EXHIBIT 1.2
$105,000,000
ALTRA INDUSTRIAL MOTION, INC.
9% SENIOR SECURED NOTES DUE 2011
PURCHASE AGREEMENT
April 3, 2007
XXXXXXXXX & COMPANY, INC.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Altra Industrial Motion, Inc., a Delaware corporation (the "Company"), and
each of the Guarantors (as hereinafter defined) hereby agree with you as
follows:
1. ISSUANCE OF NOTES. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to Xxxxxxxxx & Company, Inc.
(the "Initial Purchaser") $105,000,000 aggregate principal amount of 9% Senior
Secured Notes due 2011 (the "Notes"). The Notes will be issued pursuant to the
Indenture, dated as of November 30, 2004, among the Company, the subsidiary
guarantors named therein and The Bank of New York Trust Company, N.A., as
trustee (the "Trustee") as supplemented by the First Supplemental Indenture
dated February 7, 2006, the Second Supplemental Indenture dated February 8,
2006, the Third Supplemental Indenture dated April 24, 2006 and the Fifth
Supplemental Indenture, dated April 5, 2007 (the "Indenture"). On November 30,
2004, the Company issued $165,000,000 aggregate principal amount of 9% Senior
Secured Notes due 2011 (the "Existing Notes") pursuant to the Indenture.
Capitalized terms used, but not defined herein, shall have the meanings set
forth in the "Description of the Notes" section of the Final Offering Circular
(as hereinafter defined).
The proceeds of the Notes, along with cash on hand and funds from the
Company's senior revolving credit facility, will be used to finance the
acquisition (the "Acquisition") of all of the outstanding share capital of XX
Xxxx'x Corporation ("XX Xxxx'x"), as described under "The XX Xxxx'x Acquisition
and Related Transactions" section of the Offering Circular (as defined below).
In connection with the Acquisition, the Company, through its affiliates, has
made a tender offer (the "Tender Offer") for all of the outstanding shares of XX
Xxxx'x and, in the event that less than all of the outstanding shares of XX
Xxxx'x are tendered, will acquire all of the outstanding shares of XX Xxxx'x
pursuant to a statutory "short-form" merger (the "Back-end Merger"). The
Offering (as defined below) is conditioned upon the consummation of the Tender
Offer.
The Notes will be offered and sold to the Initial Purchaser pursuant to
exemptions from the registration requirements under the Securities Act of 1933,
as amended (the "Act"). Upon original issuance thereof, and until such time as
the same are no longer required under the applicable requirements of the Act,
the Notes shall bear the legends set forth under the "Notice to Investors"
section of the final
offering circular, dated the date hereof (the "Final Offering Circular"). The
Company has prepared (i) a preliminary offering circular, dated March 26, 2007
(the "Preliminary Offering Circular"), (ii) a pricing term sheet attached hereto
as Exhibit A, which includes pricing terms and other information with respect to
the Notes (the "Pricing Term Sheet") and (iii) the Final Offering Circular
relating to the offer and sale of the Notes (the "Offering"). "Offering
Circular" means the Preliminary Offering Circular and any exhibits and schedules
thereto, as supplemented by the Pricing Term Sheet at 9:00 a.m. New York City
time on the date hereof (the "Applicable Time"). No later than the second
Business Day following the date hereof, the Company will prepare and deliver to
the Initial Purchaser the Final Offering Circular and from and after the time
such Final Offering Circular is delivered to the Initial Purchaser, all
references herein to the "Offering Circular" shall be deemed collectively to
refer to (i) the Preliminary Offering Circular (as supplemented by the Pricing
Term Sheet and any exhibits thereto) and (ii) the Final Offering Circular (and
any amendment or supplement to either such document), including exhibits and
schedules thereto. The Preliminary Offering Circular immediately prior to the
Applicable Time, taken together with the Pricing Term Sheet, is referred to as
the "Pricing Disclosure Package."
2. TERMS OF OFFERING. The Initial Purchaser has advised the Company,
and the Company understands, that the Initial Purchaser will make offers to sell
(the "Exempt Resales") some or all of the Notes purchased by the Initial
Purchaser hereunder on the terms set forth in the Pricing Disclosure Package and
the Final Offering Circular, as amended or supplemented, to persons (the
"Subsequent Purchasers") whom the Initial Purchaser reasonably believes to be
(i) "qualified institutional buyers" ("QIBs") as defined in Rule 144A under the
Act, as such may be amended from time to time or (ii) non-U.S. persons permitted
to purchase the Notes in offshore transactions in reliance upon Regulation S
under the Act (each, a "Reg S Person" and, together with the QIBs and the
Institutional Accredited Investors, "Eligible Purchasers").
Pursuant to the Indenture, all Domestic Restricted Subsidiaries of the
Company shall fully and unconditionally guarantee, on a senior secured basis, to
each holder of the Notes and the Trustee, the payment and performance of the
Company's obligations under the Indenture and the Notes (each such subsidiary
being referred to herein as a "Guarantor" and each such guarantee being referred
to herein as a "Guarantee").
Pursuant to the terms of the Collateral Agreements, all of the
obligations under the Notes and the Indenture will be secured by a second
priority lien and security interest on substantially all of the assets of the
Company and the Guarantors described therein (subject to a prior ranking lien
for the benefit of the lenders under the Credit Agreement and the Permitted
Liens).
Holders of the Notes (including Subsequent Purchasers) will have the
registration rights set forth in the registration rights agreement applicable to
the Notes attached hereto as Exhibit B (the "Registration Rights Agreement"), to
be executed on and dated as of the Closing Date (as hereinafter defined).
Pursuant to the Registration Rights Agreement, the Company will agree, among
other things, to file with the Securities and Exchange Commission (the "SEC")
(a) a registration statement under the Act relating to Senior Secured Notes (the
"Exchange Notes"), which shall be identical to the Notes (except that the
Exchange Notes shall have been registered pursuant to such registration
statement and will not be subject to restrictions on transfer or contain
additional interest provisions) to be offered in exchange for the Notes (such
offer to exchange being referred to as the "Exchange Offer"), and/or (b) under
certain circumstances, a shelf registration statement pursuant to Rule 415 under
the Act (the "Shelf Registration Statement") relating to the resale by certain
holders of the Notes. If required under the Registration Rights Agreement, the
Company will issue Exchange Notes to the Initial Purchaser (the "Private
Exchange Notes"). If the Company fails to satisfy its obligations under the
Registration Rights Agreement, it will be required to pay additional interest to
the holders of the Notes under certain circumstances.
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This Agreement, the Indenture, Collateral Agreements, the Registration
Rights Agreement, the Notes, the Guarantees, the Exchange Notes and the Private
Exchange Notes are collectively referred to herein as the "Documents."
3. PURCHASE, SALE AND DELIVERY. On the basis of the representations,
warranties, agreements and covenants herein contained and subject to the terms
and conditions herein set forth, the Company agrees to issue and sell to the
Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Company, the Notes at a purchase price of $103,398,750 (constituting 97.5% of
the $106,050,000 of gross proceeds of the Offering) plus accrued interest from
December 1, 2006. Delivery to the Initial Purchaser of and payment for the Notes
shall be made at the closing of the Offering to be held at 10:00 a.m., New York
City time, on April 5, 2007 (the "Closing Date") at the New York offices of
Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx Xxx Xxxx, XX 00000.
The Company shall deliver to the Initial Purchaser one or more certificates
representing the Notes in definitive form, registered in such names and
denominations as the Initial Purchaser may request, against payment by the
Initial Purchaser of the purchase price therefor by immediately available
federal funds bank wire transfer to such bank account or accounts as the Company
shall designate to the Initial Purchaser at least two business days prior to the
Closing Date. The certificates representing the Notes in definitive form shall
be made available to the Initial Purchaser for inspection at the New York
offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx Xxx Xxxx, XX 00000 (or
such other place as shall be reasonably acceptable to the Initial Purchaser) not
later than 10:00 a.m. one business day immediately preceding the Closing Date.
Notes to be represented by one or more definitive global securities in
book-entry form will be deposited on the Closing Date, by or on behalf of the
Company, with The Depository Trust Company ("DTC") or its designated custodian,
and registered in the name of Cede & Co.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS.
The Company and the Guarantors jointly and severally represent and warrant to
the Initial Purchaser that, as of the date hereof, as of the Applicable Time and
as of the Closing Date (after giving effect to the Acquisition):
(a) As of the Applicable Time, the Pricing Disclosure Package and Final
Offering Circular do not, and at the Closing Date, will not, contain any
untrue statement of a material fact or omit 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; provided that the
representations and warranties set forth in this Section 4(a) do not apply
to statements or omissions made in reliance upon and in conformity with
information relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use in the Offering
Circular. For the purposes of this Agreement, the only information
furnished in writing to the Company by the Initial Purchaser specifically
for use in the Pricing Disclosure Package or the Final Offering Circular or
any amendment or supplement thereto is the information set forth in the
third paragraph under the heading "Plan of Distribution" in the Offering
Circular (such information, the "Furnished Information"). No injunction or
order has been issued that either (i) asserts that any of the transactions
contemplated by the Documents is subject to the registration requirements
of the Act or (ii) would prevent or suspend the issuance or sale of any of
the Notes or the use of the Preliminary Offering Circular, the Pricing
Disclosure Package, the Final Offering Circular or any amendment or
supplement thereto, in any jurisdiction. The Pricing Disclosure Package as
of the Applicable Time and each of the Preliminary Offering Circular and
the Final Offering Circular, as of their respective dates, contained, and
the Pricing Disclosure Package and the Offering Circular, as of the Closing
Date, will contain, all the information specified in, and meet the
requirements of, Rule 144A(d)(4) under the Act.
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(b) Each corporation, partnership or other entity in which the Company,
directly or indirectly through any of its subsidiaries, owns more than
fifty percent (50%) of any class of equity securities or interests is
listed on Schedule I attached hereto (the "Subsidiaries"). Each Subsidiary
that is a Foreign Restricted Subsidiary has an asterisk ("*") next to its
name on such schedule.
