EXHIBIT 10.1
EXECUTION COPY
RYDER TRS, INC.
$175,000,000
10% SENIOR SUBORDINATED NOTES DUE 2006
PURCHASE AGREEMENT
------------------
November 20, 1996
CHASE SECURITIES INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Ryder TRS, Inc., a Delaware corporation, proposes to issue and sell
$175,000,000 principal amount of its 10% Senior Subordinated Notes due 2006 (the
"Notes"). The Notes are to be issued pursuant to an Indenture substantially in
the form of Exhibit A hereto to be dated as of November 25, 1996 (the
"Indenture"), between the Company and The Bank of New York, as trustee (the
"Trustee"). The Company hereby confirms the agreement with Chase Securities
Inc. (the "Initial Purchaser" or "CSI") with respect to the sale by the Company
of the Notes.
The Notes will be offered and sold to the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance on an exemption therefrom. The Company has prepared a
preliminary offering memorandum dated November 7, 1996 (such preliminary
offering memorandum being hereinafter referred to as the "Preliminary Offering
Memorandum"), and an offering memorandum dated November 20, 1996 (such offering
memorandum, in the form first furnished to the Initial Purchaser for use in
connection with the offering of the Notes, being hereinafter referred to as the
"Offering Memorandum"), setting forth information regarding the Company and the
Notes. The Company hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering and sale of the Notes.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the Exchange and Registration Rights Agreement
(the "Registration Rights Agreement"), to be dated the Closing
2
Date, in substantially the form of Exhibit B hereto, for so long as any such
Notes constitute "Transfer Restricted Notes" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of a series of
senior subordinated notes (the "Exchange Notes") identical in all material
respects to the Notes (except that the Exchange Notes will not contain terms
with respect to transfer restrictions) to be offered in exchange for the Notes
(the "Exchange Offer") and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement").
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company. The
----------------------------------------------------------
Company represents and warrants to and agrees with the Initial Purchaser as of
the date hereof and as of the Closing Date that:
(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains all the information that,
if requested by a prospective purchaser, would be required to be provided
pursuant to Rule 144A(d)(4) under the Securities Act. Each of the
Preliminary Offering Memorandum and the Offering Memorandum, as of its
respective date, did not, and at the Closing Date, the Offering Memorandum
and any amendment or supplement thereto will not, contain any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading. The preceding sentence does not apply to
information contained in or omitted from the Preliminary Offering
Memorandum or the Offering Memorandum (or any supplement or amendment
thereto) in reliance upon and in conformity with written information
relating to the Initial Purchaser furnished to the Company by or on behalf
of the Initial Purchaser specifically for use therein (the "Initial
Purchaser's Information"). The parties acknowledge and agree that the
Initial Purchaser's Information consists solely of the third, fourth, sixth
and seventh
3
paragraphs under the caption "Plan of Distribution" in the Offering
Memorandum.
(b) Each of the Company and its subsidiary, RCTR, Inc. ("Leasco")
have been duly incorporated and are validly existing as corporations in
good standing under the laws of the State of Delaware. The Company and
Leasco are not in violation of their respective charters and by-laws. The
Company and Leasco are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their
ownership or lease of property or the conduct of their businesses requires
such qualification, and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged as described in the Offering Memorandum, except where the
failure to so qualify or have such power or authority would not have,
singularly or in the aggregate, a material adverse effect on the condition
(financial or otherwise), results of operations, business or prospects of
the Company or Leasco, taken as a whole (a "Material Adverse Effect").
(c) The Company has an authorized capitalization as set forth in the
Offering Memorandum, and all the issued shares of capital stock of the
Company and Leasco have been duly and validly authorized and issued and are
fully paid and non-assessable. The capital stock of the Company conforms
to the description thereof contained in the Offering Memorandum.
(d) This Agreement has been duly authorized and validly executed and
delivered by the Company and constitutes a valid and legally binding
agreement of the Company. The Registration Rights Agreement has been duly
authorized by the Company, and, when duly executed and delivered in
accordance with its terms by each party thereto, will constitute a valid
and legally binding agreement of the Company. At the Closing Date the
Indenture will conform in all respects to the requirements of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission applicable to an indenture which is
qualified thereunder; and the Indenture has been duly authorized by the
Company and, when duly executed and delivered in accordance with its terms
by each party thereto, will constitute a valid and legally binding
agreement of the Company. Each of
4
this Agreement, the Registration Rights Agreement and the Indenture is or
will be, as the case may be, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws affecting
creditors' rights and remedies generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law
or in equity) and except that indemnity and contribution provisions may be
unenforceable.
(e) On the Closing Date, the Notes will have been duly authorized by
the Company, and the Notes, the Indenture and the Registration Rights
Agreement will have been duly executed by the Company and will conform in
all material respects to the descriptions thereof contained in the Offering
Memorandum. When the Notes are issued, authenticated and delivered in
accordance with the Indenture and paid for in accordance with the terms of
this Agreement, the Notes will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance
with their terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws affecting creditors' rights and remedies
generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(f) The execution, delivery and performance of the Indenture, the
Notes, the Registration Rights Agreement and this Agreement by the Company,
the consummation of the transactions contemplated hereby and thereby, and
the fulfillment of the terms hereof or thereof, will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the property or assets of the
Company is subject (except as would not have a Material Adverse Effect),
nor will such actions result in any violation of the provisions of the
charter or by-laws of the Company or
5
any statute or any judgment, order, decree, rule or regulation of any court
or arbitrator or governmental agency or body having jurisdiction over the
Company or any of its properties or assets; and no consent, approval,
authorization or order of, or filing or registration with, any such court
or arbitrator or governmental agency or body under any such statute,
judgment, order, decree, rule or regulation is required for the execution,
delivery and performance of the Indenture, the Notes, the Registration
Rights Agreement or this Agreement by the Company or the consummation of
the transactions contemplated hereby and thereby which shall not have been
obtained or made prior to the Closing Date (other than state securities
laws or blue sky laws or other than such consents, approvals,
authorizations or orders of, or filings or registrations with the
Commission or any state securities regulatory authorities as may be
required to be obtained or made pursuant to the Registration Rights
Agreement).
(g) KPMG Peat Marwick LLP and Coopers & ▇▇▇▇▇▇▇ L.L.P. are
independent public accountants with respect to the Company as required by
the Securities Act and the rules and regulations thereunder for financial
statements included in a definitive prospectus forming part of a
registration statement on Form S-1 under the Securities Act. The
historical financial statements (including the related notes, if any)
included in the Preliminary Offering Memorandum and the Offering Memorandum
comply in all material respects (except for the exclusion of financial
statement schedules) with the requirements applicable to a Registration
Statement on Form S-1 and have been prepared, and fairly present, the
financial position of the Company at the respective dates indicated and the
results of its operations and its cash flows for the respective periods
indicated, in accordance with generally accepted accounting principles
consistently applied throughout such periods; and the financial information
and financial data set forth in the Offering Memorandum under the captions
"Summary -- Summary Historical and Pro Forma Financial Information" and
"Selected Historical and Pro Forma Financial Information" are derived from
the accounting records of the Company, and fairly present the data
purported to be shown. The pro forma financial statements contained in the
--- -----
Preliminary Offering Memorandum and the Offering Memorandum have
6
been prepared on a basis consistent with such historical statements, except
for the pro forma adjustments specified therein, include all material
--- -----
adjustments to the historical financial data required by Rule 11-02 of
Regulation S-X to reflect the Transactions and the Offering, and give
effect to assumptions made on a reasonable basis and present fairly the
historical and proposed transactions contemplated by the Preliminary
Offering Memorandum, the Offering Memorandum and this Agreement. The other
historical financial and statistical information and data included in the
Preliminary Offering Memorandum and the Offering Memorandum are, in all
material respects, accurately presented.
