EXHIBIT 4.14
EXECUTION COPY
PURCHASE AGREEMENT
Dated September 9, 2002
By and among
ERICO INTERNATIONAL CORPORATION
(Fully and Unconditionally Guaranteed by ERICO Products, Inc.)
and
CITIBANK, N.A.
ERICO INTERNATIONAL CORPORATION
$30,000,000 11.0% Senior Notes due 2012
Purchase Agreement
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
Pursuant to the terms and conditions of this Purchase
Agreement (this "Agreement"), ERICO International Corporation, an Ohio
corporation (the "Issuer"), proposes to issue and sell to Citibank, N.A. (the
"Purchaser") $30,000,000 aggregate principal amount of its 11.0% Senior
Subordinated Notes due 2012 (the "Securities") to be fully and unconditionally
guaranteed on a senior subordinated basis by ERICO Products, Inc., an Ohio
corporation (the "Subsidiary Guarantor"), and such other Subsidiaries as may be
required from time to time pursuant to the Indenture. The Securities are to be
issued pursuant to the provisions of an indenture, dated as of the Closing Date
(the "Indenture"), by and among the Issuer, the Subsidiary Guarantor and the
Purchaser. Capitalized terms used and not defined herein shall have the meanings
assigned to such terms in the Indenture.
1. Representations and Warranties of the Issuer and
Subsidiary Guarantor. Each of the Issuer and the Subsidiary Guarantor represents
and warrants as of the date hereof and as of the Closing Date (except with
respect to the representations and warranties made in paragraph (i) of this
Section 1 which shall be made as of the Closing Date only) as follows:
(a) The Issuer has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of Ohio,
has the corporate power and authority to own its property and to conduct its
business and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the condition, financial or otherwise, or in the earnings,
business or operations of the Issuer, the Subsidiary Guarantor and their
respective Subsidiaries, taken as a whole (a "Material Adverse Effect").
(b) The Subsidiary Guarantor has been duly organized, is
validly existing and in good standing under the laws of the State of Ohio, has
all requisite power and authority to own its property and to conduct its
business and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a Material
Adverse Effect. All of the issued shares of capital stock of the Subsidiary
Guarantor have been duly and validly authorized and issued, are fully paid and
nonassessable and are wholly owned directly by the Issuer, free and clear of all
Liens (other than Liens in favor of the lenders party to the Amended and
Restated Multicurrency Credit and Security Agreement (as amended from time to
time, the "Credit Agreement"), dated as of May 2, 2002, by and among the Issuer,
the Subsidiary Guarantor, ERICO Europa B.V., National City Bank and the other
banks signatory thereto ("Senior Liens")).
(c) This Agreement has been duly authorized, executed and
delivered by each of the Issuer and the Subsidiary Guarantor and is a valid and
binding obligation of each of the Issuer and the Subsidiary Guarantor,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and general
principles of equity.
(d) The Securities have been duly authorized by the
Issuer and the Subsidiary Guarantor and, when delivered to and paid for by the
Purchaser in accordance with the terms of this Agreement and the Indenture, will
be valid and binding obligations of each of the Issuer and the Subsidiary
Guarantor, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity, and will be entitled to the benefits of the
Indenture.
(e) The Indenture, including all Obligations of the
Issuer under the Indenture and the Securities issued thereunder, has been
guaranteed by the Subsidiary Guarantor and each of the Indenture and the
Subsidiary Guarantee has been duly authorized and when executed and delivered by
the Issuer and the Subsidiary Guarantor, will be a valid and binding obligation
of the Issuer and the Subsidiary Guarantor, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity.