(c) Each of the Company and its Subsidiaries (i) has been duly organized or
formed, as the case may be, is validly existing and is in good standing
under the laws of its jurisdiction of organization, (ii) has all requisite
power and authority to carry on its business as described in the Offering
Circular and to own, lease and operate its properties and assets as
described in the Offering Circular and (iii) is duly qualified or licensed
to do business and is in good standing as a foreign corporation,
partnership, limited liability company or other entity, as the case may be,
authorized to do business in each jurisdiction in which the nature of such
business or the ownership or leasing of such properties requires such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on (A) the
properties, business, operations, earnings, assets, liabilities or
condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, (B) the ability of the Company to perform its obligations
in all material respects under any Document, (C) the enforceability of the
Collateral Agreements or the attachment, perfection or priority of any of
the Liens or security interests intended to be created thereby, (D) the
validity or enforceability of any of the Documents or (E) the consummation
of any of the transactions contemplated under any of the Documents (each, a
"Material Adverse Effect").
(d) All of the issued and outstanding shares of capital stock of or membership
interests in, as the case may be, the Company and the Subsidiaries have
been duly authorized and validly issued, are fully paid and nonassessable,
and were not issued in violation of, and are not subject to, any preemptive
or similar rights. The table under the caption "Capitalization" in the
Pricing Disclosure Package (including the footnotes thereto) sets forth, as
of its date, (i) the actual cash and cash equivalents and capitalization of
the Company and the Subsidiaries on a consolidated basis and (ii) the
adjusted cash and cash equivalents and capitalization of the Company and
the Subsidiaries, on a consolidated basis, after giving effect to the offer
and sale of the Notes, the application of the net proceeds therefrom, the
Acquisition and the other transactions described in the Offering Circular
under the section entitled "Use of Proceeds." Except as set forth in such
table, immediately following the closing of the Offering, neither the
Company nor any of the Subsidiaries will have any liabilities, absolute,
accrued, contingent or otherwise, other than (A) liabilities that are
reflected in the Financial Statements (as hereinafter defined) or (B)
liabilities incurred subsequent to the date thereof in the ordinary course
of business, consistent with past practice, or in connection with the
Acquisition, that would not, individually or in the aggregate, have a
Material Adverse Effect. All of the outstanding shares of capital stock or
other equity interests of each of the Subsidiaries are owned, directly or
indirectly, by the Company, free and clear of all liens, security
interests, mortgages, pledges, charges, equities, claims or restrictions on
transferability or encumbrances of any kind (collectively, "Liens"), other
than those described in the Pricing Disclosure Package, (i) pursuant to the
senior revolving credit facility among the Company, the other parties named
therein and Xxxxx Fargo Foothill, Inc. (as amended, supplemented, modified,
extended or restated from time to time, the "Credit Agreement"), (ii)
pursuant to the Indenture, (iii) pursuant to the assumed debt of XX Xxxx'x
as part of the Acquisition as described in the Pricing Disclosure Package,
or (iv) imposed by the Act and the securities or "Blue Sky" laws of certain
domestic or foreign jurisdictions. Except as disclosed in the Pricing
Disclosure Package, there are no outstanding (A) options, warrants or other
rights to purchase from the Company or any of the Subsidiaries, (B)
agreements, contracts, arrangements or other obligations of the Company or
any of the Subsidiaries to issue or (C) other rights to convert any
obligation into or exchange any securities for, in the case of each of
clauses (A)
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through (C), shares of capital stock of or other ownership or equity
interests in the Company or any of the Subsidiaries.
(e) No holder of securities of the Company or any of the Subsidiaries will be
entitled to have such securities registered under the registration
statements required to be filed by the Company and the Guarantors with
respect to the Notes pursuant to the Registration Rights Agreement.
(f) The Company and each of the Subsidiaries that are corporations have the
requisite corporate power and authority, and the Company and each of the
Subsidiaries that are limited partnerships or limited liability companies
have all the requisite partnership or other power and authority, to
execute, deliver and perform their respective obligations under the
Documents to which they are a party and to consummate the transactions
contemplated thereby.
(g) This Agreement has been duly and validly authorized, executed and delivered
by the Company and the Guarantors. Each of the Indenture and the Collateral
Agreements have been duly and validly authorized by the Company and the
Guarantors. Each of the Indenture and the Collateral Agreements constitutes
a legal, valid and binding obligation of each of the Company and
Guarantors, enforceable against each of the Company and the Guarantors in
accordance with its terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, receivership,
moratorium, fraudulent conveyance or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles
of equity (whether applied by a court of law or equity) and the discretion
of the court before which any proceeding therefor may be brought.
(h) The Registration Rights Agreement has been duly and validly authorized by
the Company and the Guarantors. The Registration Rights Agreement, when
executed and delivered by the Company and the Guarantors, will constitute a
legal, valid and binding obligation of the Company and the Guarantors,
enforceable against the Company and the Guarantors in accordance with its
terms, except that (i) the enforcement thereof may be subject to (A)
bankruptcy, insolvency, reorganization, receivership, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally and (B) general principles of
equity (whether applied by a court of law or equity) and the discretion of
the court before which any proceeding therefor may be brought and (ii) any
rights to indemnity or contribution thereunder may be limited by federal
and state securities laws and public policy considerations.
(i) The Notes, when issued, will be in the form contemplated by the Indenture.
The Indenture meets the requirements for qualification under the Trust
Indenture Act of 1939, as amended (the "TIA"). The Notes, Exchange Notes
and Private Exchange Notes have each been duly and validly authorized by
the Company and, in the case of the Notes, when delivered to and paid for
by the Initial Purchaser in accordance with the terms of this Agreement and
authenticated by the Trustee in accordance with the Indenture, will have
been duly executed, issued and delivered and will be legal, valid and
binding obligations of the Company, entitled to the benefit of the
Indenture, the Collateral Agreements and the Registration Rights Agreement,
and enforceable against the Company in accordance with their terms, except
that the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (whether applied by a court
of law or equity) and the discretion of the court before which any
proceeding therefor may be brought.
(j) The Guarantees have been duly and validly authorized by the Guarantors and,
when executed by the Guarantors, will have been duly executed, issued and
delivered and will be legal, valid and
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binding obligations of the Guarantors, entitled to the benefit of the
Indenture, the Collateral Agreements and the Registration Rights Agreement,
and enforceable against the Guarantors in accordance with their terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance
or other similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) general principles of equity (whether applied by
a court of law or equity) and the discretion of the court before which any
proceeding therefor may be brought.
(k) Neither the Company nor any of the Subsidiaries is in violation of its
certificate of incorporation, by-laws or other organizational documents
(the "Charter Documents"). Neither the Company nor any of the Subsidiaries
is (i) in violation of any federal, state, local or foreign statute, law
(including, without limitation, common law) or ordinance, or any judgment,
decree, rule, regulation or order (collectively, "Applicable Law") of any
federal, state, local and other governmental authority, governmental or
regulatory agency or body, court, arbitrator or self-regulatory
organization, domestic or foreign (each, a "Governmental Authority")
applicable to any of them or any of their respective properties, or (ii) in
breach of or default under any bond, debenture, note or other evidence of
indebtedness, indenture, mortgage, deed of trust, lease or any other
agreement or instrument to which any of them is a party or by which any of
them or their respective property is bound (collectively, "Applicable
Agreements"), except for such violations, breaches or defaults that would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. To the knowledge of the Company, there exists no
condition that, with the passage of time or otherwise, would constitute (a)
a violation of such Charter Documents or Applicable Laws, (b) a breach of
or default under any Applicable Agreement or (c) result in the imposition
of any penalty or the acceleration of any indebtedness.
(l) Neither the execution, delivery or performance of the Documents, as
applicable, nor the consummation of any transactions contemplated therein
will conflict with, violate, constitute a breach of or a default (with the
passage of time or otherwise) under, require the consent of any person
(other than consents already obtained and in full force and effect) under,
result in the imposition of a Lien on any assets of the Company or any of
its Subsidiaries (except for Liens pursuant to the Collateral Agreements),
or result in an acceleration of indebtedness under or pursuant to (i) the
Charter Documents, (ii) any Applicable Agreement or (iii) any Applicable
Law, except for, with respect to clauses (ii) and (iii), any conflict,
violation, breach or default that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. After
consummation of the Offering and transactions contemplated in the
Documents, no Default or Event of Default under the Indenture will exist.
(m) When executed and delivered, the Documents will conform in all material
respects to the descriptions thereof in the Pricing Disclosure Package.
Except as disclosed in the Pricing Disclosure Package, there are no related
party transactions that would be required to be disclosed in the Pricing
Disclosure Package if the Pricing Disclosure Package were a prospectus
included in a Registration Statement on Form S-1 filed under the Act.
(n) No consent, approval, authorization or order of any Governmental Authority
or third party is required for the issuance and sale by the Company of the
Notes to the Initial Purchaser or the consummation by the Company of the
other transactions contemplated hereby, except such as have been obtained
and such as may be required under state securities or "Blue Sky" laws in
connection with the purchase and resale of the Notes by the Initial
Purchaser and such as may be required in connection with the Exchange Offer
or Shelf Registration Statement.
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(o) Except as disclosed in the Pricing Disclosure Package, there is no action,
claim, suit, demand, hearing, notice of violation or deficiency, or
proceeding, domestic or foreign (collectively, "Proceedings"), pending or,
to the knowledge of the Company, threatened, that either (i) seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge any of
the Documents or any of the transactions contemplated therein or (ii)
would, individually or in the aggregate, have a Material Adverse Effect.
The Company is not subject to any judgment, order, decree, rule or
regulation of any Governmental Authority that would, individually or in the
aggregate, have a Material Adverse Effect.