(h) There are no pending actions or suits or judicial, arbitral,
rule-making or other administrative or other proceedings to which the
Company is a party or of which any property or assets of the Company is the
subject which, singularly or in the aggregate, are reasonably likely to
have a Material Adverse Effect; and , to the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(i) No action has been taken and no statute, rule or regulation or
order has been enacted, adopted or issued by any governmental agency or
body which prevents the issuance of the Notes or suspends the sale of the
Notes in any jurisdiction; no injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction has been
issued with respect to the Company which would prevent or suspend the
issuance or sale of the Notes, or the use of the Preliminary Offering
Memorandum or the Offering Memorandum in any jurisdiction; no action, suit
or proceeding is pending against or threatened against or affecting the
Company before any court or arbitrator or any governmental body, agency or
official, domestic or foreign, which could reasonably be expected to
interfere with or adversely affect the issuance of the Notes or the
validity thereof or the validity of the Indenture, the Notes, the
Registration Rights Agreement or this Agreement or any action taken or to
be taken pursuant hereto or thereto; and every request of any securities
authority or agency of any jurisdiction for additional information (to be
included
7
in the Preliminary Offering Memorandum or the Offering Memorandum or
otherwise) has been complied with.
(j) The Company (i) is not in default, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a party
or by which it is bound or to which any of its property or assets is
subject and (ii) is not in violation in any respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property
or assets may be subject, except any violation or default under clauses (i)
or (ii) that would not have a Material Adverse Effect.
(k) Except as disclosed in the Offering Memorandum, the Company
possesses all material licenses, certificates, authorizations and permits
issued by, and has made all declarations and filings with, the appropriate
state, federal or foreign regulatory agencies or bodies which are necessary
or desirable for the ownership of its properties or the conduct of its
businesses as described in the Offering Memorandum, except where the
failure to possess or make the same would not have, singularly or in the
aggregate, a Material Adverse Effect, and the Company has not received
notification of any revocation or modification of any such license,
authorization or permit and has no reason to believe that any such license,
certificate, authorization or permit will not be renewed.
(l) All Tax Returns (as defined below) required to be filed by the
Company in any jurisdiction have been filed, other than those filings being
contested in good faith, and all material taxes, including withholding
taxes, penalties and interest, assessments, fees and other charges due or
claimed to be due from such entities have been paid, other than those being
contested in good faith and for which adequate reserves have been provided
or those currently payable without penalty or interest. All Tax Returns
filed by the Company prior to the date hereof were complete and accurate,
except such as could not reasonably be expected to result, singularly or in
the aggregate, in
8
a Material Adverse Effect. No material claim for assessment or collection
of Taxes is presently being asserted against the Company. Furthermore, the
Company is not a party to any pending action, proceeding or investigation
by any governmental authority for the assessment or collection of Taxes,
nor does the Company have knowledge of any such threatened action,
proceeding or investigation, except such as could not reasonably be
expected to result, singularly or in the aggregate, in a Material Adverse
Effect. No waivers of statutes of limitation in respect of any Tax Returns
have been given by or requested of the Company, nor has the Company agreed
to any extension of time with respect to a Tax assessment or deficiency.
No claim by any authority in a jurisdiction where the Company does not
currently file a Tax Return is pending to the effect that the Company is or
may be subject to taxation by that jurisdiction, except any claim that,
singularly or in the aggregate, would not have a Material Adverse Effect.
No Liens are presently imposed upon or asserted against any of the
Company's assets as a result of or in connection with any failure, or
alleged failure, to pay any Tax, except any Lien that, singularly or in the
aggregate, would not have a Material Adverse Effect. As of the Closing
Date, the Company will not have any agreement, whether or not written,
providing for the payment of Tax liabilities or entitlements to refunds
with any other party. The Company has withheld and paid all Taxes required
to be withheld in connection with any amounts paid or owing to any
employee, creditor, independent contractor or other third party with
respect to the business of the Company. The unpaid Taxes of the Company do
not exceed the reserve for Tax liability (as opposed to any reserve for
deferred Taxes established to reflect timing differences between book and
tax income) set forth on the most recent balance sheet of the Company, as
adjusted for the passage of time through the date hereof in accordance with
past custom and practice in filing Tax Returns. For purposes of this
Agreement, the terms "Tax" and "Taxes" shall mean all federal, state, local
or foreign income, payroll, employee withholding, unemployment insurance,
social security, sales, use, service use, leasing use, excise, franchise,
gross receipts, value added, alternative or add-on minimum, estimated,
occupation, real and personal property, stamp, transfer, workers'
compensation, severance, windfall profits, environmental (including taxes
under
9
Section 59A of the Internal Revenue Code of 1986, as amended (the "Code")),
or other tax of the same or of a similar nature, including any interest,
penalty, or addition thereto. The term "Tax Return" means any return,
declaration, report, form, claim for refund, or information return or
statement relating to Taxes or income subject to taxation, or any amendment
thereto, and including any schedule or attachment thereto.
(m) The Company is not (a) an "investment company" or a company
"controlled" by an investment company within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and the
rules and regulations of the Commission thereunder or (b) a "holding
company" or a "subsidiary company" of a holding company, or an "affiliate"
thereof within the meaning of the Public Utility Holding Company Act of
1935, as amended.
(n) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(o) The Company maintains insurance (including self-insurance)
covering its properties, operations, personnel and businesses, in amounts
as is in accordance with customary industry practice to protect the Company
and its businesses, and which insures (or self-insures) against such losses
and risks, in accordance with customary industry practice to protect the
Company and its businesses. The Company has not received notice from any
insurer or agent of such insurer that capital improvements or other
expenditures will have to be made in order to continue such insurance,
except such as could not reasonably be expected, singularly or in the
aggregate, to have a Material Adverse Effect.
10
(p) There are no securities of the Company registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or listed
on a national securities exchange or quoted in a United States automated
inter-dealer quotation system. The Company has been advised that the Notes
have been designated as PORTAL securities in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. (the
"NASD").