(f) The execution and delivery by the Issuer and the
Subsidiary Guarantor of, and the performance by the Issuer and the Subsidiary
Guarantor of its obligations under, this Agreement, the Indenture, the
Subsidiary Guarantee and the Securities will not contravene (i) any agreement or
other instrument binding upon the Issuer or the Subsidiary Guarantor or any of
their respective Subsidiaries (including, without limitation, the Credit
Agreement); (ii) any provision of applicable law, (iii) any provision of the
certificate of incorporation or by-laws of the Issuer and the Subsidiary
Guarantor, or (iv) any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Issuer, the Subsidiary Guarantor or
any Subsidiary, except as to clause (i), (ii) or (iv) above, where such
contravention, individually or in the aggregate, would not have, and could not
reasonably be expected to have, a Material Adverse Effect. No consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Issuer and the Subsidiary
Guarantor of their obligations under this Agreement, the Indenture, or the
Securities, except (i)(x) such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Securities and (y) by Federal and state securities laws with respect to the
Issuer's and the Subsidiary Guarantor's obligations under Section 6 of this
Agreement, and (ii) in each case, where the failure to obtain any such consent,
approval, authorization, order or qualification would not have, and could not
reasonably be expected to have, a Material Adverse Effect.
(g) Since December 31, 2001, there has not occurred any
Material Adverse Effect or any development reasonably likely to result in a
Material Adverse Effect.
(h) There are no legal or governmental actions, suits or
proceedings pending or, to the best of the Issuer's or the Subsidiary
Guarantor's knowledge, threatened against or affecting the Issuer or the
Subsidiary Guarantor, which has as the subject thereof any property owned or
leased by the Issuer or the Subsidiary Guarantor, where in each such case there
is a reasonable possibility that such action, suit or proceeding might be
determined adversely to the Issuer or the Subsidiary Guarantor and any such
action, suit or proceeding, if so determined adversely, would reasonably be
expected to result in a Material Adverse Effect or adversely affect the
consummation of the transactions contemplated by this Agreement or the
Indenture. No material labor dispute with the employees of the Issuer or the
Subsidiary Guarantor, exists or, to the Issuer's or the Subsidiary Guarantor's
knowledge, is threatened or imminent.
(i) Court Square Capital Limited, a Delaware corporation
("Court Square"), owns 400 shares of Class A voting common stock (the "Common
Stock"), no par value, of ERICO Holding Company, an Ohio corporation and the
Issuer's direct parent corporation ("ERICO Holdings").
(j) The Issuer, the Subsidiary Guarantor and their
respective Subsidiaries (i) are in compliance with all applicable foreign,
federal, state and local laws and regulations relating to the
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protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
have received all permits, licenses or other approvals required of them under
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, have a Material Adverse Effect.
(k) There are no costs or liabilities associated with
Environmental Laws, including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties which
would, individually or in the aggregate, have a Material Adverse Effect.
(l) The Issuer will use the proceeds received from the
issuance of the Securities to repay senior secured debt of the Issuer, provide
for working capital needs and for other general corporate purposes of the Issuer
and the Subsidiary Guarantor.
(m) Neither the Issuer nor the Subsidiary Guarantor is,
and after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof, will be, required to register as an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended; and the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(n) None of the Issuer, the Subsidiary Guarantor or any
affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act,
an "Affiliate") of the Issuer or the Subsidiary Guarantor has directly, or
through any agent, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the Securities
Act) which is or will be integrated with the sale of the Securities in a manner
that would require the registration under the Securities Act of the Securities
or (ii) engaged in any form of general solicitation or general advertising in
connection with the offering of the Securities (as those 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.
(o) No default or event of default exists under any
contract, indenture, mortgage, loan agreement, note, lease, or other agreement
or instrument constituting Senior Debt.
(p) Each of the Issuer and the Subsidiary Guarantor owns
or possesses sufficient trademarks, trade names, patent rights, copyrights,
licenses, approvals, trade secrets and other similar rights (collectively,
"Intellectual Property Rights") reasonably necessary to conduct its business as
conducted as of the date hereof (except, in each case, where the failure to so
own or possess would not, individually or in the aggregate, result in a Material
Adverse Effect) and the expected expiration of any of such Intellectual Property
Rights would not result in a Material Adverse Effect. Neither the Issuer nor the
Subsidiary Guarantor has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or conflict
is reasonably likely to be determined adversely to the Issuer or the Subsidiary
Guarantor and, if the subject of an unfavorable decision, would result in a
Material Adverse Effect.