(p) The Company and its Subsidiaries possess all licenses, permits,
certificates, consents, orders, approvals and other authorizations from,
and has made all declarations and filings with, all Governmental
Authorities presently required or necessary to own or lease, as the case
may be, and to operate their respective properties and to carry on their
respective businesses as now or proposed to be conducted as set forth in
the Pricing Disclosure Package ("Permits"), except where the failure to
possess such Permits would not, individually or in the aggregate, have a
Material Adverse Effect; each of the Company and its Subsidiaries has
fulfilled and performed all of its obligations with respect to such Permits
and no event has occurred that allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit that
would individually or in the aggregate, have a Material Adverse Effect; and
none of the Company or its Subsidiaries has received any notice of any
proceeding relating to revocation or modification of any such Permit,
except as described in the Pricing Purchase Package or except where such
revocation or modification would not, individually or in the aggregate,
have a Material Adverse Effect.
(q) Each of the Company and its Subsidiaries has good and indefeasible title to
all real property owned by it and good title to all personal property owned
by it and good title to all leasehold estates in real and personal property
being leased by it and, as of the Closing Date, all such owned or leased
real or personal property will be free and clear of all Liens (other than
Permitted Liens). All Applicable Agreements to which the Company or any of
its Subsidiaries is a party or by which any of them is bound are legal,
valid and binding obligations, other than as disclosed in the Pricing
Disclosure Package, and are enforceable against each of the Company or such
Subsidiary, as applicable, and are enforceable against the other party or
parties thereto and are in full force and effect with only such exceptions
as would not, individually or in the aggregate, have a Material Adverse
Effect.
(r) Except with respect to Warner Electric UK Group which has not filed its
Company Tax Return Form or Corporation Tax Computation for fiscal years
ended 2004 and 2005 which failure to file will not have a Material Adverse
Effect, all Tax returns required to be filed by the Company and each of the
Subsidiaries have been filed and all such returns are true, complete and
correct in all material respects. All material Taxes that are due from the
Company and its Subsidiaries have been paid other than those (i) currently
payable without penalty or interest or (ii) being contested in good faith
and by appropriate proceedings and for which adequate reserves have been
established in accordance with generally accepted accounting principles of
the United States, consistently applied ("GAAP"). To the knowledge of the
Company, after reasonable internal inquiry, there are no actual or proposed
Tax assessments against the Company or any of the Subsidiaries that would,
individually or in the aggregate, have a Material Adverse Effect. The
accruals and reserves on the books and records of the Company and its
Subsidiaries in respect of any material Tax liability for any period not
finally determined are adequate to meet any assessments of Tax for any such
period. For purposes of this Agreement, the term "Tax" and "Taxes" shall
mean all federal, state, local and foreign taxes, and other assessments of
a similar
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nature (whether imposed directly or through withholding), including any
interest, additions to tax or penalties applicable thereto.
(s) Each of the Company and the Subsidiaries owns, or is licensed under, and
has the right to use, 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 (collectively,
"Intellectual Property") necessary for the conduct of its business and, as
of the Closing Date, such Intellectual Property will be free and clear of
all Liens, other than Permitted Liens. No claims or notices of any
potential claim have been asserted by any person challenging the use of any
such Intellectual Property by the Company or any of the Subsidiaries or
questioning the validity or effectiveness of the Intellectual Property or
any license or agreement related thereto (other than any claims that would
not, individually or in the aggregate, have a Material Adverse Effect). The
use of such Intellectual Property by the Company or any of the Subsidiaries
will not infringe on the Intellectual Property rights of any other person.
(t) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) material transactions
are executed in accordance with management's general or specific
authorization, (ii) material transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP, 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
material differences.
(u) The audited consolidated financial statements and related notes of the
Company and the Predecessor (as such term is defined in the Pricing
Disclosure Package and the Final Offering Circular) contained in the
Pricing Disclosure Package and the Final Offering Circular (the "Company
Financial Statements") present fairly (without giving effect to the
Acquisition) the consolidated financial position, results of operations and
cash flows of the Company and its consolidated Subsidiaries and the
Predecessor (without giving effect to the Acquisition), as the case may be,
as of the respective dates and for the respective periods to which they
apply and have been prepared in accordance with GAAP and the requirements
of Regulation S-X of the Act. The consolidated financial statements and
related notes of XX Xxxx'x contained in the Pricing Disclosure Package and
the Final Offering Circular (the "Target Financial Statements" and,
together with the Company Financial Statements, the "Financial Statements")
present fairly its financial position, results of operations and cash
flows, as of the respective dates and for the respective periods to which
they apply and have been prepared or adjusted in accordance with GAAP and
the requirements of Regulation S-X of the Act. The financial data set forth
under "Summary Historical and Pro Forma Consolidated Financial Data" and
"Selected Historical Consolidated Financial Data" included in the Pricing
Disclosure Package and the Final Offering Circular has been prepared on a
basis consistent with that of the Financial Statements and present fairly
the consolidated financial position and results of operations of the
Company, the Predecessor, Hay Hall (as such term is defined in the Pricing
Disclosure Package and the Final Offering Circular) and XX Xxxx'x as of the
respective dates and for the respective periods indicated. The unaudited
pro forma financial statements and related notes of the Company contained
in the Pricing Disclosure Package and the Final Offering Circular have been
prepared in accordance with the requirements of Regulation S-X and give
effect to assumptions used in the preparation thereof on a reasonable basis
and in good faith. All other financial, statistical, market and industry
related data included in the Pricing Disclosure Package and the Final
Offering Circular are fairly and accurately presented in all material
respects and are based on or derived from sources that the Company believes
to be reliable and accurate.
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(v) Subsequent to the respective dates as of which information is given in the
Pricing Disclosure Package and the Final Offering Circular, except as
disclosed in the Pricing Disclosure Package and the Final Offering
Circular, (i) neither the Company nor any of the Subsidiaries has incurred
any liabilities, direct or contingent, that are material, individually or
in the aggregate, to the Company, or has entered into any transactions not
in the ordinary course of business, (ii) there has not been any material
decrease in the capital stock or any material increase in long-term
indebtedness or any material increase in short-term indebtedness of the
Company, or any payment of or declaration to pay any dividends or any other
distribution with respect to the Company, and (iii) there has not been any
material adverse change in the properties, business, operations, earnings,
assets, liabilities or condition (financial or otherwise) of the Company
and the Subsidiaries taken as a whole in the aggregate (each of clauses
(i), (ii) and (iii), a "Material Adverse Change"). To the knowledge of the
Company, after reasonable internal inquiry, there is no event that is
reasonably likely to occur, which would, individually or in the aggregate,
have a Material Adverse Effect except as disclosed in the Pricing
Disclosure Package and the Final Offering Circular.
(w) 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 Company that it is considering imposing) any condition
(financial or otherwise) on the Company retaining any rating assigned to
the Company or any of the Subsidiaries or to any securities of the Company
or any of the Subsidiaries or (ii) has indicated to the Company 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 negative change in the
outlook for any rating of the Company or any of the Subsidiaries or any
securities of the Company or any of the Subsidiaries.
(x) All indebtedness represented by the Notes is being incurred in good faith
and for the purposes set forth in the "Use of Proceeds" section of the
Pricing Disclosure Package. On the Closing Date, after giving pro forma
effect to the Offering and the use of proceeds therefrom as indicated in
the "Use of Proceeds" section of the Pricing Disclosure Package and the
Final Offering Circular, the Company and the Guarantors, on a consolidated
basis, (i) will be solvent, (ii) will have sufficient capital for carrying
on its business and (iii) will be able to pay its debts as they mature. As
used in this paragraph, the term "Solvent" means, with respect to a
particular date, that on such date (i) the present fair market value (or
present fair saleable value) of the assets of the Company and each
Guarantor is not less than the total amount required to pay the liabilities
of the Company and each Guarantor on its total existing debts and
liabilities (including contingent liabilities) as they become absolute and
matured; (ii) the Company and each Guarantor is able to pay its debts and
other liabilities, contingent obligations and commitments as they mature
and become due in the normal course of business; (iii) assuming
consummation of the issuance of the Notes and Guarantees as contemplated by
this Agreement and the Pricing Disclosure Package and the Final Offering
Circular, neither the Company nor any Guarantor is incurring debts or
liabilities beyond its ability to pay as such debts and liabilities mature;
(iv) neither the Company nor any Guarantor is engaged in any business or
transaction, and does not propose to engage in any business or transaction,
for which its property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in
which the Company or any Guarantor is engaged; and (v) neither the Company
nor any Guarantor is otherwise insolvent under the standards set forth in
applicable laws.
(y) The Company has not and, to its knowledge after reasonable internal
inquiry, no one acting on its behalf (excluding for such purposes, the
Initial Purchaser) has, (i) taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or that might
reasonably be
9
expected to constitute, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of any of the
Notes, (ii) sold, bid for, purchased or paid anyone any compensation for
soliciting purchases of any of the Notes or (iii) except as disclosed in
the Pricing Disclosure Package, paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(z) Assuming (i) the accuracy of the representations contained in Section 6
hereof (including, without limitation, the accuracy of the Initial
Purchaser's representations contained herein regarding the absence of
general solicitation in connection with the sale of the Notes to the
Initial Purchaser and in the Exempt Resales), (ii) that the purchasers in
the Exempt Resales are QIBs, Institutional Accredited Investors or non-U.S.
persons (as defined under Regulation S of the Act) and (iii) the accuracy
of the representations made by each Institutional Accredited Investor that
purchases the Notes pursuant to an Exempt Resale as set forth in the
Accredited Investor Letter, without limiting any provision herein, no
registration under the Act and no qualification of the Indenture under the
TIA is required for the sale of the Notes to the Initial Purchaser as
contemplated hereby or for the Exempt Resales.
(aa) Assuming the accuracy of the representations contained in Section 6 hereof,
the Notes are eligible for resale pursuant to Rule 144A under the Act and
no other securities of the Company are of the same class (within the
meaning of Rule 144A under the Act) as the Notes and listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system. No securities of
the Company of the same class as the Notes have been offered, issued or
sold by the Company or any of its respective Affiliates within the
six-month period immediately prior to the date hereof.
