Each of the Company and Trimet owns
or possesses adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights and know-how necessary to conduct the
businesses now or proposed to be operated by it as described in the Final
Memorandum, and neither the Company nor Trimet has received any notice of
infringement of or conflict with (or knows of any such infringement of or
conflict with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how which, if such
assertion of infringement or conflict were sustained, would have a Material
Adverse Effect.
(s) There are no legal or governmental proceedings involving
or affecting the Company or Trimet or any of their respective properties or
assets which would be required to be described in a prospectus pursuant to the
Act that are not described in the Final Memorandum, nor are there any material
contracts or other documents which would be required to be described in a
prospectus pursuant to the Act that are not described in the Final Memorandum.
(t) Except as described in the Final Memorandum or as would
not, individually or in the aggregate, have a Material Adverse Effect (A) each
of the Company and Trimet is in compliance with and not subject to liability
under applicable Environmental Laws (as defined below), (B) each of the Company
and Trimet has made all filings and provided all notices required under any
applicable Environmental Law, and has and is in compliance with all Permits
required under any applicable Environmental Laws and each of them is in full
force and effect, (C) there is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for information pending or, to the knowledge
of the Company, threatened against the Company or Trimet under any Environmental
Law, (D) no lien, charge, encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or property owned,
operated, leased or controlled by the Company or Trimet, (E) neither the Company
nor Trimet has received notice that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ("CERCLA") or any comparable state law,
(F) no property or facility of the Company or Trimet
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is (i) listed or proposed for listing on the National Priorities List under
CERCLA or is (ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated pursuant to CERCLA,
or on any comparable list maintained by any state or local governmental
authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable federal, state and local laws or regulations,
codes, orders, decrees, judgments or injunctions issued, promulgated, approved
or entered thereunder, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or threatened releases of
hazardous materials into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (iii) underground
and above ground storage tanks and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(u) There is no strike, labor dispute, slowdown or work
stoppage with the employees of the Company or Trimet which is pending or, to the
knowledge of the Company, threatened.
(v) Each of the Company and Trimet carries insurance in such
amounts and covering such risks as is adequate for the conduct of its business
and the value of its properties.
(w) Neither the Company nor Trimet has any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other plan
which is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Company or Trimet makes or ever has made a
contribution and in which any employee of the Company or Trimet is or has ever
been a participant. With respect to such plans, each of the Company and Trimet
is in compliance in all material respects with all applicable provisions of
ERISA.
(x) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
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(y) The Company will not be an "investment company" or
"promoter" or "principal underwriter" for an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
(z) The Notes, the Indenture and the Registration Rights
Agreement will conform in all material respects to the descriptions thereof in
the Final Memorandum.
(aa) No holder of securities of the Company will be entitled
to have such securities registered under the registration statements required to
be filed by the Company pursuant to the Registration Rights Agreement other than
as expressly permitted thereby.
(bb) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable value
of the assets of the Company will exceed the sum of its stated liabilities and
identified contingent liabilities; the Company is not, or will not be,
immediately after giving effect to the execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby or
referred to herein, (a) left with unreasonably small capital with which to carry
on its business as it is proposed to be conducted, (b) unable to pay its debts
(contingent or otherwise) as they mature or (c) otherwise insolvent.
(cc) None of the Company or any of its Affiliates (as defined
in Rule 501(b) of Regulation D under the Act) has directly, or through any
agent, (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
could be integrated with the sale of the Notes in a manner that would require
the registration under the Act of the Notes or (ii) engaged in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the Notes or in
any manner involving a public offering within the meaning of Section 4(2) of the
Act. Assuming the accuracy of the representations and warranties of the Initial
Purchaser in Section 8 hereof, it is not necessary in connection with the offer,
sale and delivery of the Notes to the Initial Purchaser in the manner
contemplated by this Agreement to register any of the Notes under the Act or to
qualify the Indenture under the TIA.
(dd) No securities of the Company are of the same class
(within the meaning of Rule 144A under the Act) as the Notes and listed on a
national securities exchange registered under Section 6 of the Exchange Act, or
quoted in a U.S. automated inter-dealer quotation system.
