TW HOLDINGS CORPORATION
11 3/8% Senior Discount Notes
PURCHASE AGREEMENT
February 13, 1998
BT ALEX. XXXXX INCORPORATED
Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TW Holdings Corporation, a Delaware corporation (the
"Company"), hereby confirms its agreement with you (the "Initial Purchaser"), as
set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchaser
$43,500,000 aggregate principal amount at maturity of its Senior Discount Notes,
Series A (the "Notes"). The Notes are to be issued under an indenture (the
"Indenture") to be dated as of February 20, 1998 by and between the Company and
United States Trust Company of New York, as Trustee (the "Trustee").
The Notes will be offered and sold to the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "Act"), in
reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum dated January 28, 1998 (the "Preliminary
Memorandum") and a final offering memorandum dated February 13, 1998 (the "Final
Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "Memorandum") setting forth or including a description of
the terms of the Notes, the terms of the offering of the Notes, a description of
the Company and any material developments relating to the Company occurring
after the date of the most recent historical financial statements included
therein.
The Initial Purchaser and its direct and indirect transferees of the
Notes will be entitled to the benefits of the Registration Rights Agreement,
substantially in the form attached hereto as Exhibit A (the "Registration Rights
Agreement"), pursuant to which the Company has agreed, among other things, to
file a registration statement (the "Registration Statement") with the Securities
and Exchange Commission (the "Commission") registering the Notes or the Exchange
Notes (as defined in the Registration Rights Agreement) under the Act.
The Notes are being issued in connection with the consummation of the
transactions contemplated in the Stock Purchase Agreement, dated as of December
18, 1997 (the "Stock Purchase Agreement") between Tidewater, Inc. ("Tidewater")
and TW Acquisition Corp. ("TW"), a wholly owned subsidiary of the Company,
pursuant to which TW will acquire 100% of the voting securities of Tidewater
Compression Service, Inc. from Tidewater (the "Acquisition") for a purchase
price of $360 million (the "Purchase Price"). TW will fund the Purchase Price
with (i) the gross proceeds of the issuance of the TW Senior Discount Notes due
2008 (the "TW Notes"); (ii) an aggregate equity contribution of $105 million
(the "Equity Contribution") from the Company, derived from an $81 million cash
contribution from Xxxxxx Xxxxxx Partners III, L.P. ("CHP") (which organized both
the Company and TW and is the controlling stockholder of the Company) and other
parties to the Company (the "Cash Contribution") and $24 million net proceeds
from the issuance of the Notes offered hereby; and (iii) a Term Loan Credit
Facility of $75 million and a Revolving Credit Facility of $85 million ($38
million of which will be drawn at the closing of the Acquisition), each with
Bankers Trust Company, as agent, and other lending institutions (the "Credit
Agreement"). Immediately following the issuance of the TW Notes and the
completion of the Acquisition, TW will be merged (the "Merger") pursuant to a
Merger Agreement (the "Merger Agreement") with and into Tidewater Compression
Service, Inc., which will change its name to Universal Compression, Inc. The
Stock Purchase Agreement, the Credit Agreement and the Merger Agreement are
collectively referred to herein as the "Transaction Documents". All references
in this Agreement to the "Company" mean Universal Compression Holdings, Inc.
2. Representations and Warranties. The Company represents and warrants
to and agrees with the Initial Purchaser that:
(a) Neither the Preliminary Memorandum as of the date thereof nor the
Final Memorandum nor any amendment or sup-
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plement thereto as of the date thereof and at all times subsequent thereto up to
the Closing Date (as defined in Section 3 below) contained or contains any
untrue statement of a material fact or omitted or omits 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 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with information relating to
the Initial Purchaser furnished to the Company in writing by the Initial
Purchaser expressly for use in the Preliminary Memorandum, the Final Memorandum
or any amendment or supplement thereto.
(b) As of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Final Memorandum; all of
the outstanding shares of capital stock of the Company and each of the Company's
subsidiaries (each a "Subsidiary", collectively, 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 as set forth in the Final Memorandum, all of the
outstanding shares of capital stock of the Company and each of the Subsidiaries
will be free and clear of all liens, encumbrances (other than as may be imposed
by the Credit Agreement), equities and claims or restrictions on transferability
(other than those imposed by the Act and the securities or "Blue Sky" laws of
certain jurisdictions) or voting; except as set forth in the Final Memorandum,
there are no (i) options, warrants or other rights to purchase, (ii) agreements
or other obligations to issue or (iii) other rights to convert any obligation
into, or exchange any securities for, shares of capital stock of or ownership
interests in the Company or any of the Subsidiaries outstanding. Except for the
Subsidiaries or as disclosed in the Final Memorandum, the Company does not own,
directly or indirectly, any shares of capital stock or any other equity or
long-term debt securities or have any equity interest in any firm, partnership,
joint venture or other entity.
(c) Each of the Company and the Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and has all requisite corporate power and
authority to own its properties and conduct its business as now conducted and as
described in the Final Memorandum; each of the Company and the Subsidiaries is
duly qualified to do business as a foreign corporation in good standing in all
other jurisdictions where the ownership or leasing of its properties or the
conduct of its business re-
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quires such qualification, except where the failure to be so qualified would
not, individually or in the aggregate, have a material adverse effect on the
management, business, condition (financial or otherwise), prospects or results
of operations of the Company and the Subsidiaries, taken as a whole (any such
event, a "Material Adverse Effect").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the Registration
Rights Agreement). The Notes, when issued, will be in the form contemplated by
the Indenture. The Notes, the Exchange Notes and the Private Exchange Notes have
each been duly and validly authorized by the Company and, when executed by the
Company and authenticated by the Trustee in accordance with the provisions of
the Indenture and, in the case of the Notes, when delivered to and paid for by
the Initial Purchaser in accordance with the terms of this Agreement, will
constitute valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in accordance
with their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought.
