EXHIBIT 2.10
EXECUTION COPY
NTK HOLDINGS, INC.
$403,000,000 AGGREGATE PRINCIPAL AMOUNT AT MATURITY
OF 10 3/4% SENIOR DISCOUNT NOTES DUE 2014
PURCHASE AGREEMENT
February 10, 2005
New York, New York
Credit Suisse First Boston LLC
Banc of America Securities LLC
UBS Securities LLC
c/o Credit Suisse First Boston LLC
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
NTK Holdings, Inc., a Delaware corporation (the "ISSUER"), agrees
with you as follows:
1. Issuance of Notes. The Issuer proposes, subject to and upon the
terms and conditions set forth below, to issue and sell to Credit Suisse First
Boston LLC (the "REPRESENTATIVE") and the several parties named on Schedule I
hereto (together with the Representative, the "INITIAL PURCHASERS") $403,000,000
aggregate principal amount at maturity of 10 3/4% Senior Discount Notes due 2014
(the "ORIGINAL NOTES").
The Original Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "ACT"). The Issuer will prepare a final
offering memorandum dated as of the date hereof (as amended or supplemented on
or prior to the date hereof, including all exhibits thereto and all documents
incorporated by reference therein which have been prepared by Nortek, Inc. (the
"COMPANY") and filed with the Securities and Exchange Commission (the
"COMMISSION") at the date hereof, the "OFFERING MEMORANDUM"), relating to the
Issuer, the Subsidiaries (as defined below), the offering of the Original Notes
and the Original Notes.
Subject to the foregoing paragraph, any references herein to the
terms "AMEND," "AMENDMENT" or "SUPPLEMENT" with respect to the Offering
Memorandum shall be deemed to refer to and include any document filed under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or otherwise
filed with the Commission, subsequent to the date hereof that is incorporated by
reference therein; and all references in this Agreement to financial statements
and schedules and other information which are "CONTAINED," "INCLUDED," "STATED,"
"SET FORTH" or "DESCRIBED" in the Offering Memorandum (or other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which are included in any document
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filed under the Act or the Exchange Act, as applicable, and incorporated by
reference in the Offering Memorandum.
The Initial Purchasers have advised the Issuer that the Initial
Purchasers intend, as soon as they deem practicable after this Purchase
Agreement (this "AGREEMENT") has been executed and delivered, to resell (the
"EXEMPT RESALES") the Original Notes in private sales exempt from registration
under the Act on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers" ("QIBs"), as defined in Rule 144A
under the Act ("RULE 144A"), in accordance with Rule 144A and (ii) other
eligible purchasers pursuant to offers and sales that occur outside the United
States within the meaning of Regulation S under the Act ("REGULATION S") in
accordance with Regulation S (the persons specified in clauses (i) and (ii), the
"ELIGIBLE PURCHASERS").
Holders (including subsequent transferees) of the Original Notes
will have the registration rights under the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), among the Issuer and the Initial Purchasers,
to be dated the Closing Date, substantially in the form attached hereto as
Exhibit A. Under the Registration Rights Agreement, the Issuer will agree to (i)
file with the Securities and Exchange Commission (the "COMMISSION") (a) a
registration statement under the Act (the "EXCHANGE OFFER REGISTRATION
STATEMENT") relating to a new issue of debt securities (collectively with the
Private Exchange Notes (as defined in the Registration Rights Agreement), the
"EXCHANGE NOTES" and, together with the Original Notes, the "NOTES"), to be
offered in exchange for the Original Notes (the "EXCHANGE OFFER") and issued
under the Indenture (as defined below) or an indenture substantially identical
to the Indenture and/or (b) under certain circumstances set forth in the
Registration Rights Agreement, a shelf registration statement pursuant to Rule
415 under the Act (the "SHELF REGISTRATION STATEMENT") relating to the resale by
certain holders of the Original Notes, (ii) use its reasonable best efforts to
cause the Exchange Offer Registration Statement and, if applicable, the Shelf
Registration Statement to be declared effective and (iii) use its reasonable
best efforts to consummate the Exchange Offer, all within the time periods
specified in the Registration Rights Agreement.
The Original Notes will be issued pursuant to an indenture (the
"INDENTURE"), to be dated the Closing Date (as defined herein), among the Issuer
and U.S. Bank National Association, as trustee (the "TRUSTEE").
This Agreement, the Original Notes, the Indenture and the
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "NOTE DOCUMENTS." The issuance and sale of the Original Notes and the use
of proceeds therefrom described in the Offering Memorandum are collectively
referred to as the "TRANSACTIONS."
2. Agreements to Sell and Purchase. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained in this Agreement, the Issuer
agrees to issue and sell to the Initial Purchasers, and each of the Initial
Purchasers, severally and not jointly, agrees to purchase from the Issuer, the
aggregate principal amount at maturity of Original Notes set forth opposite its
name on Schedule I attached hereto. The purchase price for the Original Notes
shall be 60.89328% of their principal amount at maturity.
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3. Delivery and Payment. Payment of the purchase price for the
Original Notes shall be made at 9:00 a.m., New York time, on February 15, 2005
(such date, the "CLOSING DATE") at the offices of Ropes & Gray LLP, 00
Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, against delivery thereof on the
Closing Date. The Closing Date and the location of delivery of and the form of
payment for the Original Notes may be varied by mutual agreement between the
Initial Purchasers and the Issuer.
The Original Notes shall be delivered by the Issuer to the Initial
Purchasers (or as the Initial Purchasers direct) through the facilities of The
Depository Trust Company against payment by the Initial Purchasers of the
purchase price therefor by means of wire transfer of immediately available funds
to such account or accounts specified by the Issuer in accordance with Section
8(h) on or prior to the Closing Date, or by such means as the parties hereto
shall agree prior to the Closing Date. The Original Notes shall be evidenced by
one or more certificates in global form registered in such names as the Initial
Purchasers may request upon at least one business day's notice prior to the
Closing Date and having an aggregate principal amount at maturity corresponding
to the aggregate principal amount at maturity of the Original Notes.
4. Agreements of the Issuer. The Issuer covenants and agrees with
the Initial Purchasers as follows:
(a) To furnish the Initial Purchasers and those persons identified
by the Initial Purchasers, without charge, with as many copies of the
Offering Memorandum, and any amendments or supplements thereto, as the
Initial Purchasers may reasonably request. The Issuer consents to the use
of the Offering Memorandum, and any amendments and supplements thereto, by
the Initial Purchasers in connection with Exempt Resales.
(b) Not to make any changes or additions to the information
contained in the Offering Memorandum from the corresponding information
contained in the most recent draft Offering Memorandum (the "DRAFT OM")
provided to the Representative prior to the execution of this Agreement
other than (i) changes and additions to reflect pricing information with
respect to the Original Notes and (ii) such other changes and additions as
to which the Representative shall have consented (such consent not to be
unreasonably withheld or delayed). Not to amend or supplement the Offering
Memorandum prior to the Closing Date unless the Initial Purchasers (i)
shall previously have been advised of such proposed amendment or
supplement at least two business days prior to the proposed use (or such
shorter period as may be required to comply with applicable legal and
contractual obligations) and (ii) shall not have objected to, or shall
have consented to (such consent not to be unreasonably withheld or
delayed), such amendment or supplement.
(c) If, prior to the time that the Initial Purchasers have completed
their distribution of the Original Notes, any event shall occur and, as a
result thereof, in the judgment of the Issuer or in the judgment of
counsel to the Initial Purchasers, the Offering Memorandum, as then
amended or supplemented, would include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements in the Offering Memorandum, as then amended or supplemented, in
the light of the circumstances under which they are made, not misleading,
or if it is necessary to amend or supplement the Offering Memorandum
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to comply with all applicable laws, the Issuer shall promptly notify the
Initial Purchasers of such event and (subject to Section 4(b)) prepare an
appropriate amendment or supplement to the Offering Memorandum so that (i)
the statements in the Offering Memorandum, as amended or supplemented,
will not contain any 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 at the time that the Offering Memorandum is
delivered to prospective Eligible Purchasers, not misleading and (ii) the
Offering Memorandum will comply with applicable law.