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(ee) The Company has not taken, nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the Notes
(other than any stabilization transactions conducted by the Initial Purchaser as
disclosed in the Final Memorandum).
(ff) None of the Company, any of its Affiliates or any person
acting on its behalf (other than the Initial Purchaser) has engaged in any
directed selling efforts (as that term is defined in Regulation S under the Act
("Regulation S")) with respect to the Notes; the Company and its Affiliates and
any person acting on its behalf (other than the Initial Purchaser) have complied
with the offering restrictions requirement of Regulation S.
3. PURCHASE, SALE AND DELIVERY OF THE NOTES. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company at 97% of their principal amount, the Notes. One or
more certificates in definitive form for the Notes that the Initial Purchaser
has agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Initial Purchaser requests upon written
notice to the Company at least 36 hours prior to the Closing Date, shall be
delivered by or on behalf of the Company to the Initial Purchaser, against
payment by or on behalf of the Initial Purchaser of the purchase price therefor
by wire transfer (same day funds), to such account or accounts as the Company
shall specify prior to the Closing Date, or by such means as the parties hereto
shall agree prior to the Closing Date. Such delivery of and payment for the
Notes shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 A.M., New York time, on July 31, 1998, or at such
other place, time or date as the Initial Purchaser, on the one hand, and the
Company, on the other hand, may agree upon, such time and date of delivery
against payment being herein referred to as the "CLOSING DATE." The Company will
make such certificate or certificates for the Notes available for checking and
packaging by the Initial Purchaser at the offices of BT ▇▇▇▇. ▇▇▇▇▇ Incorporated
in New York, New York, or at such other place as BT ▇▇▇▇. ▇▇▇▇▇ Incorporated may
designate, at least 24 hours prior to the Closing Date.
4. OFFERING BY THE INITIAL PURCHASER. The Initial Purchaser
proposes to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchaser is advisable.
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5. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the Initial Purchaser that:
(a) The Company will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial Purchaser
shall not previously have been advised and furnished a copy for a reasonable
period of time prior to the proposed amendment or supplement and as to which the
Initial Purchaser shall not have given its consent. The Company will promptly,
upon the reasonable request of the Initial Purchaser or counsel for the Initial
Purchaser, make any amendments or supplements to the Preliminary Memorandum or
the Final Memorandum that may be necessary or advisable in connection with the
resale of the Notes by the Initial Purchaser.
(b) The Company will cooperate with the Initial Purchaser in
arranging for the qualification of the Notes for offering and sale under the
securities or "Blue Sky" laws of which jurisdictions as the Initial Purchaser
may designate and will continue such qualifications in effect for as long as may
be necessary to complete the resale of the Notes; PROVIDED, HOWEVER, that in
connection therewith, the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation in excess of a nominal dollar amount
in any such jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the
distribution by the Initial Purchaser of the Notes or the Private Exchange
Notes, any event occurs or information becomes known as a result of which the
Final Memorandum as then amended or supplemented would include any untrue
statement of a material fact, or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Final Memorandum to comply with applicable law, the
Company will promptly notify the Initial Purchaser thereof and will prepare, at
the expense of the Company, an amendment or supplement to the Final Memorandum
that corrects such statement or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or supplement
thereto as the Initial Purchaser may reasonably request.
(e) The Company will apply the net proceeds from the sale of
the Notes substantially as set forth under "Use of Proceeds" in the Final
Memorandum.
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(f) For so long as any of the Notes remain outstanding, the
Company will furnish to the Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the Company to the Trustee
or to the holders of the Notes and, as soon as available, copies of any reports
or financial statements furnished to or filed by the Company with the Commission
or any national securities exchange on which any class of securities of the
Company may be listed.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchaser, as soon as they have been prepared, a copy of any unaudited
interim financial statements of the Company or Trimet for any period subsequent
to the period covered by the most recent financial statements appearing in the
Final Memorandum.
(h) None of the Company or any of its Affiliates will sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale of
the Notes in a manner which would require the registration under the Act of the
Notes.