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The Indenture
meets 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 Company and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Trustee), will constitute a valid
and legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought.
(f) The Company 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
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Company and, when executed and delivered by the Company, will
constitute a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except that (A) the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
and the discretion of the court before which any proceeding therefor may be
brought and (B) any rights to indemnity or contribution thereunder may be
limited by federal and state securities laws and public policy considerations.
(g) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, each of the
Transaction Documents and to consummate the transactions contemplated hereby and
thereby. This Agreement, each of the Transaction Documents and the consummation
by the Company of the transactions contemplated hereby and thereby have been
duly and validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.
(h) 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 Company of the Notes to the Initial Purchaser or the consummation by
the Company of each of the Transaction Documents and the other transactions
contemplated hereby and thereby, except such as have been obtained and such as
may be required under state securities or "Blue Sky" laws in connection with the
purchase and resale of the Notes by the Initial Purchaser. None of the Company
or the Subsidiaries is (i) in violation of its certificate of incorporation or
bylaws (or similar organizational document), (ii) in breach or violation of any
statute, judgment, decree, order, rule or regulation applicable to it or any of
its properties or assets, except for any such breach or violation which would
not, individually or in the aggregate, have a Material Adverse Effect, or (iii)
in breach of or default under (nor has any event occurred which, 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 are subject
(collectively, "Contracts"), except for any such breach, default, violation or
event which would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
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(i) The execution, delivery and performance by the Company of this
Agreement, the Indenture, the Registration Rights Agreement and each of the
Transaction Documents and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and
sale of the Notes to the Initial Purchaser) will not conflict with or constitute
or result in a breach of or a default under (or an event which with notice or
passage of time or both would constitute a default under) or violation of any of
(i) the terms or provisions of any Contract, except for any such conflict,
breach, violation, default or event which would not, individually or in the
aggregate, have a Material Adverse Effect, (ii) the certificate of incorporation
or bylaws (or similar organizational document) of the Company or any of the
Subsidiaries, or (iii) (assuming compliance with all applicable state securities
or "Blue Sky" laws and assuming the accuracy of the representations and
warranties of the Initial Purchaser in Section 8 hereof) any statute, judgment,
decree, order, rule or regulation applicable to the Company or any of the
Subsidiaries or any of their properties or assets, except for any such conflict,
breach or violation which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(j) The audited consolidated financial statements of the Company
included in the Final Memorandum present fairly in all material respects the
financial position, results of operations and cash flows of the Company at the
respective dates and for the respective periods to which they relate and have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated therein. The summary
and selected financial and statistical data in the Final Memorandum present
fairly in all material respects the information shown therein and have been
prepared and compiled on a basis consistent with the audited financial
statements included therein, except as otherwise stated therein. KPMG Peat
Marwick LLP and Deloitte & Touche (the "Independent Accountants") are
independent public accounting firms within the meaning of the Act and the rules
and regulations promulgated thereunder.
(k) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final Memorandum
(i) comply as to form in all material respects with the applicable requirements
of Regulation S-X promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (ii) have been prepared in all material respects
in accordance with the Commission's
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rules and guidelines with respect to pro forma financial statements, and (iii)
have been properly computed on the bases described therein; the assumptions used
in the preparation of the pro forma financial data and other pro forma financial
information included in the Final Memorandum are reasonable and the adjustments
used therein are appropriate in all material respects to give effect to the
transactions or circumstances referred to therein.
(l) There is not pending or, to the knowledge of the Company,
threatened any action, suit, proceeding, inquiry or investigation to which the
Company or any of the Subsidiaries is a party, or to which the property or
assets of the Company or any of the Subsidiaries are subject, before or brought
by any court, arbitrator or governmental agency or body which, if determined
adversely to the Company or any of the Subsidiaries, would reasonably be
expected to have individually or in the aggregate, have a Material Adverse
Effect or which seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Notes to be sold hereunder or
the consummation of the other transactions described in the Final Memorandum.
(m) Each of the Company and the Subsidiaries possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, presently required or necessary to own or lease, as
the case may be, and to operate its properties and to carry on its businesses as
now or proposed to be conducted as set forth in the Final Memorandum
("Permits"), except where the failure to obtain such Permits would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; each of the Company and the Subsidiaries has fulfilled and
performed all of its obligations with respect to such Permits and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the holder of any such Permit; none of the Company or the Subsidiaries has
received any notice of any proceeding relating to revocation or modification of
any such Permit, except as described in the Final Memorandum and except where
such revocation or modification would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
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(n) Since the date of the most recent financial statements appearing in
the Final Memorandum, except as described therein, (i) none of the Company 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 management, business, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries, taken
as a whole, (ii) none of the Company or the Subsidiaries has purchased any of
its outstanding capital stock or declared, paid or otherwise made any dividend
or distribution of any kind on its capital stock and (iii) there shall not have
been any change in the capital stock or long-term indebtedness of the Company or
the Subsidiaries.
(o) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where the
failure to so file such returns would not, individually or in the aggregate,
have a Material Adverse Effect, and has, except for delinquent sales and use
taxes (and a late payment penalty related thereto) owed to the State of
Louisiana, paid all taxes shown due with respect to periods covered by such
returns; and other than tax deficiencies which the Company or any Subsidiary is
contesting in good faith and for which the Company or any Subsidiary has
provided adequate reserves, there is no tax deficiency that has been asserted
against the Company or the Subsidiaries that would have, individually or in the
aggregate, a Material Adverse Effect.
(p) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company and the
Subsidiaries believe to be reliable and accurate.
(q) None of the Company, the Subsidiaries or any agent acting on its
behalf has taken or will take any action that might cause this Agreement or the
sale of the Notes to violate Regulation G, 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.
