1
Exhibit 4.2
$100,000,000
10 1/4% Senior Subordinated Notes due 2007
SAC AUTOMOTIVE, INC.
PURCHASE AGREEMENT
December 4, 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
2
$100,000,000
10 1/4% Senior Subordinated Notes due 2007
SAC AUTOMOTIVE INC.
PURCHASE AGREEMENT
December 4, 1997
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
SAC Automotive Inc., a Delaware corporation, which upon the
completion of the Acquisition and the Merger Transactions referred to below will
have the name "Stanadyne Automotive Corp." (the "COMPANY"), proposes to issue
and sell to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation (the "INITIAL
PURCHASER") an aggregate of $100,000,000 in principal amount of its 10 1/4%
Senior Subordinated Notes due 2007 (the "SERIES A NOTES"), subject to the terms
and conditions set forth herein. The Series A Notes are to be issued pursuant to
the provisions of an indenture (the "INDENTURE"), to be dated as of the Closing
Date (as defined below), among the Company, and United States Trust Company of
New York, as trustee (the "TRUSTEE"). The Series A Notes and the Series B Notes
(as defined below) issuable in exchange therefor are collectively referred to
herein as the "NOTES." The Notes will be guaranteed (the "SUBSIDIARY
GUARANTEES") by each of the entities listed on Schedule A hereto (each, a
"GUARANTOR" and collectively the "GUARANTORS"). The Company and the Guarantors
are referred to herein collectively as the "ISSUERS." Capitalized terms used but
not defined herein shall have the meanings given to such terms in the Indenture.
The Notes are being issued and sold in connection with the purchase
(the "STOCK PURCHASE"), pursuant to a Stock Purchase Agreement dated November 7,
1997 (the "STOCK PURCHASE AGREEMENT"), by American Industrial Partners Capital
Fund II, L.P. ("AIP"), from Metromedia Company and certain other persons
(collectively, the "STANADYNE SELLERS") of all of the issued and outstanding
shares of capital stock of Stanadyne Automotive Holding Corp., a Delaware
corporation ("OLD HOLDINGS"). Pursuant to the Stock Purchase and certain related
transactions that will be consummated substantially simultaneously, (i) AIP and
certain management investors will purchase common equity of SAC, Inc., a
Delaware corporation ("NEW HOLDINGS"), (ii) the Company will issue and sell the
Notes, together with the guarantee thereof of the Subsidiary Guarantors, (iii)
the Company will enter into a Credit Agreement (the "CREDIT AGREEMENT") with the
lenders and
3
administrative and collateral agents named therein pursuant to which it will
borrow $55.0 million in term loans and approximately $11.5 million in revolving
loans, (iv) the Company will advance $67.5 million to New Holdings in the form
of an intercompany note, and (v) New Holdings will purchase the issued and
outstanding capital stock of Old Holdings. Immediately upon the consummation of
the Acquisition, (a) Old Holdings will merge with and into Stanadyne Automotive
Corp., a Delaware corporation ("OLD STANADYNE"), which will be the surviving
corporation of the merger, (b) the Company will merge with and into Old
Stanadyne, which will be the surviving corporation of the merger, and (c) New
Holdings will change its name to "Stanadyne Automotive Holding Corp."
As used in this Agreement, (I) the term "ACQUISITION" shall mean the
transaction described in clause (v) of the immediately foregoing paragraph; (II)
the term "MERGER TRANSACTIONS" shall mean, collectively, the transactions
described in clauses (a), (b) and (c) of the immediately foregoing paragraph;
(III) the term "ACQUISITION TRANSACTIONS" shall mean, collectively, all of the
transactions described in the immediately foregoing paragraph; (IV) the term
"ACQUISITION DOCUMENTS" shall mean, collectively, the Stock Purchase Agreement
and all related acquisition agreements and documentation (including without
limitation all documentation relating to or providing for the Merger
Transactions), (V) the term "BANK AGREEMENTS" shall mean, collectively, the
Credit Agreement and all related agreements creating security interests in the
assets of the Company for the benefit of the holders of indebtedness arising
under the Credit Agreement, and (VI) the term "TRANSACTION DOCUMENTS" shall
mean, collectively, the Acquisition Documents, the Bank Agreements, this
Agreement, the Notes, the Subsidiary Guarantees and the Indenture.
1. OFFERING MEMORANDUM. The Series A Notes will be offered and sold
to the Initial Purchaser pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"ACT"). The Issuers have prepared a preliminary offering memorandum, dated
November 17, 1997 (the "PRELIMINARY OFFERING MEMORANDUM") and a final offering
memorandum, dated December 4, 1997 (the "OFFERING MEMORANDUM"), relating to the
Series A Notes and the Subsidiary Guarantees.
Upon original issuance thereof, and until such time as the same is
no longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THE NOTES (OR THEIR PREDECESSORS) EVIDENCED HEREBY WERE ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX
XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE NOTES 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 NOTES 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 NOTES EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH NOTES
2
4
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE
UNITED STATES 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 903 OR RULE 904 OF REGULATION
S UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON
AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (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
NOTES EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Issuers agree to issue
and sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase
from the Issuers, an aggregate principal amount of $100,000,000 of Series A
Notes at a purchase price equal to 97 1/4% of the principal amount thereof (the
"PURCHASE PRICE").
3. TERMS OF OFFERING. The Initial Purchaser has advised the Issuers
that the Initial Purchaser will make offers (the "EXEMPT RESALES") of the Series
A Notes purchased hereunder on the terms set forth in the Offering Memorandum,
as amended or supplemented, solely to (i) persons whom the Initial Purchaser
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBS"), and (ii) to persons permitted to purchase the
Series A Notes in offshore transactions in reliance upon Regulation S under the
Act (each, a "REGULATION S PURCHASER") (such persons specified in clauses (i)
and (ii) being referred to herein as the "ELIGIBLE PURCHASERS"). The Initial
Purchaser will offer the Series A Notes to Eligible Purchasers initially at a
price equal to 100% of the principal amount thereof. Such price may be changed
at any time without notice.