(bb) Neither of the Company nor any of its Affiliates or other person acting on
behalf of the Company (excluding for such purposes, the Initial Purchaser)
has offered or sold the Notes by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the Act or,
with respect to Notes sold outside the United States to non-U.S. persons
(as defined in Rule 902 under the Act), by means of any directed selling
efforts within the meaning of Rule 902 under the Act, and the Company, any
affiliate of the Company and any person acting on behalf of the Company
have complied with and will implement the "offering restrictions" within
the meaning of such Rule 902; provided, that no representation is made in
this subsection with respect to the actions of the Initial Purchaser.
(cc) Except as disclosed in the Pricing Disclosure Package, each of the Company,
the Subsidiaries and each ERISA Affiliate has fulfilled its obligations, if
any, under the minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx
Xxxxxx Employee Retirement Income Security Act of 1974, as amended
("ERISA"), with respect to each "pension plan" (as defined in Section 3(2)
of ERISA) subject to Section 302 of ERISA that the Company, the
Subsidiaries or any ERISA Affiliate sponsors or maintains, or with respect
to which it has (or within the last three years had) any obligation to make
contributions, and each such plan is in compliance in all material respects
with the presently applicable provisions of ERISA and the Internal Revenue
Code of 1986, as amended (the "Code"), in each case, except as would not,
individually or in the aggregate, have a Material Adverse Effect. Except as
disclosed in the Pricing Disclosure Package, neither the Company, the
Subsidiaries, nor any ERISA Affiliate has incurred any unpaid liability to
the Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of
ERISA. "ERISA Affiliate" means a corporation, trade or business that is,
along with the Company or any Subsidiary, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
Section 414 of the Code or Section 4001 of ERISA.
10
(dd) Other than as disclosed in the Pricing Disclosure Package, (i) neither the
Company nor any of the Subsidiaries is party to or bound by any collective
bargaining agreement with any labor organization; (ii) none of the
employees of the Company or the Subsidiaries is represented by a labor
union, and, to the knowledge of the Company after reasonable internal
inquiry, no union organizing activities are taking place that could,
individually or in the aggregate, have a Material Adverse Effect; (iii) to
the Company's knowledge, no union organizing or decertification efforts are
underway or threatened against the Company or the Subsidiaries; (iv) no
labor strike, work stoppage, slowdown or other material labor dispute is
pending against the Company or the Subsidiaries, or, to the knowledge of
the Company, after reasonable internal inquiry, threatened against the
Company or the Subsidiaries; (v) there is no worker's compensation
liability, experience or matter that could be reasonably expected to have a
Material Adverse Effect; (vi) to the knowledge of the Company, after
reasonable internal inquiry, there is no threatened or pending liability
against the Company or the Subsidiaries pursuant to the Worker Adjustment
Retraining and Notification Act of 1988, as amended ("WARN"), or any
similar state or local law; (vii) there is no employment-related charge,
complaint, grievance, investigation, unfair labor practice claim or inquiry
of any kind pending against the Company or the Subsidiaries that could,
individually or in the aggregate, have a Material Adverse Effect; (viii) to
the knowledge of the Company, after reasonable internal inquiry, no
employee or agent of the Company or the Subsidiaries has committed any act
or omission giving rise to liability for any violation identified in
subsection (vi) and (vii) above, other than such acts or omissions that
would not, individually or in the aggregate, have a Material Adverse
Effect; and (ix) no term or condition of employment exists through
arbitration awards, settlement agreements, or side agreement that is
contrary to the express terms of any applicable collective bargaining
agreement.
(ee) None of the transactions contemplated in the Documents or the application
by the Company or any of the Subsidiaries of the proceeds of the Notes will
violate or result in a violation of Section 7 of the Exchange Act
(including, without limitation, 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).
(ff) Neither the Company nor any of the Subsidiaries is an open-end investment
company, unit investment trust or face-amount certificate company that is
or is required to be registered under Section 8 of the United States
Investment Company Act of 1940 (the "Investment Company Act"); and neither
the Company nor any of the Subsidiaries, after giving effect to the
Offering and sale of the Notes and the application of the proceeds thereof
as described in the Offering Circular, will be an "investment company" as
defined in the Investment Company Act.
(gg) The Company has not engaged any broker, finder, commission agent or other
person (other than the Initial Purchaser) in connection with the Offering
or any of the transactions contemplated in the Documents, and the Company
is not under any obligation to pay any broker's fee or commission in
connection with such transactions (other than commissions or fees to the
Initial Purchaser).
(hh) Each of the Company and the Subsidiaries is (i) in compliance with any and
all applicable foreign, provincial, federal, state and local laws and
regulations relating to health and safety, or the pollution or the
protection of the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) has received and is
in compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct its respective
businesses and (iii) has not received notice of, and is not aware of, any
actual or potential liability for damages to natural resources or the
investigation or remediation of any disposal, release or existence of
hazardous or toxic substances or wastes, pollutants or
11
contaminants, in each case except where such non-compliance with
Environmental Laws, failure to receive and comply with required permits,
licenses or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any of
the Subsidiaries has been named as a "potentially responsible party" under
the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, or any similar state or local or foreign or provincial
Environmental Laws or regulations requiring the Company or any of its
Subsidiaries to investigate or remediate any pollutants or contaminants,
except where such requirements would not, individually or in the aggregate,
have a Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business.
In the ordinary course of its business, the Company periodically reviews
the effects of Environmental Laws on the business, operations and
properties of the Company and the Subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis of
such review and the indemnification for certain costs and liabilities that
the Company or its Subsidiaries is entitled to receive from the Company's
former parent company, the Company has reasonably concluded that such
associated costs would not, individually or in the aggregate, have a
Material Adverse Effect on the Company's business, operations or earnings.
In connection with the Acquisition, the Company reviewed the effects of
Environmental Laws on the business, operations and properties of the
Company and the Subsidiaries, and has identified and evaluated associated
costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit arising from the
Company's or its Subsidiaries' or any predecessors' or formerly owned or
operated properties or license or approval, any related constraints on
operating activities and any potential liabilities to third parties). Based
on such review, the Company has reasonably concluded that such associated
costs and liabilities would not, individually or in the aggregate, have a
Material Adverse Effect on the Company's business, operations or earnings.
(ii) As of the Closing Date, except as provided in the Credit Agreement and the
Indenture and as disclosed in the Pricing Disclosure Package, there will be
no encumbrances or restrictions (other than under applicable law) on the
ability of any Subsidiary of the Company (x) to pay dividends or make other
distributions on such Subsidiary's capital stock or to pay any indebtedness
to the Company or any other Subsidiary of the Company, (y) to make loans or
advances or pay any indebtedness to, or investments in, the Company or any
other Subsidiary of the Company or (z) to transfer any of its property or
assets to the Company or any other Subsidiary of the Company.
(jj) Upon execution and delivery of certain modification agreements in
connection with the existing Collateral Agreements and the issuance of the
Notes, (i) the Collateral Agreements, as modified, will provide, in favor
of the Collateral Agent, for the benefit of the Holders of the Notes, a
legal, valid and enforceable security interest in all right, title and
interest of the Company and any Guarantor (subject only to Permitted Liens)
in the Collateral (as defined in the Security Agreement), subject to the
Intercreditor Agreement, and (ii) upon the filing of any necessary
additional UCC financing statements, together with any necessary amendments
to such existing UCC financing statements required under the Code (as
defined in the Security Agreement), or other filings as may be required
under federal law, in the case of any Patents, Trademarks or Copyrights
(each as defined in the Security Agreement), such security interests will
be valid and perfected, and subject to the Intercreditor Agreement, will
constitute a second priority security
12
interest in the Collateral (as defined in the Security Agreement), subject
only to Permitted Liens. As of the Closing Date, the Collateral (as defined
in the Security Agreement) will be subject to no Liens other than Permitted
Liens. Upon the execution and delivery by the Company and/or any Guarantor
of a Control Agreement (as defined in the Security Agreement), such
security interest will be valid and perfected (to the extent required
thereunder), and will constitute a second priority security interest such
Securities Account or Deposit Account, as applicable (each as defined in
the Security Agreement), subject to the Intercreditor Agreement. As of the
Closing Date, any such Securities Account or Deposit Account, as applicable
(each as defined in the Security Agreement), if any, will be subject to no
Liens other than Permitted Liens.
(kk) Each certificate signed by any officer of the Company, or any Subsidiary
thereof, delivered to the Initial Purchaser shall be deemed a
representation and warranty by the Company or any such Subsidiary thereof
(and not individually by such officer) to the Initial Purchaser with
respect to the matters covered thereby.
(ll) Each of the Company and its Subsidiaries is 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. All policies of insurance insuring the Company or any of its
Subsidiaries or their respective businesses, assets, employees, officers
and directors are in full force and effect. The Company and the
Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects, and there are no claims by the
Company or any of the Subsidiaries under any such policy or instrument as
to which any insurance company is denying liability or defending under a
reservation of rights clause. Neither the Company nor any such Subsidiary
has been refused any insurance coverage sought or applied for, and neither
the Company nor any such Subsidiary 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 as may
be necessary to continue its business at a cost that would not,
individually or in the aggregate, have a Material Adverse Effect.
(mm) There is and has been no failure on the part of the Company and the
Subsidiaries or any of the officers and directors of the Company or any of
the Subsidiaries, in their capacities as such, to comply in all material
respects with the applicable provisions of The Xxxxxxxx-Xxxxx Act of 2002
and the rules and regulations in connection therewith.
(nn) (i) The Company has established and maintains "disclosure controls and
procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange
Act) and (ii) the Company's "disclosure controls and procedures" are
reasonably designed to ensure that all information (both financial and
non-financial) required to be disclosed by the Company in the reports that
it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and
regulations thereunder, and that all such information is accumulated and
communicated to the Company's management as appropriate to allow timely
decisions regarding required disclosure and to make the certifications of
the Chief Executive Officer and Chief Financial Officer of the Company
required under the Exchange Act with respect to such reports.