(d) To qualify or register the Original Notes under the securities
laws of such jurisdictions as the Initial Purchasers may request and to
continue such qualification in effect so long as required for the Exempt
Resales. Notwithstanding the foregoing, the Issuer shall not be required
to qualify as a foreign corporation in any jurisdiction in which it is not
so qualified or to execute a general consent to service of process in any
such jurisdiction or subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not then so subject.
(e) To advise the Initial Purchasers promptly and, if requested by
the Initial Purchasers, to confirm such advice in writing, of the issuance
by any securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Original Notes
for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any securities commission or other
regulatory authority. The Issuer shall use its reasonable best efforts to
prevent the issuance of any stop order or order suspending the
qualification or exemption of any of the Original Notes under any
securities laws, and, if at any time any securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption of any of the Original Notes under any securities laws, the
Issuer shall use its reasonable best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(f) Whether or not the transactions contemplated by this Agreement
are consummated, to pay all costs, expenses, fees and disbursements
(including fees and disbursements of counsel and accountants for the
Issuer) incurred in connection with the performance of the obligations of
the Issuer under this Agreement and all stamp, documentary or similar
taxes incident to and in connection therewith, including, those relating
to: (i) the preparation, printing and distribution of the Offering
Memorandum and any amendments and supplements thereto, (ii) all expenses
(including travel expenses) of the Issuer in connection with any meetings
with prospective investors in the Original Notes (including, if
applicable, rental costs of airplanes used to transport representatives of
the Issuer, the Company and the Initial Purchasers to such meetings),
(iii) the preparation (except to the extent prepared by counsel to the
Initial Purchasers), notarization (if necessary) and delivery of the Note
Documents and all other agreements, memoranda, correspondence and
documents prepared and delivered in connection with this Agreement and
with the Exempt Resales, (iv) the issuance, transfer and delivery of the
Original Notes by the Issuer to the Initial Purchasers, (v) the
qualification or registration of the Original Notes for offer and sale
under the securities laws of the several states of the United States or
provinces of Canada (including, without limitation, the cost of printing
and mailing preliminary and final Blue Sky or legal investment memoranda
and reasonable fees
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and disbursements of counsel (including local counsel) to the Initial
Purchasers relating thereto), (vi) the application for quotation of the
Original Notes in The PORTALSM Market ("PORTAL") of the National
Association of Securities Dealers, Inc. ("NASD"), (vii) the inclusion of
the Original Notes in the book-entry system of The Depository Trust
Company ("DTC"), (viii) the rating of the Original Notes by rating
agencies, (ix) the fees and expenses of the Trustee and its counsel and
(x) the performance by the Issuer of its other obligations under the Note
Documents. Except as specifically provided in this Section 4(f), the
Initial Purchasers shall pay all of their own expenses (including all of
the fees and disbursements of counsel) in connection with the preparation
of this Agreement and the other Note Documents, the transactions
contemplated hereby and thereby and all Exempt Resales.
(g) To use the net proceeds from the sale of the Original Notes in
the manner described in the Offering Memorandum under the caption "Use of
proceeds." (h) Not to, and not to permit any of the Issuer's subsidiaries
listed on Schedule II attached hereto (each, a "SUBSIDIARY" and
collectively, the "SUBSIDIARIES") to, sell, offer for sale or solicit
offers to buy any security (as defined in the Act) that would be
integrated with the sale of the Original Notes in a manner that would
require the registration under the Act of the sale of the Original Notes
to the Initial Purchasers or any Eligible Purchasers.
(i) During the period of two years immediately following the Closing
Date, not to, and to cause their respective controlled "affiliates" (as
defined in Rule 144 under the Act) not to, resell any of the Original
Notes that constitute "restricted securities" under Rule 144 that have
been reacquired by any of them (other than in a transaction registered
under the Act).
(j) Not to engage, and to cause the Subsidiaries and their other
respective controlled affiliates or any person acting on their behalf
(other than, in any case, the Initial Purchasers and any of their
controlled affiliates, as to whom the Issuer makes no covenant) not to
engage, in any form of general solicitation or general advertising (within
the meaning of Regulation D under the Act) in connection with any offer or
sale of the Original Notes in the United States.
(k) Not to engage, and to cause the Subsidiaries and their other
respective controlled affiliates or any person acting on their behalf
(other than, in any case, the Initial Purchasers and any of their
controlled affiliates, as to whom the Issuer makes no covenant) not to
engage, in any directed selling effort with respect to the Original Notes,
and to comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by Regulation
S.
(l) From and after the Closing Date, for so long as any of the
Original Notes remain outstanding and are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act and during any period in which
the Issuer is not subject to Section 13 or 15(d) of the Exchange Act, to
make available upon request the information required by Rule 144A(d)(4)
under the Act to (i) any holder or beneficial owner of Original Notes in
connection with any sale of such Original Notes and (ii) any prospective
purchaser of such Original Notes from any
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such holder or beneficial owner designated by the holder or beneficial
owner. The Issuer will pay the reasonable expenses of preparing, printing
and distributing such documents.
(m) To comply with its obligations under the Registration Rights
Agreement.
(n) To comply with its obligations under the letter of
representations to DTC relating to the approval of the Original Notes by
DTC for "book-entry" transfer and to use their reasonable best efforts to
obtain approval of the Original Notes by DTC for "book-entry" transfer.
(o) Prior to the Closing Date, to furnish without charge to the
Initial Purchasers, (i) as soon as they have been prepared by the Company,
a copy of any regularly prepared internal financial statements of the
Company and the Subsidiaries for any period subsequent to the period
covered by the financial statements appearing in the Offering Memorandum,
(ii) as soon as they have been furnished to the Issuer, all other reports
and other communications (financial or otherwise) that the Issuer or any
of the Subsidiaries mails or otherwise makes available to its security
holders and (iii) such other information as the Initial Purchasers shall
reasonably request.
(p) Not to, and to cause any of their respective controlled
affiliates or anyone acting on their or such person's behalf (other than
the Initial Purchasers and their affiliates, as to whom the Issuer makes
no covenant) not to, distribute prior to the Closing Date any offering
material in connection with the offer and sale of the Original Notes other
than the Offering Memorandum (it being understood that certain potential
purchasers of the Original Notes from the Initial Purchasers may be
provided with a summary term sheet and "description of notes" prior to the
distribution of the Offering Memorandum).
(q) During the period of two years after the Closing Date or, if
earlier, until such time as the Original Notes are no longer restricted
securities (as defined in Rule 144 under the Act), not to be or become a
closed-end investment company required to be registered, but not
registered, under the Investment Company Act of 1940.
(r) In connection with the offering, until the Initial Purchasers
shall have notified the Issuer of the completion of the distribution of
the Original Notes, not to, and to cause any of its controlled
"affiliates" (as such term is defined in Rule 501(b) of Regulation D under
the Act) not to, either alone or with one or more other persons, bid for
or purchase for any account in which it or any of its affiliates has a
beneficial interest, for the purpose of creating actual or apparent active
trading in, or of raising the price of, the Original Notes.
(s) To use its reasonable best efforts to effect the inclusion of
the Original Notes in Portal.
(t) During the period from the date hereof through and including the
date that is 90 days after the date hereof, without the prior written
consent of the Representative, offer, sell, contract to sell or otherwise
dispose of any debt securities issued or guaranteed by the Issuer or any
Subsidiary and having a tenor of more than one year, other than debt
instruments
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issued to sellers of property, capital lease obligations, credit
facilities used for working capital or to finance acquisitions and in
connection with the Company's exchange offer for its 8 1/2% senior
subordinated notes.