Holders (including subsequent transferees) of the Series A Notes
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such Series A Notes
constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuers
will agree to file with the Securities and Exchange Commission (the
"COMMISSION") under the circumstances set forth therein (i) a registration
statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating
to the Company's 10 1/4% Series B Senior Subordinated Notes (the "SERIES B
NOTES"), to be offered in exchange for the Series A Notes and the Subsidiary
Guarantees thereof (such offer to
3
5
exchange being referred to as the "EXCHANGE OFFER") and (ii) a shelf
registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT" and, together with the Exchange Offer Registration
Statement, the "REGISTRATION STATEMENTS") relating to the resale by certain
holders of the Series A Notes and to use its best efforts to cause such
Registration Statements to be declared and remain effective and usable for the
periods specified in the Registration Rights Agreement and to consummate the
Exchange Offer. The Transaction Documents and the Registration Rights Agreement
are hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the
Series A Notes shall be made at the offices of Xxxxxxxx & Xxxxx at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other location as may be mutually
acceptable. Such delivery and payment shall be made at 9:00 a.m. New York City
time, on December 11, 1997 or at such other time as shall be agreed upon by the
Initial Purchaser and the Company. The time and date of such delivery and the
payment are herein called the "Closing Date."
(b) One or more of the Series A Notes in definitive global
form, registered in the name of Cede & Co., as nominee of the Depository Trust
Company ("DTC"), having an aggregate principal amount corresponding to the
aggregate principal amount of the Series A Notes (collectively, the "GLOBAL
NOTE"), shall be delivered by the Company to the Initial Purchaser (or as the
Initial Purchaser directs) in each case with any transfer taxes thereon duly
paid by the Company against payment by the Initial Purchaser of the Purchase
Price thereof by wire transfer in same day funds to the order of the Company.
The Global Note shall be made available to the Initial Purchaser for inspection
not later than 9:30 a.m., New York City time, on the business day immediately
preceding the Closing Date.
5. AGREEMENTS OF EACH OF THE ISSUERS. Each of the Issuers, jointly
and severally, hereby agrees with the Initial Purchaser as follows:
(a) To advise the Initial Purchaser promptly and, if requested
by the Initial Purchaser, confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the qualification
or exemption from qualification of any Series A Notes for offering or sale in
any jurisdiction designated by the Initial Purchaser pursuant to Section 5(e)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose and (ii) of
the happening of any event during the period referred to in Section 5(c) below
that makes any statement of a material fact made in the Preliminary Offering
Memorandum or the Offering Memorandum untrue or that requires any additions to
or changes in the Preliminary Offering Memorandum or the Offering Memorandum in
order to make the statements therein not misleading. The Company shall use its
best efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption of any Series A Notes under any state securities or
Blue Sky laws and, if at any time any state securities commission or other
federal or state regulatory authority shall issue an order suspending the
qualification or exemption of any Series A Notes under any state securities or
Blue Sky laws, the Company shall use its best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time.
4
6
(b) To furnish the Initial Purchaser and those persons
identified by the Initial Purchaser to the Company as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchaser may reasonably request for the
time period specified in Section 5(c). Subject to the Initial Purchaser's
compliance with its representations and warranties and agreements set forth in
Section 7 hereof, the Company consents to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchaser in connection with
Exempt Resales.
(c) During such period as in the opinion of counsel for the
Initial Purchaser an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchaser and in connection with
market-making activities of the Initial Purchaser for so long as any Series A
Notes are outstanding, (i) not to make any amendment or supplement to the
Offering Memorandum of which the Initial Purchaser shall not previously have
been advised or to which the Initial Purchaser shall reasonably object after
being so advised and (ii) to prepare promptly upon the Initial Purchaser's
reasonable request, any amendment or supplement to the Offering Memorandum which
may be necessary or advisable in connection with such Exempt Resales or such
market-making activities.
(d) If, during the period referred to in Section 5(c) above,
any event shall occur or condition shall exist as a result of which, in the
opinion of counsel to the Initial Purchaser, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when such Offering Memorandum is delivered to an
Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchaser, it is necessary to amend or supplement the Offering
Memorandum to comply with any applicable law, forthwith to prepare an
appropriate amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such Offering
Memorandum will comply with applicable law, and to furnish to the Initial
Purchaser and such other persons as the Initial Purchaser may designate such
number of copies thereof as the Initial Purchaser may reasonably request.
(e) Prior to the sale of all Series A Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchaser and
counsel to the Initial Purchaser in connection with the registration or
qualification of the Series A Notes for offer and sale to the Initial Purchaser
and pursuant to Exempt Resales under the securities or Blue Sky laws of such
states as the Initial Purchaser may request and to continue such registration or
qualification in effect so long as required for Exempt Resales and to file such
consents to service of process or other documents as may be necessary in order
to effect such registration or qualification; provided, however, that none of
the Issuers shall be required in connection therewith to qualify as a foreign
corporation in any jurisdiction in which it is not now so qualified or to take
any action that would subject it to general consent to service of process or
taxation other than as to matters and transactions relating to the Preliminary
Offering Memorandum, the Offering Memorandum or Exempt Resales, in any
jurisdiction in which it is not now so subject.
5
7
(f) So long as the Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company and its
subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
the Company's independent public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(g) So long as the Notes are outstanding, to furnish to the
Initial Purchaser as soon as available copies of all reports or other
communications furnished by any of the Issuers to its security holders or
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of any of the Issuers is listed and such other
publicly available information concerning the Company and/or its subsidiaries as
the Initial Purchaser may reasonably request.
(h) So long as any of the Series A Notes remain outstanding
and during any period in which the Issuers are not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
to make available to any holder of Series A Notes in connection with any sale
thereof and any prospective purchaser of such Series A Notes from such holder
the information ("RULE 144A INFORMATION") required by Rule 144A(d)(4) under the
Act.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the obligations of the Issuers
under this Agreement, including: (i) the fees, disbursements and expenses of
counsel to the Issuers and accountants of the Issuers in connection with the
sale and delivery of the Series A Notes to the Initial Purchaser and pursuant to
Exempt Resales, and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum, the Offering Memorandum and all amendments and supplements to any of
the foregoing (including financial statements), including the mailing and
delivering of copies thereof to the Initial Purchaser and persons designated by
it in the quantities specified herein, (ii) all fees and expenses in connection
with the roadshow; provided, however, the Initial Purchaser shall, subject to
receipt of reasonably satisfactory supporting documentation therefore, pay 50%
of the costs and expenses related to the services of the airplane used for such
roadshow, (iii) all costs and expenses related to the transfer and delivery of
the Series A Notes to the Initial Purchaser and pursuant to Exempt Resales,
including any transfer or other taxes payable thereon, (iv) all costs of
printing or producing this Agreement, the other Operative Documents and any
other agreements or documents in connection with the offering, purchase, sale or
delivery of the Series A Notes, (v) all expenses in connection with the
registration or qualification of the Series A Notes and the Subsidiary
Guarantees for offer and sale under the securities or Blue
6
8
Sky laws of the several states and all costs of printing or producing any
preliminary and supplemental Blue Sky memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for the Initial
Purchaser in connection with such registration or qualification and memoranda
relating thereto), (vi) the cost of printing certificates representing the
Series A Notes and the Subsidiary Guarantees, (vii) all expenses and listing
fees in connection with the application for quotation of the Series A Notes in
the National Association of Securities Dealers, Inc. ("NASD") Automated
Quotation System - PORTAL ("PORTAL"), (viii) the fees and expenses of the
Trustee and the Trustee's counsel in connection with the Indenture, the Notes
and the Subsidiary Guarantees, (ix) the costs and charges of any transfer agent,
registrar and/or depositary (including DTC), (x) any fees charged by rating
agencies for the rating of the Notes, (xi) all costs and expenses of the
Exchange Offer and any Registration Statement, as set forth in the Registration
Rights Agreement, and (xii) and all other costs and expenses incident to the
performance of the obligations of the Issuers hereunder for which provision is
not otherwise made in this Section.