(oo) The accountants who certified the financial statements included in the
Pricing Disclosure Package and Final Offering Circular are independent
public accountants as required by the Act, the regulations promulgated
under the Act and the Exchange Act.
(pp) No forward-looking statement (within the meaning of Section 27A of the Act
and Section 21E of the Exchange Act) or presentation of market-related or
statistical data contained in the Pricing
13
Disclosure Package has been made or reaffirmed without a reasonable basis
or has been disclosed in other than good faith.
(qq) All of the conditions to the Tender Offer have been satisfied or waived by
the Company. Upon the expiration of the Tender Offer, the Company has
accepted letters of transmittal pursuant to the Tender Offer representing
95% of the outstanding shares of common stock of XX Xxxx'x.
(rr) The Company has not taken any action or omitted to take any action (such as
issuing any press release or made any other public announcement referring
to the Offering without the "Stabilization/FSZ" legend) which may result in
the loss by the Initial Purchaser of the ability to rely on the
stabilization safe harbor provided by the Financial Services Authority
under the Financial Services and Markets Xxx 0000 (the "FSMA"); provided,
however, that the such "Stabilization/FSZ" legend was not in the
Preliminary Offering Circular or the Pricing Term Sheet. The Company has
been informed of the guidance relating to stabilization provided by the
Financial Services Authority, in particular Section MAR 2 Annex 2G of the
Financial Services Handbook.
5. COVENANTS OF THE COMPANY AND THE GUARANTORS. Each of the Company
and the Guarantors jointly and severally agrees:
(a) To (i) advise the Initial Purchaser promptly after obtaining knowledge
(and, if requested by the Initial Purchaser, confirm such advice in
writing) of (A) the issuance by any state securities commission of any stop
order suspending the qualification or exemption from qualification of any
of the Notes for offer or sale in any jurisdiction, or the initiation of
any proceeding for such purpose by any state securities commission or other
regulatory authority, or (B) the happening of any event that makes any
statement of a material fact made in the Pricing Disclosure Package or the
Final Offering Circular untrue or that requires the making of any additions
to or changes in the Pricing Disclosure Package or the Final Offering
Circular in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (ii) use its
commercially reasonable efforts to prevent the issuance of any stop order
or order suspending the qualification or exemption from qualification of
any of the Notes under any state securities or Blue Sky laws, and (iii) if,
at any time, any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of any of the Notes under any such laws, use its commercially
reasonable efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To (i) furnish the Initial Purchaser, without charge, with as many copies
of the Preliminary Offering Circular, the Pricing Disclosure Package and
the Final Offering Circular, and any amendments or supplements thereto, as
the Initial Purchaser may reasonably request, and (ii) promptly prepare,
upon the Initial Purchaser's reasonable request, any amendment or
supplement to the Pricing Disclosure Package and the Offering Circular that
the Initial Purchaser, upon advice of legal counsel, reasonably determine
may be necessary in connection with Exempt Resales (and the Company hereby
consents to the use of the Preliminary Offering Circular, the Pricing
Disclosure Package and the Final Offering Circular, and any amendments and
supplements thereto, by the Initial Purchaser in connection with Exempt
Resales).
(c) Not to amend or supplement the Pricing Disclosure Package or the Offering
Circular prior to the Closing Date, or at any time prior to the completion
of the resale by the Initial Purchaser of all the Notes purchased by the
Initial Purchaser, unless the Initial Purchaser shall previously have been
advised thereof and shall have provided its written consent thereto.
14
(d) So long as the Initial Purchaser shall hold any of the Notes, (i) if any
event shall occur as a result of which, in the reasonable judgment of the
Company or the Initial Purchaser, it becomes necessary or advisable to
amend or supplement the Pricing Disclosure Package or the Final Offering
Circular in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary to amend or supplement the Pricing Disclosure Package or the
Final Offering Circular to comply with Applicable Law, to prepare, at the
expense of the Company, an appropriate amendment or supplement to the
Pricing Disclosure Package or the Final Offering Circular (in form and
substance reasonably satisfactory to the Initial Purchaser) so that (A) as
so amended or supplemented, the Pricing Disclosure Package and the Final
Offering Circular will not include an untrue statement of material fact or
omit 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, and (B) the Pricing Disclosure Package and the Final Offering
Circular will comply with Applicable Law and (ii) if in the reasonable
judgment of the Company it becomes necessary or advisable to amend or
supplement the Pricing Disclosure Package or the Final Offering Circular so
that the Pricing Disclosure Package and the Final Offering Circular will
contain all of the information specified in, and meet the requirements of,
Rule 144A(d)(4) of the Act, to prepare an appropriate amendment or
supplement to the Pricing Disclosure Package or the Final Offering Circular
(in form and substance reasonably satisfactory to the Initial Purchaser) so
that the Pricing Disclosure Package and the Final Offering Circular, as so
amended or supplemented, will contain the information specified in, and
meet the requirements of, such Rule.
(e) To cooperate with the Initial Purchaser and the Initial Purchaser's counsel
in connection with the qualification of the Notes under the securities or
Blue Sky laws of such jurisdictions as the Initial Purchaser may request
and continue such qualification in effect so long as reasonably required
for Exempt Resales.
(f) Whether or not any of the Offering or the transactions contemplated under
the Documents are consummated or this Agreement is terminated, to pay (i)
all costs, expenses, fees and taxes incident to and in connection with: (A)
the preparation, printing and distribution of the Preliminary Offering
Circular, the Pricing Disclosure Package and the Final Offering Circular
and all amendments and supplements thereto (including, without limitation,
financial statements and exhibits), and all other agreements, memoranda,
correspondence and other documents prepared and delivered in connection
herewith, (B) the negotiation, printing, processing and distribution
(including, without limitation, word processing and duplication costs) and
delivery of, each of the Documents, (C) the preparation, issuance and
delivery of the Notes, (D) the qualification of the Notes for offer and
sale under the securities or Blue Sky laws of the several states
(including, without limitation, the fees and disbursements of the Initial
Purchaser's counsel relating to such registration or qualification), (E)
furnishing such copies of the Preliminary Offering Circular, the Pricing
Disclosure Package and the Final Offering Circular, and all amendments and
supplements thereto, as may reasonably be requested for use by the Initial
Purchaser and (F) the performance of the obligations of the Company and the
Guarantors under the Registration Rights Agreement, including but not
limited to the Exchange Offer, the Exchange Offer Registration Statement
and any Shelf Registration Statement, (ii) all fees and expenses of the
counsel, accountants and any other experts or advisors retained by the
Company, (iii) all expenses and listing fees in connection with the
application for quotation of the Notes on the Private Offerings, Resales
and Trading Automated Linkages ("PORTAL") market, (iv) all fees and
expenses (including fees and expenses of counsel) of the Company in
connection with approval of the Notes by DTC for "book-entry" transfer, (v)
all fees charged by rating agencies in connection with the rating of the
Notes, (vi) all fees and expenses (including reasonable fees and expenses
of counsel) of the Trustee and (vii) up to $250,000 of the fees,
disbursements and out-
15
of-pocket expenses incurred by the Initial Purchaser in connection with
their services to be rendered hereunder including, without limitation, the
reasonable fees and disbursements of Proskauer Rose LLP, counsel to the
Initial Purchaser, travel and lodging expenses, word processing charges,
messenger and duplicating services, facsimile expenses and other customary
expenditures. If the sale of the Notes provided for herein is not
consummated because any condition to the obligations of the Initial
Purchaser set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated pursuant to Section 9 hereof or because of any
failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or
satisfied hereunder (other than in each such case solely by reason of a
default by the Initial Purchaser on their obligations hereunder after all
conditions hereunder have been satisfied in accordance herewith), the
Company agrees to promptly reimburse the Initial Purchaser in cash upon
demand for up to $250,000 of the fees, disbursements and out- of-pocket
expenses (including reasonable fees, disbursements of Proskauer Rose LLP,
counsel to Initial Purchaser) that shall have been incurred by the Initial
Purchaser in connection with the proposed purchase and sale of the Notes.
(g) To use the proceeds of the Offering in the manner described in the Pricing
Disclosure Package under the caption "Use of Proceeds."
(h) To do and perform all things required to be done and performed under the
Documents prior to and after the Closing Date.
(i) Not to, and to ensure that no affiliate (as defined in Rule 501(b) of the
Act) of the Company will, 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 Notes in a manner that would
require the registration under the Act of the sale to the Initial Purchaser
or to the Subsequent Purchasers of the Notes.
(j) For so long as any of the Notes remain outstanding, during any period in
which the Company is not subject to Section 13 or 15(d) of the Exchange
Act, to make available, upon request, to any owner of the Notes in
connection with any sale thereof and any prospective Subsequent Purchasers
of such Notes from such owner, the information required by Rule 144A(d)(4)
under the Act.
(k) To comply with the representation letter of the Company to DTC relating to
the approval of the Notes by DTC for "book entry" transfer.
(l) To use its commercially reasonable efforts to effect the inclusion of the
Notes in Private Offerings, Resales and Trading through Automated Linkages
Market.
(m) For so long as any of the Notes remain outstanding, the Company will
furnish to the Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the Company to the
Trustee or to the holders of the Notes and, as soon as available, copies of
any reports or financial statements furnished to or filed by the Company
with the SEC or any national or foreign securities exchange on which any
class of securities of the Company may be listed.
(n) Except in connection with the Exchange Offer or the filing of the Shelf
Registration Statement, not to, and not to authorize or permit any person
acting on its behalf to, (i) distribute any offering material in connection
with the offer and sale of the Notes other than the Preliminary Offering
Circular, the Pricing Disclosure Package and the Final Offering Circular
and any amendments and supplements to the Pricing Disclosure Package and
the Final Offering Circular prepared in
16
compliance with this Agreement, or (ii) solicit any offer to buy or offer
to sell the Notes by means of any form of general solicitation or general
advertising (including, without limitation, as such terms are used in
Regulation D under the Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Act.