5. Representations and Warranties. (a) The Issuer represents and
warrants to the Initial Purchasers that:
(i) Neither (a) the Offering Memorandum as of the date thereof and
the Closing Date nor (b) any amendment or supplement thereto as of the
date thereof and the Closing Date contained or will contain any untrue
statement of a material fact or omitted or will omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 5(i) do not apply
to statements or omissions made in reliance upon and in conformity with
information relating to any of the Initial Purchasers furnished to the
Issuer in writing by the Initial Purchasers expressly for use in the
Offering Memorandum or any amendment or supplement thereto.
(ii) The documents incorporated or deemed to be incorporated by
reference in the Offering Memorandum, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder.
(iii) As of the Closing Date, after giving effect to the
Transactions, the capitalization of the Issuer shall be as described in
the Offering Memorandum under the heading "Capitalization"; all of the
subsidiaries of the Issuer are listed on Schedule II attached hereto; all
of the outstanding shares of capital stock of the Issuer and the
Subsidiaries have been, and as of the Closing Date will be, duly
authorized and validly issued, are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights; except for
security interests granted pursuant to the Company's credit agreement, all
of the outstanding shares of capital stock of the Issuer and of each of
the Subsidiaries are and will be as of the Closing Date free and clear of
all liens, encumbrances, equities and claims or restrictions on
transferability (other than those imposed by the Act, the securities or
"Blue Sky" laws of certain jurisdictions or as otherwise permitted by the
Indenture) or voting; except as set forth in the Offering Memorandum,
there are no (a) options, warrants or other rights to purchase, (b)
agreements or other obligations to issue or (c) other rights to convert
any obligation into, or exchange any securities for, shares of capital
stock of or ownership interests in the Issuer or any of the Subsidiaries
outstanding. Except for the Subsidiaries, as disclosed in the Offering
Memorandum or as set forth on Schedule III attached hereto, the Issuer
does not own, directly or indirectly, more than 5% of the outstanding
capital stock or other equity interests in any firm, partnership, joint
venture or other entity.
(iv) Each of the Issuer and the Subsidiaries is duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation, and each of the Issuer and the Subsidiaries
has all requisite corporate, limited liability company or partnership, as
applicable, power and authority to own its properties and conduct its
business as now conducted and as described in the Offering Memorandum;
each of the Issuer and the
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Subsidiaries is duly qualified to do business as a foreign corporation,
limited liability company or partnership, as applicable, in good standing,
where applicable, in all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
general affairs, management, business, condition (financial or otherwise),
prospects or results of operations of the Issuer and the Subsidiaries,
taken as a whole (any such event, a "MATERIAL ADVERSE EFFECT").
(v) The Issuer has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Original
Notes, the Exchange Notes and the Private Exchange Notes. The Original
Notes, when issued, will be in the form contemplated by the Indenture. The
Original Notes, the Exchange Notes and the Private Exchange Notes each
have been duly and validly authorized by the Issuer. When executed by the
Issuer and authenticated by the Trustee in accordance with the provisions
of the Indenture, and, in the case of the Original Notes, when delivered
to and paid for by the Initial Purchasers in accordance with the terms of
this Agreement, the Original Notes, the Exchange Notes and the Private
Exchange Notes, will constitute valid and legally binding obligations of
the Issuer, entitled to the benefits of the Indenture, and enforceable
against the Issuer in accordance with their terms, except that the
enforcement thereof may be subject to (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (b) general principles
of equity and the discretion of the court before which any proceeding
therefor may be brought (the "BANKRUPTCY EXCEPTIONS").
(vi) The Issuer has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The
Indenture will meet the requirements for qualification under the Trust
Indenture Act of 1939, as amended (the "TIA"). The Indenture has been duly
and validly authorized by the Issuer and, when executed and delivered by
the Issuer (assuming the due authorization, execution and delivery by the
Trustee), will constitute a valid and legally binding agreement of the
Issuer, enforceable against the Issuer in accordance with its terms,
except that the enforceability thereof may be limited by the Bankruptcy
Exceptions.
(vii) The Issuer has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration Rights
Agreement. The Registration Rights Agreement has been duly and validly
authorized by the Issuer. When executed and delivered by the Issuer
(assuming the due authorization, execution and delivery by the Initial
Purchasers), the Registration Rights Agreement will constitute a valid and
legally binding agreement of the Issuer enforceable against the Issuer in
accordance with its terms, except that (A) the enforcement thereof may be
subject to the Bankruptcy Exceptions and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities
laws and public policy considerations.
(viii) The Issuer has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
consummation by the Issuer of the transactions
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contemplated hereby have been duly and validly authorized by the Issuer.
This Agreement has been duly executed and delivered by the Issuer.
(ix) No consent, approval, authorization or order of any court or
governmental agency or body, or third party is required for the issuance
and sale by the Issuer of the Original Notes to the Initial Purchasers or
the consummation by the Issuer of the other transactions contemplated
hereby, except such as have been obtained or will be obtained prior to the
Closing Date and such as may be required under state securities or "Blue
Sky" laws in connection with the purchase and resale of the Original Notes
by the Initial Purchasers. Neither the Issuer nor any Subsidiary is or
will be on the Closing Date (a) in violation of their certificates of
incorporation or bylaws (or similar organizational document), (b) in
breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their properties or assets,
except for any such breach or violation that would not, individually or in
the aggregate, have a Material Adverse Effect, or (c) in breach of or
default under (nor has any event occurred that, with notice or passage of
time or both, would constitute a default under) or in violation of any of
the terms or provisions of any indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit, certificate,
contract or other agreement or instrument to which any of them is a party
or to which any of them or their respective properties or assets is
subject (collectively, "CONTRACTS"), except for any such breach, default,
violation or event that would not, individually or in the aggregate, have
a Material Adverse Effect.
(x) The execution, delivery and performance by the Issuer of this
Agreement, the Indenture and the Registration Rights Agreement and the
consummation by the Issuer of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and sale of the
Original Notes to the Initial Purchasers) will not conflict with or
constitute or result in a breach of or a default under (or an event that
with notice or passage of time or both would constitute a default under)
or violation of any of (a) the terms or provisions of any Contract, except
for any such conflict, breach, violation, default or event that would not,
individually or in the aggregate, have a Material Adverse Effect, (b) the
certificate of incorporation or bylaws (or similar organizational
document) of the Issuer or any of the Subsidiaries or (c) (assuming
compliance with all applicable state securities or "Blue Sky" laws and
assuming the accuracy of the representations and warranties of the Initial
Purchasers in Section 5(b) hereof) any statute, judgment, decree, order,
rule or regulation applicable to the Issuer or any of the Subsidiaries or
any of their respective properties or assets, except for any such
conflict, breach or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
(xi) The historical consolidated financial statements (including the
notes thereto) of the Company (or its predecessors) and its subsidiaries
included or incorporated by reference in the Offering Memorandum present
fairly in all material respects the consolidated financial position,
results of operations, cash flows and changes in stockholder's investment
of the Company at the respective dates and for the respective periods
indicated. All such financial statements have been prepared in accordance
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods presented (except as
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disclosed therein), except that the interim financial statements do not
include full footnote disclosure.
(xii) Ernst & Young LLP (the "INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM"), which has audited the financial statements and
supporting schedules as of December 31, 2003 and for the periods January
1, 2003 to January 9, 2003 and January 10, 2003 to December 31, 2003,
incorporated by reference in the Offering Memorandum, is an independent
registered public accounting firm in accordance with the Standards of the
Public Company Accounting Oversight Board (United States).