(j) To use its best efforts to effect the inclusion of the
Series A Notes in PORTAL and to maintain the listing of the Series A Notes on
PORTAL for so long as the Series A Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of
the Notes, and to comply with all of its agreements set forth in the
representation letters of the Issuers to DTC relating to the approval of the
Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise transfer or dispose of any debt securities of any Issuer or
any warrants, rights or options to purchase or otherwise acquire debt securities
of any Issuer substantially similar to the Notes and the Subsidiary Guarantees
(other than (i) the Notes and the Subsidiary Guarantees and (ii) commercial
paper issued in the ordinary course of business), without the prior written
consent of the Initial Purchaser.
(m) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Series A Notes to the Initial Purchaser
or pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Series A Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Notes.
(o) To cause the Exchange Offer to be made in the appropriate
form to permit Series B Notes and guarantees thereof by the Guarantors
registered pursuant to the Act to be offered in exchange for the Series A Notes
and the Subsidiary Guarantees and to comply with all applicable federal and
state securities laws in connection with the Exchange Offer.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
7
9
(q) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Closing Date and to satisfy all conditions precedent to the delivery of
the Series A Notes and the Subsidiary Guarantees.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF EACH OF THE
ISSUERS. As of the date hereof, each of the Issuers jointly and severally
represents and warrants to, and agrees with, the Initial Purchaser that:
(a) The Company and Old Stanadyne each have all requisite
corporate power and authority to execute, deliver and perform their respective
obligations under each of the Transaction Documents to which it is and will be a
party; each of the Transaction Documents, and the transactions contemplated
thereby, has been and upon completion of the Acquisition Transactions, will be
duly and validly authorized, executed and delivered by each of the Company and
Old Stanadyne and, to the extent it is a party thereto, each constitutes a valid
and legally binding agreement of each of the Company and Old Stanadyne
enforceable against the Company and Old Stanadyne in accordance with its terms
(assuming due authorization, execution and delivery of each Transaction Document
by any other party thereto) except that 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 (regardless of whether enforceability is considered in a
proceeding at law or in equity); except as set forth in the Offering Memorandum,
no consent, approval, authorization or order of any court or governmental agency
or body is required for the performance of any of the Transaction Documents by,
to the extent each is a party thereto, or the consummation by the Company and
Old Stanadyne of any of the transactions contemplated thereby, except such as
may be required and have been obtained, or upon effectiveness of the
Registration Statements, will have been obtained, under the Act, the Trust
Indenture Act or state securities or "Blue Sky" laws in connection with the
purchase and distribution of the Notes by the Initial Purchaser; and neither the
Company, Old Stanadyne, nor any of the Guarantors, is (i) in violation of its
certificate of incorporation or bylaws, (ii) in violation of any statute,
judgment, decree, order, rule or regulation applicable to any of them or any of
their respective properties or assets, which violation would have a Material
Adverse Effect, or (iii) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any of the Transaction
Documents or any other contract, indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit, certificate or
agreement or instrument to which any of them is a party or to which any of them
is subject, which default would have a Material Adverse Effect.
(b) The execution, delivery and performance by the Company and
Old Stanadyne to the extent each is a party thereto, of each of the Transaction
Documents, and the consummation by the Company and Old Stanadyne of the
transactions contemplated thereby, will not violate, conflict with or constitute
or result in a breach of or a default under (or an event which, with notice or
lapse of time, or both, would constitute a breach of or a default under) any of
(i) the terms or provisions of any of the Transaction Documents or any other
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, or agreement or instrument to which the Company or Old
Stanadyne, is a party or to which any of their respective properties or assets
are subject, which violation, conflict, breach or default would have a Material
Adverse Effect, (ii) the certificate of incorporation or bylaws of the Company
or Old Stanadyne, or (iii) (assuming
8
10
compliance with all applicable state securities and "Blue Sky" laws) any
statute, judgment, decree, order, rule or regulation of any court or
governmental agency or other body applicable to the Company or Old Stanadyne, or
any of their respective properties or assets, which violation, conflict, breach
or default would have a Material Adverse Effect.
(c) Immediately after the consummation of the Acquisition
Transactions, the fair value and present fair saleable value of the assets of
each of the Company and Old Stanadyne will exceed the sum of their respective
stated liabilities and identified contingent liabilities; none of the Company
nor Old Stanadyne will be, after giving effect to the execution, delivery and
performance of the Transaction Documents, to the extent each is a party thereto,
and the consummation of the transactions contemplated thereby, (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.
(d) The Company has delivered to the Initial Purchaser a true
and correct copy of each of the Transaction Documents that have been executed
and delivered prior to the date of this Agreement and each other Transaction
Document in the form substantially as it will be executed and delivered on or
prior to the Closing Date, together with all related agreements and all
schedules and exhibits thereto, and there have been no amendments, alterations,
modifications or waivers of any of the provisions of any of the Transaction
Documents since their date of execution or from the form in which it has been
delivered to the Initial Purchaser; there exists as of the date hereof (after
giving effect to the transactions contemplated by each of the Transaction
Documents) no event or condition which would constitute a default or an event of
default (in each case as defined in each of the Transaction Documents) under any
of the Transaction Documents which would result in a Material Adverse Effect or
materially adversely effect the ability of the Company and Old Stanadyne to
consummate the Acquisition Transactions and the transactions contemplated by the
Purchase Agreement.
(e) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (f) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(f) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business
9
11
in each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, or draw into question the validity of this
Agreement or the other Operative Documents (a "MATERIAL ADVERSE EFFECT").