(o) During the two year period after the Closing Date (or such shorter period
as may be provided for in Rule 144(k) under the Act, as the same may be in
effect from time to time), to not, and to not permit any current or future
Subsidiaries of either the Company or any other affiliates (as defined in
Rule 144A under the Act) controlled by the Company to, resell any of the
Notes which constitute "restricted securities" under Rule 144 that have
been reacquired by the Company, any current or future Subsidiaries or any
other "affiliates" (as defined in Rule 144A under the Act) controlled by
the Company, except pursuant to an effective registration statement under
the Act.
(p) The Company shall pay all stamp, documentary and transfer taxes and other
duties, if any, which may be imposed by the United States or any political
subdivision thereof or taxing authority thereof or therein with respect to
the issuance of the Notes or the sale thereof to the Initial Purchaser.
(q) To use their best efforts to complete on or prior to the Closing Date all
filings and other similar actions required in connection with the
perfection of security interests as and to the extent contemplated by the
Collateral Agreements.
(r) To deliver to the Initial Purchaser on and as of the Closing Date
satisfactory evidence of the good standing of the Company and the
Guarantors in their respective jurisdictions of organization and the good
standing of the Company and its subsidiaries in such other jurisdictions as
the Initial Purchaser may reasonably request, in each case in writing or
any standard form of telecommunication, from the appropriate governmental
authorities of such jurisdictions.
(s) To file on the Closing Date a certificate of merger with the Secretary of
State of the State of Delaware to consummate the Back-end Merger and to
cause XX Xxxx'x and its subsidiaries to execute a counterpart to this
Agreement in the form attached as Exhibit C hereto upon the Closing Date.
6. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASER. The
Initial Purchaser represents and warrants that:
(a) It is a QIB as defined in Rule 144A under the Act and it will offer the
Notes for resale only upon the terms and conditions set forth in this
Agreement and in the Pricing Disclosure Package and the Final Offering
Circular.
(b) It is not acquiring the Notes with a view to any distribution thereof that
would violate the Act or the securities laws of any state of the United
States or any other applicable jurisdiction. In connection with the Exempt
Resales, it will solicit offers to buy the Notes only from, and will offer
and sell the Notes only to, (A) persons reasonably believed by the Initial
Purchaser to be QIBs or (B) persons reasonably believed by the Initial
Purchaser to be Institutional Accredited Investors or (C) non-U.S. persons
reasonably believed by the Initial Purchaser to be a purchaser referred to
in Regulation S under the Act; provided, however, that in purchasing such
Notes, such persons are deemed to have represented and agreed as provided
under the caption "Notice to Investors" contained in the Pricing Disclosure
Package and the Final Offering Circular.
17
(c) No form of general solicitation or general advertising in violation of the
Act has been or will be used nor will any offers in any manner involving a
public offering within the meaning of Section 4(2) of the Act or, with
respect to Notes to be sold in reliance on Regulation S, by means of any
directed selling efforts be made by such Initial Purchaser or any of its
representatives in connection with the offer and sale of any of the Notes.
(d) The Initial Purchaser will deliver to each Subsequent Purchaser of the
Notes, in connection with its original distribution of the Notes, a copy of
the Pricing Disclosure Package and the Final Offering Circular, as amended
and supplemented at the date of such delivery.
(e) (i) It has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to
engage in investment activity (within the meaning of Section 21 of the
FSMA) received by it in connection with the issue or sale of any of the
Notes in circumstances in which Section 21(1) of the FSMA does not apply to
the Issuer and (ii) it has complied and will comply with all applicable
provisions of the FSMA, with respect to anything done by it in relation to
the Notes in, from or otherwise involving the United Kingdom
7. CONDITIONS. The obligations of the Initial Purchaser to purchase
the Notes under this Agreement are subject to the satisfaction of each of the
following conditions:
(a) All the representations and warranties of the Company and the Guarantors
contained in this Agreement and in each of the Documents to which it is a
party shall be true and correct in all material respects (except that any
representation or warranty that already contains a materiality exception
therein, in each such case shall be true and correct as written) as of the
date hereof and at the Closing Date (after giving effect to the Acquisition
and Related Transaction). On or prior to the Closing Date, the Company and
each other party to the Documents (other than the Initial Purchaser) shall
have performed or complied with all of the agreements and satisfied all
conditions on their respective parts to be performed, complied with or
satisfied pursuant to the Documents (other than conditions to be satisfied
by such other parties, which the failure to so satisfy would not reasonably
be expected to, individually or in the aggregate, have a Material Adverse
Effect).
(b) No injunction, restraining order or order of any nature by a Governmental
Authority shall have been issued as of the Closing Date that would prevent
or materially interfere with the consummation of the Offering or any of the
transactions contemplated under the Documents; and no stop order suspending
the qualification or exemption from qualification of any of the Notes in
any jurisdiction shall have been issued and no Proceeding for that purpose
shall have been commenced or, to the knowledge of the Company, after
reasonable internal inquiry, be pending as of the Closing Date.
(c) No action shall have been taken and no Applicable Law shall have been
enacted, adopted or issued that would, as of the Closing Date, prevent the
consummation of the Offering or any of the transactions contemplated under
the Documents. No Proceeding other than as set forth in the Pricing
Disclosure Package shall be pending or, to the knowledge of the Company
after reasonable internal inquiry, threatened other than Proceedings that
(i) if adversely determined would not, individually or in the aggregate,
adversely affect the issuance or marketability of the Notes, and (ii) would
not, individually or in the aggregate, have a Material Adverse Effect.
(d) Subsequent to the respective dates as of which data and information is
given in the Pricing Disclosure Package there shall not have been any
Material Adverse Change.
18
(e) The Notes shall have been designated PORTAL securities in accordance with
the rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in The PORTAL Market.
(f) On or after the date hereof and on or prior to the Closing Date, (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 the Company or any securities of
the Company (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
negative change, nor shall any notice have been given of any potential or
intended negative change, in the outlook for any rating of the Company or
any securities of the Company 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.
(g) The Initial Purchaser shall have received on the Closing Date:
(i) certificates dated the Closing Date, signed by the Chief Executive
Officer and the principal financial or accounting officer of the
Company, on behalf of the Company, to the effect that (A) the
representations and warranties set forth in Section 4 hereof and in
each of the Documents that are not qualified by materiality were true
and correct in all material respects as of the Applicable Time and are
true and correct in all material respects as of the Closing Date, with
the same force and effect as though expressly made at and as of the
Closing Date, (B) the representations and warranties set forth in
Section 4 hereof and in each of the Documents that are qualified by
materiality were true and correct as of the Applicable Time and are
true and correct as of the Closing Date, with the same force and
effect as though expressly made at and as of the Closing Date, (C) the
Company has performed and complied in all material respects with all
agreements and satisfied in all material respects all conditions on
its part to be performed or satisfied by the Company at or prior to
the Closing Date, (D) at the Closing Date, since the Applicable Time
or since the date of the most recent financial statements in the
Pricing Disclosure Package and except as described in the Pricing
Disclosure Package, (exclusive of any amendment or supplement thereto
after the date hereof), to the knowledge of such officers, no event or
events have occurred, no information has become known nor does any
condition exist that, individually or in the aggregate, would have a
Material Adverse Effect, (E) since the date of the most recent
financial statements in the Pricing Disclosure Package (exclusive of
any amendment or supplement thereto after the date hereof), other than
as described in the Pricing Disclosure Package or contemplated hereby,
neither the Company nor any Subsidiary of the Company has incurred any
liabilities or obligations, direct or contingent, not in the ordinary
course of business, that are material to the Company and the
Subsidiaries, taken as a whole, or entered into any transactions not
in the ordinary course of business that are material to the business,
condition (financial or otherwise) or results of operations or
prospects of the Company and the Subsidiaries, taken as a whole, and
there has not been any change in the capital stock or long-term
indebtedness of the Company or any Subsidiary of the Company that is
material to the business, condition (financial or otherwise) or
results of operations or prospects of the Company and the
Subsidiaries, taken as a whole, and (F) the sale of the Notes has not
been enjoined (temporarily or permanently);
19
(ii) a certificate, dated the Closing Date, executed by the Secretary of
the Company and each Guarantor, certifying such matters as the Initial
Purchaser may reasonably request;
(iii) a certificate of solvency, dated the Closing Date, executed by the
principal financial or accounting officer of the Company substantially
in the form previously approved by the Initial Purchaser or its
counsel;
(iv) the opinion of Weil, Gotshal & Xxxxxx LLP, counsel to the Company,
dated the Closing Date, in the form of Exhibit D attached hereto; and
(v) an opinion, dated the Closing Date, of Proskauer Rose LLP, counsel to
the Initial Purchaser, in form satisfactory to the Initial Purchaser
covering such matters as are customarily covered in such opinions.
(h) The Initial Purchaser shall have received from each of Ernst & Young LLP,
independent auditors, with respect to the Company, BDO Xxxx Xxxxxxx LLP,
independent auditors, with respect to Hay Hall Holdings Limited and Hay
Hall Group Limited, and Xxxxx Xxxxxxxx LLP, independent auditors, with
respect to XX Xxxx'x Corporation, (A) a comfort letter, dated as of April
3, 2007, in form and substance reasonably satisfactory to the Initial
Purchaser and their counsel, with respect to the financial statements and
certain financial information contained in the Pricing Disclosure Package
and the Final Offering Circular, and (B) a comfort letter, dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchaser and their counsel, to the effect that Ernst & Young LLP, BDO Xxxx
Xxxxxxx LLP and Xxxxx Xxxxxxxx LLP, respectively, each reaffirms the
statements made in its letter furnished pursuant to clause (A).
(i) Each of the Documents shall have been executed and delivered by all parties
thereto, and the Initial Purchaser shall have received a fully executed
original of each Document.
(j) The Initial Purchaser shall have received copies of all opinions,
certificates, letters and other documents delivered under or in connection
with the Offering or any transaction contemplated in the Documents.
(k) The terms of each Document shall conform in all material respects to the
description thereof in the Pricing Disclosure Package and the Final
Offering Circular.