(q) The Company does not own any "margin securities" as that term is
defined in Regulations G and U of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), and none of the proceeds of
the sale of the Notes will be used, directly or indirectly, for the purpose
of purchasing or carrying any margin security, for the purpose of reducing
or retiring any indebtedness which was originally incurred to purchase or
carry any margin security or for any other purpose which might cause any of
the Notes to be considered a "purpose credit" within the meanings of
Regulation G, T, U or X of the Federal Reserve Board.
(r) Other than this Agreement or as disclosed in the Offering
Memorandum under "Certain Transactions," the Company is not a party to any
contract, agreement or understanding with any person that would give rise
to a valid claim against the Company or the Initial Purchaser for a
brokerage commission, finder's fee or like payment in connection with the
Acquisition (as defined in the Indenture) or the offering of the Notes.
(s) The Company owns or possesses adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service ▇▇▇▇ registrations, copyrights, licenses
and know-how (including trade secrets and other unpatented or unpatentable
proprietary or confidential information, systems or procedures) necessary
for the conduct of its businesses and has no reason to believe that the
conduct of its businesses will conflict with any such rights of others that
might reasonably be expected to have a Material Adverse Effect, and has not
received any notice of any claim of conflict with any such rights of
others.
11
(t) The Company has good and valid title to, or has valid rights to
lease or otherwise use, all items of real or personal property which are
material to the business of the Company, in each case free and clear of all
liens, encumbrances, claims and defects that may materially interfere with
the condition (financial or otherwise), results of operations or business
of the Company, other than Permitted Liens (as defined in the Indenture).
(u) No labor disturbance by the employees of the Company exists or,
to the knowledge of the Company, is contemplated.
(v) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Code) or "accumulated funding deficiency" (as defined in
Section 302 of ERISA) or any of the events set forth in Section 4043(b) of
ERISA (other than events with respect to which the 30-day notice
requirement under Section 4043 of ERISA has been waived) has occurred with
respect to any "employee benefit plan" (as defined in ERISA Section 3(3))
of the Company other than a "multiemployer plan" (as defined in ERISA
Section 3(37)) (an "Employee Benefit Plan") which might reasonably be
expected to have a Material Adverse Effect; each Employee Benefit Plan is
in compliance in all material respects with applicable law, including ERISA
and the Code; the Company has not incurred and does not expect to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any "pension plan" (as defined in ERISA Section 3(2)); and
each "pension plan" for which the Company would have any liability and that
is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing, to the knowledge of the
Company, has occurred, whether by action or by failure to act, which might
be expected to cause the loss of such qualification.
(w) Except as disclosed in the Offering Memorandum, there has been no
storage, generation, transportation, handling, treatment, disposal,
discharge, emission, or other release of any kind of toxic or other wastes
or other hazardous substances by, due to, or caused by the Company (or any
other entity
12
for whose acts or omissions the Company is or may be liable) upon any of
the property now or, to the actual knowledge of the chief executive
officer, chief financial officer, treasurer or secretary of the Company,
previously owned or leased by the Company (i) in violation of any statute
or any ordinance, rule, regulation, order, judgment, decree or permit or
(ii) which would, under any statute or any ordinance, rule (including rule
of common law), regulation, order, judgment, decree or permit, give rise to
any liability, except in the case of both clauses (i) and (ii) for any
violation or liability which would not have, singularly or in the aggregate
with all such violations and liabilities, a Material Adverse Effect; there
has been no disposal, discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to which
the Company has knowledge, except for any such disposal, discharge,
emission, or other release of any kind which would not have, singularly or
in the aggregate with all such discharges and other releases, a Material
Adverse Effect.
(x) None of the Company, any affiliate (as such term is defined in
Rule 501(b) under the Securities Act) of the Company or any person acting
on its or their behalf has engaged or will engage in any directed selling
efforts (as that term is defined in Regulation S under the Securities Act),
and all such persons have complied and will comply with the offering
restrictions requirement of Regulation S to the extent applicable.
(y) Neither the Company nor any affiliate (as such term is defined in
Rule 501(b) under the Securities Act) of the Company has, directly or
through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any "security" (as defined in the
Securities Act), which is or will be integrated with the sale of the Notes
in a manner that would require the registration of the Notes under the
Securities Act.
(z) None of the Company or any affiliate (as such term is defined in
Rule 501(b) under the Securities Act) of the Company or any other person
acting on its or their behalf has engaged, in connection with the offering
of the Notes, in any form of general solic-
13
itation or general advertising within the meaning of Rule 502(c) under the
Securities Act.
(aa) Assuming the accuracy of the Initial Purchaser's representations
in Section 2 hereof and its compliance with the agreements set forth
therein, it is not necessary, in connection with the issuance and sale of
the Notes and the offer, resale and delivery of the Notes in the manner
contemplated by this Agreement and the Offering Memorandum, to register the
Notes under the Securities Act or to qualify the Indenture under the Trust
Indenture Act.
(bb) The Company immediately after the Closing Date (after giving
effect to the issuance of the Notes and to the other transactions related
thereto as described in the Offering Memorandum) will be Solvent. As used
in this paragraph (bb), the term "Solvent" means, with respect to a
particular date, that on such date (A) the present fair market value (or
fair salable value) of the assets of such entity is not less than the total
amount required to pay the probable liabilities of such entity on its total
existing debts and liabilities (including contingent liabilities) as they
become absolute and matured, (B) such entity is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and
commitments as they mature and become due in the normal course of business,
(C) assuming the sale of the Notes as contemplated by this Agreement and as
described in the Offering Memorandum, such entity is not incurring debts or
liabilities beyond its ability to pay as such debts and liabilities mature,
and (D) such entity is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which its property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such person is engaged. In
computing the amount of such contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount that, in
light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
(cc) The Notes satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
14
(dd) The Company has not taken and will not take, directly or indirectly,
any action prohibited by Rule 10b-6 under the Exchange Act in connection
with the offering of the Notes.
(ee) Except as described in the Offering Memorandum and except for
warrants issued pursuant to the warrant agreement dated as of October 17,
1996, between the Company and ChaseMellon Shareholder Services L.L.C.,
there are no outstanding rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of
capital stock of or other equity interest in the Company.
(ff) Since the date as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (A) there has been no
material adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, whether or
not arising in the ordinary course of business, (B) there have been no
transactions entered into by the Company, other than those in the ordinary
course of business, which are material with respect to the Company, and (C)
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
2. Purchase by the Initial Purchaser. On the basis of the
----------------------------------
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
the Initial Purchaser and the Initial Purchaser agrees to purchase from the
Company $175,000,000 in principal amount of Notes at a purchase price equal to
97.00% of the principal amount thereof less the interest for one day on such
amount (calculated at the Federal Funds Effective Rate as published on the
Telerate Screen at 9:00 A.M., New York City time, on the Closing Date).
The Company shall not be obligated to deliver any of the Notes except
upon payment for all the Notes to be purchased as provided herein.