(g) All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights. After giving effect to the
Acquisition Transactions, all of the outstanding shares of capital stock of the
Company will be owned by New Holdings, and all of the outstanding shares of
capital stock of New Holdings will be owned by AIP and management investors, in
each case free and clear of any security interest, claim, lien pledge or other
encumbrance (except as may arise pursuant to the Bank Agreements), and except as
set forth in the Offering Memorandum there are no, and at the Closing Date there
will not be, any outstanding rights (including without limitation pre-emptive
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in the
Company or any of its direct or indirect subsidiaries (including without
limitation the Guarantors), or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of any capital
stock of the Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options.
(h) The entities listed on Schedule B hereto are the only
subsidiaries, direct or indirect, of the Company. All of the outstanding shares
of capital stock of each of the Company's subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable, and are owned by the
Company, directly or indirectly through one or more subsidiaries, free and clear
of any security interest, claim, lien, encumbrance or adverse interest of any
nature (each, a "LIEN") except for Liens under the Credit Agreement.
(i) This Agreement has been duly authorized, executed and
delivered by each of the Issuers.
(j) The Indenture has been duly authorized by each of the
Issuers and, on the Closing Date, will have been validly executed and delivered
by each of the Issuers. When the Indenture has been duly executed and delivered
by each of the Issuers, and assuming the due authorization, execution and
delivery of the Indenture by the Trustee, the Indenture will be a valid and
binding agreement of each of the Issuers, enforceable against each of the
Issuers in accordance with its terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Indenture will conform in all material
respects to the requirements of the Trust Indenture Act of 1939, as amended (the
"TIA" or "TRUST INDENTURE ACT"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(k) The Series A Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Series A Notes have been issued, executed and authenticated in accordance
with the provisions of the Indenture and delivered
10
12
to and paid for by the Initial Purchaser in accordance with the terms of this
Agreement, the Series A Notes will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability. On the
Closing Date, the Series A Notes will conform as to legal matters to the
description thereof contained in the Offering Memorandum.
(l) On the Closing Date, the Series B Notes will have been
duly authorized by the Company. When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(m) The Subsidiary Guarantee to be endorsed on the Series A
Notes by each Guarantor has been duly authorized by such Guarantor and, on the
Closing Date, will have been duly executed and delivered by each such Guarantor.
When the Series A Notes have been issued, executed and authenticated in
accordance with the Indenture and delivered to and paid for by the Initial
Purchaser in accordance with the terms of this Agreement, the Subsidiary
Guarantee of each Guarantor endorsed thereon will be entitled to the benefits of
the Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Subsidiary Guarantees to be
endorsed on the Series A Notes will conform as to legal matters to the
description thereof contained in the Offering Memorandum.
(n) The Subsidiary Guarantee to be endorsed on the Series B
Notes by each Guarantor has been duly authorized by such Guarantor and, when
issued, will have been duly executed and delivered by each such Guarantor. When
the Series B Notes have been issued, executed and authenticated in accordance
with the terms of the Exchange Offer and the Indenture, the Subsidiary Guarantee
of each Guarantor endorsed thereon will be entitled to the benefits of the
Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability. When the Series B Notes are issued, authenticated and
delivered, the Subsidiary Guarantees to be endorsed on the Series B Notes will
conform as to legal matters to the description thereof in the Offering
Memorandum.
(o) The Registration Rights Agreement has been duly authorized
by the Issuers and, on the Closing Date, will have been duly executed and
delivered by the Issuers. When the Registration Rights Agreement has been duly
executed and delivered, the Registration Rights
11
13
Agreement will be a valid and binding agreement of the Issuers, enforceable
against each of the Issuers in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Registration Rights Agreement
will conform as to legal matters to the description thereof in the Offering
Memorandum.
(p) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound.
(q) The execution, delivery and performance of this Agreement
and the other Transaction Documents by the Issuers, compliance by the Issuers
with all provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states), (ii) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, (x) the charter
or by-laws of the Company or any of its subsidiaries or (y) any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and its subsidiaries, taken as a whole, to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective property is bound which default referred
to in this clause (y) would have a Material Adverse Effect, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or any of their respective property, (iv)
result in the imposition or creation of (or the obligation to create or impose)
a Lien under, any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound, or (v) result in the termination, suspension
or revocation of any Authorization (as defined below) of the Company or any of
its subsidiaries or result in any other impairment of the rights of the holder
of any such Authorization.
(r) There are no legal or governmental proceedings pending or
to the Company's knowledge threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their respective property
is or could be subject, which might, singly or in the aggregate, result in a
Material Adverse Effect.
(s) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS") or any
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a Material Adverse
Effect.
12
14
(t) There are no costs or liabilities of the Company or any of
its subsidiaries, associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any Authorization, any
related constraints on operating activities and any potential liabilities to
third parties) which would, singly or in the aggregate, have a Material Adverse
Effect.
(u) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received by
the Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(v) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its subsidiaries, in each case free and clear of all Liens and defects,
except such as are described in the Offering Memorandum or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the Offering
Memorandum.
(w) The assets of the Company and its subsidiaries include all
of the assets and properties used by the Company and its subsidiaries in, and
material to, the conduct of the businesses of the Company and its subsidiaries
as currently conducted, and such assets are in working condition, except where
the failure of such assets to be in working condition will not be reasonably
expected to have a Material Adverse Effect.
(x) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names ("INTELLECTUAL PROPERTY") currently
employed by them in connection with the business now operated by them except
where the failure to own or possess or otherwise be able to acquire such
intellectual property would not, singly or in the aggregate, have a Material
Adverse Effect.
(y) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
13
15
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; except where such failure to be valid and
in full force and effect or to be in compliance, the occurrence of any such
event or the presence of any such restriction would not, singly or in the
aggregate, have a Material Adverse Effect.
(z) There is no (i) significant unfair labor practice
complaint, grievance or arbitration proceeding pending or threatened against the
Company or any of its subsidiaries before the National Labor Relations Board or
any state or local labor relations board, (ii) strike, labor dispute, slowdown
or stoppage pending or threatened against the Company or any of its subsidiaries
or (iii) union representation question existing with respect to the employees of
the Company or any of its subsidiaries, except in the case of clauses (i), (ii)
and (iii) for such actions which, singly or in the aggregate, would not have a
Material Adverse Effect. To the best knowledge of the Company, no collective
bargaining organizing activities are taking place with respect to the Company or
any of its subsidiaries.
(aa) The accountants, Deloitte & Touche LLP, that have
certified the financial statements and supporting schedules included in the
Preliminary Offering Memorandum and the Offering Memorandum are independent
public accountants with respect to the Issuers, as required by the Act and the
Exchange Act. The historical financial statements, together with related
schedules and notes, set forth in the Preliminary Offering Memorandum and the
Offering Memorandum comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under the Act.