(r) Each of the Company and the Subsidiaries has good and marketable
title to all real property or good title to all personal property described in
the Final Memorandum as being owned by it and good and marketable title to a
leasehold
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estate in the real and personal property described in the Final Memorandum as
being leased by it free and clear of all liens, charges, encumbrances or
restrictions, except as described in the Final Memorandum or to the extent the
failure to have such title or the existence of such liens, charges, encumbrances
or restrictions would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. All leases, contracts and agreements
to which the Company or any of the Subsidiaries is a party or by which it is
bound are valid and enforceable against the Company or such Subsidiary, and are
valid and enforceable against the other party or parties thereto and are in full
force and effect with only such exceptions as would not, individually or in the
aggregate, have a Material Adverse Effect. The Company and the Subsidiaries own
or possess adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights and know-how necessary to conduct the
businesses now or proposed to be operated by them as described in the Final
Memorandum, and none of the Company or the Subsidiaries has received any notice
of infringement of or conflict with (or knows of any such infringement of or
conflict with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how which, if such
assertion of infringement or conflict were sustained, would reasonably be
expected to have a Material Adverse Effect.
(s) There are no legal or governmental proceedings involving or
affecting the Company or any Subsidiary or any of its properties or assets which
would be required to be described in a prospectus pursuant to the Act that are
not described in the Final Memorandum, nor are there any material contracts or
other documents which would be required to be described in a prospectus pursuant
to the Act that are not described in the Final Memorandum.
(t) Except as would not, individually or in the aggregate and except as
disclosed in the Final Memorandum, reasonably be expected to have a Material
Adverse Effect (A) each of the Company and the Subsidiaries is in compliance
with and not subject to liability under applicable Environmental Laws (as
defined below), (B) each of the Company 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
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pending or, to the knowledge of the Company or any of the Subsidiaries,
threatened against the Company 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 Company or any of the
Subsidiaries, (E) none of the Company 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, (F) no property or facility of
the Company 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 (i) 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), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (iii) underground
and above ground storage tanks and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(u) There is no organized strike, labor dispute, slowdown or work
stoppage with the employees of the Company or any of the Subsidiaries which is
pending or, to the knowledge of the Company or any of the Subsidiaries,
threatened.
(v) As of the Closing Date, each of the Company and the Subsidiaries
carries insurance in such amounts and covering such risks as is adequate for the
conduct of its business and the value of its properties.
(w) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records which, in reasonable detail, accurately and fairly
reflect the transactions and disposition of assets of the Company and (ii)
maintains internal
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accounting controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's general or specific authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's general or specific
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
(x) None of the Company or the Subsidiaries will be an "investment
company" or "promoter" or "principal underwriter" for an "investment company,"
as such terms are defined in the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
(y) The Notes, the Indenture, the Registration Rights Agreement and
each of the Transaction Documents will conform in all material respects to the
descriptions thereof in the Final Memorandum.
(z) No holder of securities of the Company or any Subsidiary will be
entitled to have such securities registered under the registration statements
required to be filed by the Company pursuant to the Registration Rights
Agreement other than as expressly permitted thereby.
(aa) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable value
of the assets of the Company and the Subsidiaries will exceed the sum of their
stated liabilities and identified contingent liabilities; none of the Company or
the Subsidiaries is, nor will any of the Company or the Subsidiaries be, after
giving effect to the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, (a) left with
unreasonably small capital with which to carry on its business as it is proposed
to be conducted, (b) unable to pay its debts (contingent or otherwise) as they
mature or (c) otherwise insolvent.
(bb) None of the Company, 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, (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of any "security" (as defined in the Act)
which is or could be integrated with the sale of the Notes in a manner that
would require the registration under the Act of the Notes or (ii) engaged in any
form of general solicita-
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tion or general advertising (as those terms are used in Regulation D under the
Act) in connection with the offering of the Notes or in any manner involving a
public offering within the meaning of Section 4(2) of the Act. Assuming the
accuracy of the representations and warranties of the Initial Purchaser in
Section 8 hereof, it is not necessary in connection with the offer, sale and
delivery of the Notes to the Initial Purchaser in the manner contemplated by
this Agreement to register any of the Notes under the Act or to qualify the
Indenture under the TIA.
(cc) No securities of the Company or any Subsidiary are of the same
class (within the meaning of Rule 144A under the Act) as the Notes and listed on
a national securities exchange registered under Section 6 of the Exchange Act,
or quoted in a U.S. automated inter-dealer quotation system.
(dd) None of the Company 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 Notes.
(ee) None of the Company, the Subsidiaries or any of their respective
Affiliates or any person acting on its or their behalf (other than the Initial
Purchaser) has engaged in any directed selling efforts (as that term is defined
in Regulation S under the Act ("Regulation S")) with respect to the Notes; the
Company, the Subsidiaries and their respective Affiliates and any person acting
on its or their behalf (other than the Initial Purchaser) have complied with the
offering restrictions requirement of Regulation S.
(ff) The Company has delivered to counsel to the Initial Purchaser a
true and correct copy of each of the Transaction Documents that has been
executed and delivered prior to the date of this Agreement and each other
Transaction Document in the form substantially as it will be executed and
delivered on or prior to the Closing Date, together with all related agreements
and all schedules and exhibits thereto, and there shall have been no amendments,
alterations, modifications or waivers of any of the provisions of any of the
Transaction Documents since their respective dates of execution or from the form
in which it has been delivered to the Initial Purchaser, other than any such
amendments, alterations, modifications and waivers as to which the Initial
Purchaser has been advised in writing and which would not be required to be
disclosed in the Preliminary Memorandum or the Final Memorandum, as the case may
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be; and to the knowledge of the Company or any of the Subsidiaries, there exists
no event or condition which would constitute a default or an event of default
under any of the Transaction Documents which would reasonably be expected to
result in a Material Adverse Effect or materially adversely affect the ability
to consummate the transactions contemplated by the Transaction Documents or the
Final Memorandum.