15
The Initial Purchaser has advised the Company that it is its
intention, as promptly as it deems appropriate after the Company shall have
furnished the Initial Purchaser with copies of the Offering Memorandum, to
resell the Notes, at a purchase price initially equal to the price set forth on
the front cover of the Offering Memorandum, pursuant to the procedures and upon
the terms set forth in the Offering Memorandum, including those terms stating
that the Initial Purchaser may not solicit any offer to buy or offer to sell the
Notes by means of any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act. The Initial Purchaser represents, warrants and agrees with the Company
that it has solicited and will solicit offers for Notes only from, and will
offer Notesonly to, persons that it reasonably believes to be, in the case of
offers inside the United States, (i) QIBs or (ii) other institutional Accredited
Investors. The Initial Purchaser represents and warrants that (i) it is either
a QIB or an institutional Accredited Investor, in either case with such
knowledge and experience in financial and business matters as are necessary to
evaluate the merits and risks of an investment in the Notes, and is acquiring
its interest in the Notes not with a view to the distribution or resale thereof,
except resales in compliance with the registration requirements or exemption
provisions of the Securities Act, (ii) neither it, nor anyone acting on its
behalf, will offer the Notes so as to bring the issuance and sale of the Notes
within the provisions of Section 5 of the Securities Act, (iii) it will be re-
offering and reselling the Notes only to QIBs in reliance on the exemption from
the registration requirements of the Securities Act provided by Rule 144A and to
a limited number of persons that it reasonably believes to be Institutional
Accredited Investors that execute and deliver a letter containing certain
representations and agreements in the form attached as Annex A to the Offering
Memorandum, and (iv) it has used no form of general solicitation or general
advertising in connection with the offer and sale of the Notes. The Company
acknowledges and agrees that the Initial Purchaser may sell Notes to any
affiliate of the Initial Purchaser and that any such affiliate may sell Notes
purchased by it to the Initial Purchaser. The Initial Purchaser agrees that,
prior to or simultaneously with the confirmation of sale by the Initial
Purchaser to any purchaser of any of the Notes purchased by the Initial
Purchaser from the Company pursuant hereto, the Initial Purchaser shall furnish
to that purchaser a copy of
16
the Offering Memorandum (and any amendment thereof or supplement thereto that
the Company shall have furnished to the Initial Purchaser prior to the date of
such confirmation of sale). In addition to the foregoing, the Initial Purchaser
agrees and understands that the Company and, for purposes of the opinions to be
delivered to the Initial Purchaser pursuant to Sections 5(c) and (d) hereof,
counsel to the Company and to the Initial Purchaser, respectively, may rely upon
the accuracy and truth of the foregoing representations and warranties and
compliance with the covenants in this Section 2 and the Initial Purchaser hereby
consents to such reliance.
3. Delivery of and Payment for the Notes. Delivery of and payment
--------------------------------------
for the Notes shall be made at the office of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ ("WF&G"),
New York, New York, or at such other place as shall be agreed upon by the
Initial Purchaser and the Company, at 10:00 A.M., New York City time, on
November 25, 1996, or at such other date or time, not later than seven full
business days thereafter, as shall be agreed upon by the Initial Purchaser and
the Company (such date and time being referred to herein as the "Closing Date").
On the Closing Date, the Company shall deliver or cause to be delivered to the
Initial Purchaser certificates for the Notes against payment to or upon the
order of the Company of the purchase price by wire or book-entry transfer of
immediately available funds. Upon delivery, the Notes shall be in definitive
fully registered form, in such denominations and registered in such names, or
otherwise, as the Initial Purchaser shall have requested in writing not less
than two full business days prior to the Closing Date. The Company shall make
one or more certificates for the Notes available for inspection by the Initial
Purchaser in New York, New York, not later than one full business day prior to
the Closing Date.
4. Further Agreements of the Company. The Company agrees with the
----------------------------------
Initial Purchaser:
(a) until the completion of distribution of the Notes (as determined
by you) to persons that are not your affiliates (i) to advise the Initial
Purchaser promptly and, if requested, confirm such advice in writing, of
the happening of any event which makes any statement of a material fact
made in the Offering Memorandum untrue or which requires the making of any
additions to or changes in any material respect to the Offering Memorandum
(as amended or supplemented from
17
time to time) in order to make the statements therein, in light of the
circumstances under which they were made, not misleading and not to effect
such amendment or supplementation to which the Initial Purchaser reasonably
objects; (ii) to advise the Initial Purchaser promptly of any order
preventing or suspending the use of the Preliminary Offering Memorandum or
the Offering Memorandum, of the suspension of the qualification of the
Notes for offering or sale in any jurisdiction and of the initiation or
threatening of any proceeding for any such purpose; and (iii) to use best
efforts to prevent the issuance of any such order preventing or suspending
the use of the Preliminary Offering Memorandum or the Offering Memorandum
or suspending any such qualification and, if any such suspension is issued,
to obtain the lifting thereof at the earliest possible time;
(b) to furnish promptly to the Initial Purchaser and counsel for the
Initial Purchaser, without charge, as many copies of the Preliminary
Offering Memorandum and the Offering Memorandum (and of any amendments or
supplements thereto) as may be reasonably requested; to furnish to the
Initial Purchaser on the date hereof two copies of the independent
accountants' report included in the Offering Memorandum signed by the
accountants rendering such report; and the Company hereby consents to the
use of the Preliminary Offering Memorandum and the Offering Memorandum, and
any amendments and supplements thereto, in connection with resales of the
Notes prior to the time referred to in Section 4(a);
(c) prior to the time referred to in Section 4(a), if the delivery of
the Offering Memorandum is required at any time in connection with the sale
of the Notes and if at such time any events shall have occurred as a result
of which the Offering Memorandum as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when the Offering
Memorandum is delivered, not misleading, or if for any other reason it
shall be necessary at such time to amend or supplement the Offering
Memorandum in order to comply with any law, to notify the Initial Purchaser
immediately thereof, and
18
to promptly prepare and furnish to the Initial Purchaser an amended
Offering Memorandum or a supplement to the Offering Memorandum which will
correct such statement or omission or effect such compliance; the Initial
Purchaser's delivery of any such amendment or supplement shall not
constitute a waiver of any of the conditions set forth in Section 5 hereof;
(d) for a period of five years after the Closing Date, to furnish to
the Initial Purchaser all public reports and all reports, documents,
information and financial statements furnished by the Company to the
Commission pursuant to the Indenture or the Exchange Act or any rule or
regulation of the Commission thereunder;
(e) for so long as and at any time that it is not subject to Section
13 or 15(d) of the Exchange Act, upon request of any holder of the Notes,
to furnish to such holder, and to any prospective purchaser or purchasers