(i) The Company will not engage in any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) in connection with the offering of the Notes or in any manner
involving a public offering within the meaning of Section 4(2) of the Act.
(j) For so long as any of the Notes remain outstanding, the
Company will make available at its expense, upon request, to any holder of such
Notes and any prospective purchasers thereof the information specified in Rule
144A(d)(4) under the Act, unless the Company is then subject to Section 13 or
15(d) of the Exchange Act.
(k) The Company will use its best efforts to (i) permit the
Notes to be designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the Private Offerings,
Resales and Trading through Automated Linkages market (the "PORTAL MARKET") and
(ii) permit the Notes to be eligible for clearance and settlement through The
Depository Trust Company.
(l) In connection with Notes offered and sold in an offshore
transaction (as defined in Regulation S) the Company will not register any
transfer of such Notes not made in accordance with the provisions of Regulation
S and will not, except in accordance with the provisions of Regulation S, if
applicable, issue any such Notes in the form of definitive securities.
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14
6. EXPENSES. The Company agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum and any amendment
or supplement thereto, (ii) all arrangements relating to the delivery to the
Initial Purchaser of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company, (iv) preparation (including printing), issuance and
delivery to the Initial Purchaser of the Notes, (v) the qualification of the
Notes under state securities and "Blue Sky" laws, and the preparation of a "Blue
Sky" memoranda, including filing fees and fees and disbursements of counsel for
the Initial Purchaser relating thereto, (vi) expenses in connection with any
meetings with prospective investors in the Notes, (vii) fees and expenses of the
Trustee, including fees and expenses of counsel, (viii) all expenses and listing
fees incurred in connection with the application for quotation of the Notes on
the PORTAL Market and (ix) any fees charged by investment rating agencies for
the rating of the Notes. If the sale of the Notes provided for herein 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 or because of any failure, refusal or inability on the part of the
Company 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 of its obligations hereunder), the Company agrees to promptly
reimburse the Initial Purchaser for all reasonable out-of-pocket expenses
(including reasonable fees, disbursements and charges of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Initial Purchaser), which shall be accompanied by such
supporting documentation as the Company may reasonably request, that shall have
been incurred by the Initial Purchaser in connection with the proposed purchase
and sale of the Notes.
7. CONDITIONS OF THE INITIAL PURCHASER'S OBLIGATIONS. The
obligation of the Initial Purchaser to purchase and pay for the Notes shall, in
its reasonable sole discretion, be subject to the satisfaction or waiver of the
following conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchaser shall have
received the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, subject to customary exceptions and qualifications, of ▇▇▇▇▇▇▇▇ ▇▇▇▇
& ▇▇▇▇▇, counsel
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for the Company, in form and substance satisfactory to counsel for the Initial
Purchaser, to the effect that:
(i) The Company is duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has
all requisite corporate power and authority to own its properties and
to conduct its business as described in the Final Memorandum. The
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions where the ownership or leasing
of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect.
(ii) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum; all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights.
(iii) Except as set forth in the Final Memorandum (A) no options,
warrants or other rights to purchase from the Company shares of capital
stock or ownership interests in the Company are outstanding, (B) no
agreements or other obligations to issue, or other rights to convert,
any obligation into, or exchange any securities for, shares of capital
stock or ownership interests in the Company are outstanding and (C) no
holder of securities of the Company is entitled to have such securities
registered under a registration statement filed by the Company pursuant
to the Registration Rights Agreement, other than pursuant to the Equity
Agreements.
(iv) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the
Indenture, the Notes, the Exchange Notes and the Private Exchange
Notes; the Indenture meets the requirements for qualification under the
TIA; the Indenture has been duly and validly authorized by the Company
and, when duly executed and delivered by the Company (assuming the due
authorization, execution and delivery thereof by the Trustee), will
constitute the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except
that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of
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equity and the discretion of the court before which any proceeding
therefor may be brought.