(bb) The historical financial statements, together with
related schedules and notes forming part of the Offering Memorandum (and in each
case any amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and changes in financial position of
the Company and its subsidiaries on the basis stated in the Offering Memorandum
at the respective dates or for the respective periods, as applicable, 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; and the other
financial and statistical information and data set forth in the Offering
Memorandum (and any amendment or supplement thereto) are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(cc) The pro forma financial statements and the related notes
thereto included in the Preliminary Offering Memorandum and the Offering
Memorandum (and in each case any amendment or supplement thereto) have been
prepared on a basis consistent with the historical financial statements and the
related notes thereto of the Company and its subsidiaries, except as
specifically referred to therein or in the notes thereto, and give effect to
assumptions used in the preparation thereof on a reasonable basis and in good
faith and present fairly the historical and
14
16
proposed transactions contemplated by the Preliminary Offering Memorandum and
the Offering Memorandum; and such pro forma financial statements comply as to
form in all material respects with the requirements applicable to pro forma
financial statements included in registration statements on Form S-1 under the
Act. The other pro forma financial and statistical information and data included
in the Offering Memorandum are, in all material respects, accurately presented
and prepared on a basis consistent with the pro forma financial statements.
(dd) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (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 the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(ee) 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 prudent and customary in the businesses in which they
are engaged; and neither the Company nor any of its subsidiaries (i) has
received notice from any insurer or agent of such insurer that substantial
capital improvements or other material expenditures will have to be made in
order to continue such insurance or (ii) has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers at a cost that would
not have a Material Adverse Effect.
(ff) The Company is not and, after giving effect to the
offering and sale of the Series A Notes and the application of the net proceeds
thereof as described in the Offering Memorandum will not be, an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended.
(gg) Except for the Registration Rights Agreement (attached as
Exhibit A hereto), there are no contracts, agreements or understandings between
the Company or any Guarantor and any person granting such person the right to
require the Company or such Guarantor to file a registration statement under the
Act with respect to any securities of the Company or such Guarantor or to
require the Company or such Guarantor to include such securities with the Notes
and Subsidiary Guarantees registered pursuant to any Registration Statement.
(hh) Neither the Company, Old Stanadyne, nor any of their
subsidiaries nor any agent thereof acting on the behalf of them has taken, and
none of them will take, any action that might cause this Agreement, the Bank
Agreement or the issuance or sale of the Series A Notes to violate Regulation G
(12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R.
Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System.
(ii) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act (i) has imposed (or has informed the
15
17
Company or any Guarantor that it is considering imposing) any condition
(financial or otherwise) on the Company's or any Guarantor's retaining any
rating assigned to the Company or any Guarantor, or any securities of the
Company or any Guarantor, or (ii) has indicated to the Company or any Guarantor
that it is considering (a) the downgrading, suspension, or withdrawal of, or any
review for a possible change that does not indicate the direction of the
possible change in, any rating so assigned or (b) any change in the outlook for
any rating of the Company, any Guarantor or any securities of the Company or any
Guarantor.
(jj) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material adverse change
or any development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii) there has
not been any material adverse change or any development involving a prospective
material adverse change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent.
(kk) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information specified in,
and meeting the requirements of, Rule 144A(d)(4) under the Act.
(ll) When the Series A Notes and the Subsidiary Guarantees are
issued and delivered pursuant to this Agreement, neither the Series A Notes nor
the Subsidiary Guarantees will be of the same class (within the meaning of Rule
144A under the Act) as any security of the Company or the Guarantors 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 inter-dealer
quotation system.
(mm) No form of general solicitation or general advertising
(as defined in Regulation D under the Act) was used by any of the Issuers or any
of their respective representatives (other than the Initial Purchaser, as to
whom the Issuers make no representation) in connection with the offer and sale
of the Series A Notes contemplated hereby, including, but not limited to,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Series A Notes have been
issued and sold by the Company within the six-month period immediately prior to
the date hereof.
(nn) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA.
(oo) None of the Issuers nor any of their respective
affiliates or any person acting on its or their behalf (other than the Initial
Purchaser, as to whom the Issuers make no representation) has engaged or will
engage in any directed selling efforts within the meaning of Regulation S under
the Act ("REGULATION S") with respect to the Series A Notes or the Subsidiary
Guarantees.
16
18
(pp) There is no substantial U.S. market interest (as defined
in Rule 902(n) under the Act) in any debt security of any of the Issuers.
(qq) Neither of the Issuers is a "foreign issuer," as defined
in Rule 902 under the Act.
(rr) The sale of the Series A Notes pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of the Act.
(ss) No registration under the Act of the Series A Notes or
the Subsidiary Guarantees is required for the sale of the Series A Notes and the
Subsidiary Guarantees to the Initial Purchaser as contemplated hereby or for the
Exempt Resales assuming the accuracy of the Initial Purchaser's representations
and warranties and agreements set forth in Section 7 hereof.
(tt) Each certificate signed by any officer of the Company or
any Guarantor and delivered to the Initial Purchaser or counsel for the Initial
Purchaser shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Initial Purchaser as to the matters covered thereby.
The Company acknowledges that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial Purchaser
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
7. INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES. The Initial
purchaser represents and warrants to, and agrees with, the Issuers:
(a) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Series A Notes only to (x) QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A, and (y) in offshore
transactions in reliance upon Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser in connection with
the offer and sale of the Series A Notes pursuant hereto, including, but not
limited to, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
17
19
(d) Such Initial Purchaser agrees that, in connection with
Exempt Resales, such Initial Purchaser will solicit offers to buy the Series A
Notes only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. The Initial Purchaser further agrees that it will offer to sell the
Series A Notes only to, and will solicit offers to buy the Series A Notes only
from (A) Eligible Purchasers that the Initial Purchaser reasonably believes are
QIBs, and (B) Regulation S Purchasers, in each case, that agree that (x) the
Series A Notes purchased by them may be resold, pledged or otherwise transferred
within the time period referred to under Rule 144(k) (taking into account the
provisions of Rule 144(d) under the Act, if applicable) under the Act, as in
effect on the date of the transfer of such Series A Notes, only (I) to the
Company or any of its subsidiaries, (II) to a person whom the seller reasonably
believes is a QIB purchasing for its own account or for the account of a QIB in
a transaction meeting the requirements of Rule 144A under the Act, (III) in an
offshore transaction (as defined in Rule 902 under the Act) meeting the
requirements of Rule 904 of the Act, (IV) in a transaction meeting the
requirements of Rule 144 under the Act, (V) to an Accredited Institution that,
prior to such transfer, furnishes the Trustee a signed letter containing certain
representations and agreements relating to the registration of transfer of such
Series A Note (the form of which is substantially the same as Annex A to the
Offering Memorandum) and, if such transfer is in respect of an aggregate
principal amount of Series A Notes less than $250,000, an opinion of counsel
acceptable to the Company that such transfer is in compliance with the Act, (VI)
in accordance with another exemption from the registration requirements of the
Act (and based upon an opinion of counsel acceptable to the Company) or (VII)
pursuant to an effective registration statement and, in each case, in accordance
with the applicable securities laws of any state of the United States or any
other applicable jurisdiction and (y) they will deliver to each person to whom
such Series A Notes or an interest therein is transferred a notice substantially
to the effect of the foregoing.