(q) Each of the Issuer and the Subsidiary Guarantor
possesses such valid and current certificates, authorizations or permits issued
by the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct its business (except, in each case, where the failure to so
possess would not, individually or in the aggregate, result in a Material
Adverse Effect) and neither the Issuer nor
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the Subsidiary Guarantor has received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such certificate,
authorization or permit as to which there is a reasonable likelihood of an
adverse determination to the Issuer or such Subsidiary Guarantor and that, if so
adversely determined, could individually or in the aggregate result in a
Material Adverse Effect.
(r) Each of the Issuer, the Subsidiary Guarantor and
their respective Subsidiaries has good and marketable title to all the
properties and assets necessary to conduct its business, in each case free and
clear of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except (i) such as do not materially and adversely
affect the value of such property and do not materially interfere with the use
made or proposed to be made of such property by the Issuer, such Subsidiary
Guarantor or such Subsidiary and (ii) with respect to Senior Liens. The real
property, improvements, equipment and personal property held under lease by each
of the Issuer and the Subsidiary Guarantor are held under valid and enforceable
leases, with such exceptions as are not material and do not materially interfere
with the use made or proposed to be made of such real property, improvements,
equipment or personal property by the Issuer and the Subsidiary Guarantor.
(s) The Issuer and its consolidated Subsidiaries
(including the Subsidiary Guarantor) have filed all necessary federal, state and
foreign income and franchise tax returns and have paid all taxes required to be
paid by any of them and, if due and payable, any related or similar assessment,
fine or penalty levied against any of them, except where the failure to make
such filings or pay such taxes, assessments fines or penalties would not,
individually or in the aggregate, result in a Material Adverse Effect. The
Issuer has made adequate charges, accruals and reserves in the audited
consolidated financial statements of the Issuer and its Subsidiaries in respect
of all federal, state and foreign income and franchise taxes for all periods as
to which the tax liability of the Issuer and any of its consolidated
Subsidiaries (including the Subsidiary Guarantor) has not been finally
determined, in each case, to the extent required to be so recorded in accordance
with generally accepted accounting principles.
(t) Each of the Issuer and the Subsidiary Guarantor is
insured by recognized, financially sound institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering real and personal property owned or leased by the Issuer
and the Subsidiary Guarantor against theft, damage, destruction and acts of
vandalism. Neither the Issuer nor the Subsidiary Guarantor has any reason to
believe that it will not be able (i) to renew its existing insurance coverage as
and when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now
conducted and at a cost that would not be material to the Issuer or its
Subsidiaries, taken as a whole. Since December 31, 2001, neither the Issuer nor
the Subsidiary Guarantor has been denied any insurance coverage that it has
sought or for which it has applied.
(u) Assuming that the representations and warranties of
the Purchaser in Section 7 are true, correct and complete, it is not necessary
in connection with the offer, sale and delivery of the Securities to the
Purchaser in the manner contemplated by this Agreement to register the
Securities under the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended.
(v) No event is outstanding which constitutes (or, with
the giving of notice, lapse of time, or the fulfillment of any other applicable
condition (other than the mere occurrence of such event), will constitute) a
Default or an Event of Default.
2. Agreements to Sell and Purchase. The Issuer hereby
agrees to sell to the Purchaser, and the Purchaser, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase from the Issuer, the entire aggregate
principal amount of the Securities at a purchase price equal to 97% of the
principal amount thereof (the
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"Purchase Price"). The excess of (i) the $30,000,000 aggregate principal amount
of the Securities over (ii) the Purchase Price shall represent a 3%
nonrefundable financing fee (which fee the Purchaser has deemed to be a
Collateral Debt Asset Closing Fee as defined in the indenture (the "CVC Capital
Indenture") governing the Class B-1 and Class B-2 Notes issued by CVC Capital
Funding, LLC, an Affiliate of the Purchaser).
3. Payment and Delivery. Payment for the Securities
shall be made to the Issuer in United States Federal or other funds immediately
available in New York City against delivery of such Securities for the account
of the Purchaser at 9:00 am., New York City time, on September 12, 2002. The
time and date of such payment are hereinafter referred to as the "Closing Date."
The certificate evidencing the Securities shall be in the form
of a Definitive Note and registered in such names and in such denominations as
the Purchaser shall request in writing not later than one full Business Day
prior to the Closing Date. The certificate evidencing the Securities shall be
delivered to the Purchaser on the Closing Date for the account of the Purchaser,
with any transfer taxes payable in connection with the transfer of the
Securities to the Purchaser duly paid, against payment of the Purchase Price
therefor.