(xiii) There is not pending or, to the knowledge of the Issuer,
threatened any action, suit, proceeding, inquiry or investigation to which
the Issuer or any of the Subsidiaries is a party, or to which the property
or assets of the Issuer or any of the Subsidiaries are subject, before or
brought by any court, arbitrator or governmental agency or body that could
reasonably be expected to have a Material Adverse Effect or that seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge the
issuance or sale of the Original Notes to be sold hereunder or the
consummation of the other transactions described in the Offering
Memorandum.
(xiv) The Issuer and the Subsidiaries own or possess adequate
licenses or other rights to use all patents, trademarks, service marks,
trade names, copyrights, technology and know-how necessary to conduct the
business now or proposed to be conducted by the Issuer and the
Subsidiaries as described in the Offering Memorandum, except for those
patents, trademarks, service marks, trade names, copyrights, technology
and know-how the failure to own or have the right to use which would not
have a Material Adverse Effect, and, except as disclosed in the Offering
Memorandum, neither the Issuer, nor any of the Subsidiaries has received
any notice of infringement of or conflict with (or knows of such
infringement of or conflict with) rights of others with respect to any
patents, trademarks, service marks, trade names, copyrights, technology or
know-how except for conflicts which could not reasonably be expected to
have a Material Adverse Effect; and to the best knowledge of the Issuer,
do not in the conduct of their business as now conducted or proposed to be
conducted, infringe or conflict with any such rights of any third party,
except as could not reasonably be expected to have a Material Adverse
Effect.
(xv) Since the date of the most recent financial statements
appearing or incorporated by reference in the Offering Memorandum, except
as described therein, (a) none of the Issuer or the Subsidiaries has
incurred any liabilities or obligations, direct or contingent, or entered
into or agreed to enter into any transactions or contracts (written or
oral) not in the ordinary course of business, which liabilities,
obligations, transactions or contracts would, individually or in the
aggregate, be material to the general affairs, management, business,
condition (financial or otherwise), prospects or results of operations of
the Company and the Subsidiaries, taken as a whole, (b) none of the Issuer
or the Subsidiaries has purchased any of its outstanding capital stock,
nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock (other than with respect to any of such
Subsidiaries, the purchase of, or dividend or distribution on, capital
stock owned by the Issuer or any of the Subsidiaries and other than on the
Closing Date as described in the Offering Memorandum
-11-
under "Use of Proceeds") and (c) there shall not have been any material
change in the capital stock or long-term indebtedness of the Issuer or the
Subsidiaries.
(xvi) The Issuer and the Subsidiaries have (A) filed all federal,
state and local and foreign tax returns which are required to be filed
through the date hereof, and all such tax returns are true, complete and
accurate in all material respects, or (B) received valid extensions
thereof and have paid all taxes shown on such returns and all assessments
received by them except where, in the case of state and local and foreign
tax returns, the failure to file in clause (A), or extend the due date of
or pay the same in clause (B), in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; the Issuer has no knowledge of
any tax deficiency which has been or might be asserted against the Issuer
or any of the Subsidiaries which could reasonably be expected to have a
Material Adverse Effect; and to the best knowledge of the Issuer, all tax
liabilities of the Issuer and the Subsidiaries are adequately provided for
on the consolidated books of the Issuer.
(xvii) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources that the Issuer
believes to be reliable and accurate.
(xviii) None of the Issuer, the Subsidiaries or any agent acting on
their behalf has taken or will take any action that might cause this
Agreement or the sale of the Original Notes to violate Regulation T, U or
X of the Board of Governors of the Federal Reserve System, in each case as
in effect, or as the same may hereafter be in effect, on the Closing Date.
(xix) Each of the Issuer and the Subsidiaries has good and
marketable title to all real property and personal property and assets
owned by them which is material to the business of the Issuer and the
Subsidiaries, in each case subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (A) liens that are permitted under the
Indenture, (B) those set forth in the Offering Memorandum (including,
without limitation, those securing the credit facilities as described in
the Offering Memorandum) or (C) those which are not material in amount and
do not adversely affect the use made and proposed to be made of such
property by the Issuer and the Subsidiaries except for such uses the
failure of which to be made would not have a Material Adverse Effect. Each
of the Issuer and the Subsidiaries holds its leased properties under
valid, subsisting and enforceable leases, with such exceptions as are not,
individually or in the aggregate, material and do not, individually or in
the aggregate, interfere with the use made or proposed to be made of such
properties by the Issuer or any of the Subsidiaries (except for such uses
the failure of which to be made would not have a Material Adverse Effect).
Except as disclosed in the Offering Memorandum, the Issuer and each of the
Subsidiaries owns or leases all such properties as are necessary to its
operations as now conducted or as proposed to be conducted (except for
such properties the failure of which to own or lease would not have a
Material Adverse Effect).
(xx) There are no legal or governmental proceedings involving or
affecting the Issuer or any Subsidiary or any of their respective
properties or assets that would be required to be described in a
prospectus pursuant to the Act that are not described in the Offering
Memorandum, nor are there any material contracts or other documents that
would be required to be
-12-
described in a prospectus pursuant to the Act that are not described in
the Offering Memorandum.
(xxi) Except as would not, individually or in the aggregate, have a
Material Adverse Effect, (A) each of the Issuer and the Subsidiaries is in
compliance with and not subject to liability under applicable
Environmental Laws (as defined below), (B) each of the Issuer and the
Subsidiaries has made all filings and provided all notices required under
any applicable Environmental Law, and has and is in compliance with all
Permits required under any applicable Environmental Laws and each of them
is in full force and effect, (C) there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for
information pending or, to the knowledge of the Issuer or any of the
Subsidiaries, threatened against the Issuer or any of the Subsidiaries
under any Environmental Law, (D) no lien, charge, encumbrance or
restriction has been recorded under any Environmental Law with respect to
any assets, facility or property owned, operated, leased or controlled by
the Issuer or any of the Subsidiaries, (E) none of the Issuer or the
Subsidiaries has received notice that it has been identified as a
potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"),
or any comparable state law and (F) no property or facility of the Issuer
or any of the Subsidiaries is (i) listed or proposed for listing on the
National Priorities List under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by
any state or local governmental authority.
For purposes of this Agreement, "ENVIRONMENTAL LAWS" means the
common law and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, laws relating to (a) emissions, discharges,
releases or threatened releases of hazardous materials into the
environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), (b) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of hazardous materials, and (c) underground and
above ground storage tanks and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(xxii) Except as described in the Offering Memorandum, (A) no labor
disturbance by or dispute with the employees of the Issuer or any of the
Subsidiaries exists or, to the best knowledge of the Issuer, is threatened
and (B) the Issuer is not aware of any labor disturbance by the employees
of any of the Issuer's or the Subsidiaries' significant manufacturers,
suppliers, customers or contractors, that could reasonably be expected, in
the case of both (A) and (B), to have a Material Adverse Effect.
(xxiii) The Issuer and the Subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, which
insures against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged and, in the
opinion of the Issuer, are adequate to protect their respective
businesses.
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(xxiv) Except as would not have a Material Adverse Effect, none of
the Issuer or the Subsidiaries has any liability for any prohibited
transaction or funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other plan that
is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which the Issuer or any of the Subsidiaries makes or
ever has made a contribution and in which any employee of the Issuer or
any Subsidiary is or has ever been a participant. With respect to such
plans, the Issuer and each Subsidiary is in compliance in all material
respects with all applicable provisions of ERISA.
(xxv) The Issuer and each Subsidiary maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with the management's general or
specific authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. To the best
knowledge of the executive officers of the Issuer, after reasonable
investigation, the Company's auditors and the audit committee of the board
of directors of the Company have been advised of all, and none of such
executive officers is now aware of any: (A) significant deficiencies in
the design or operation of internal controls which could materially
adversely affect the Company's ability to record, process, summarize and
report financial data; and (B) material fraud that involves management or
other employees who have a role in the Company's internal controls; and
since the date of the most recent evaluation of such disclosure controls
and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses. The Issuer (or the Company, in
connection with the offering of the Company's 8 1/2% Senior Subordinated
Notes due 2014) has provided or made available to the Initial Purchasers
or their counsel true and complete copies of, or accurately described to
such counsel, all extant minutes or draft minutes of meetings, or
resolutions adopted by written consent (or all material aspects thereof,
in the case of oral descriptions), of the board of directors of the Issuer
and each Subsidiary and each committee of each such board in the past
three years.