Any certificate signed by any officer of the Company or any Subsidiary
and delivered to the Initial Purchaser or to counsel for the Initial Purchaser
shall be deemed a joint and several representation and warranty by the Company
and each of the Subsidiaries to the Initial Purchaser as to the matters covered
thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser, agrees to
purchase the Notes from the Company, at 54.101% of their principal amount at
maturity of the Senior Discount Notes. One or more certificates in definitive
form for the Notes that the Initial Purchaser has agreed to purchase hereunder,
and in such denomination or denominations and registered in such name or names
as the Initial Purchaser requests upon notice to the Company at least 36 hours
prior to the Closing Date, shall be delivered by or on behalf of the Company to
the Initial Purchaser, against payment by or on behalf of the Initial Purchaser
of the purchase price therefor by wire transfer (same day funds), to such
account or accounts as the Company shall specify prior to the Closing Date, or
by such means as the parties hereto shall agree prior to the Closing Date. Such
delivery of and payment for the Notes shall be made at the offices of Xxxxxxx
Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 A.M., New York
time, on February 20, 1998, or at such other place, time or date as the Initial
Purchaser, on the one hand, and the Company, on the other hand, may agree upon,
such time and date of delivery against payment being herein referred to as the
"Closing Date." The Company will make such certificate or certificates for the
Notes available for checking and packaging by the Initial Purchaser at the
offices of BT Alex. Xxxxx Incorporated in New York, New York, or at such other
place as BT Alex. Xxxxx Incorporated may designate, at least 24 hours prior to
the Closing Date.
4. Offering by the Initial Purchaser. The Initial Purchaser proposes to
make an offering of the Notes at the
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price and upon the terms set forth in the Final Memorandum, as soon as
practicable after this Agreement is entered into and as in the judgment of the
Initial Purchaser is advisable.
5. Covenants of the Company. The Company covenants and agrees with the
Initial Purchaser that:
(a) The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchaser shall not
previously have been advised and furnished a copy for a reasonable period of
time prior to the proposed amendment or supplement and as to which the Initial
Purchaser shall reasonably object to in writing. The Company will promptly, upon
the reasonable request of the Initial Purchaser or counsel for the Initial
Purchaser, make any amendments or supplements to the Preliminary Memorandum or
the Final Memorandum that may be necessary or advisable in connection with the
resale of the Notes by the Initial Purchaser.
(b) The Company will cooperate with the Initial Purchaser in arranging
for the qualification of the Notes for offering and sale under the securities or
"Blue Sky" laws of which jurisdictions as the Initial Purchaser may designate
and will continue such qualifications in effect for as long as may be necessary
to complete the resale of the Notes; provided, however, that in connection
therewith, the Company shall not be required to qualify as a foreign corporation
or to execute a general consent to service of process in any jurisdiction or
subject itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(c) If, at any time prior to the completion of the distribution by the
Initial Purchaser of the Notes or the Private Exchange Notes, any event occurs
or information becomes known as a result of which the Final Memorandum as then
amended or supplemented would include any untrue statement of a material fact,
or 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, or if
for any other reason it is necessary at any time to amend or supplement the
Final Memorandum to comply with applicable law, the Company will promptly notify
the Initial Purchaser thereof and will prepare, at the expense of the Company,
an amendment or supplement to the Final Memorandum that corrects such statement
or omission or effects such compliance.
(d) The Company will, without charge, provide to the Initial Purchaser
and to counsel for the Initial Purchaser as
-14-
many copies of the Preliminary Memorandum and the Final Memorandum or any
amendment or supplement thereto as the Initial Purchaser may reasonably request.
(e) The Company will apply the net proceeds from the sale of the Notes
as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For so long as any of the Notes remain outstanding, the Company
will furnish to the Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the Company to the Trustee
or to the holders of the Notes and, as soon as available, copies of any reports
or financial statements furnished to or filed by the Company with the Commission
or any national securities exchange on which any class of securities of the
Company may be listed.
(g) Prior to the Closing Date, the Company will furnish to the Initial
Purchaser, as soon as they have been prepared, a copy of any unaudited interim
financial statements of the Company for any period subsequent to the period
covered by the most recent financial statements appearing in the Final
Memorandum.
(h) None of the Company or any of its Affiliates will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale of
the Notes in a manner which would require the registration under the Act of the
Notes.
(i) The Company will not, and will not permit any of the Subsidiaries
to, engage in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in connection with the offering of
the Notes or in any manner involving a public offering within the meaning of
Section 4(2) of the Act.
(j) For so long as any of the Notes remain outstanding, the Company
will make available at its expense, upon request, to any holder of such Notes
and any prospective purchasers thereof the information specified in Rule
144A(d)(4) under the Act, unless the Company is then subject to Section 13 or
15(d) of the Exchange Act.
(k) The Company will use its best efforts to (i) permit the Notes to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the NASD re-
-15-
lating to trading in the Private Offerings, Resales and Trading through
Automated Linkages market (the "Portal Market") and (ii) permit the Notes to be
eligible for clearance and settlement through The Depository Trust Company.
(l) In connection with Notes offered and sold in an off shore
transaction (as defined in Regulation S) the Company will not register any
transfer of such Notes not made in accordance with the provisions of Regulation
S and will not, except in accordance with the provisions of Regulation S, if
applicable, issue any such Notes in the form of definitive securities.