4. Conditions to the Purchaser's Obligations. The
obligations of the Purchaser to purchase and pay for the Securities on the
Closing Date are subject to the following conditions:
(a) The representations and warranties of each of the
Issuer and the Subsidiary Guarantor contained in this Agreement shall be true
and correct as of the Closing Date and each of the Issuer and the Subsidiary
Guarantor shall have complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
(b) On or prior to the Closing Date, Court Square shall
have purchased shares of Common Stock for an aggregate purchase price of
$1,000,000, pursuant to terms and conditions and documentation satisfactory to
the Purchaser in form and substance.
(c) Subsequent to the execution and delivery of this
Agreement and prior to (and including) the Closing Date, there shall not have
occurred any change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or operations of
the Issuer, ERICO Holdings, the Subsidiary Guarantor and their respective
Subsidiaries, taken as a whole, in each case that, in the Purchaser's judgment,
is material and adverse and that makes it, in the Purchaser's judgment,
impracticable or inadvisable to proceed with the purchase of the Securities.
(d) The Purchaser shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an officer of the Issuer, to
the effect that the representations and warranties of the Issuer and the
Subsidiary Guarantor contained in this Agreement are true and correct as of the
Closing Date and that each of the Issuer and the Subsidiary Guarantor has
complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied hereunder on or before the Closing Date. The
Issuer's officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
(e) There shall not be any pending or threatened
litigation or proceeding against the Issuer, the Subsidiary Guarantor, or any of
their respective Subsidiaries or Affiliates (other than Citicorp Venture
Capital, Ltd. and its Affiliates), or otherwise relating to the transactions
contemplated hereby which seeks to enjoin or challenge the transactions
contemplated hereby or which could reasonably be expected in the Purchaser's
judgment to have a Material Adverse Effect.
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(f) The Purchaser shall have received evidence that all
governmental, shareholder and material third party consents and approvals
necessary in connection with the transactions contemplated hereby have been
obtained and all applicable waiting periods have expired without any action
being taken by any authority or third party that could restrain, prevent or
impose any material adverse conditions on such transactions or that could seek
or threaten any of the foregoing.
(g) The Purchaser shall have received on the Closing Date
an opinion of Dechert, counsel to the Issuer and the Subsidiary Guarantor, dated
as of the Closing Date, addressed to the Purchaser and in form and substance
satisfactory to Purchaser.
(h) The Purchaser shall have received prior to the
Closing Date confirmation that the Securities have a rating of at least "B3"
from Xxxxx'x Investors Service, Inc. and "B-" from Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc.
(i) The Purchaser shall have received on or before the
Closing Date the following documents:
(i) counterparts hereof signed by each of the
parties listed on the signature pages hereof (or, in the case of any
party as to which an executed counterpart shall not have been received,
receipt by the Purchaser in form satisfactory to it of telegraphic,
telex or other written confirmation from such party of execution of a
counterpart hereof by such party);
(ii) duly executed Securities from the Company on
the Closing Date for the account of the Purchaser dated on or before
the Closing Date;
(iii) the Indenture, duly executed by the parties
thereto and which shall be in full force and effect;
(iv) the Waiver Letter and Amendment No. I to the
Amended and Restated Multicurrency Credit and Security Agreement
("Amendment No. 1 to the Credit Agreement"), in the form attached
hereto as Exhibit A, duly executed by the parties thereto and which
shall be in full force and effect;
(v) copies of the certificate of incorporation
or articles of incorporation, as applicable, of each of the Issuer and
the Subsidiary Guarantor and certified to be true and complete as of a
recent date by the appropriate governmental authority of the state of
its incorporation;
(vi) copies of the bylaws or code of regulations,
as applicable, of each of the Issuer and the Subsidiary Guarantor,
certified by an officer of the Issuer or the Subsidiary Guarantor, as
applicable, as of the Closing Date to be true and correct and in full
force and effect as of the Closing Date;
(vii) copies of resolutions of the board of
directors of each of the Issuer and the Subsidiary Guarantor approving
and adopting this Agreement, the Indenture, the Securities, the
Amendment No. 1 to the Credit Agreement, the transactions contemplated
therein and authorizing execution and delivery thereof, certified by an
officer of the Issuer or the Subsidiary Guarantor, as applicable, as of
the Closing Date to be true and correct and in full force and effect as
of the Closing Date;
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(viii) copies of (A) certificates of good standing,
existence or its equivalent with respect to each of the Issuer and the
Subsidiary Guarantor certified as of a recent date by the appropriate
governmental authorities of the state of its incorporation;
(ix) an incumbency certificate of each of the
Issuer and the Subsidiary Guarantor certified by a secretary or
assistant secretary of each such entity to be true and correct as of
the Closing Date; and
(x) all documents that the Purchaser may
reasonably request relating to the existence of the Issuer and the
Subsidiary Guarantor, the corporate authority for and the validity of
this Agreement, the Indenture, and the Securities, and any other
matters relevant hereto, all in form and substance satisfactory to the
Purchaser in its sole good faith discretion.