(xxvi) Neither the Issuer nor any of the Subsidiaries is, and upon
consummation of the transactions contemplated hereby, none of such persons
will be, subject to registration as an "investment company" or an entity
"controlled by" an "investment company" within the meaning of Investment
Company Act of 1940, as amended, and the rules and regulations promulgated
thereunder. Each such person will conduct its business and financial
affairs in such a manner as to ensure that it will not become an
"investment company" or an entity "controlled" by an "investment company".
Neither the Issuer nor any of the Subsidiaries is, and upon consummation
of the transactions contemplated hereby, none of such persons will be,
subject to registration as 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.
-14-
(xxvii) The Original Notes, the Indenture and the Registration
Rights Agreement will conform in all material respects to the descriptions
thereof in the Offering Memorandum.
(xxviii) No holder of securities of the Issuer or any Subsidiary
will be entitled to have such securities registered under the registration
statements required to be filed by the Issuer pursuant to the Registration
Rights Agreement other than as expressly permitted thereby.
(xxix) Immediately prior to and immediately after the consummation
of the transactions contemplated hereby, the Issuer, together with the
Subsidiaries on a consolidated basis is and will be Solvent. As used in
this paragraph, the term "SOLVENT" means, with respect to a particular
date, that on such date (A) the present fair saleable value of the assets
of the Issuer, together with the Subsidiaries on a consolidated basis is
not less than the total amount required to pay the probable liabilities of
the Issuer, together with the subsidiaries on a consolidated basis on its
total existing debts and liabilities (including contingent liabilities) as
they become absolute and matured, (B) the Issuer, together with the
Subsidiaries on a consolidated basis 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 Original Notes as contemplated by
this Agreement and the Offering Memorandum, the Issuer, together with the
Subsidiaries on a consolidated basis is not incurring debts or liabilities
beyond its ability to pay as such debts and liabilities mature and (D) the
Issuer, together with the Subsidiaries on a consolidated basis is not
engaged in any business or transaction, and is not about 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 Issuer, 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.
(xxx) None of the Issuer or any of the Subsidiaries nor, to the
knowledge of the Issuer, any director, officer, agent, employee or other
person associated with or acting on behalf of the Issuer or any of the
Subsidiaries has used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political
activity, made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or
campaigns from corporate funds, made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment or violated any provision of
the Foreign Corrupt Practices Act of 1977.
(xxxi) None of the Issuer, the Subsidiaries or any of their
respective "affiliates" (as defined in Rule 501(b) of Regulation D under
the Act) has directly, or through any agent, (a) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
"security" (as defined in the Act) that is or could be integrated with the
sale of the Original Notes in a manner that would require the registration
under the Act of the Original Notes or (b) engaged in any form of general
solicitation or general advertising (as those terms are used in Regulation
D under the Act) or in any manner involving a public offering of the
Original Notes within the meaning of Section 4(2) of the Act, in either
case, in connection with the offering of the Original Notes. Assuming the
accuracy of the representations and warranties of
-15-
the Initial Purchasers in Section 5(b) hereof, it is not necessary in
connection with the offer, sale and delivery of the Original Notes to the
Initial Purchasers in the manner contemplated by this Agreement to
register any of the Original Notes under the Act or to qualify the
Indenture under the TIA.
(xxxii) No securities of the Issuer or any Subsidiary are of the
same class (within the meaning of Rule 144A under the Act) as the Original
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.
(xxxiii) None of the Issuer or the Subsidiaries has taken, nor will
any of them take, directly or indirectly, any action designed to, or that
might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Original Notes.
(xxxiv) None of the Issuer, the Subsidiaries, any of their
respective affiliates or any person acting on its or their behalf (other
than the Initial Purchasers) has engaged in any directed selling efforts
(as that term is defined in Regulation S under the Act ("REGULATION S"))
with respect to the Original Notes; the Issuer, the Subsidiaries and their
respective Affiliates and any person acting on its or their behalf (other
than the Initial Purchasers) have complied with the offering restrictions
requirement of Regulation S.
(xxxv) There is and has been no failure on the part of the Company
and any of its respective directors or officers, in their capacities as
such, to comply in all material respects with any provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in
connection therewith that are now in effect and that apply to the Company.
Each certificate signed by any officer of the Issuer and delivered
to the Initial Purchasers or counsel for the Initial Purchasers pursuant to, or
in connection with, this Agreement shall be deemed to be a representation and
warranty by the Issuer to the Initial Purchasers as to the matters covered by
such certificate.
The Issuer acknowledges that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 8 of this Agreement, counsel to the Issuer and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and the Issuer hereby consents to such reliance.
(b) Each Initial Purchaser represents that it is a QIB and
acknowledges that it is purchasing the Original Notes pursuant to a private sale
exemption from registration under the Act, and that the Original Notes have not
been registered under the Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except pursuant to
an exemption from the registration requirements of the Act. Each Initial
Purchaser, severally and not jointly, represents, warrants and covenants to the
Issuer that:
(i) Neither it, nor any person acting on its behalf, has or will
solicit offers for, or offer or sell, the Original Notes by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) or in any manner involving a public
-16-
offering within the meaning of Section 4(2) of the Act, and it has and
will solicit offers for the Original Notes only from, and will offer and
sell the Original Notes only to, (1) persons whom such Initial Purchaser
reasonably believes to be QIBs or, if any such person is buying for one or
more institutional accounts for which such person is acting as fiduciary
or agent, only when such person has represented to such Initial Purchaser
that each such account is a QIB to whom notice has been given that such
sale or delivery is being made in reliance on Rule 144A, and, in each
case, in reliance on the exemption from the registration requirements of
the Act pursuant to Rule 144A, or (2) persons other than U.S. persons
outside the United States in reliance on, and in compliance with, the
exemption from the registration requirements of the Act provided by
Regulation S.
(ii) With respect to offers and sales outside the United States,
such Initial Purchaser has offered the Original Notes and will offer and
sell the Original Notes (1) as part of its distribution at any time and
(2) otherwise until 40 days after the later of the commencement of the
offering of the Original Notes and the Closing Date, only in accordance
with Rule 903 of Regulation S or another exemption from the registration
requirements of the Act. Accordingly, neither such Initial Purchaser nor
any person acting on its behalf has engaged or will engage in any directed
selling efforts (within the meaning of Regulation S) with respect to the
Original Notes, and any such persons have complied and will comply with
the offering restrictions requirements of Regulation S. Terms used in this
Section 5(b)(ii) have the meanings given to them by Regulation S.
(iii) Each Initial Purchaser severally agrees that, at or prior to
confirmation of a sale of Original Notes pursuant to Regulation S it will
have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Original Notes from
it or through it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the United States Securities Act of 1933, as amended (the
"SECURITIES ACT"), and may not be offered or sold within the United
States or to or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time and (ii) otherwise until
forty days after the later of the date upon which the offering of
the Securities commenced and the date of closing, except in either
case in accordance with Regulation S or Rule 144A under the
Securities Act. Terms used above have the meaning given to them by
Regulation S."
The Initial Purchasers understand that the Issuer and, for purposes
of the opinions to be delivered to them pursuant to Section 8 hereof, counsel to
the Issuer and counsel to the Initial Purchasers will rely upon the accuracy and
truth of the foregoing representations, and each Initial Purchaser hereby
consents to such reliance.