6. Expenses. The Company agrees to pay all costs and expenses incident
to the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to (i)
the printing, word processing or other production of documents with respect to
the transactions contemplated hereby, including any costs of printing the
Preliminary Memorandum and the Final Memorandum and any amendment or supplement
thereto, and any "Blue Sky" memoranda, (ii) all arrangements relating to the
delivery to the Initial Purchaser of copies of the foregoing documents, (iii)
the fees and disbursements of the counsel, the accountants and any other experts
or advisors retained by the Company, (iv) preparation (including printing),
issuance and delivery to the Initial Purchaser of the Notes, (v) the
qualification of the Notes under state securities and "Blue Sky" laws, including
filing fees and fees and disbursements of counsel for the Initial Purchaser
relating thereto, (vi) expenses in connection with any meetings with prospective
investors in the Notes, (vii) fees and expenses of the Trustee including
reasonable fees and expenses of counsel, (viii) all expenses and listing fees
incurred in connection with the application for quotation of the Notes on the
Portal Market and (ix) any fees charged by investment rating agencies for the
rating of the Notes. If the sale of the Notes provided for herein is not
consummated because any condition to the obligations of the Initial Purchaser
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated or because of any failure, refusal or inability on the part of the
Company to perform all obligations and satisfy all conditions on their part to
be performed or satisfied hereunder (other than solely by reason of a default by
the Initial Purchaser of its obligations hereunder or by reason of Section
11(a)) the Company agrees to promptly reimburse the Initial Purchaser upon
demand for all out-of-pocket expenses (including reasonable fees, disbursements
and charges of Xxxxxx Xxxxxx & Xxxxxxx, counsel for
-16-
the Initial Purchaser) that shall have been incurred by the Initial Purchaser in
connection with the proposed purchase and sale of the Notes.
7. Conditions of the Initial Purchaser's Obligations. The obligation of
the Initial Purchaser to purchase and pay for the Notes shall, in its sole
discretion, be subject to the satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchaser shall have received the
opinion, dated as of the Closing Date and addressed to the Initial Purchaser, of
Xxxxxxx Xxxx & Xxxxx LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Initial Purchaser, to the effect that:
(i) Each of the Company and the Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and has all requisite corporate power and
authority to own its properties and to conduct its business as described in
the Final Memorandum. Each of the Company and the Subsidiaries is duly
qualified to do business as a foreign corporation in good standing in all
other domestic jurisdictions where it conducts operations as disclosed in the
Final Memorandum except where the failure to be so qualified would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(ii) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum; all of the outstanding
shares of capital stock of the Company and the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights.
(iii) Except as set forth in or contemplated by the Final Memorandum to
the knowledge of such counsel (A) no options, warrants or other rights to
purchase from the Company or any Subsidiary shares of capital stock or
ownership interests in the Company or any Subsidiary are outstanding, (B) no
agreements or other obligations to issue, or other rights to convert, any
obligation into, or exchange any securities for, shares of capital stock or
ownership interests in the Company or any Subsidiary are outstanding and (C)
no holder of securities of the Company or any Subsidiary is entitled to have
such securities regis-
-17-
tered under a registration statement filed by the Company pursuant to the
Registration Rights Agreement.
(iv) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Indenture, the
Notes, the Exchange Notes and the Private Exchange Notes; the Indenture meets
the requirements for qualification under the TIA in all material respects;
the Indenture has been duly and validly authorized by the Company and, when
duly executed and delivered by the Company (assuming the due authorization,
execution and delivery thereof by the Trustee), will constitute the valid and
legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that the enforcement thereof may be subject
to (i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity and the discretion of the court before
which any proceeding therefor may be brought.
(v) The Notes are in the form contemplated by the Indenture. The Notes
have each been duly and validly authorized by the Company and, when duly
executed and delivered by the Company and paid for by the Initial Purchaser
in accordance with the terms of this Agreement (assuming the due
authorization, execution and delivery of the Indenture by the Trustee and due
authentication and delivery of the Notes by the Trustee in accordance with
the Indenture), will constitute the valid and legally binding obligations of
the Company, entitled to the benefits of the Indenture, and enforceable
against the Company in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
and the discretion of the court before which any proceeding therefor may be
brought.
(vi) The Exchange Notes and the Private Exchange Notes have been duly
and validly authorized by the Company, and when the Exchange Notes and the
Private Exchange Notes have been duly executed and delivered by the Company
in accordance with the terms of the Registration Rights Agreement and the
Indenture (assuming the due authorization, execution and delivery of the
Indenture by the Trus-
-18-
tee and due authentication and delivery of the Exchange Notes and the Private
Exchange Notes by the Trustee in accordance with the Indenture), will
constitute the valid and legally binding obligations of the Company, entitled
to the benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought.
(vii) The Company 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 Company and, when duly executed and delivered by the
Company (assuming due authorization, execution and delivery thereof by the
Initial Purchaser), will constitute the valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except that (A) the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) general principles
of equity and the discretion of the court before which any proceeding
therefor may be brought, (B) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public
policy considerations and (C) such counsel may exclude the enforceability of
liquidated damages provisions from its opinion.
(viii) The Company 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 Company of the transactions contemplated hereby have been
duly and validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.
(ix) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under each of the Transaction
Documents; each of the Transaction Documents has been duly and validly
authorized by the Company and, when duly executed and delivered by
-19-
the Company (assuming due authorization, execution and delivery thereof by
the Initial Purchaser), will constitute the valid and legally binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except that (A) the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which any
proceeding therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations.
(x) The Indenture, the Notes, the Registration Rights Agreement and
each of the Transaction Documents conform in all material respects to the
descriptions thereof contained in the Final Memorandum.
(xi) To the knowledge of such counsel, no legal or governmental
proceedings are pending or, to the knowledge of such counsel, threatened to
which the Company or the Subsidiaries is a party or to which the property or
assets of the Company or the Subsidiaries are subject which, if determined
adversely to the Company or the Subsidiaries, would reasonably be expected to
result, individually or in the aggregate, in a Material Adverse Effect, or
which seek to restrain, enjoin, prevent the consummation of or otherwise
challenge the issuance or sale of the Notes to be sold hereunder or the
consummation of the other transactions described in the Final Memorandum
under the caption "Description of Company Acquisition".