(j) The Purchaser shall have received payment in full in
immediately available funds of all reasonable expenses (including attorney's
fees) incurred in connection with the negotiation and execution of this
Agreement, the Indenture, the Securities, and all other documents, instruments
and agreements executed and/or delivered in connection therewith.
(k) The Purchaser shall have determined in its sole
discretion that the terms of the Securities as reflected in the Indenture and
the Definitive Note issued thereunder satisfy the criteria for a Qualifying
Collateral Debt Asset as defined under the CVC Capital Indenture.
(l) The Purchaser shall have received evidence
satisfactory to it that on the Closing Date, immediately after giving effect to
the issuance of to be made hereunder, the Company and its Subsidiaries shall
have no Indebtedness outstanding other than Permitted Indebtedness.
(m) The Purchaser shall have received such other
documents and certificates as are reasonably requested by the Purchaser or its
counsel.
5. Covenants of the Issuer and the Subsidiary Guarantor.
In further consideration of the agreements of the Purchaser contained in this
Agreement, each of the Issuer and the Subsidiary Guarantor covenants with the
Purchaser as follows:
(a) To endeavor to qualify the Securities for offer and
sale under the securities or Blue Sky laws of the State of New York.
(b) Not to, nor to permit any Affiliate controlled by
them to, sell, offer for sale 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 Securities in a manner which would require the
registration under the Securities Act of the Securities.
(c) While any of the Securities remain "restricted
securities" within the meaning of the Securities Act, to make available, upon
request, to any seller of the Securities the information specified in Rule
144A(d)(4) under the Securities Act, unless the Issuer is then subject to
Section 13 or 15(d) of the Exchange Act.
6. Exchange.
(a) Upon any issuance prior to August 30, 2012 by (i) the
Issuer, (ii) ERICO Holdings or (iii) Global of Eligible Debt Securities (as
defined below), (x) the Issuer shall pay or cause ERICO Holdings or Global to
pay all accrued and unpaid interest on the Securities to the date of
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exchange, and (y) the Issuer shall exchange and cause ERICO Holdings or Global
to exchange all then outstanding Securities (and the Purchaser and each other
holder of Securities will exchange all then outstanding Securities) for Eligible
Debt Securities having a principal amount equal to the product of (A) the
principal amount of the Securities so exchanged multiplied by (B) the price at
which the Eligible Debt Securities are offered to investors by the initial
purchasers thereof (expressed as a percentage of the principal amount of the
Eligible Debt Securities so offered). As used herein, "Eligible Debt Securities"
means debt securities that (i) are issued by the Issuer, ERICO Holdings or
Global (such issuer, the "Exchange Issuer") to qualified institutional buyers
(as defined in Rule 144A under the Securities Act) pursuant to Section 4(2) of
the Securities Act in an aggregate principal amount of not less than $100.0
million, (ii) are intended to be eligible for resale pursuant to Rule 144A of
the Securities Act, (iii) have terms no less favorable to the Exchange Issuer
than market terms for an issuance of debt securities issued by issuers in the
same industry as the Issuer with ratings from nationally recognized rating
agencies identical to the ratings assigned to the Exchange Issuer, (iv) are
subject to a registration rights agreement to be entered into by and among the
Exchange Issuer and the initial purchasers of such Eligible Debt Securities
(including, without limitation, the Purchaser and each other holder of
Securities), pursuant to which the Exchange Issuer will have agreed to (A) file
a registration statement (the "Exchange Offer Registration Statement") after the
issue date of such Eligible Debt Securities (such issue date, the "Eligible Debt
Securities Issuance Date") with respect to an offer to exchange such Eligible
Debt Securities for new issues of debt securities of the Exchange Issuer (the
"Exchange Notes") registered under the Securities Act, with terms substantially
identical to those of the Eligible Debt Securities, and (B) use its best efforts
to cause the Exchange Offer Registration Statement to be declared effective by
the SEC on or prior to a specified date after the Eligible Debt Securities
Issuance Date (subject to remedies and exceptions usual and customary for
registration rights granted in connection with an initial issuance of high-yield
debt securities), and (v) qualify as a Qualifying Collateral Debt Asset (as
defined in the CVC Capital Indenture).