(l) [INTENTIONALLY DELETED]
(m) [INTENTIONALLY DELETED]
(n) The Company shall have received an executed waiver and consent from Xxxxx
Fargo Foothill, Inc., in accordance with the terms of the Credit Agreement,
authorizing the Company to consummate the Acquisition without violating any
provision of the Credit Agreement. TB's Wood's shall have received an
executed waiver and consent from and creditors of XX Xxxx'x with respect to
XX Xxxx'x existing senior secured revolving credit facility assumed by the
Company in connection with the Acquisition, in accordance with the terms of
such credit facility, authorizing XX Xxxx'x to become subject to the terms
of the Indenture and Senior Unsecured Notes Indentures (including becoming
a Guarantor and providing security under the Indenture and becoming a
guarantor under the terms of the Senior Unsecured Notes Indenture) without
violating any provision of such credit facility.
20
(o) Immediately prior to the Closing Date, Forest Acquisition Corporation shall
be a direct, wholly-owned subsidiary of the Company. Forest Acquisition
Corporation shall remain a direct, wholly-owned subsidiary of the Company
until the Back-end Merger is completed.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and each of the Guarantors jointly and severally agree to
indemnify and hold harmless the Initial Purchaser, and each person, if any,
who control the Initial Purchaser within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, against any losses, claims, damages
or liabilities of any kind to which the Initial Purchaser or such
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Preliminary Offering Circular, the Pricing Disclosure
Package or the Final Offering Circular (or any amendment or supplement
thereto);
(ii) the omission or alleged omission to state in the Preliminary Offering
Circular, the Pricing Disclosure Package or the Final Offering
Circular (or any amendment or supplement thereto) a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; or
(iii) any breach by the Company or any of the Guarantors of their
respective representations, warranties and agreements set forth
herein;
and, subject to the provisions hereof, will reimburse, as incurred, the
Initial Purchaser and each such controlling person for any legal or other
expenses reasonably incurred by the Initial Purchaser or such controlling
person in connection with investigating, defending against or appearing as
a third-party witness in connection with any such loss, claim, damage,
liability or action in respect thereof; provided, however, the Company and
the Guarantors will not be liable in any such case to the extent (but only
to the extent) that any such loss, claim, damage or liability is finally
judicially determined by a court of competent jurisdiction in a final,
unappealable judgment, to have resulted solely from any untrue statement or
alleged untrue statement or omission or alleged omission made in the
Preliminary Offering Circular, the Pricing Disclosure Package or the Final
Offering Circular (or any amendment or supplement thereto) in reliance upon
and in conformity with the Furnished Information. This indemnity agreement
will be in addition to any liability that the Company and the Guarantors
may otherwise have to the indemnified parties. The Company and the
Guarantors shall not be liable under this Section 8 for any settlement of
any claim or action effected without their prior written consent, which
shall not be unreasonably withheld.
(b) Each Initial Purchaser, severally and not jointly, agrees to indemnify and
hold harmless each of the Company and the Guarantors and their respective
directors, officers and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act against any losses, claims, damages or liabilities to which the Company
or any such director, officer or controlling person may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) are finally
judicially determined by a court of competent jurisdiction in a final,
unappealable judgment, to have resulted solely from (i) any untrue
statement or alleged untrue statement of any material fact contained in any
Offering Circular or any amendment or supplement thereto or (ii) the
omission or the alleged omission to state therein a material fact required
to be stated in any
21
Offering Circular or any amendment or supplement thereto or necessary to
make the statements therein not misleading, in each case to the extent (but
only to the extent) that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity
with the Furnished Information; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses incurred by the Company, each of the Guarantors or any
such director, officer or controlling person in connection with any such
loss, claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any liability that the Initial Purchaser
may otherwise have to the indemnified parties.
(c) As promptly as reasonably practicable after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action for which
such indemnified party is entitled to indemnification under this Section 8,
such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party of the commencement thereof in writing; but the omission
to so notify the indemnifying party (i) will not relieve such indemnifying
party from any liability under paragraph (a) or (b) above unless and only
to the extent it is materially prejudiced as a result thereof and (ii) will
not, in any event, relieve the indemnifying party from any obligations to
any indemnified party other than the indemnification obligation provided in
paragraphs (a) and (b) above. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may determine, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the defendants in any such action
include both the indemnified party and the indemnifying party, and the
indemnified party shall have been advised by counsel in writing that there
may be one or more legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, or (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after receipt by the
indemnifying party of notice of the institution of such action, then, in
each such case, the indemnifying party shall not have the right to direct
the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party
or parties at the expense of the indemnifying party. After notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable
to such indemnified party under this Section 8 for any legal or other
expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying
party shall not be liable for the expenses of more than one separate
counsel (in addition to local counsel) in any one action or separate but
substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Initial
Purchaser in the case of paragraph (a) of this Section 8 or the Company in
the case of paragraph (b) of this Section 8, representing the indemnified
parties under such paragraph (a) or paragraph (b), as the case may be, who
are parties to such action or actions) or (ii) the indemnifying party has
authorized in writing the employment of counsel for the indemnified party
at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will
not be liable for the costs and expenses of any settlement of such action
effected by
22
such indemnified party without the prior written consent of the
indemnifying party (which consent shall not be unreasonably withheld),
unless such indemnified party waived in writing its rights under this
Section 8, in which case the indemnified party may effect such a settlement
without such consent.
(d) No indemnifying party shall be liable under this Section 8 for any
settlement of any claim or action (or threatened claim or action) effected
without its written consent, which shall not be unreasonably withheld, but
if a claim or action is settled with its written consent, or if there is a
final judgment for the plaintiff with respect to any such claim or action,
each indemnifying party jointly and severally agrees, subject to the
exceptions and limitations set forth above, to indemnify and hold harmless
each indemnified party from and against any and all losses, claims, damages
or liabilities (and legal and other expenses as set forth above) incurred
by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party (which consent
shall not be unreasonably withheld), effect any settlement or compromise of
any pending or threatened proceeding in respect of which the indemnified
party is or could have been a party, or indemnity could have been sought
hereunder by the indemnified party, unless such settlement (A) includes an
unconditional written release of the indemnified party, in form and
substance satisfactory to the indemnified party, from all liability on
claims that are the subject matter of such proceeding and (B) does not
include any statement as to an admission of fault, culpability or failure
to act by or on behalf of the indemnified party.
(e) In circumstances in which the indemnity agreement provided for in the
preceding paragraphs of this Section 8 is unavailable to, or insufficient
to hold harmless, an indemnified party in respect of any losses, claims,
damages or liabilities (or actions in respect thereof), each indemnifying
party, in order to provide for just and equitable contributions, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties, on the one
hand, and the indemnified party, on the other hand, from the Offering or
(ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties, on the one hand, and
the indemnified party, on the other hand, in connection with the statements
or omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof). The
relative benefits received by the Company, on the one hand, and the Initial
Purchaser, on the other hand, shall be deemed to be in the same proportion
as the total proceeds from the Offering (before deducting expenses)
received by the Company bear to the total discounts and commissions
received by the Initial Purchaser. The relative fault of the parties shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Initial Purchaser, on the other hand, the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission or alleged statement or
omissions, and any other equitable considerations appropriate in the
circumstances.
(f) The Company, the Guarantors and the Initial Purchaser agree that it would
not be equitable if the amount of such contribution determined pursuant to
the immediately preceding paragraph (e) were determined by pro rata or per
capita allocation or by any other method of allocation that does not take
into account the equitable considerations referred to in the first sentence
of the immediately preceding paragraph (e). Notwithstanding any other
provision of this Section 8, the Initial Purchaser shall not be obligated
to make contributions hereunder that in the aggregate exceed the total
discounts, commissions and other compensation received by such Initial
23
Purchaser under this Agreement, less the aggregate amount of any damages
that such Initial Purchaser has otherwise been required to pay by reason of
the untrue or alleged untrue statements or the omissions or alleged
omissions to state a material fact. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of the immediately preceding
paragraph (e), each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Initial Purchaser,
and each director of the Company and the Guarantors, each officer of the
Company and the Guarantors and each person, if any, who controls either of
the Company or the Guarantors within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company and the Guarantors.
9. TERMINATION. The Initial Purchaser may terminate this Agreement at
any time prior to the Closing Date by written notice to the Company if any of
the following has occurred:
(a) since the date hereof, any Material Adverse Effect or development involving
or reasonably expected to result in a prospective Material Adverse Effect
that could, in the Initial Purchaser's sole judgment, be expected to (i)
make it impracticable or inadvisable to proceed with the offering or
delivery of the Notes on the terms and in the manner contemplated in the
Offering Circular, or (ii) materially impair the investment quality of any
of the Notes;
(b) the failure of the Company or the Guarantors to satisfy the conditions
contained in Section 7(a) hereof on or prior to the Closing Date;
(c) any outbreak or escalation of hostilities or other national or
international calamity or crisis, including acts of terrorism, or material
adverse change or disruption in economic conditions in, or in the financial
markets of, the United States (it being understood that any such change or
disruption shall be relative to such conditions and markets as in effect on
the date hereof), if the effect of such outbreak, escalation, calamity,
crisis, act or material adverse change in the economic conditions in, or in
the financial markets of, the United States could be reasonably expected to
make it, in the Initial Purchaser's sole judgment, impracticable or
inadvisable to market or proceed with the offering or delivery of the Notes
on the terms and in the manner contemplated in the Offering Circular or to
enforce contracts for the sale of any of the Notes;
(d) the enactment, publication, decree or other promulgation after the date
hereof of any Applicable Law that in the Initial Purchaser's counsels' sole
opinion materially and adversely affects, or could be reasonably expected
to materially and adversely affect, the properties, business, prospects,
operations, earnings, assets, liabilities or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole;
(e) any securities of the Company shall have been downgraded or placed on any
"watch list" for possible downgrading by any "nationally recognized
statistical rating organization," as such term is defined for purposes of
Rule 436(g)(2) under the Act; or
(f) the declaration of a banking moratorium by any Governmental Authority; or
the taking of any action by any Governmental Authority after the date
hereof in respect of its monetary or fiscal affairs that in the Initial
Purchaser's opinion could reasonably be expected to have a material adverse
effect on the financial markets in the United States or elsewhere.