of the Notes designated by such holder, information satisfying the
requirements of subsection (d)(4) of Rule 144A under the Securities Act;
this covenant is intended to be for the benefit of the holders from time to
time of the Notes, and prospective purchasers of the Notes designated by
such holders;
(f) to use the proceeds from the sale of the Notesin the manner
described in the Offering Memorandum under the caption "Use of Proceeds";
(g) to use reasonable best efforts to assist the Initial Purchaser, at
its request, in arranging to cause the Notes to be designated as PORTAL
securities in accordance with the rules and regulations of the NASD;
(h) in connection with the offering of the Notes, to make its officers
and employees, and to use its best efforts to make its independent
accountants and legal counsel reasonably available to the Initial Purchaser
upon its reasonable request for the purpose of discussing matters, as
appropriate for such persons, set forth in the Offering Memorandum;
(i) to do and perform all things required to be done and performed
under this Agreement by it that are
19
within its control prior to or after the Closing Date and to use its best
efforts to satisfy all conditions precedent on its part to the delivery of
the Notes;
(j) except following the effectiveness of the Exchange Offer or Shelf
Registration Statement, as the case may be, to not, and to use its best
efforts to ensure that no affiliate (as such term is defined in Rule 501(b)
under the Securities Act) of the Company will, and not authorize or
knowingly permit any person acting on its or their behalf to, solicit any
offer to buy or offer to sell the Notes by means of any form of general
solicitation or general advertising (as such terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act;
(k) to not, and to use its best efforts to ensure that no affiliate
(as such term is defined in Rule 501(b) under the Securities Act) of the
Company will, offer, sell or solicit offers to buy or otherwise negotiate
in respect of any "security" (as defined in the Securities Act) which could
be integrated with the sale of the Notes in a manner that would require the
registration of the Notes under the Securities Act;
(l) to not, so long as the Notes are outstanding, be or become 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 Investment Company Act, and will not be or become a closed-end
investment company required to be registered, but not registered
thereunder;
(m) to cause each Note to bear the legend set forth in the form of
Note attached as Exhibit A to the Indenture until such legend shall no
longer be necessary or advisable because the Notes are no longer subject to
the restrictions on transfer described therein;
(n) promptly to take from time to time such action as the Initial
Purchaser may reasonably request to qualify the Notes for offering and sale
under the securities laws of such jurisdictions as the Initial Purchaser
may reasonably request and to comply with such laws so as to permit the
continuance of sales and
20
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Notes; provided, however, that in
-------- -------
connection therewith the Company shall not be required to qualify as a
foreign corporation or as a dealer in securities or to file a general
consent to service of process in any jurisdiction where it is not so
qualified or so subject or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject;
the Company will promptly advise the Initial Purchaser of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose;
(o) to comply with the Registration Rights Agreement and all
agreements set forth in the representation letters of the Company to The
Depository Trust Company relating to the approval of the Notes for "book-
entry" transfer;
(p) for a period of 120 days from the date of the Offering Memorandum,
to not offer for sale, sell, contract to sell or otherwise dispose of,
directly or indirectly, or file a registration statement for, or announce
any offer, sale, contract for sale of or other disposition of any debt
securities issued or guaranteed by the Company (other than the Notes, the
Exchange Notes, securities issued in or in connection with the
Securitization or in any loan, credit or financing transaction with banks
or similar institutions) without the prior written consent of the Initial
Purchaser;
(q) in connection with the offering, until the completion of the
initial resale of the Notes by the Initial Purchaser, neither the Company
nor any of its affiliated purchasers (as defined in Rule 10b-6 under the
Exchange Act), either alone or with one or more other persons, will bid for
or purchase, for any account in which it or any of its affiliated
purchasers has a beneficial interest, any Notes, or attempt to induce any
person to purchase any Notes; and neither it nor any of its affiliated
purchasers will make bids or purchases for the purpose of creating actual,
or apparent, active trading in or of raising the price of the Notes;
21
(r) during the period from the Closing Date until three years after
the Closing Date, without the prior written consent of the Initial
Purchaser, to not, and not permit any of its affiliates (as defined in Rule
144 under the Securities Act) to, resell any of the Notes that have been
reacquired by them, except for Notes purchased by the Company or any of its
affiliates and resold in a transaction registered under the Securities Act;
(s) prior to the Closing Date, not to issue any press release or other
communication or hold any press conference with respect to the Company, its
condition, financial or otherwise, or earnings, business affairs or
business prospects (except for routine oral marketing communications in the
ordinary course of business and consistent with the past practices of the
Company or of which the Initial Purchaser is notified), without the prior
written consent of the Initial Purchaser which may not be unreasonably
withheld, unless in the judgment of the Company and its counsel, and after
notification to the Initial Purchaser (and, if prior notification is
impossible, notification immediately subsequent to such release or
communication) such press release or communication is required by law;
(t) to not take any action prior to the execution and delivery of the
Indenture which, if taken after such execution and delivery, would have
violated any of the covenants contained in the Indenture;
(u) to not take any action prior to the Closing Date which in the
Company's reasonable judgment would require the Offering Memorandum to be
amended or supplemented pursuant to Section 4(c) hereof; and
(v) to make its reasonable best efforts, as determined in good faith
by the Board of Directors of the Company, to obtain the consents necessary
to convert the Notes from Senior Subordinated Indebtedness (as defined in
the Indenture) to Senior Indebtedness (as defined in the Indenture) as
contemplated by Section 10.18 of the Indenture.
5. Conditions of Initial Purchaser's Obligations. The obligations of
----------------------------------------------
the Initial Purchaser hereunder are subject to the accuracy, when made and on
the Closing Date,
22
of the representations and warranties of the Company contained herein, to the
accuracy of the statements of officers of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchaser as promptly as practicable on the date
of this Agreement, the date following the date of this Agreement or at such
other date and time as to which the Initial Purchaser may agree; and no
stop order suspending the sale of the Notes in any jurisdiction shall have
been issued and no proceeding for that purpose shall have been commenced or
shall be pending or threatened.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of the Notes, the Indenture, the
Registration Rights Agreement, this Agreement and the Offering Memorandum,
and all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be satisfactory in all material respects to the
Initial Purchaser, and the Company shall have furnished to the Initial
Purchaser all documents and information that it or its counsel may
reasonably request to enable them to pass upon such matters.