(b) Subject to the terms and conditions of Section 6 (a),
each of the Issuer, the Exchange Issuer, and the Purchaser shall take or cause
to be taken all actions and do or cause to be done all things necessary to
consummate and make effective the transactions contemplated by Section 6(a).
7. Representations and Warranties of the Purchaser. The
Purchaser represents and warrants to the Issuer and the Subsidiary Guarantor
that such Purchaser is a qualified institutional buyer as defined in Rule 144A
under the Securities Act with such knowledge and experience in financial and
business matters as is necessary in order to evaluate the merits and risks of an
investment in the Securities. The Purchaser is not acquiring the Securities with
a view to any distribution thereof or with any present intention of offering or
selling any of the Securities in a transaction that would violate the Securities
Act or the securities laws of any state of the United States.
8. Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Issuer and the Subsidiary Guarantor agree to pay or cause to be paid on a
joint and several basis all reasonable expenses incident to the performance of
its obligations under this Agreement and the Indenture, including: (i) the fees,
disbursements and expenses of (A) counsel to the Purchaser and (B) counsel and
accountants to the Issuer and the Subsidiary Guarantor in each case in
connection therewith, (ii) all costs and expenses related to the transfer and
delivery of the Securities to the Purchaser, including any transfer or other
taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or
legal investment memorandum in connection with the offer and sale of the
Securities under state securities laws and all expenses in connection with the
qualification of the Securities for offer and sale under state securities laws
as provided in Section 5(a) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Purchaser in connection with such
qualification and in connection with the Blue Sky or legal investment
memorandum, (iv) any fees charged by rating agencies for the rating of the
Securities, (v) the costs and charges of the Purchaser and any
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transfer agent, registrar or depositary, and (vi) all other costs and expenses
incident to the performance of the obligations of the Issuer and the Subsidiary
Guarantor hereunder and under the Indenture for which provision is not otherwise
made in this Section 8.
9. Indemnity and Contribution.
(a) The Issuer and the Subsidiary Guarantor agree to
indemnify and hold harmless the Purchaser and each person, if any, who controls
any Purchaser within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by, arising out of, or based upon, in whole or in
part, (i) any inaccuracy in the representations and warranties of the Issuer or
the Subsidiary Guarantor contained herein or (ii) any failure of the Issuer or
the Subsidiary Guarantor to perform its obligations hereunder or under law.