(v) The Notes are in the form contemplated by the Indenture. The
Notes have each been duly and validly authorized by the Company and,
when duly executed and delivered by the Company and paid for by the
Initial Purchaser in accordance with the terms of this Agreement
(assuming the due authorization, execution and delivery of the
Indenture by the Trustee and due authentication and delivery of the
Notes by the Trustee in accordance with the Indenture), will constitute
the valid and legally binding obligations of the Company, entitled to
the benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought.
(vi) The Exchange Notes and the Private Exchange Notes have been
duly and validly authorized by the Company, and when the Exchange Notes
and the Private Exchange Notes have been duly executed and delivered by
the Company in accordance with the terms of the Registration Rights
Agreement and the Indenture (assuming the due authorization, execution
and delivery of the Indenture by the Trustee and due authentication and
delivery of the Exchange Notes and the Private Exchange Notes by the
Trustee in accordance with the Indenture), will constitute the valid
and legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be
brought.
(vii) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration
Rights Agreement; the Registration Rights Agreement has been duly and
validly authorized by the Company and, when duly executed and delivered
by the Company (assuming due authorization, execution and delivery
thereof by the Initial Purchaser), will constitute the valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except that (A) the enforcement
thereof may be subject to
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(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought and (B) any rights
to indemnity or contribution thereunder may be limited by federal and
state securities laws and public policy considerations.
(viii) The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby; this Agreement
and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by the Company. This
Agreement has been duly executed and delivered by the Company.
(ix) The Indenture, the Notes and the Registration Rights Agreement
conform in all material respects to the descriptions thereof contained
in the Final Memorandum.
(x) No legal or governmental proceedings are pending or, to the
knowledge of such counsel, threatened to which any of the Company is a
party or to which the property or assets of the Company is subject
which, if determined adversely to the Company, would result,
individually or in the aggregate, in a Material Adverse Effect, or
which seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Notes to be sold
hereunder or the consummation of the other transactions described in
the Final Memorandum under the caption "Use of Proceeds."
(xi) The Company is not (i) in violation of its certificate of
incorporation or bylaws (or similar organizational document), (ii) to
the knowledge such counsel, in breach or violation of any statute,
judgment, decree, order, rule or regulation applicable to it or any of
its properties or assets, except for any such breach or violation which
would not, individually or in the aggregate, have a Material Adverse
Effect, or (iii) in breach or default under (nor has any event occurred
which, with notice or passage of time or both, would constitute a
default under) or in violation of any of the terms or provisions of any
Contract known to such counsel, except for any such breach, default,
violation or event which would not, individually or in the aggregate,
have a Material Adverse Effect.
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(xii) The execution, delivery and performance of this Agreement, the
Asset Purchase Agreement, the Indenture, the Registration Rights
Agreement and the consummation of the transactions contemplated hereby
and thereby (including, without limitation, the issuance and sale of
the Notes to the Initial Purchaser) will not conflict with or
constitute or result in a breach or a default under (or an event which
with notice or passage of time or both would constitute a default
under) or violation of any of (i) to the knowledge of such counsel, the
terms or provisions of any Contract, except for any such conflict,
breach, violation, default or event which would not, individually or in
the aggregate, have a Material Adverse Effect, (ii) the certificate of
incorporation or bylaws (or similar organizational document) of the
Company, or (iii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of the Initial Purchaser in Section 8
hereof) to the knowledge of such counsel, any statute, judgment,
decree, order, rule or regulation known to such counsel to be
applicable to the Company or any of its properties or assets, except
for any such conflict, breach or violation which would not,
individually or in the aggregate, have a Material Adverse Effect.
(xiii) No consent, approval, authorization or order of any
governmental authority is required for the issuance and sale by the
Company of the Notes to the Initial Purchaser or the consummation by
the Company of the other transactions contemplated hereby, except such
as may be required under Blue Sky laws, as to which such counsel need
express no opinion, and those which have previously been obtained.
(xiv) The Company has obtained all Permits necessary to conduct the
businesses now or proposed to be conducted by them as described in the
Final Memorandum, the lack of which would, individually or in the
aggregate, have a Material Adverse Effect; to the knowledge of such
counsel, the Company has fulfilled and performed all of its obligations
with respect to such 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.