6. Indemnification. (a) The Issuer agrees to indemnify and hold
harmless the Initial Purchasers, each person, if any, who controls any Initial
Purchaser within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, the agents, employees, officers and directors of any Initial
Purchaser and the agents, employees, officers and directors of any such
controlling
-17-
person from and against any and all losses, liabilities, claims, damages and
expenses whatsoever (including, but not limited, to reasonable attorneys' fees
and any and all reasonable expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all reasonable amounts paid in settlement of any
claim or litigation) (collectively, "LOSSES") to which they or any of them may
become subject under the Act, the Exchange Act or otherwise insofar as such
Losses (or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Offering Memorandum, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, the Issuer
will not be liable in any such case to the extent, but only to the extent, that
any such Loss arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission relating to an Initial
Purchaser made therein in reliance upon and in conformity with written
information furnished to the Issuer or the Company by or on behalf of such
Initial Purchaser through the Representative expressly for use therein;
provided, further, however, that the foregoing indemnity agreement shall not
inure to the benefit of any Initial Purchaser (or any person controlling any
Initial Purchaser) with respect to any Losses arising out of or based upon (x)
any untrue statement or alleged untrue statement of any material fact in that
certain Offering Memorandum (the "FIRST OFFERING MEMORANDUM") delivered by the
Company to the Initial Purchasers for distribution to all persons purchasing
notes from the Initial Purchasers in the initial resale of such notes (such
persons "INITIAL RESALE PURCHASERS") or (y) the omission or alleged omission to
state in the First Offering Memorandum a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, if: (1) the First Offering Memorandum is amended or
supplemented prior to the delivery of the written confirmation of the sale of
the Original Notes (as amended or supplemented, the "AMENDED OFFERING
MEMORANDUM"); (2) the First Offering Memorandum was delivered to the Initial
Resale Purchasers; (3) the Company furnished sufficient copies of the Amended
Offering Memorandum on a timely basis to permit delivery of the Amended Offering
Memorandum to all Initial Resale Purchasers at or prior to the written
confirmation of the sale of the Original Notes to such person; (4) the Initial
Resale Purchaser asserting such Losses purchased Original Notes in the initial
resale from the Initial Purchasers, a copy of the First Offering Memorandum was
sent or given by or on behalf of such Initial Purchaser to such Initial Resale
Purchaser and a copy of the Amended Offering Memorandum was not sent or given by
or on behalf of such Initial Purchaser to such Initial Resale Purchaser; and (5)
the Amended Offering Memorandum would have cured the defect giving rise to such
Losses. This indemnity agreement will be in addition to any liability that the
Issuer may otherwise have, including, but not limited to, liability under this
Agreement. Notwithstanding anything to the contrary contained herein, any costs
or expenses advanced by the Issuer to any indemnified person pursuant to the
terms of this Section 6(a) shall be promptly reimbursed to the extent that such
indemnified person is ultimately determined not to have been entitled to
indemnification therefor.
(b) Each Initial Purchaser agrees to indemnify and hold harmless the
Issuer, and each person, if any, who controls the Issuer within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, and the agents,
employees, officers and directors of the Issuer or of any such controlling
person from and against any and all Losses to which they or any of them may
become subject under the Act, the Exchange Act or otherwise insofar as such
Losses (or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a
-18-
material fact contained in the Offering Memorandum, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that any such
Loss arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission relating to such Initial Purchaser
made therein in reliance upon and in conformity with information furnished in
writing to the Issuer or the Company by or on behalf of such Initial Purchaser
through the Representative expressly for use therein. The Issuer and the Initial
Purchasers acknowledge that the information described in Section 9 is the only
information furnished in writing by the Initial Purchasers to the Issuer or the
Company expressly for use in the Offering Memorandum.
(c) Promptly after receipt by an indemnified party under subsection
6(a) or 6(b) above of notice of the commencement of any action, suit or
proceeding (collectively, an "ACTION"), such indemnified party shall, if a claim
in respect thereof is to be made against the indemnifying party under such
subsection, notify each party against whom indemnification is to be sought in
writing of the commencement of such action (but the failure so to notify an
indemnifying party shall not relieve such indemnifying party from any liability
that it may have under this Section 6 except to the extent that it has been
prejudiced in any material respect by such failure). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement of such action, the indemnifying party will be entitled to
participate in such action, and to the extent it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense of such action with counsel
reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such action, but the reasonable fees and expenses of
such counsel shall be at the expense of such indemnified party or parties unless
(i) the employment of such counsel and the payment of such fees and expenses by
the indemnifying parties shall have been authorized and agreed to in writing by
the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) the named parties to such action (including any impleaded
parties) include such indemnified party and the indemnifying parties (or such
indemnifying parties have assumed the defense of such action), and such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them that are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such reasonable fees and expenses of counsel shall be borne by the indemnifying
parties. In no event shall the indemnifying parties be liable for the fees and
expenses of more than one counsel (together with appropriate local counsel) at
any time for all indemnified parties in connection with any one action or
separate but substantially similar or related actions arising in the same
jurisdiction out of the same general allegations or circumstances. An
indemnifying party shall not be liable for any settlement of any claim or action
effected without its written consent, which consent may not be unreasonably
withheld. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement (x) includes an unconditional release of such indemnified party
from all
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liability on claims that are the subject matter of such proceeding and (y) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 of this
Agreement is for any reason held to be unavailable from the indemnifying party,
or is insufficient to hold harmless a party indemnified under Section 6 of this
Agreement, each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such aggregate Losses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Issuer, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Original Notes or (ii) if such allocation is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Issuer,
on the one hand, and the Initial Purchasers, on the other hand, in connection
with the statements or omissions that resulted in such Losses, as well as any
other relevant equitable considerations. The relative benefits received by the
Issuer, on the one hand, and the Initial Purchasers, on the other hand, shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
of Original Notes (net of discounts and commissions but before deducting
expenses) received by the Issuer are to (y) the total discount and commissions
received by the Initial Purchasers. The relative fault of the Issuer, on the one
hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer or the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission or alleged statement or omission.
The Issuer and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7, (i) in no case shall any Initial Purchaser be
required to contribute any amount in excess of the amount by which the total
discount and commissions applicable to the Original Notes purchased by such
Initial Purchaser pursuant to this Agreement exceeds the amount of any damages
that such Initial Purchaser has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person, if any, who controls any Initial Purchaser within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act shall have the same
rights to contribution as the Initial Purchasers, and each person, if any, who
controls the Issuer within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and each director, officer, employee and agent of the Issuer
shall have the same rights to contribution as the Issuer. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim for contribution may be
made against another party or parties under this Section 7, notify such party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 7 or
otherwise, except to the extent that it has been prejudiced in any material
respect by such failure; provided, however, that no additional notice shall be
required with respect to any action for which notice has been given under
Section 6 for purposes of indemnification. Anything in this section to the
contrary notwithstanding, no party shall be liable for contribution with
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respect to any action or claim settled without its written consent; provided,
however, that such written consent was not unreasonably withheld.
8. Conditions of Initial Purchasers' Obligations. The obligations of
the Initial Purchasers to purchase and pay for the Original Notes, as provided
for in this Agreement, shall be subject to satisfaction of the following
conditions prior to or concurrently with such purchase:
(a) All of the representations and warranties of the Issuer
contained in this Agreement shall be true and correct in all material
respects on the date of this Agreement and on the Closing Date. The Issuer
shall have performed or complied in all material respects with all of the
agreements and covenants contained in this Agreement and required to be
performed or complied with by it at or prior to the Closing Date. The
Initial Purchasers shall have received a certificate, dated the Closing
Date, signed by the chief executive officer and the chief financial
officer of the Issuer, certifying as to the foregoing and to the effect in
Section 8(c).