(b) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 9(a) hereof, such person (the
"Indemnified Party") shall promptly notify the person against whom such
indemnity may be sought (the "Indemnifying Party") in writing and the
Indemnifying Party, upon request of the Indemnified Party, shall retain counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the Indemnifying Party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any Indemnified Party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party and the Indemnified Party
shall have been advised by such counsel that representation of both parties by
the same counsel would be inappropriate due to one or more legal defenses
available to the Indemnified Party which are different from or additional to
those available to the Indemnifying Party. It is understood that the
Indemnifying Party shall not, in respect of the legal expenses of any
Indemnified Party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such Indemnified
Parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Purchaser. The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an Indemnified Party shall have requested an Indemnifying Party to
reimburse the Indemnified Party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the Indemnifying Party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such Indemnifying Party of the aforesaid request and (ii)
such Indemnifying Party shall not have reimbursed the Indemnified Party in
accordance with such request prior to the date of such settlement. 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
includes an unconditional release of such Indemnified Party from all liability
on claims that are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in
Section 9(a) is unavailable to an Indemnified Party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein,
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then each Indemnifying Party under such paragraph, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Party or parties on the one hand and the
Indemnified Party or parties on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause 9(c)(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 9(c)(i) above but also the
relative fault of the Indemnifying Party or parties on the one hand and of the
Indemnified Party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Issuer and the Subsidiary Guarantor on the one hand and the
Purchaser on the other hand in connection with the offering of the Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of the Securities (before deducting expenses) received by the
Issuer and the Subsidiary Guarantor and the financing fee received by the
Purchaser in respect thereof, bear to the aggregate offering price of the
Securities. The relative fault of the Issuer and the Subsidiary Guarantor on the
one hand and of the Purchaser on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer and the Subsidiary Guarantor or by
the Purchaser and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(d) The Issuer, the Subsidiary Guarantor and the
Purchaser agree that it would not be just or equitable if contribution pursuant
to this Section 9 were determined by pro rata allocation or by any other method
of allocation that does not take account of the equitable considerations
referred to in this Section 9. The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages and liabilities referred to in
this Section 9 shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 9 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any Indemnified Party at law or in
equity.
(e) The indemnity and contribution provisions contained
in this Section 9 and the representations, warranties and other statements of
the Issuer and the Subsidiary Guarantor contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of the Purchaser or any
person controlling any Purchaser or by or on behalf of the Issuer, the
Subsidiary Guarantor, their respective officers or directors or any person
controlling the Issuer and the Subsidiary Guarantor and (iii) acceptance of and
payment for any of the Securities.
10. Termination. This Agreement shall be subject to
termination by notice given by the Purchaser to the Issuer and the Subsidiary
Guarantor, if (i) after the execution and delivery of this Agreement and prior
to the Closing Date (A) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (B) a general moratorium on commercial
banking activities in New York shall have been declared by either United States
Federal or New York State authorities or (C) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the Purchaser's judgment, is material and adverse
and (ii) in the case of any of the events specified in clauses 10(i)(A) through
10(i)(C), such event,
10
individually or together with any other such event, makes it, in the Purchaser's
judgment, impracticable or inadvisable to proceed with the purchase of the
Securities.
11. Effectiveness; Defaulting Purchaser. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If this Agreement shall be terminated by the Purchaser because
of any failure or refusal on the part of the Issuer or the Subsidiary Guarantor
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Issuer or the Subsidiary Guarantor shall be unable to
perform its obligations under this Agreement or the Indenture, the Issuer and
the Subsidiary Guarantor will, jointly and severally, reimburse the Purchaser
for all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by the Purchaser in connection with this Agreement
or the Indenture or the offering contemplated hereunder and thereunder.
12. Notices. All notices and other communications under
this Agreement shall be in writing and mailed, delivered or sent by facsimile
transmission to: if sent to the Purchaser, Citibank, N.A., New York, New York
10043, Attention: Xxxxx X. Xxxxx, facsimile number (000) 000-0000 and if sent to
the Issuer, to ERICO International Corporation, 00000 Xxxxxxxxxx Xxxx, Xxxxx
000, Xxxxx, Xxxx 00000, attention: President, facsimile number (000) 000-0000.
13. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
15. Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.
16. Successors and Assigns; Amendment. This Agreement
shall inure to the benefit of and be binding upon the Issuer, the Subsidiary
Guarantor, the Purchaser, their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person shall have any right or
obligation hereunder; provided, that neither the Issuer nor the Subsidiary
Guarantor may assign any or all of its rights or delegate its obligations
hereunder without the express prior written consent of the Purchaser. This
Agreement may not be amended or modified unless in writing by all of the parties
hereto.
* * *
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
ERICO INTERNATIONAL CORPORATION
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: General Counsel and Treasurer
ERICO PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: General Counsel and Treasurer
Accepted as of the date hereof:
CITIBANK, N.A.
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
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