(c) ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ shall have furnished to the Initial
Purchaser their written opinion, as counsel to the Company, addressed to
the Initial Purchaser and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchaser, to the effect that:
(i) the Company and Leasco have been duly incorporated and are
validly existing as corporations in good standing under the laws of
the State of Delaware, are duly qualified to do business and are in
good standing as foreign corporations in each jurisdiction in which
their ownership or lease of property or the conduct of their
businesses requires such qualification (other than those jurisdictions
in which the failure to so qualify would not have a Material Adverse
Effect), and have all corporate power and
23
authority necessary to own or hold their properties and to conduct the
businesses in which they are engaged;
(ii) the outstanding shares of common stock of the Company and
of Leasco have been duly and validly authorized and issued and are
fully paid and nonassessable;
(iii) the Company has full corporate power and authority to
execute and deliver the Indenture, the Notes, the Registration Rights
Agreement and this Agreement and to perform its obligations hereunder
and thereunder; and all corporate action required to be taken for the
due and proper authorization, execution and delivery of the Indenture,
the Notes, the Registration Rights Agreement and this Agreement and
the consummation of the transactions contemplated hereby and thereby
have been duly and validly taken;
(iv) each of this Agreement and the Registration Rights Agreement
has been duly authorized, executed and delivered by the Company;
(v) the Indenture has been duly authorized, executed and
delivered by the Company and the Notes have been duly authorized and
executed by the Company;
(vi) the Company's authorized capitalization is as set forth in
the Offering Memorandum; the capital stock of the Company conforms to
the description thereof contained in the Offering Memorandum;
(vii) the descriptions in the Offering Memorandum of statutes,
legal and governmental proceedings and contracts and other documents
are accurate in all material respects and fairly present in all
material respects the information that would be required to be shown
if the Offering Memorandum were a prospectus included in a
registration statement on Form S-1 under the Securities Act; the
statements in the Offering Memorandum under the caption "Certain
Federal Income Tax Considerations", to the extent that they constitute
matters of law or regulation or
24
legal conclusions, have been reviewed by them and fairly summarize the
matters described therein in all material respects; and such counsel
does not have actual knowledge of any current or pending legal or
governmental actions, suits or proceedings which would be required to
be described in the Offering Memorandum if the Offering Memorandum
were a prospectus included in a registration statement on Form S-1
which are not described as required;
(viii) as of its date and on the Closing Date, the Offering
Memorandum (except for financial statements and the notes thereto and
other financial and statistical data included in the Offering
Memorandum, as to which no opinion need be expressed) complies as to
form in all material respects with that which would be required by the
Securities Act and the rules and regulations of the Commission
thereunder applicable to a definitive prospectus forming part of a
registration statement on Form S-1 under the Securities Act;
(ix) the Indenture conforms as to form in all material respects
with the requirements of the Trust Indenture Act and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder;
(x) no authorization, approval, consent or order of, or filing or
registration with, any governmental body or agency or any court that
has jurisdiction over the Company or any of its assets or properties
is required for the consummation by the Company of the transactions
contemplated by this Agreement, except such as may be required under
state securities or Blue Sky laws or regulations or as may be required
for the consummation by the Company of the transactions contemplated
by the Registration Rights Agreement;
(xi) the Company is not (A) an "investment company" within the
meaning of the Investment Company Act and the rules and regulations of
the Commission thereunder, without taking account of any exemption
under the Investment Company Act arising out of the number of holders
of the
25
Company's securities, or a company "controlled" by an investment
company or (B) a "holding company" or a "subsidiary company" of a
holding company, or an "affiliate" thereof within the meaning of the
Public Utility Holding Company Act of 1935, as amended;
(xii) the Registration Rights Agreement constitutes a valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms (assuming the due execution and
delivery thereof by the other parties thereto) subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws now or hereafter in effect relating to or
affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except to the extent that
indemnification or contribution provisions may be unenforceable;
(xiii) the Indenture constitutes a valid and legally binding
agreement of the Company, enforceable against the Company in
accordance with its terms (assuming due execution and delivery by the
Trustee), subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws now
or hereafter in effect relating to or affecting creditors' rights and
remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity);
the Notes are in the form contemplated by the Indenture and, upon the
due authentication and delivery thereof by the Trustee pursuant to the
Indenture, will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws now or hereafter in effect relating to or
affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity); and
26
the Indenture, the Notes and the Registration Rights Agreement conform
in all material respects to the descriptions thereof contained in the
Offering Memorandum;
(xiv) the execution, delivery and performance by the Company of
the Indenture, the Notes, the Registration Rights Agreement and this
Agreement, the consummation of the transactions contemplated hereby
and thereby, do not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument identified to such counsel in a certificate of
the Company as being a material instrument to which the Company is a
party or by which the Company is bound or to which any of the property
or assets of the Company is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of the
Company or any statute, or any judgment, order, decree, rule or
regulation known to such counsel of any federal or state court or
governmental agency or body or arbitrator having jurisdiction over the
Company or any of its properties or assets; and no consent, approval,
authorization or order of, or filing or registration with, any such
court or arbitrator or governmental agency or body is required under
any such statute, judgment, order, decree, rule or regulation for the
execution, delivery and performance of the Indenture, the Notes or the
Registration Rights Agreement by the Company or the consummation of
the transactions contemplated hereby and thereby; provided, however,
-------- -------
that the foregoing may exclude state securities laws or Blue Sky laws
and any such consents, approvals, authorizations or orders of, or
filings or registrations with, the Commission and any state securities
regulatory authorities as may be required to be obtained or made
pursuant to the Registration Rights Agreement;
(xv) neither the consummation of the transactions contemplated by
this Agreement nor the sale,
27
issuance, execution or delivery of the Notes will violate Regulation
G, T, U or X of the Federal Reserve Board;
(xvi) to such counsel's actual knowledge, there is no pending
action or suit or judicial, arbitral, rule-making or other
administrative or other proceeding to which the Company is a party or
of which any property or assets of the Company is the subject that,
singularly or in the aggregate, (A) challenges the validity of this
Agreement, the Registration Rights Agreement or the Indenture or any
action taken or to be taken pursuant hereto or thereto, or (B) if
determined adversely to the Company is reasonably likely to have a
Material Adverse Effect and to such counsel's actual knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others; and
(xvii) assuming the accuracy of the representations and
warranties and compliance with the agreements of the Company contained
in paragraphs (x), (y) and (z) of Section 1 of this Agreement, of the
Initial Purchaser contained in Section 2 of this Agreement, and of any
institutional Accredited Investor contained in the Transferee Letter
of Representation delivered by such investor as contemplated in the
Offering Memorandum, it is not necessary in connection with the offer,
sale and delivery of the Notes to the Initial Purchaser or in
connection with the initial resale of the Notes by the Initial
Purchaser, in each case in the manner contemplated in the Offering
Memorandum and this Agreement, to register the Notes under the
Securities Act or to qualify the Indenture under the Trust Indenture
Act in connection therewith.
Such counsel shall state that they have participated in conferences
with representatives of the Company, representatives of the independent
auditors of the Company and representatives of the Initial Purchaser at
which conferences the contents of the Offering Memorandum, any amendment
thereof and supplement thereto and related matters were discussed, and,
although such counsel have not investigated or verified independently, and
assume no responsibility
28
for, the accuracy or completeness or fairness of the statements contained
in the Offering Memorandum, any amendment thereof or supplement thereto
(except as expressly provided above), nothing has come to the attention of
such counsel to cause such counsel to believe that the Offering Memorandum
or any amendment thereof or supplement thereto (other than the financial
statements, the notes thereto and other financial and statistical
information contained therein, as to which such counsel need express no
belief) contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials which are
furnished to the Initial Purchaser; provided, however, that with respect to
the opinion as to the foreign qualification of the Company and Leasco
expressed in clause (i) above, such counsel may rely exclusively on good
standing certificates.
(d) The Initial Purchaser shall have received from Cravath, Swaine &
▇▇▇▇▇, counsel for the Initial Purchaser, such opinion or opinions, dated
the Closing Date, with respect to such matters as the Initial Purchaser may
reasonably require, and the Company shall have furnished to such counsel
such documents as they reasonably request for enabling them to pass upon
such matters.