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers on the second business day
immediately following the date of this Agreement or at such later date as
the Initial Purchasers may determine. No stop order suspending the
qualification or exemption from qualification of the Original Notes in any
jurisdiction shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(c) (i) The Notes will be rated at least Caa2 from Xxxxx'x Investors
Service and at least CCC+ from Standard & Poor's Ratings Group, in each
case, with a stable or better outlook; and (ii) the Company's existing
8 1/2% Senior Subordinated Notes due 2014 shall be rated at least Caa1
from Xxxxx'x Investors Service and at least CCC+ from Standard & Poor's
Ratings Group, in each case, with a stable or better outlook.
(d) The Initial Purchasers shall have received on the Closing Date
opinions dated the Closing Date, addressed to the Initial Purchasers, of
(x) Ropes & Gray LLP, counsel to the Issuer, substantially in the form of
Exhibit B-1 attached hereto, and (y) Xxxxx X. Xxxxxxxx, general counsel of
the Issuer, substantially in the form of Exhibit B-2 attached hereto.
(e) The Initial Purchasers shall have received on the Closing Date
an opinion dated the Closing Date of Xxxxxx Xxxxxx & Xxxxxxx LLP, counsel
to the Initial Purchasers, in form and substance satisfactory to the
Representative. Such counsel shall have been furnished with such
certificates and documents as they may reasonably request to enable them
to review or pass upon the matters referred to in this Section 8 and in
order to evidence the accuracy, completeness or satisfaction in all
material respects of any of the representations, warranties or conditions
contained in this Agreement.
(f) The Initial Purchasers shall have received a "comfort letter"
from the independent public accountants for the Company, dated the date of
this Agreement, addressed to the Initial Purchasers and substantially in
the form most recently provided to the Initial Purchasers, and otherwise
in form and substance reasonably satisfactory to the Representative and
counsel to the Initial Purchasers prior to 5:00 p.m. New York City time,
on the business day
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following the date on which a copy of the Offering Memorandum becomes
available, containing excerpts from the Offering Memorandum indicating the
procedures performed by such independent public accountants on the
financial data included therein in form and substance satisfactory to the
Representative and counsel to the Initial Purchasers. In addition, the
Initial Purchasers shall have received a "bring-down comfort letter" from
the independent public accountants for the Company, dated as of the
Closing Date, addressed to the Initial Purchasers and in form and
substance reasonably satisfactory to the Representative and counsel to the
Initial Purchasers.
(g) The Issuer and the Trustee shall have executed and delivered the
Indenture and the Initial Purchasers shall have received copies thereof.
The Issuer shall have executed and delivered the Registration Rights
Agreement and the Initial Purchasers shall have received executed
counterparts thereof.
(h) The Initial Purchasers shall have been furnished with wiring
instructions for the application of the proceeds of the Original Notes in
accordance with this Agreement and such other information as they may
reasonably request.
(i) The Original Notes shall be eligible for trading in Portal upon
issuance. All agreements set forth in the blanket representation letter of
the Issuer to DTC relating to the approval of the Original Notes by DTC
for "book-entry" transfer shall have been complied with.
(j) The Initial Purchasers shall have received a certificate of the
Chief Financial Officer of the Issuer dated the Closing Date and
substantially in the Form of Exhibit C.
If any of the conditions specified in this Section 8 shall not have
been fulfilled when and as required by this Agreement to be fulfilled (or waived
by the Initial Purchasers), this Agreement may be terminated by the Initial
Purchasers on notice to the Issuer at any time at or prior to the Closing Date,
and such termination shall be without liability of any party to any other party.
The documents required to be delivered by this Section 8 will be
delivered at the office of counsel for the Initial Purchasers on the Closing
Date.
9. Initial Purchasers Information. The Issuer and the Initial
Purchasers severally acknowledge that the statements set forth in the first and
second sentence of the sixth paragraph and the entire seventh paragraph under
"Plan of distribution" in the Offering Memorandum constitute the only
information furnished in writing by or behalf of any Initial Purchaser expressly
for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements contained in this Agreement, including
the agreements contained in Sections 4(f) and 11(d), the indemnity agreements
contained in Section 6 and the contribution agreements contained in Section 7,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Initial Purchasers or any controlling
person thereof or by or on behalf of the Issuer or any controlling person
thereof, and shall survive delivery of and payment for
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the Original Notes to and by the Initial Purchasers. The agreements contained in
Sections 4(f), 6, 7, 9 and 11(d) shall survive the termination of this
Agreement, including pursuant to Section 11.
11. Effective Date of Agreement; Termination. (a) This Agreement
shall become effective upon execution and delivery of a counterpart hereof by
each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Issuer from the
Initial Purchasers, without liability (other than with respect to Sections 6 and
7) on the Initial Purchasers' part to the Issuer or any affiliate thereof if, on
or prior to such date, (i) the Issuer shall have failed, refused or been unable
to perform any agreement on its part to be performed under this Agreement when
and as required; (ii) any other condition to the obligations of the Initial
Purchasers under this Agreement to be fulfilled by the Issuer pursuant to
Section 8 is not fulfilled when and as required in any material respect; (iii)
trading in any securities of the Company, or trading in securities generally on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or materially limited, or minimum prices shall
have been established thereon by the Commission, or by such exchange or other
regulatory body or governmental authority having jurisdiction; (iv) a general
moratorium shall have been declared by either Federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States shall have occurred; (v)
there is an outbreak or escalation of hostilities or national or international
calamity in any case involving the United States, on or after the date of this
Agreement, or if there has been a declaration by the United States of a national
emergency or war or other national or international calamity or crisis
(economic, political, financial or otherwise) which affects the U.S. and
international markets, making it, in the Representative's judgment,
impracticable to proceed with the offering or delivery of the Original Notes on
the terms and in the manner contemplated in the Offering Memorandum; (vi) there
shall have been such a material adverse change in general economic, political or
financial conditions or the effect (or potential effect if the financial markets
in the United States have not yet opened) of international conditions on the
financial markets in the United States shall be such as, in the Representative's
judgment, to make it inadvisable or impracticable to proceed with the offering
or delivery of the Original Notes on the terms and in the manner contemplated in
the Offering Memorandum; or (vii) the Issuer shall have become aware of any
matter that it determines is required by Section 4(c) to be disclosed in the
Offering Memorandum which the Representative reasonably determines is materially
adverse as compared to the information with respect to the Issuer and the
Subsidiaries disclosed in the Draft OM.
(c) Any notice of termination pursuant to this Section 11 shall be
given at the address specified in Section 12 below by telephone or facsimile,
confirmed in writing by letter.
(d) If any one or more Initial Purchasers shall fail to purchase and
pay for any of the Original Notes agreed to be purchased by such Initial
Purchaser hereunder and such failure to purchase shall constitute a default in
the performance of its or their obligations under this Agreement, the remaining
Initial Purchasers shall be obligated severally to take up and pay for (in the
respective proportions which the principal amount at maturity of Original Notes
set forth opposite their names in Schedule I hereto bears to the aggregate
principal amount at maturity of Original Notes set forth opposite the names of
all the remaining Initial Purchasers) the Original Notes which the defaulting
Initial Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that
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the aggregate principal amount at maturity of Original Notes which the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase
shall exceed 10% of the aggregate principal amount at maturity of Original Notes
set forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Original Notes, and if such nondefaulting Initial Purchasers do not purchase
all the Original Notes, this Agreement will terminate without liability to any
nondefaulting Initial Purchaser or the Issuer. In the event of a default by any
Initial Purchaser as set forth in this Section 11(d), with the consent of the
Issuer (which consent shall not be unreasonably withheld or delayed) the Closing
Date shall be postponed for such period, not exceeding seven business days, as
the Representative shall determine in order that the required changes in the
Offering Memorandum or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Initial
Purchaser of its liability, if any, to the Issuer or any nondefaulting Initial
Purchaser for damages occasioned by its default hereunder.