(xv) To such counsel's knowledge, the Company (a) owns or possesses
adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights and know-how necessary to
conduct the businesses now or proposed to be operated by them as
described in the Final Memorandum, and (b) has not received any notice
of
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infringement of or conflict with asserted rights of others with respect
to any patents, trademarks, service marks, trade names, copyrights or
know-how which, if such assertion of infringement or conflict were
sustained, would have a Material Adverse Effect.
(xvi) To the knowledge of such counsel, there are no legal or
governmental proceedings involving or affecting the Company or any of
its properties or assets which would be required to be described in a
prospectus pursuant to the Act that are not described in the Final
Memorandum, nor are there any material contracts or other documents
which would be required to be described in a prospectus pursuant to the
Act that are not described in the Final Memorandum.
(xvii) The Company is not, or immediately after the sale of the
Notes to be sold hereunder and the application of the proceeds from
such sale (as described in the Final Memorandum under the caption "Use
of Proceeds") will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(xviii) No registration under the Act of the Notes is required in
connection with the sale of the Notes to the Initial Purchaser as
contemplated by this Agreement and the Final Memorandum or in
connection with the initial resale of the Notes by the Initial
Purchaser in accordance with Section 8 of this Agreement, and prior to
the commencement of the Exchange Offer (as defined in the Registration
Rights Agreement) or the effectiveness of the Shelf Registration
Statement (as defined in the Registration Rights Agreement), the
Indenture is not required to be qualified under the TIA, in each case
assuming (i) (A) that the purchasers who buy such Notes in the initial
resale thereof are qualified institutional buyers as defined in Rule
144A promulgated under the Act ("QIBs") or accredited investors as
defined in Rule 501(a) (1), (2), (3) or (7) promulgated under the Act
("Accredited Investors") or (B) that the offer or sale of the Notes is
made in an offshore transaction as defined in Regulation S, (ii) the
accuracy of the Initial Purchaser's representations in Section 8 and
those of the Company contained in this Agreement regarding the absence
of a general solicitation in connection with the sale of such Notes to
the Initial Purchaser and the initial resale thereof and (iii) the due
performance by the Initial Purchaser of the agreements set forth in
Section 8 hereof.
(xix) Neither the consummation of the transactions contemplated by
this Agreement nor the sale, issuance, execution or delivery of the
Notes will violate
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Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
At the time the foregoing opinion is delivered, ▇▇▇▇▇▇▇▇ ▇▇▇▇
& ▇▇▇▇▇ shall additionally state that it has participated in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company, representatives of the Initial
Purchaser and counsel for the Initial Purchaser, at which conferences the
contents of the Final Memorandum and related matters were discussed, and,
although it has not independently verified and is not passing upon and assumes
no responsibility for the accuracy, completeness or fairness of the statements
contained in the Final Memorandum (except to the extent specified in subsection
7(a)(ix)), no facts have come to its attention which lead it to believe that the
Final Memorandum, on the date thereof or at the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading (it being
understood that such firm need express no opinion with respect to the financial
statements and related notes thereto and the other financial, statistical and
accounting data included in the Final Memorandum). The opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇ described in this Section shall be rendered to the Initial Purchaser at
the request of the Company and shall so state therein.
References to the Final Memorandum in this subsection (a)
shall include any amendment or supplement thereto prepared in accordance with
the provisions of this Agreement at the Closing Date.
(b) On the Closing Date, the Initial Purchaser shall have
received the opinion, in form and substance satisfactory to the Initial
Purchaser, dated as of the Closing Date and addressed to the Initial Purchaser,
of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchaser, with respect to
certain legal matters relating to this Agreement and such other related matters
as the Initial Purchaser may reasonably require. In rendering such opinion,
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have received and may rely upon such certificates
and other documents and information as it may reasonably request to pass upon
such matters.
(c) The Initial Purchaser shall have received from the
Independent Accountants a comfort letter or letters dated the date hereof and
the Closing Date, in form and substance reasonably satisfactory to counsel for
the Initial Purchaser.