(e) None of such Initial Purchaser nor any of its affiliates
or any person acting on its or their behalf has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Series A Notes or the Subsidiary Guarantees.
(f) The Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S have been and will be
offered and sold only in offshore transactions.
(g) The sale of the Series A Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
(h) Such Initial Purchaser further represents and agrees that
(1) it has not offered or sold and will not offer or sell any Series A Notes to
persons in the United Kingdom prior to the expiration of the period of six
months from the issue date of the Series A Notes, except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995, (ii) it has complied and will comply with
all applicable provisions of the Financial Services Xxx 0000 with respect to
anything done by it in relation to the Series A Notes in, from or otherwise
involving the United Kingdom and (iii) it
18
20
has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issuance of the
Series A Notes to a person who is of a kind described in Article 11(3) of the
Financial Services Act of 1986 (Investment Advertisements) (Exemptions) Order
1996 or is a person to whom the document may otherwise lawfully be issued or
passed on.
(i) Such Initial Purchaser agrees that it will not offer, sell
or deliver any of the Series A Notes in any jurisdiction outside the United
States except under circumstances that will result in compliance with the
applicable laws thereof, and that it will take at its own expense whatever
action is required to permit its purchase and resale of the Series A Notes in
such jurisdictions. Such Initial Purchaser understands that no action has been
taken to permit a public offering in any jurisdiction outside the United States
where action would be required for such purpose.
The Initial Purchaser acknowledges that the Issuers and, for
purposes of the opinions to be delivered to each Initial Purchaser pursuant to
Section 9 hereof, counsel to the Issuers and counsel to the Initial Purchaser
will rely upon the accuracy and truth of the foregoing representations and the
Initial Purchaser hereby consents to such reliance.
8. INDEMNIFICATION.
(a) Each Issuer agrees, jointly and severally, to indemnify
and hold harmless the Initial Purchaser, its directors, its officers and each
person, if any, who controls such 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 judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Offering Memorandum (or any amendment or supplement thereto), the
Preliminary Offering Memorandum or any Rule 144A Information provided by any
Issuer to any holder or prospective purchaser of Series A Notes pursuant to
Section 5(h) or caused by 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 judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to the
Initial Purchaser furnished in writing to the Company by such Initial Purchaser.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Issuers, and their respective directors and officers and each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) any of the Issuers, to the same extent as the
foregoing indemnity from Issuers to the Initial Purchaser but only with
reference to information relating to the Initial Purchaser furnished in writing
to the Company by the Initial Purchaser expressly for use in the Preliminary
Offering Memorandum or the Offering Memorandum.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "INDEMNIFIED PARTY"), the
19
21
indemnified party shall promptly notify the person against whom such indemnity
may be sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party
shall assume the defense of such action, including the employment of counsel
reasonably satisfactory to the indemnified party and the payment of all fees and
expenses of such counsel, as incurred (except that in the case of any action in
respect of which indemnity may be sought pursuant to both Sections 8(a) and
8(b), the Initial Purchaser shall not be required to assume the defense of such
action pursuant to this Section 8(c), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such counsel,
except as provided below, shall be at the expense of the Initial Purchaser). Any
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Xxxxxxxxx, Xxxxxx
& Xxxxxxxx Securities Corporation, in the case of the parties indemnified
pursuant to Section 8(a), and by the Company, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party) and, prior to the
date of such settlement, the indemnifying party shall have failed to comply with
such reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each 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 and judgments (i) in such
proportion as is
20
22
appropriate to reflect the relative benefits received by the Issuers, on the one
hand, and the Initial Purchaser on the other hand from the offering of the
Series A Notes or (ii) if the allocation provided by clause 8(d)(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 8(d)(i) above but also the
relative fault of the Issuers, on the one hand, and the Initial Purchaser, on
the other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Issuers, on the one hand and the Initial Purchaser, on the other hand, shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Series A Notes (before deducting expenses) received by the Company, and
the total discounts and commissions received by the Initial Purchaser bear to
the total price to investors of the Series A Notes, in each case as set forth in
the table on the cover page of the Offering Memorandum. The relative fault of
the Issuers, on the one hand, and the Initial Purchaser, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by any of the Issuers,
on the one hand, or the Initial Purchaser, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Issuers, and the Initial Purchaser agree that it would not
be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such indemnified party in connection with investigating or defending any
matter, including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, the Initial Purchaser shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchaser exceeds the amount of any damages which the Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The obligations of
the Initial Purchaser to purchase the Series A Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) There have been no amendments, alterations, modifications,
or waivers of any provisions of the Transaction Documents, except such
amendments, alterations, modifications or waivers which, in the judgment of the
Company, as evidenced by a certificate signed by the Chairman of the Board, the
President, an Executive Vice President, Vice President or Secretary of
21
23
the Company, were necessitated by a materially adverse change in the business,
operations or financial condition of the Company or its subsidiaries, and do not
modify the maturities of or security arrangements for other indebtedness being
incurred to consummate the transactions contemplated by the Transaction
Documents. You shall have received a certificate dated the Closing Date and
signed by the Chairman of the Board, the President, an Executive Vice President,
Vice President or Secretary of the Company to such effect.
(b) The following events shall have taken place at the time of
the purchase of the Notes by the Initial Purchaser (i) Old Holdings will have
merged with and into Old Stanadyne, which will be the surviving corporation of
the merger and (ii) the Company will have merged with and into Old Stanadyne,
which will be the surviving corporation of the merger.
(c) On or before the Closing Date, the Initial Purchaser and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Initial Purchaser,
shall have received such further documents, opinions, certificates and schedules
or instruments relating to the business, corporate, legal and financial affairs
of the Company and Old Stanadyne.