(xii) The execution, delivery and performance of this Agreement, the
Indenture, the Registration Rights Agreement, each of the Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and sale of the Notes to
the Initial Purchaser) will not conflict with or constitute or result in a
breach or a default under (or an event which with notice or passage of time
or both would constitute a default under) or violation of any of (i) the
terms or provisions of any Contract listed on a schedule reasonably
acceptable to the Initial Purchasers, except for any such conflict, breach,
violation, default or event which would not, individually or in the
aggregate, have a Material Adverse Effect, (ii) the certificate of
incorporation or bylaws of the Company or any of the
-20-
Subsidiaries or (iii) (assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the
representations and warranties of the Initial Purchaser in Section 8 hereof)
any statute, judgment, decree, order, rule or regulation known to such
counsel to be applicable to the Company or any of the Subsidiaries or any of
their respective properties or assets, except for any such conflict, breach
or violation which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(xiii) No consent, approval, authorization or order of any governmental
authority is required for the issuance and sale by the Company of the Notes
to the Initial Purchaser, the consummation by the Company of each of the
Transaction Documents or of the other transactions contemplated hereby and
thereby, except such as may be required under the Federal Securities laws or
Blue Sky laws, as to which such counsel need express no opinion, and those
which have previously been obtained.
(xiv) None of the Company or the Subsidiaries is, or immediately after
the sale of the Notes to be sold hereunder and the application of the
proceeds from such sale (as described in the Final Memorandum under the
caption "Use of Proceeds") will be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(xv) No registration under the Act of the Notes is required in
connection with the sale of the Notes to the Initial Purchaser as
contemplated by this Agreement and the Final Memorandum or in connection with
the initial resale of the Notes by the Initial Purchaser in accordance with
Section 8 of this Agreement, and prior to the commencement of the Exchange
Offer (as defined in the Registration Rights Agreement) or the effectiveness
of the Shelf Registration Statement (as defined in the Registration Rights
Agreement), the Indenture is not required to be qualified under the TIA, in
each case assuming (i) (A) that the purchasers who buy such Notes in the
initial resale thereof are qualified institutional buyers as defined in Rule
144A promulgated under the Act ("QIBs") or accredited investors as defined in
Rule 501(a)(1), (2), (3) or (7) promulgated under the Act ("Accredited
Investors") or (B) that the offer or sale of the Notes is made in an offshore
transaction as defined in and in compliance with Regulation S, (ii) the
accuracy of the Initial Pur-
-21-
chaser's representations in Section 8 and those of the Company contained in
this Agreement regarding the absence of a general solicitation in connection
with the offer and sale of such Notes to the Initial Purchaser and the
initial resale thereof and (iii) the due performance by the Initial Purchaser
of the agreements set forth in Section 8 hereof.
(xvi) Neither the consummation of the transactions contemplated by this
Agreement nor the sale, issuance, execution or delivery of the Notes will
violate Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
At the time the foregoing opinion is delivered, Xxxxxxx Xxxx & Xxxxx
LLP shall additionally state that it has participated in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company, representatives of the Initial
Purchaser and counsel for the Initial Purchaser, at which conferences the
contents of the Final Memorandum and related matters were discussed, and,
although it has not independently verified and is not passing upon and assumes
no responsibility for the accuracy, completeness or fairness of the statements
contained in the Final Memorandum (except to the extent specified in subsection
7(a)(x)), no facts have come to its attention which lead it to believe that the
Final Memorandum, on the date thereof or at the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading (it being
understood that such firm need express no opinion with respect to the financial
statements and related notes thereto and the other financial, statistical and
accounting data included in the Final Memorandum). The opinion and statement of
Xxxxxxx Xxxx & Xxxxx LLP described in this Section shall be rendered to the
Initial Purchaser at the request of the Company and shall so state therein. In
rendering such opinion, Xxxxxxx Xxxx & Xxxxx LLP shall have received and may
rely upon such certificates and other documents and information as it may
reasonably request to pass upon such matters.
References to the Final Memorandum in this subsection (a) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
-22-
(b) On the Closing Date, the Initial Purchaser shall have received the
opinion, in form and substance satisfactory to the Initial Purchaser, dated as
of the Closing Date and addressed to the Initial Purchaser, of Xxxxxx Xxxxxx &
Xxxxxxx, counsel for the Initial Purchaser, with respect to certain legal
matters relating to this Agreement and such other related matters as the Initial
Purchaser may reasonably require. In rendering such opinion, Xxxxxx Xxxxxx &
Xxxxxxx shall have received and may rely upon such certificates and other
documents and information as it may reasonably request to pass upon such
matters.
(c) The Initial Purchaser shall have received from each of the
Independent Accountants a comfort letter or letters dated the date hereof and
the Closing Date, in form and substance satisfactory to counsel for the Initial
Purchaser.
(d) The representations and warranties of the Company contained in
this Agreement shall be true and correct on and as of the date hereof and on and
as of the Closing Date as if made on and as of the Closing Date; the statements
of the Company's officers made pursuant to any certificate delivered in
accordance with the provisions hereof shall be true and correct in all material
respects on and as of the date made and on and as of the Closing Date; the
Company shall have performed in all material respects all covenants and
agreements and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Date; and, except as described in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), subsequent to the date of the most recent financial statements in
such Final Memorandum, there shall have been no event or development, and no
information shall have become known, that, individually or in the aggregate, has
or would be reasonably likely to have a Material Adverse Effect.
(e) The sale of the Notes hereunder shall not be enjoined (temporarily
or permanently) on the Closing Date.
(f) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), none of the Company or any of the Subsidiaries shall have
sustained any loss or interference with respect to its business or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slowdown or work stoppage or
from any legal or governmental proceeding, order or decree, which loss or
interference,
-23-
individually or in the aggregate, has or would be reasonably likely to have a
Material Adverse Effect.