(d) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all
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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; the statements of the Company's
officers made pursuant to any certificate delivered in accordance with the
provisions hereof shall be true and correct in all material respects on and as
of the date made and on and as of the Closing Date; the Company shall have
performed all covenants and agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to the Closing Date; and,
except as described in the Final Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), subsequent to the date of the most
recent financial statements in such Final Memorandum, there shall have been no
event or development, and no information shall have become known, that,
individually or in the aggregate, has or would be reasonably likely to have a
Material Adverse Effect.
(e) The sale of the Notes hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(f) Subsequent to the date of the most recent financial
statements in the Final Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), the Company shall not have sustained any loss or
interference with respect to its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any strike, labor dispute, slow down or work stoppage or from any legal or
governmental proceeding, order or decree, which loss or interference,
individually or in the aggregate, has or would be reasonably likely to have a
Material Adverse Effect.
(g) The Initial Purchaser shall have received a certificate of
the Company, dated the Closing Date, signed on behalf of the Company by its
Chairman of the Board, President or any Senior Vice President and the Chief
Financial Officer, to the effect that:
(i) The representations and warranties of the Company contained in
this Agreement are true and correct in all material respects on and as
of the date hereof and on and as of the Closing Date, and the Company
has performed all covenants and agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to the
Closing Date;
(ii) At the Closing Date, since the date hereof or since the date of
the most recent financial statements in the Final Memorandum (exclusive
of any amendment or supplement thereto after the date hereof), no event
or development has occurred, and no information has become
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known, that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect; and
(iii) The sale of the Notes hereunder has not been enjoined
(temporarily or permanently).
(h) On or before the Closing Date, (i) the Acquisition shall
have been consummated, (ii) the Company shall have received an equity
contribution in the aggregate amount of $6.0 million from Charter Oak Partners,
its affiliates and management, and (iii) the New Credit Agreement shall have
been executed and delivered by the parties thereto, shall be in full force and
effect and in form and substance satisfactory to the Initial Purchaser.
(i) On the Closing Date, the Initial Purchaser shall have
received the Registration Rights Agreement executed by the Company and such
agreement shall be in full force and effect at all times from and after the
Closing Date.
On or before the Closing Date, the Initial Purchaser and
counsel for the Initial Purchaser shall have received such further documents,
opinions, certificates, letters and schedules or instruments relating to the
business, corporate, legal and financial affairs of the Company as they shall
have heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters, schedules
or instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchaser and counsel for the Initial Purchaser. The
Company shall furnish to the Initial Purchaser such conformed copies of such
documents, opinions, certificates, letters, schedules and instruments in such
quantities as the Initial Purchaser shall reasonably request.
8. OFFERING OF NOTES; RESTRICTIONS ON TRANSFER. (a) The
Initial Purchaser represents and warrants that it is a QIB. The Initial
Purchaser agrees with the Company that (i) it has not and will not solicit
offers for, or offer or sell, the Notes by any form of general solicitation or
general advertising (as those terms are used in Regulation D under the Act) or
in any manner involving a public offering within the meaning of Section 4(2) of
the Act; and (ii) it has and will solicit offers for the Notes only from, and
will offer the Notes only to (A) in the case of offers inside the United States,
persons whom the Initial Purchaser reasonably believes 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
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the Initial Purchaser that each such account is a QIB, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A and (B) in the case of offers outside
the United States, to persons other than U.S. persons ("foreign purchasers,"
which term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)); PROVIDED, HOWEVER, that, in the case of this clause (B),
in purchasing such Notes such persons are deemed to have represented and agreed
as provided under the caption "Transfer Restrictions" contained in the Final
Memorandum (or, if the Final Memorandum is not in existence, in the most recent
Memorandum).