12. Notice. All communications with respect to or under this
Agreement, except as may be otherwise specifically provided in this Agreement,
shall be in writing and, if sent to the Initial Purchasers, shall be mailed,
delivered or telecopied and confirmed in writing to c/o Credit Suisse First
Boston LLC, Xxxxxx Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (fax number:
(000) 000-0000), Attention: Investment Banking Department -- Transactions
Advisory Group, with a copy for information purposes only to Xxxxxx Xxxxxx &
Xxxxxxx LLP, 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 (fax number: 000-000-0000),
Attention: Xxxxxx X. Xxxxxxx; and if sent to the Issuer, shall be mailed,
delivered or telecopied and confirmed in writing to Nortek, Inc., 00 Xxxxxxx
Xxxxx, Xxxxxxxxxx, XX 00000-0000 (telephone: (000) 000-0000, fax: (401)
000-0000), Attention: Xxxxx X. Xxxxxxxx; with a copy to Xxxxxx X. Xxx Partners,
L.P., 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, facsimile: (617)
227-3514, Attention: Xxxxxxx X. XxXxxx and Xxxx X. Xxxxxx, with an additional
copy to Ropes & Gray LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000-0000, facsimile: (000) 000-0000, Attention: Xxxx X. Xxxx, Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged by telecopier machine, if telecopied; and one business day after
being timely delivered to a next-day air courier.
13. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchasers, the Issuer and the other
indemnified parties referred to in Sections 6 and 7, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. The term "successors
and assigns" shall not include a purchaser, in its capacity as such, of Original
Notes from the Initial Purchasers.
14. Construction. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed wholly therein (without giving effect to any provisions
thereof relating to conflicts of law, except Section 5-1401 of the New York
General Obligations Law).
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15. Submission to Jurisdiction; Waiver of Jury Trial. No proceeding
related to this Agreement or the transactions contemplated hereby may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and each of the parties
hereto hereby consents to the jurisdiction of such courts and personal service
with respect thereto. Each of the parties hereto hereby waives all right to
trial by jury in any proceeding (whether based upon contract, tort or otherwise)
in any way arising out of or relating to this Agreement. Each of the parties
hereto agrees that a final judgment in any such proceeding brought in any such
court shall be conclusive and binding upon the parties hereto and may be
enforced in any other courts in the jurisdiction of which any party hereto is or
may be subject, by suit upon such judgment.
16. Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
17. Counterparts. This Agreement may be executed in various
counterparts that together shall constitute one and the same instrument.
[Signature Pages Follow]
If the foregoing Purchase Agreement correctly sets forth the
understanding among you and the Initial Purchasers, please so indicate in the
space provided below for the purpose, whereupon this letter and your acceptance
shall constitute a binding agreement among you and the Initial Purchasers.
NTK Holdings, Inc.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
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Confirmed and accepted as of the date first above written:
CREDIT SUISSE FIRST BOSTON LLC
BANC OF AMERICA SECURITIES LLC
UBS SECURITIES LLC
By: CREDIT SUISSE FIRST BOSTON LLC
as Representative of the several Initial Purchasers
By: /s/ Xxxxx Xxxxxxxx
----------------------
Name: Xxxxx Xxxxxxxx
Title: Director
SCHEDULE I
PRINCIPAL AMOUNT AT MATURITY OF
INITIAL PURCHASER ORIGINAL NOTES TO BE PURCHASED
------------------------------ -------------------------------
Credit Suisse First Boston LLC $ 161,200,000
-----------------
Banc of America Securities LLC $ 161,200,000
-----------------
UBS Securities LLC $ 80,600,000
-----------------
TOTAL $ 403,000,000
=================
SCHEDULE II
% HELD, DIRECTLY
JURISDICTION OR INDIRECTLY, BY
SUBSIDIARY OF ORGANIZATION NTK HOLDINGS INC.
------------------------------------- ----------------------- -----------------
Xxxxxx Manufacturing, Inc. Delaware 100%
Best Deutschland GmbH Germany 100%
Best France S.A. France 100%
Best S.p.A. Italy 100%
Broan-NuTone Canada Inc. Ontario 100%
Broan-NuTone (HK) Limited Hong Kong, People's Re- 100%
public of China
Broan-NuTone LLC Delaware 100%
CES Group, Inc. Delaware 100%
DMU Xxxxxx Inc. Delaware 100%
Xxxxx-Xxxxxxxx (Millbank) Limited UK 100%
Xxxxx-Xxxxxxxx Exports Limited UK 100%
Xxxxx-Xxxxxxxx Group Limited UK 100%
Xxxxx-Xxxxxxxx Holding Limited UK 100%
Xxxxx-Xxxxxxxx Limited UK 100%
Xxxxx-Xxxxxxxx Products Limited UK 100%
Xxxxx-Xxxxxxxx Service Limited UK 100%
Edenaire Limited UK 100%
Elan Home Systems, L.L.C. Kentucky 100%
Elektromec S.p.A. Italy 100%
Fidelity Investment Co. Rhode Island 100%
Governair Corporation Oklahoma 100%
Innergy Tech Inc. Quebec 100%
J.A.R. Industries, Inc. Missouri 100%
Xxxxxx Industries, Inc. Delaware 100%
Linear Canada Holdings, Inc. Delaware 100%
Linear Electronics of Canada, Limited Canadian Federal 100%
Linear Foreign Sales Corporation U.S. V.I. 100%
Linear H.K. LLC Delaware 100%
Linear H.K. Manufacturing Limited Hong Kong, People's 100%
Republic of China
Linear LLC California 100%
M&S Systems GP, Inc. Delaware 100%
M&S Systems, LP Delaware 100%
M&S Systems LP, Inc. Delaware 100%
Mammoth, Inc. Delaware 100%
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Mammoth China, Ltd. Delaware 100%
MPDC, Inc. Delaware 100%
Multiplex Technology, Inc. California 100%
Niche Medical Inc. Delaware 100%
Nordyne, Inc. Delaware 100%
Xxxxxxxx, Inc. Rhode Island 100%
NorMed, Inc. Delaware 100%
Nortek (UK) Limited UK 100%
Nortek Holding B.V. Netherlands 100%
Nortek Holdings, Inc. Delaware 100%
Nortek, Inc. Delaware 100%
NuTone Inc. Delaware 100%
OmniMount Systems, Inc. Arizona 100%
Operator Specialty Company, Inc. Michigan 100%
Precision Air Control Limited UK 100%
Rangaire GP, Inc. Delaware 100%
Rangaire LP Delaware 100%
Rangaire LP, Inc. Delaware 100%
Ring Brothers Corporation California 100%
SpeakerCraft, Inc. Delaware 100%
Studley Canada Limited Ontario 100%
Temtrol, Inc. Oklahoma 100%
Vapac Humidity Control Limited UK 100%
Venmar CES, Inc. Saskatchewan 100%
Venmar Ventilation (H.D.H.) Inc. Quebec 100%
Venmar Ventilation Inc. Quebec 100%
Ventrol Air Handling Systems Inc. Canada (Federal Corp.) 100%
WDS LLC Delaware 100%
We Monitor America Incorporated Colorado 100%
Webco, Inc. Missouri 100%
Xantech Corporation California 100%
SCHEDULE III
OTHER EQUITY INTERESTS
Shanghai Mammoth Air Conditioning Co., Ltd. -- 47% equity interest held by
Mammoth China, Ltd.
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
[See attached.]
EXHIBIT B-1
FORM OF OPINION OF ROPES & GRAY LLP
[See attached.]
EXHIBIT B-2
FORM OF OPINION OF XXXXX X. XXXXXXXX,
GENERAL COUNSEL FOR THE COMPANY
[See attached.]
EXHIBIT C
FORM OF CHIEF FINANCIAL OFFICER CERTIFICATE
[See attached.]