10. SURVIVAL OF REPRESENTATIONS AND INDEMNITIES. The representations
and warranties, covenants, indemnities and contribution and expense
reimbursement provisions and other
24
agreements, representations and warranties of the Company and the Guarantors set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the Initial
Purchaser, (ii) acceptance of the Notes, and payment for them hereunder, and
(iii) any termination of this Agreement.
11. DEFAULT BY THE INITIAL PURCHASER. If either Initial Purchaser
shall breach its obligations to purchase the Notes that it has agreed to
purchase hereunder on the Closing Date and arrangements satisfactory to the
Company for the purchase of such Notes are not made within 36 hours after such
default, this Agreement shall terminate with respect to such Initial Purchaser
without liability on the part of the Company or the Guarantors or any other
Initial Purchaser. Nothing herein shall relieve the defaulting Initial Purchaser
from liability for its default.
12. NO FIDUCIARY DUTY. The Company hereby acknowledges that the
Initial Purchaser is acting solely in connection with the purchase and sale of
the Notes. The Company further acknowledges that the Initial Purchaser are
acting pursuant to a contractual relationship created solely by this Purchase
Agreement entered into on an arm's length basis and in no event do the parties
intend that the Initial Purchaser act or be responsible as a fiduciary to the
Company, its management, stockholders, creditors or any other person in
connection with any activity that the Initial Purchaser may undertake or have
undertaken in furtherance of the purchase and sale of the Notes, either before
or after the date hereof. The Initial Purchaser hereby expressly disclaim any
fiduciary or similar obligations to the Company, either in connection with the
transactions contemplated by this Purchase Agreement or any matters leading up
to such transactions, and the Company hereby confirms its understanding and
agreement to that effect. The Company and the Initial Purchaser agree that they
are each responsible for making their own independent judgments with respect to
any such transactions, and that any opinions or views expressed by the Initial
Purchaser to the Company regarding such transactions, including but not limited
to any opinions or views with respect to the price or market for the Notes, do
not constitute advice or recommendations to the Company. The Company hereby
waives and releases, to the fullest extent permitted by law, any claims that the
Company may have against the Initial Purchaser with respect to any breach or
alleged breach of any fiduciary or similar duty to the Company in connection
with the transactions contemplated by this Purchase Agreement or any matters
leading up to such transactions.
13. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this Agreement shall be
addressed as follows: (i) if to the Company, to: 00 Xxxxxxx Xx., Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxx, with a copy to: Weil,
Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx Xxxxx, Esq., and (ii) if to the Initial Purchaser, to:
Xxxxxxxxx & Company, Inc., 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000, Attention: Xxxx Xxxxxxx, Esq., with a copy to: Proskauer Rose LLP,
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxx, Esq.
(or in any case to such other address as the person to be notified may have
requested in writing).
(b) This Agreement has been and is made solely for the benefit of and shall be
binding upon the Company and the Guarantors, the Initial Purchaser and, to
the extent provided in Section 8 hereof, the controlling persons, officers,
directors, partners, employees, representatives and agents referred to in
Section 8, and their respective heirs, executors, administrators,
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 Notes from the Initial Purchaser merely
because of such purchase. Notwithstanding the foregoing, it is expressly
understood and agreed that each
25
purchaser who purchases Notes from the Initial Purchaser is intended to be
a beneficiary of the covenants of the Company and the Guarantors contained
in the Registration Rights Agreement to the same extent as if the Notes
were sold and those covenants were made directly to such purchaser by the
Company and the Guarantors, and each such purchaser shall have the right to
take action against the Company and the Guarantors to enforce, and obtain
damages for any breach of, those covenants.
(c) THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND
CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
(d) EACH OF THE COMPANY AND THE GUARANTORS HEREBY EXPRESSLY AND IRREVOCABLY (I)
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN ANY SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY; AND (II) WAIVES (A) ITS RIGHT TO A TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE INITIAL PURCHASER
AND FOR ANY COUNTERCLAIM RELATED TO ANY OF THE FOREGOING AND (B) ANY
OBLIGATION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE
OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY
CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(e) This Agreement may be signed in various counterparts, which together shall
constitute one and the same instrument.
(f) The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
(g) If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means
to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated
and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(h) This Agreement may be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may be given, provided
that the same are in writing and signed by all of the signatories hereto.
(i) Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Guarantors and the Initial Purchaser.
26
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Guarantors and the Initial Purchaser.
Very truly yours,
ALTRA INDUSTRIAL MOTION, INC.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Executive Officer
AMERICAN ENTERPRISES MPT CORP.
AMERICAN ENTERPRISES MPT HOLDINGS, LLC
AMERIDRIVES INTERNATIONAL, LLC
BOSTON GEAR LLC
FORMSPRAG LLC
INERTIA DYNAMICS LLC
XXXXXX MANUFACTURING CORPORATION
XXXXXXX GEAR LLC
WARNER ELECTRIC INTERNATIONAL HOLDING,
INC.
WARNER ELECTRIC LLC
WARNER ELECTRIC TECHNOLOGY LLC
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Executive Officer
ACCEPTED AND AGREED TO:
XXXXXXXXX & COMPANY, INC.
By: /s/ Xxxxx Xxxx
---------------------------------
Name: Xxxxx Xxxx
-------------------------------
Title: Managing Director
------------------------------
SCHEDULE I
LIST OF SUBSIDIARIES
ALTRA INDUSTRIAL MOTION, INC. SUBSIDIARIES JURISDICTION OF INCORPORATION/FORMATION
------------------------------------------ ---------------------------------------
3091780 Nova Scotia Company* Nova Scotia, Canada
American Enterprises MPT Corp. Delaware
American Enterprises MPT Holdings, LLC Delaware
Ameridrives International, LLC Delaware
Bibby Group Ltd.* United Kingdom
Bibby Transmissions Ltd.* United Kingdom
Bibby Turboflex SA* South Africa
Boston Gear LLC Delaware
Dynatork Air Motors Ltd.* United Kingdom
Dynatork, Ltd.* United Kingdom
Formsprag LLC Delaware
The Hay Hall Group Ltd.* United Kingdom
Hay Hall Holdings Ltd.* United Kingdom
Huco Engineering Industries Ltd.* United Kingdom
Huco Power Transmission, Ltd.* United Kingdom
Inertia Dynamics, LLC Delaware
Xxxxxx Canada, ULC* Nova Scotia, Canada
Xxxxxx Manufacturing Corporation Delaware
Matrix International GmbH* Germany
Matrix International, Ltd.* United Kingdom
Xxxxxxx Gear LLC Delaware
Xxxxx Turboflex Pty Ltd.* India
Saftek Ltd.* United Kingdom
Xxxxxxx GmbH* Germany
Torsiflex Ltd.* United Kingdom
Turboflex Ltd.* United Kingdom
Twiflex Ltd.* United Kingdom
Warner Electric Australia Pty. Ltd.* Australia
Warner Electric Europe SAS* France
Warner Electric Group GmbH* Germany
Warner Electric (Holding) SAS* France
Warner Electric International Holding, Inc. Delaware
Warner Electric LLC Delaware
Warner Electric (Netherlands) Holding, B.V.* Netherlands
Warner Electric (Singapore), Ltd.* Singapore
Warner Electric (Taiwan) Ltd.* Taiwan
Warner Electric Technology LLC Delaware
Warner Electric (Thailand) Ltd.* Thailand
Warner Electric UK Group Ltd.* United Kingdom
Warner Electric UK Holding, Ltd.* United Kingdom
Warner Electric Verwaltungs GmbH* Germany
Xxxxxx Xxxx Hing Limited, (HK)* Hong Kong
Wichita Company Ltd.* United Kingdom
XX XXXX'X CORPORATION SUBSIDIARIES JURISDICTION OF INCORPORATION/FORMATION
---------------------------------- ---------------------------------------
Xxxxxx electronic GmbH* Germany
Xxxxxx electronic S.r.l.* Italy
Industrial Blaju, S.A. de C.V.* Mexico
Plant Engineering Consultants, LLC Tennessee
X.X. Xxxx'x Canada Ltd.* Canada
XX Xxxx'x Enterprises, Inc. Delaware
XX Xxxx'x Incorporated Pennsylvania
XX Xxxx'x (India) Private Ltd.* India
* Denotes a Foreign Restricted Subsidiary of the Company
EXHIBIT A
[PRICING TERM SHEET]
EXHIBIT B
[REGISTRATION RIGHTS AGREEMENT]
EXHIBIT C
COUNTERPART TO THE PURCHASE AGREEMENT
APRIL 5, 2007
The undersigned hereby agrees to be bound by the terms of the Purchase
Agreement dated April 3, 2007, among Altra Industrial Motion, Inc., a Delaware
corporation and each of the Guarantors (as defined therein) and the Initial
Purchaser (as defined therein). For the avoidance of doubt, such obligors shall
include, but not be limited to, the obligations enumerated in Section 8(a) of
the Purchase Agreement. The undersigned hereby also agrees that all references
to "Guarantors" in the Purchase Agreement shall include the undersigned and the
undersigned shall be bound by all provisions of the Purchase Agreement
containing such references.
XX XXXX'X CORPORATION
By: /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
----------------------------------
Title: President, CEO and Director
---------------------------------
PLANT ENGINEERING CONSULTANTS, LLC
By: /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
----------------------------------
Title: President
---------------------------------
XX XXXX'X ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: President and Treasurer
---------------------------------
XX XXXX'X INCORPORATED
By: /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
----------------------------------
Title: President, CEO and Director
---------------------------------
Dated: April 5, 2007
EXHIBIT D
[WEIL OPINION AND NEGATIVE ASSURANCE LETTER]