(d) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(e) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of any of the Issuers or any securities of any of the Issuers (including,
without limitation, the placing of any of the foregoing ratings on credit watch
with negative or developing implications or under review with an uncertain
direction) by any "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act, (ii) there
shall not have occurred any change, nor shall any notice have been given of any
potential or intended change, in the outlook for any rating of any of the
Issuers or any securities of any of the Issuers by any such rating organization
and (iii) no such rating organization shall have given notice that it has
assigned (or is considering assigning) a lower rating to the Notes than that on
which the Notes were marketed.
(f) Since the respective dates as of which information is
given in the Offering Memorandum, other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement) (i) there shall not have occurred any change or any
development involving a prospective change in the condition, financial or
otherwise, or the earnings, business, management, prospects or operations of the
Company and its subsidiaries, taken as a whole, (ii) there shall not have been
any change or any development involving a prospective change in the capital
stock or in the long-term debt of the Company or any of its subsidiaries and
(iii) neither the Company nor any of its subsidiaries shall have incurred any
liability or obligation, direct or contingent, the effect of which, in any such
case described in clause 9(f)(i), 9(f)(ii) or 9(f)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Series A Notes on the terms and in the manner contemplated in the Offering
Memorandum.
22
24
(g) You shall have received on the Closing Date a certificate
dated such date, signed by the President and the Chief Financial Officer of the
Issuers, confirming the matters set forth in Sections 6(ah), 9(d) and 9(e) and
stating that the Issuers have complied with all the agreements and satisfied all
of the conditions herein contained and required to be complied with or satisfied
on or prior to such date.
(h) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchaser), dated the Closing
Date, of Xxxxxxxx & Xxxxx, counsel for the Company, to the effect that:
(i)the Company and its subsidiaries and Old Stanadyne,
to the extent each is a party thereto, have all requisite
corporate power and authority to execute, deliver and perform
their respective obligations under each of the Transaction
Documents to which it is a party; each of the Transaction
Documents, and the transactions contemplated thereby, has been
and upon completion of the Acquisition Transactions, will be
duly and validly authorized, executed and delivered by each of
the Company and Old Stanadyne and, to the extent it is a party
thereto, each constitutes a valid and legally binding
agreement of each of the Company and Old Stanadyne enforceable
against the Company and Old Stanadyne in accordance with its
terms (assuming due authorization, execution and delivery of
each Transaction Document by any other party thereto) except
that 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 (regardless of
whether enforceability is considered in a proceeding at law or
in equity); except as set forth in the Offering Memorandum, no
consent, approval, authorization or order of any court or
governmental agency or body is required for the performance of
any of the Transaction Documents by, to the extent each is a
party thereto, or the consummation by the Company and Old
Stanadyne of any of the transactions contemplated thereby,
except such as may be required and have been obtained, or upon
effectiveness of the Registration Statements, will have been
obtained, under the Act, the Trust Indenture Act or state
securities or "Blue Sky" laws in connection with the purchase
and distribution of the Notes by the Initial Purchaser; and
neither the Company, Old Stanadyne, nor any of the Guarantors,
is (i) in violation of its certificate of incorporation or
bylaws, (ii) in violation of any statute, judgment, decree,
order, rule or regulation applicable to any of them or any of
their respective properties or assets, which violation would
have a Material Adverse Effect, or (iii) in default in the
performance or observance of any obligation, agreement,
covenant or condition contained in any of the Transaction
Documents or any other contract, indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate or agreement or instrument to
which any of them is a party or to
23
25
which any of them is subject, which default would have a
Material Adverse Effect;
(ii)the execution, delivery and performance by the
Company and Old Stanadyne to the extent each is a party
thereto, of each of the Transaction Documents, and the
consummation by the Company and Old Stanadyne of the
transactions contemplated thereby, will not violate, conflict
with or constitute or result in a breach of or a default under
(or an event which, with notice or lapse of time, or both,
would constitute a breach of or a default under) any of (i)
the terms or provisions of any of the Transaction Documents or
any other indenture, mortgage, deed of trust, loan agreement,
note, lease, license, franchise agreement, or agreement or
instrument to which the Company or Old Stanadyne, is a party
or to which any of their respective properties or assets are
subject, which violation, conflict, breach or default would
have a Material Adverse Effect, (ii) the certificate of
incorporation or bylaws of the Company or Old Stanadyne, or
(iii) (assuming compliance with all applicable state
securities and "Blue Sky" laws) any statute, judgment, decree,
order, rule or regulation of any court or governmental agency
or other body applicable to the Company or Old Stanadyne, or
any of their respective properties or assets, which violation,
conflict, breach or default would have a Material Adverse
Effect;
(iii) the Company has delivered to the Initial Purchaser
a true and correct copy of each of the Transaction Documents
that have been executed and delivered prior to the date of
this Agreement and each other Transaction Document in the form
substantially as it will be executed and delivered on or prior
to the Closing Date, together with all related agreements and
all schedules and exhibits thereto, and there have been no
amendments, alterations, modifications or waivers of any of
the provisions of any of the Transaction Documents since their
date of execution or from the form in which it has been
delivered to the Initial Purchaser; there exists as of the
date hereof (after giving effect to the transactions
contemplated by each of the Transaction Documents) no event or
condition which would constitute a default or an event of
default (in each case as defined in each of the Transaction
Documents) under any of the Transaction Documents which would
result in a Material Adverse Effect or materially adversely
effect the ability of the Company and Old Stanadyne to
consummate the Acquisition Transactions and the transactions
contemplated by the Purchase Agreement;
(iv)the Acquisition Documents and the Banking Agreements
conform in all material respects to the descriptions thereof
contained in the Offering Memorandum and are valid, duly
authorized and enforceable agreements against the Company and
Old Stanadyne;
(v)each of the Company and its subsidiaries has been
duly incorporated, is validly existing as a corporation in
good standing under the
24
26
laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as
described in the Offering Memorandum and to own, lease and
operate its properties;
(vi)each of the Company and its subsidiaries is duly
qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect;
(vii) all the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are
fully paid, non-assessable and not subject to any preemptive
or similar rights; after giving effect to the Acquisition
Transactions, all of the outstanding shares of capital stock
of the Company will be owned by New Holdings, and all of the
outstanding shares of capital stock of New Holdings will be
owned by AIP, in each case free and clear of any security
interest, claim, lien pledge or other encumbrance (except as
may arise pursuant to the Bank Agreements) and except as set
forth in the Offering Memorandum there are no outstanding
rights (including without limitation pre-emptive rights,
warrants or options to acquire, or instruments convertible
into to exchangeable for, any shares of capital stock or other
equity interest in the Company or any of its direct or
indirect subsidiaries (including without limitation the
Guarantors), or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such
subsidiary, any such convertible or exchangeable securities or
any such rights, warrants or options;
(viii) the Series A Notes have been duly authorized and,
when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Initial Purchaser in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (x) the