(b) The Initial Purchaser represents and warrants with respect
to offers and sales outside the United States that (i) it has and will comply
with all applicable laws and regulations in each jurisdiction in which it
acquires, offers, sells or delivers Notes or has in its possession or
distributes any Memorandum or any such other material, in all cases at its own
expense; (ii) the Notes have not been and will not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act; (iii) it has offered the Notes and will
offer and sell the Notes (A) as part of its distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date, only in accordance with Rule 903 of Regulation S and,
accordingly, neither it nor any persons acting on its behalf have engaged or
will engage in any directed selling efforts (within the meaning of Regulation S)
with respect to the Notes, and any such persons have complied and will comply
with the offering restrictions requirement of Regulation S; and (iv) it agrees
that, at or prior to confirmation of sales of the Notes, it will have sent to
each distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Notes from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under
the United States Securities Act of 1933 (the "Securities
Act") and may not be offered and sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as
part of the distribution of the Securities at any time or (ii)
otherwise until 40 days after the later of the commencement of
the offering and the closing date of the
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offering, except in either case in accordance with Regulation
S (or Rule 144A if available) under the Securities Act. Terms
used above have the meaning given to them in Regulation S."
Terms used in this Section 8 and not defined in this Agreement
have the meanings given to them in Regulation S.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company 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, against any losses, claims, damages or
liabilities to which the Initial Purchaser or such controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as any such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto
or any application or other document, or any amendment or supplement
thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in
order to qualify the Notes under the securities or "Blue Sky" laws
thereof or filed with any securities association or securities exchange
(each an "Application"); or
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto or any Application, a material fact
required to be stated therein or necessary to make the statements
therein not misleading,
and will reimburse, as incurred, the Initial Purchaser and each such controlling
person for any reasonable legal or other expenses incurred by the Initial
Purchaser or such controlling person in connection with investigating, defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action; PROVIDED, HOWEVER, the Company will not be
liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any Memorandum or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information concerning the Initial Purchaser furnished
to the Company by the Initial Purchaser specifically for use therein.
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This indemnity agreement will be in addition to any liability that the Company
may otherwise have to the indemnified parties. The Company shall not be liable
under this Section 9 for any settlement of any claim or action effected without
its prior written consent, which shall not be unreasonably withheld. The Initial
Purchaser shall not, without the prior written consent of the Company, effect
any settlement or compromise of any pending or threatened proceeding in respect
of which the Company is or could have been a party, or indemnity could have been
sought hereunder by the Company, unless such settlement (A) includes an
unconditional written release of the Company, in form and substance reasonably
satisfactory to the Company, from all liability on claims that are the subject
matter of such proceeding and (B) does not include any statement as to an
admission of fault, culpability or failure to act by or on behalf of the
Company.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Company, its directors, its officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer or controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any Memorandum or any amendment or supplement thereto
or any Application, or (ii) the omission or the alleged omission to state
therein a material fact required to be stated in any Memorandum or any amendment
or supplement thereto or any Application, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
concerning the Initial Purchaser, furnished to the Company by the Initial
Purchaser specifically for use therein; and subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action in respect thereof. This indemnity agreement will be
in addition to any liability that the Initial Purchaser may otherwise have to
the indemnified parties. The Initial Purchaser shall not be liable under this
Section 9 for any settlement of any claim or action effected without their
consent, which shall not be unreasonably withheld. The Company shall not,
without the prior written consent of the Initial Purchaser, effect any
settlement or
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compromise of any pending or threatened proceeding in respect of which the
Initial Purchaser is or could have been a party, or indemnity could have been
sought hereunder by the Initial Purchaser, unless such settlement (A) includes
an unconditional written release of the Initial Purchaser, in form and substance
reasonably satisfactory to the Initial Purchaser, from all liability on claims
that are the subject matter of such proceeding and (B) does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of the Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party of the commencement
thereof in writing; but the omission to so notify the indemnifying party (i)
will not relieve it from any liability under paragraph (a) or (b) above unless
and to the extent such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraphs (a) and (b)
above. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party; PROVIDED, HOWEVER, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such
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indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Initial Purchaser
in the case of paragraph (a) of this Section 9 or the Company in the case of
paragraph (b) of this Section 9, representing the indemnified parties under such
paragraph (a) or paragraph (b), as the case may be, who are parties to such
action or actions) or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the prior written consent of the indemnifying party (which consent shall
not be unreasonably withheld), unless such indemnified party waived in writing
its rights under this Section 9, in which case the indemnified party may effect
such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 9 is unavailable to, or
insufficient to hold harmless, an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Notes or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
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actions in respect thereof). The relative benefits received by the Company on
the one hand and the Initial Purchaser on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (before deducting
expenses) received by the Company bear to the total discounts and commissions
received by the Initial Purchaser. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand,
or the Initial Purchaser on the other, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission or alleged statement or omission, and any other equitable
considerations appropriate in the circumstances. The Company and the Initial
Purchaser agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), the Initial Purchaser
shall not be obligated to make contributions hereunder that in the aggregate
exceed the total discounts, commissions and other compensation received by the
Initial Purchaser under this Agreement, less the aggregate amount of any damages
that the Initial Purchaser has otherwise been required to pay by reason of the
untrue or alleged untrue statements or the omissions or alleged omissions to
state a material fact, and no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial Purchaser, and each director of the Company, each officer of the Company
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company.