(e) The Company shall have furnished to the Initial Purchaser (x) a
letter of KPMG Peat Marwick LLP, dated the date hereof, with respect to the
Company's fiscal years ended December 31, 1992, December 31, 1993, December
31, 1994, December 31, 1995 and the nine month periods ended September 30,
1996 and 1995, and (y) a letter of Coopers & ▇▇▇▇▇▇▇ L.L.P., with respect
to the unaudited pro forma financial statements included in the Offering
Memorandum, dated the date hereof, which shall be in form and substance
satisfactory to the Initial Purchaser, to the effect that:
29
(i) they are each independent certified public accountants with
respect to the Company within the meaning of the applicable rules and
regulations thereunder and Rule 101 of the American Institute of
Certified Public Accountants' Code of Professional Conduct and its
interpretations and rulings;
(ii) with respect to the letter of KPMG Peat Marwick LLP only,
based upon a reading of the latest unaudited financial statements made
available by the Company, the procedures of the American Institute of
Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71,
reading of minutes and inquiries of certain officials of the Company
who have responsibility for financial and accounting matters and
certain other limited procedures requested by the Initial Purchaser
and described in detail in such letter, nothing has come to their
attention that causes them to believe that (A) any unaudited financial
statements included or incorporated in the Offering Memorandum do not
comply in form in all material respects with applicable accounting
requirements or (B) any material modifications should be made to the
unaudited financial statements included in the Offering Memorandum for
them to be in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements included in the Offering Memorandum;
(iii) with respect to the letter of KPMG Peat Marwick LLP only,
based upon the procedures detailed in such letter with respect to the
period subsequent to the date of the last available balance sheet,
including reading of minutes and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters,
nothing has come to their attention that causes them to believe that
(1) at a specified date not more than five business days prior to the
date of the letter, there was any increase in long-term debt as
compared with the amounts shown in the September 30, 1996, unaudited
balance sheet included in the Offering Memorandum, except as
30
disclosed in the Offering Memorandum, or (2) for the period from
September 30, 1996, to a specified date not more than five business
days prior to the date of the letter, there were any decreases, as
compared with the corresponding period in the preceding year, in truck
rental and related revenue, except in all instances for changes,
increases or decreases which are set forth in such letter, in which
case the letter shall be accompanied by an explanation by the Company
as to the significance thereof unless said explanation is not deemed
necessary by the Initial Purchaser;
(iv) they have each performed certain other specified procedures
as a result of which they respectively determined that certain
information of an accounting, financial or statistical nature (which
is limited to accounting, financial or statistical information derived
from the general accounting records of the Company) set forth in the
Offering Memorandum agrees with the accounting records of the Company,
excluding any questions of legal interpretation; and
(v) With respect to the letter of Coopers & ▇▇▇▇▇▇▇ L.L.P. only,
on the basis of a reading of the unaudited pro forma financial
statements included in the Offering Memorandum (the "pro forma
financial statements"); carrying out certain specified procedures;
reading of minutes and inquiries of certain officials of the Company
who have responsibility for financial and accounting matters; and
proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the pro forma financial
statements, nothing came to their attention which caused them to
believe that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of such statements.
(f) The Company shall have furnished to the Initial Purchaser a
letter (the "bring-down letter") of KPMG Peat Marwick LLP, addressed to the
Initial Purchaser and dated the Closing Date confirming, as of the date of
the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
31
information is given in the Offering Memorandum, as of a date not more than
two days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by its letter delivered to the Initial Purchaser
concurrently with the execution of this Agreement and described in
paragraph (e).
(g) The Company shall have furnished to the Initial Purchaser a
certificate, dated the Closing Date, of its chief executive officer and its
chief operating officer stating that (A) such officers have carefully
examined the Offering Memorandum, (B) in their opinion, as of its date, the
Offering Memorandum did not include any untrue statement of a material fact
and did not omit to state a material fact necessary to make the statements
therein not misleading and since its date, no event has occurred which
should have been set forth in a supplement or amendment to the Offering
Memorandum so that the Offering Memorandum, as so supplemented or amended,
shall not be misleading in any material respect and (C) as of the Closing
Date, the representations and warranties of the Company in this Agreement
are true and correct, the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, and subsequent to the date of the most
recent financial statements in the Offering Memorandum, there has been no
material adverse change in the financial position or results of operation
of the Company, or any material adverse change, or any development
including a prospective material adverse change, in or affecting the
condition (financial or otherwise), results of operations, business or
prospects of the Company, except as set forth in the Offering Memorandum.
(h) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company, or any change specified
in the letters referred to in paragraph (e) or (f) of this Section, the
effect of which, in any such case described above,
32
is, in the reasonable judgment of the Initial Purchaser, so material and
adverse as to 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 Memorandum (exclusive of any amendment or
supplement).
(i) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency which would, as of the Closing Date, prevent the issuance or sale of
the Notes; and no injunction, restraining order or order of any other
nature by a Federal or state court of competent jurisdiction shall have
been issued as of the Closing Date which would prevent the issuance or sale
of the Notes.
(j) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Notes by any
"nationally recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2) of the rules and
regulations of the Commission under the Securities Act, and (ii) no such
organization shall have publicly announced that it has under surveillance
or review (other than an announcement with positive implications of a
possible upgrading), its rating of the Notes.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on either of such exchanges or
such market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction, or (ii) any moratorium
on commercial banking activities shall have been declared by Federal or New
York State authorities or (iii) an outbreak or escalation of hostilities or
a declaration by the United States of a national emergency or war or such a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the
reasonable judgment of the Initial Purchaser, impracticable or
33
inadvisable to proceed with the offering or the delivery of the Notes on
the terms and in the manner contemplated in the Offering Memorandum.
(l) The Company and the Initial Purchaser shall have executed and
delivered the Registration Rights Agreement.
(m) The Notes shall have been approved by the NASD for trading in the
PORTAL market.
(n) The Indenture shall have been duly executed and delivered by the
Company and the Trustee and the Notes shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.
(o) If any event shall have occurred that requires the Company under
Section 4(c) hereof to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared and
copies thereof delivered to the Initial Purchaser.
(p) There shall not have occurred any invalidation of Rule 144A under
the Securities Act by any court or any withdrawal or proposed withdrawal of
any rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
which in the reasonable judgment of the Initial Purchaser would materially
impair the ability of the Initial Purchaser to purchase, hold or effect
resales of the Notes as contemplated hereby.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to Cravath, Swaine & ▇▇▇▇▇.
6. Termination. The obligations of the Initial Purchaser hereunder
------------
may be terminated by the Initial Purchaser, in its absolute discretion, by
notice given to and received by the Company prior to delivery of and payment for
the Notes if, prior to that time, any of the events described in Section 5(h),
5(i), 5(j), 5(k) or 5(p) shall have occurred.