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(ix) the Subsidiary Guarantees have been duly authorized
and, when the Series A Notes are executed and authenticated in
accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchaser in accordance with
the terms of this Agreement, the Subsidiary Guarantees
endorsed thereon will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the
Guarantors, enforceable in accordance with their terms except
as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors'
rights
25
27
generally and (y) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(x) the Indenture has been duly authorized, validly
executed and delivered by each of the Issuers and is a valid
and binding agreement of each of the Issuers, enforceable
against each of the Issuers in accordance with its terms
except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(xi) this Agreement has been duly authorized, executed
and delivered by the Issuers;
(xii) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Issuers and is a
valid and binding agreement of each of the Issuers,
enforceable against each of the Issuers in accordance with its
terms, except as (x) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(xiii) the Series B Notes have been duly authorized;
(xiv) such counsel is of the opinion ascribed to it in
the Offering Memorandum under the caption "Certain United
States Federal Income Tax Considerations For Non-United States
Holders";
(xv) the execution, delivery and performance of this
Agreement and the other Operative Documents by the Issuers,
the compliance by the Issuers with all provisions hereof and
thereof and the consummation of the transactions contemplated
hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be
required under the securities or Blue Sky laws of the various
states), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or
by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement
or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of
its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of their respective property is bound,
(iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the
Company, any of its subsidiaries or any of their respective
property, (iv) result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any agreement or
instrument to which the Company or
26
28
any of its subsidiaries is a party or by which the Company or
any of its subsidiaries or any of their respective property is
bound, or (v) result in the termination, suspension or
revocation of any Authorization (as defined below) of the
Company or any of its subsidiaries or result in any other
impairment of the rights of the holder of any such
Authorization;
(xvi) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could
be subject, which might result, singly or in the aggregate, in
a Material Adverse Effect;
(xvii) the Company is not and, after giving effect to
the offering and sale of the Series A Notes and the
application of the net proceeds thereof as described in the
Offering Memorandum, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended;
(xviii) the Indenture complies as to form in all
material respects with the requirements of the TIA, and the
rules and regulations of the Commission applicable to an
indenture which is qualified thereunder. It is not necessary
in connection with the offer, sale and delivery of the Series
A Notes to the Initial Purchaser in the manner contemplated by
this Agreement or in connection with the Exempt Resales to
qualify the Indenture under the TIA;
(xix) such counsel has no reason to believe that, as of
the date of the Offering Memorandum or as of the Closing Date,
the Offering Memorandum, as amended or supplemented, if
applicable (except for the financial statements and other
financial data included therein, as to which such counsel need
not express any belief) contains any untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The opinion of Xxxxxxxx & Xxxxx described in Section 9(e) above
shall be rendered to you at the request of the Issuers and shall so state
therein. In giving such opinion with respect to the matters covered by Section
9(h)(xxvii) Xxxxxxxx & Xxxxx, may state that their opinion and belief are based
upon their participation in the preparation of the Offering Memorandum and any
amendments or supplements thereto and review and discussion of the contents
thereof, but are without independent check or verification except as specified.
(i) The Initial Purchaser shall have received on the Closing
Date an opinion, dated the Closing Date, of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, counsel for the Initial Purchaser, in form and substance reasonably
satisfactory to the Initial Purchaser.
27
29
(j) The Initial Purchaser shall have received, at the time
this Agreement is executed and at the Closing Date, letters dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchaser from Deloitte & Touche LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to the Initial Purchaser
with respect to the financial statements and certain financial information
contained in the Offering Memorandum.
(k) The Series A Notes shall have been approved by the NASD
for trading and duly listed in PORTAL.
(l) The Initial Purchaser shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Issuers and the Trustee.
(m) The Issuers shall have executed the Registration Rights
Agreement and the Initial Purchaser shall have received an original copy
thereof, duly executed by the Company and the Guarantors.
(n) Neither of the Issuers shall have failed at or prior to
the Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the either of the
Issuers, as the case may be, at or prior to the Closing Date.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchaser by written notice to the Company if any of
the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchaser's judgment, is material and adverse and, in the Initial
Purchaser's judgment, makes it impracticable to market the Series A Notes on the
terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or
the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of any of the Issuers on any exchange or
in the over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
11. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to any of the Issuers, to
Stanadyne Automotive Corp., 92
28
00
Xxxxxxxxx Xxxx, Xxxxxxx, XX 00000, Attention: Xxxx Xxxxx and (ii) if to the
Initial Purchaser, Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, or in any
case to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Issuers and the Initial
Purchaser set forth in or made pursuant to this Agreement shall remain operative
and in full force and effect, and will survive delivery of and payment for the
Series A Notes, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Initial Purchaser, the officers or
directors of the Initial Purchaser, any person controlling the Initial
Purchaser, any of the Issuers, the officers or directors of any of the Issuers,
or any person controlling any of the Issuers, (ii) acceptance of the Series A
Notes and payment for them hereunder and (iii) termination of this Agreement.
If for any reason the Series A Notes are not delivered by or on
behalf of the Company as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Issuers, jointly and
severally, agree to reimburse the Initial Purchaser for all out-of-pocket
expenses (including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Company shall be liable
for all expenses which it has agreed to pay pursuant to Section 5(i) hereof.
Each Issuer also agree, jointly and severally, to reimburse the Initial
Purchaser and its officers, directors and each person, if any, who controls such
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act for any and all fees and expenses (including without limitation
the fees and expenses of counsel) incurred by them in connection with enforcing
their rights under this Agreement (including without limitation its rights under
Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Issuers, the Initial
Purchaser, the Initial Purchaser's directors and officers, any controlling
persons referred to herein, the directors of the Issuers and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Series A Notes from the Initial Purchaser merely because of such
purchase.
This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
29
31
Please confirm that the foregoing correctly sets forth the agreement
among the Issuers and the Initial Purchaser.
Very truly yours,
STANADYNE AUTOMOTIVE CORP.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
PRECISION ENGINE PRODUCTS CORP.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
DSD INTERNATIONAL CORP.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
30
32
SCHEDULE A
GUARANTORS
1. Precision Engine Products Corp.
2. DSD International Corp.
33
SCHEDULE B
SUBSIDIARIES
1. Precision Engine Products Corp.
2. DSD International Corp.
3. Stanadyne Automotive S.p.A.
4. Stanadyne Automotive Foreign Sales Corp.
34
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