10. SURVIVAL CLAUSE. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, its officers and the Initial Purchaser set forth in this Agreement or
made by or on behalf of them pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, the Initial Purchaser or any
controlling person referred to in Section 9 hereof and (ii) delivery of and
payment for the Notes. The respective agreements, covenants, indemnities and
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other statements set forth in Sections 6, 9 and 15 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
11. TERMINATION. (a) This Agreement may be terminated in the
reasonable sole discretion of the Initial Purchaser by written notice to the
Company, which notice shall specify the basis for termination, given prior to
the Closing Date in the event that the Company shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on its part to
be performed or satisfied hereunder at or prior thereto or, if at or prior to
the Closing Date:
(i) the Company shall have sustained any loss or interference with
respect to its businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or
from any strike, labor dispute, slow down or work stoppage or any legal
or governmental proceeding, which loss or interference, in the sole
judgment of the Initial Purchaser, has had or has a Material Adverse
Effect, or there shall have been, in the sole judgment of the Initial
Purchaser, any event or development that, individually or in the
aggregate, has or could be reasonably likely to have a Material Adverse
Effect (including without limitation a change in control of the
Company), except in each case as described in the Final Memorandum
(exclusive of any amendment or supplement thereto);
(ii) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the NASDAQ National Market shall have been
suspended or minimum or maximum prices shall have been established on
any such exchange or market;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States which, in the case of (A), (B) or (C)
above and in the reasonable sole judgment of the Initial Purchasers,
makes it impracticable or inadvisable to proceed with the offering or
the delivery of the Notes as contemplated by the Final Memorandum; or
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(v) any securities of the Company shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. INFORMATION SUPPLIED BY THE INITIAL PURCHASER. The
statements set forth in the last paragraph on the front cover page and in the
second and third sentences of the third paragraph under the heading "Private
Placement" in the Final Memorandum (to the extent such statements relate to the
Initial Purchaser) constitute the only information furnished by the Initial
Purchaser to the Company for the purposes of Sections 2(a) and 9 hereof.
13. NOTICES. All communications hereunder shall be in writing
and, if sent to the Initial Purchasers, shall be mailed or delivered to BT ▇▇▇▇.
▇▇▇▇▇ Incorporated, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Finance Department; if sent to the Company, shall be mailed or
delivered to the Company at GEO Specialty Chemicals, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇;
with a copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, 3900 Society Center, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; and one
business day after being timely delivered to a next-day air courier.
14. SUCCESSORS. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchaser, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 9 of this Agreement
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shall also be for the benefit of any person or persons who control the Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchaser contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Company, its officers and any person or persons who control the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Notes from the Initial Purchaser will be deemed a successor
because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and the Initial Purchaser.
Very truly yours,
GEO SPECIALTY CHEMICALS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President & C.F.O.
The foregoing Agreement is
hereby confirmed and accepted as of
the date first above written.
BT ALEX. BROWN INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
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