(g) The Initial Purchaser shall have received a certificate of the
Company, dated the Closing Date, signed on behalf of the Company by its Chairman
of the Board, President or any Senior Vice President and the Chief Financial
Officer, to the effect that:
(i) After giving effect to the Offering of the Notes and the
consummation of each of the Transaction Documents, the representations and
warranties of the Company contained in this Agreement are true and correct in
all material respects on and as of the date hereof and on and as of the
Closing Date, and the Company has performed in all material respects all
covenants and agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the date of
the most recent financial statements in the Final Memorandum (exclusive of
any amendment or supplement thereto after the date hereof), no event or
development has occurred, and no information has become known, that,
individually or in the aggregate, has or would be reasonably likely to have a
Material Adverse Effect; and
(iii) The sale of the Notes hereunder has not been enjoined
(temporarily or permanently).
(h) On the Closing Date, the Initial Purchaser shall have received the
Registration Rights Agreement executed by the Company.
(i) On the Closing Date, all material conditions (other than the
payment of the purchase price) to the consummation of the Stock Purchase
Agreement shall have been satisfied and such Stock Purchase Agreement shall be
in full force and effect. Since the date of this Agreement, except as previously
disclosed to the Initial Purchaser and reasonably acceptable to it, there have
been no amendments, modifications, restatements or waivers to the Stock Purchase
Agreement that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, or materially adversely affect the holders of
the Notes, or which would be required to be disclosed in the Final Memorandum
and are not so disclosed.
-24-
(j) On the Closing Date, all material conditions to the consummation
of the Merger Agreement shall have been satisfied; the Certificate of Merger
merging the Company with and into Tidewater Compression Service, Inc. shall have
been pre-cleared under the laws of the State of Delaware and the State of Texas,
and the Certificate of Name Change changing Tidewater Compression Services,
Inc.'s name to Universal Compression, Inc. shall have been pre-cleared under the
laws of the State of Texas. The Merger Agreement conforms in all material
respects to the description of the Merger set forth in the Final Memorandum.
(k) On the Closing Date, all material conditions to the consummation
of the Credit Agreement and the making of the initial Loans (as defined in the
Credit Agreement) shall have been satisfied. The Credit Agreement conforms in
all material respects to the description thereof in the Final Memorandum.
(l) On the Closing Date, all material conditions to the consummation
of the Equity Contribution shall have been satisfied and the Cash Contribution
shall have been consummated prior to the consummation of the offering of Notes.
The Equity Contribution conforms in all material respects to the description
thereof in the Final Memorandum.
(m) The Initial Purchaser shall have received a true, correct and
executed copy of the (i) Credit Agreement; (ii) Stock Purchase Agreement; (iii)
Merger Agreement; and (iv) Assumption Agreement, a form of which is attached
hereto as Exhibit A.
On or before the Closing Date, the Initial Purchaser and counsel for
the Initial Purchaser shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiaries as
they shall have heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchaser and counsel for the Initial Purchaser. The Company shall
furnish to the Initial Purchaser such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchaser shall reasonably request.
-25-
8. Offering of Notes; Restrictions on Transfer.
(a) The Initial Purchaser represents and warrants that it is a QIB.
The Initial Purchaser agrees with the Company that (i) it has not and will not
solicit offers for, or offer or sell, the 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 offering within the meaning
of Section 4(2) of the Act; and (ii) it has and will solicit offers for the
Notes only from, and will offer the Notes only to (A) in the case of offers
inside the United States, persons whom the 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 the 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 transactions under Rule 144A and
(B) in the case of offers outside the United States, to persons other than U.S.
persons ("foreign purchasers," which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)); provided,
however, that, in the case of this clause (B), in purchasing such Notes such
persons are deemed to have represented and agreed as provided under the caption
"Transfer Restrictions" contained in the Final Memorandum (or, if the Final
Memorandum is not in existence, in the most recent Memorandum).
(b) The Initial Purchaser represents and warrants with respect to
offers and sales outside the United States that (i) it has and will comply with
all applicable laws and regulations in each jurisdiction in which it acquires,
offers, sells or delivers Notes or has in its possession or distributes any
Memorandum or any such other material, in all cases at its own expense; (ii) the
Notes have not been and will not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Act or pursuant to an exemption from the registration
requirements of the Act; (iii) it has offered the Notes and will offer and sell
the Notes (A) as part of its distribution at any time and (B) otherwise until 40
days after the later of the commencement of the offering and the Closing Date,
only in accordance with Rule 903 of Regulation S and, accordingly, neither it
nor any persons acting on its behalf have engaged or will engage in any directed
selling efforts (within the meaning of Regulation S) with respect to the Notes,
and any such per-
-26-
sons have complied and will comply with the offering restrictions requirement of
Regulation S; and (iv) it agrees that, at or prior to confirmation of sales of
the Notes, it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Notes from 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 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit of,
U.S. persons (i) as part of the distribution of the Securities at any time or
(ii) otherwise until 40 days after the later of the commencement of the
offering and the closing date of the offering, except in either case in
accordance with Regulation S (or Rule 144A if available) under the Securities
Act. Terms used above have the meaning given to them in Regulation S."
Terms used in this Section 8 and not defined in this Agreement have
the meanings given to them in Regulation S.
9. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser, and each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities to which the Initial Purchaser or such controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as any such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto or
any application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the Notes
under the securities or "Blue Sky" laws thereof or filed with any securities
association or securities exchange (each an "Application"); or
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto or
-27-
any Application, a material fact required to be stated therein or necessary
to make the statements therein not misleading,
and will reimburse, as incurred, the Initial Purchaser and each such controlling
person for any legal or other expenses reasonably incurred by the Initial
Purchaser or such controlling person in connection with investigating, defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action; provided, however, the Company will not be
liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any Memorandum or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information concerning the Initial Purchaser furnished
to the Company by the Initial Purchaser specifically for use therein. This
indemnity agreement will be in addition to any liability that the Company may
otherwise have to the indemnified parties. The Company shall not be liable under
this Section 9 for any settlement of any claim or action effected without its
prior written consent, which shall not be unreasonably withheld.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company, its directors, its officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Memorandum or any amendment or supplement thereto or any
Application, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in any Memorandum or any amendment or
supplement thereto or any Application, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
concerning such Initial Purchaser, furnished to the Company by the Initial
Purchaser specifically for use therein; and subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any legal or
other expenses reasonably incurred by the Company or any such director, officer
or controlling person in
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connection with investigating or defending against or appearing as a third party
witness in connection with any such loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
that the Initial Purchaser may otherwise have to the indemnified parties. The
Initial Purchaser shall not be liable under this Section 9 for any settlement of
any claim or action effected without its consent, which shall not be
unreasonably withheld. The Company shall not, without the prior written consent
of the Initial Purchaser, effect any settlement or compromise of any pending or
threatened proceeding in respect of which the Initial Purchaser is or could have
been a party, or indemnity could have been sought hereunder by the Initial
Purchaser, unless such settlement (A) includes an unconditional written release
of the Initial Purchaser, in form and substance reasonably satisfactory to the
Initial Purchaser, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of the Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of the commencement of any action for which such indemnified party is
entitled to indemnification under this Section 9, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
this Section 9, notify the indemnifying party of the commencement thereof in
writing; but the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to the
extent such failure results in material prejudice to the indemnifying party and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in
paragraphs (a) and (b) above. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party; provided, however, that if (i) the use of counsel chosen
by the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it and/or other indemnified parties that are
different from
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or additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 9 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Initial Purchaser in the case of
paragraph (a) of this Section 9 or the Company in the case of paragraph (b) of
this Section 9, representing all of the indemnified parties under such paragraph
(a) or paragraph (b), as the case may be, who are parties to such action or
actions) or (ii) the indemnifying party has authorized in writing the employment
of counsel for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the prior
written consent of the indemnifying party (which consent shall not be
unreasonably withheld), unless such indemnified party waived in writing its
rights under this Section 9, in which case the indemnified party may effect such
a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to, or insufficient to
hold harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution,
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shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Notes or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by the Company on
the one hand and the Initial Purchaser on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (before deducting
expenses) received by the Company bear to the total discounts and commissions or
other compensation received by the Initial Purchaser with respect to the Notes
purchased hereunder. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand, or the Initial
Purchaser on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company and the Initial Purchaser agree
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of this paragraph (d). Notwithstanding any other
provision of this paragraph (d), the Initial Purchaser shall not be obligated to
make contributions hereunder that in the aggregate exceed the total discounts,
commissions and other compensation received by the Initial Purchaser under this
Agreement, less the aggregate amount of any damages that the Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact, and
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 paragraph (d),
each person, if any, who controls an Initial Purchaser within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to con-
-31-
tribution as the Initial Purchaser, and each director of the Company, each
officer of the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Company.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the Initial Purchaser set forth in this Agreement or made by or on
behalf of them pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, the Initial Purchaser or any controlling person
referred to in Section 9 hereof and (ii) delivery of and payment for the Notes.
The respective agreements, covenants, indemnities and other statements set forth
in Sections 6, 9 and 15 hereof shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchaser by notice to the Company given prior to the
Closing Date in the event that the Company shall have failed, refused or been
unable to perform in all material respects all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Closing Date:
(i) any of the Company or the Subsidiaries shall have sustained any
loss or interference with respect to its businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any strike, labor dispute, slowdown or work stoppage or
any legal or governmental proceeding, which loss or interference, in the sole
judgment of the Initial Purchaser, has had or has a Material Adverse Effect,
or there shall have been, in the sole judgment of the Initial Purchaser, any
event or development that, individually or in the aggregate, has or could be
reasonably likely to have a Material Adverse Effect (including without
limitation a change in control of the Company or the Subsidiaries), except in
each case as described in the Final Memorandum (exclusive of any amendment or
supplement thereto);
(ii) trading in securities generally on the New York Stock Exchange,
American Stock Exchange or the NASDAQ National Market shall have been
suspended or minimum or
-32-
maximum prices shall have been established on any such exchange or market;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of hostilities
between the United States and any foreign power, or (B) an outbreak or
escalation of any other insurrection or armed conflict involving the United
States or any other national or international calamity or emergency, or (C)
any material change in the financial markets of the United States which, in
the case of (A), (B) or (C) above and in the sole judgment of the Initial
Purchaser, makes it impracticable or inadvisable to proceed with the offering
or the delivery of the Notes as contemplated by the Final Memorandum.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchaser. The statements set
forth in the last paragraph on the front cover page, in the first paragraph on
page (ii), in the second and third sentences of the third paragraph and the
third and fourth sentences of the fifth paragraph and the last paragraph under
the heading "Private Placement" in the Final Memorandum (to the extent such
statements relate to the Initial Purchaser) constitute the only information
furnished by the Initial Purchaser to the Company for the purposes of Sections
2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing
and, if sent to the Initial Purchaser, shall be mailed or delivered to BT Alex.
Xxxxx Incorporated, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department; if sent to the Company, shall be mailed or
delivered to the Company at 0000 Xxxxxxxxxx, Xxxxxxx, Xxxxx 00000, Attention:
Xxxxx Xxxxxx, Chief Financial Officer; with a copy to (i) Xxxxxx Xxxxxx Partners
III, L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxx X.
Xxxxxx and Xxxxxxx X. Xxxxxxx and (ii) Xxxxxxx, Xxxx & Xxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx Xxxxx, 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
-33-
mail, postage prepaid, if mailed; and one business day after being timely
delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchaser, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the indemnities
of the Company contained in Section 9 of this Agreement shall also be for the
benefit of any person or persons who control the Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchaser contained in Section 9 of this Agreement
shall also be for the benefit of the directors of the Company, its officers and
any person or persons who control the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act. No purchaser of Notes from the
Initial Purchaser will be deemed a successor because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS
THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Initial Purchaser.
Very truly yours,
TW HOLDINGS CORPORATION
By: /e/ XXXXX XXXXXX
--------------------------
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
BT ALEX. XXXXX INCORPORATED
By: /s/ XXXXX XXXXXXX
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