34
7. Reimbursement of Initial Purchaser's Expenses. If for any reason
----------------------------------------------
permitted under this Agreement the purchase of the Notes by the Initial
Purchaser is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 11 and the
respective obligations of the Company and the Initial Purchaser pursuant to
Sections 8 and 9 shall remain in effect. In addition, if the purchase of the
Notes by the Initial Purchaser is not consummated because any condition to the
obligations of the Initial Purchaser set forth in Section 5 hereof is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Initial Purchaser, the Company will
reimburse the Initial Purchaser upon demand for all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with this Agreement and the proposed
purchase and sale of the Notes.
8. Indemnification. (a) The Company shall indemnify and hold
----------------
harmless the Initial Purchaser, its affiliates, and their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls the Initial Purchaser within the meaning of the Securities Act or the
Exchange Act (collectively referred to for the purposes of this Section 8 and
Section 9 as an Initial Purchaser), to the fullest extent lawful, against any
loss, claim, damage, expense or liability, joint or several, or any action in
respect thereof, to which the Initial Purchaser may become subject, whether
commenced or threatened under the Securities Act, the Exchange Act, or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of or is
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in the Preliminary Offering Memorandum or the Offering Memorandum
or in any amendment or supplement thereto or any information provided by the
Company pursuant to Section 4(e) or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse the Initial Purchaser
for any legal or other expenses reasonably incurred by the Initial Purchaser in
connection with investigating or preparing to defend or defending against or
appearing as a third party witness in connection with any
35
such loss, claim, damage, liability, expense or action as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
-------- -------
case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission from any of such documents in reliance upon and in
conformity with the Initial Purchaser's Information; and provided further, that
----------------
with respect to any such untrue statement or omission made in the Preliminary
Offering Memorandum, the indemnity agreement contained in this Section 8 shall
not inure to the benefit of the Initial Purchaser from whom the person asserting
any such losses, claims, damages or liabilities purchased the Notes concerned if
both (A) a copy of the Offering Memorandum was not sent or given to such person
at or prior to the written confirmation of the sale of such Notes to such
person, and (B) the untrue statement or omission in the Preliminary Offering
Memorandum was corrected in the Offering Memorandum unless, in either case, such
failure to deliver the Offering Memorandum was a result of noncompliance by the
Company with Section 4(b).
(b) The Initial Purchaser shall indemnify and hold harmless the
Company, its affiliates, and their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for the purposes of this Section 8 and Section 9 as the Company), to
the same extent as the foregoing indemnity from the Company to the Initial
Purchaser, against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company may become subject, under
the Securities Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
expense, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum or in any amendment
or supplement thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with any Initial Purchaser's
Information, and shall reimburse the Company for
36
any legal or other expenses reasonably incurred by the Company in connection
with investigating or preparing to defend or defending against or appearing as
third party witness in connection with any such loss, claim, damage, liability,
expense or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 8(a) or 8(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
--------
however, that the failure to notify the indemnifying party shall not relieve it
-------
from any liability which it may have under this Section 8 except to the extent
it has been materially prejudiced (through the forfeiture of substantive rights
or defenses) by such failure; and, provided further, that the failure to notify
----------------
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 8. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
-------- -------
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (1) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to
37
direct the defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm of attorneys (in addition to no more than one local counsel in
any jurisdiction) at any one time for all such indemnified party or parties.
Each indemnified party, as a condition of the indemnity agreements contained in
Sections 8(a) and 8(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
The obligations of the Company and the Initial Purchaser in this
Section 8 and in Section 9 are in addition to any other liability that the
Company or the Initial Purchaser, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
9. Contribution. If the indemnification provided for in Section 8 is
-------------
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or (b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchaser on
the other from the offering of the Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
38
Initial Purchaser on the other with respect to the statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Initial Purchaser on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Notes purchased under this
Agreement (before deducting expenses) received by or on behalf of the Company
bear to the total discounts received by the Initial Purchaser with respect to
the Notes purchased under this Agreement, in each case as set forth in the table
on the cover page of the Offering Memorandum. The relative fault 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 to the Initial Purchaser's Information on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Initial Purchaser agree that it would not be just and equitable if contributions
pursuant to this Section 9 were to be determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 9 shall be deemed to include, for
purposes of this Section 9, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 9, the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total price at which the Notes purchased from the Company by it
were offered to investors less the amount of any damages which the Initial
Purchaser has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
-----------------------------------------
inure to the benefit of and be binding upon the Initial Purchaser, the Company
and their respective
39
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchaser, the Company and their respective affiliates and successors
and the controlling persons and officers and directors referred to in Sections 8
and 9 and their heirs and legal representatives and other than holders of the
Notes any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
11. Expenses. The Company agrees to pay (a) the costs incident to
---------
the authorization, issuance, sale, preparation and delivery of the Notes and any
taxes payable in that connection; (b) the costs incident to the preparation,
printing and distribution of any Preliminary Offering Memorandum, the Offering
Memorandum and any amendments and supplements thereto; (c) the costs of
reproducing and distributing this Agreement, the Registration Rights Agreement
and the Indenture; (d) the preparation, issuance and delivery of the
certificates for the Notes to the Initial Purchaser; (e) the fees and expenses
of qualifying the Notes under the securities laws of the several jurisdictions
as provided in Section 4(n) and of preparing, printing and distributing Blue Sky
Memoranda (including related fees and expenses of CS&M); (f) any fees charged by
securities rating services for rating the Notes; (g) all fees and expenses of
the Trustee; (h) all costs incident to and fees and expenses of the inclusion of
the Notes on the PORTAL system and the approval of the Notes for book-entry
transfer by The Depository Trust Company; and (i) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement; provided, however, that, except as otherwise provided in this Section
-------- -------
11 and in Section 7 the Initial Purchaser shall pay its own costs and expenses,
including the costs and expenses of its counsel, any transfer taxes on the Notes
that they may sell and the expenses of advertising any offering of the Notes
made by the Initial Purchaser.
12. Survival. The respective indemnities, rights of contribution,
---------
representations, warranties and agreements made by or on behalf of the Company
and the Initial Purchaser and any of their respective affiliates,
representatives, officers, directors or controlling persons contained in this
Agreement or in any certificate delivered pursuant to this Agreement, shall
survive the delivery of and payment for the Notes and shall remain in full force
and
40
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any of them or any person controlling any
of them.
13. Notices, etc. All statements, requests, notices and agreements
-------------
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent by mail,
telex or facsimile transmission to Chase Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Offering Memorandum, Attention: Chief Financial Officer;
provided, however, that any notice to the Initial Purchaser pursuant to Section
-------- -------
8(c) shall be delivered or sent by mail, telex or facsimile transmission to the
Initial Purchaser at its address set forth on the signature page hereof.
Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof.
14. Business Day. For purposes of this Agreement, "business day"
-------------
means any day on which the New York Stock Exchange, Inc. is open for trading.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
--------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
16. Counterparts. This Agreement may be executed in any number of
-------------
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of
---------
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
41
If the foregoing is in accordance with your understanding of the
agreement between the Company and the Initial Purchaser, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
Ryder TRS, Inc.,
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Assistant
Secretary
Accepted:
CHASE SECURITIES INC.,
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
