Exhibit 4.02
$150,000,000
WESTINGHOUSE AIR BRAKE TECHNOLOGIES
CORPORATION
6 7/8% Senior Notes due 2013
Purchase Agreement
------------------
July 23, 2003
X.X. Xxxxxx Securities Inc.
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Westinghouse Air Brake Technologies Corporation, a Delaware
corporation (the "Company"), proposes to issue and sell to the several Initial
Purchasers listed in Schedule 1 hereto (the "Initial Purchasers"), for whom you
are acting as representative (the "Representative"), $150,000,000 principal
amount of its 6 7/8% Senior Notes due 2013 (the "Notes"). The Notes will be
issued pursuant to an Indenture to be dated as of August 6, 2003 (the
"Indenture") among the Company, the guarantors listed in Schedule 2 hereto (the
"Guarantors") and The Bank of New York, as trustee (the "Trustee"), and will be
guaranteed on an unsecured senior basis by each of the Guarantors (the
"Guarantees" and, together with the Notes, the "Securities").
The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company has
prepared a preliminary offering memorandum dated July 11, 2003 (the "Preliminary
Offering Memorandum") and will prepare an offering memorandum dated the date
hereof (the "Offering Memorandum") setting forth information concerning the
Company and the Securities. Copies of the Preliminary Offering
Memorandum have been, and copies of the Offering Memorandum will be, delivered
by the Company to the Initial Purchasers pursuant to the terms of this
Agreement. Any references herein to the Preliminary Offering Memorandum and the
Offering Memorandum shall be deemed to include all amendments and supplements
thereto, unless otherwise noted. The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement. Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Offering Memorandum. References herein to the Preliminary Offering
Memorandum and the Offering Memorandum shall be deemed to refer to and include
any document incorporated by reference therein.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement, to be dated the Closing Date (as defined below)
and substantially in the form attached hereto as Exhibit A (the "Registration
Rights Agreement"), pursuant to which the Company and the Guarantors will agree
to file one or more registration statements with the Securities and Exchange
Commission (the "Commission") providing for the registration under the
Securities Act of the Securities or the Exchange Securities referred to (and as
defined) in the Registration Rights Agreement.
The Company hereby confirms its agreement with the several
Initial Purchasers concerning the purchase and resale of the Securities, as
follows:
1. Purchase and Resale of the Securities. (a) The Company
agrees to issue and sell the Securities to the several Initial Purchasers as
provided in this Agreement, and each Initial Purchaser, on the basis of the
representations, warranties and agreements set forth herein and subject to the
conditions set forth herein, agrees, severally and not jointly, to purchase from
the Company the respective principal amount of Securities set forth opposite
such Initial Purchaser's name in Schedule 1 hereto at a price equal to 97.75% of
the principal amount thereof plus accrued interest, if any, from August 6, 2003
to the Closing Date. The Company will not be obligated to deliver any of the
Securities except upon payment for all the Securities to be purchased as
provided herein.
(b) The Company understands that the Initial Purchasers intend
to offer the Securities for resale on the terms set forth in the Offering
Memorandum. Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) it is a qualified institutional buyer within the meaning of
Rule 144A under the Securities Act (a "QIB") and an accredited investor
within the meaning of Rule 501(a) under the Securities Act;
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(ii) neither it, nor any affiliate referenced in Section 1(d) below,
has solicited offers for, or offered or sold, and will not solicit offers
for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act ("Regulation D") or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act; and
(iii) neither it, nor any affiliate referenced in Section 1(d) below
has solicited offers for, or offered or sold, and will not solicit offers
for, or offer or sell, the Securities as part of their initial offering
except:
(A) within the United States to persons whom it reasonably
believes to be QIBs in transactions pursuant to Rule 144A under the
Securities Act ("Rule 144A") or if any such person is buying for one
or more institutional accounts for which such person is acting as a
fiduciary or agent, only when such person reasonably believes that
each account is a QIB, and in connection with each such sale, it has
taken or will take reasonable steps to ensure that the purchaser of
the Securities is aware that such sale is being made in reliance on
Rule 144A; or
(B) in accordance with the restrictions set forth in Annex
A hereto.
(c) Each Initial Purchaser acknowledges and agrees that the Company
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 5(f) and 5(g), counsel for the Company and counsel for the
Initial Purchasers, respectively, may rely upon the accuracy of the
representations and warranties of the Initial Purchasers, and compliance by the
Initial Purchasers with their agreements, contained in paragraph (b) above
(including Annex A hereto), and each Initial Purchaser hereby consents to such
reliance.
(d) The Company acknowledges and agrees that the Initial Purchasers
may offer and sell Securities to or through any affiliate of an Initial
Purchaser and that any such affiliate may offer and sell Securities purchased by
it to or through any Initial Purchaser.
2. Payment and Delivery. (a) Payment for and delivery of the
Securities shall be made at the offices of Xxxxxx Xxxxxx & Xxxxxxx llp at 10:00
A.M., New York City time, on August 6, 2003, or at such other time or place on
the same or such other date, not later than the fifth business day thereafter,
as the Representative and the Company shall agree upon in writing. The time and
date of such payment and delivery is referred to herein as the "Closing Date".
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(b) Payment for the Securities shall be made by wire transfer
in immediately available funds to the account(s) specified by the Company to the
Representative against delivery to the nominee of The Depository Trust Company,
for the account of the Initial Purchasers, of one or more global notes
representing the Securities (collectively, the "Global Note"), with any transfer
taxes payable in connection with the sale of the Securities duly paid by the
Company. The Global Note will be made available for inspection by the
Representative not later than 1:00 P.M., New York City time, on the business day
prior to the Closing Date.
3. Representations and Warranties of the Company and the
Guarantors. The Company and the Guarantors jointly and severally represent and
warrant to each Initial Purchaser that:
(a) Offering Memoranda. The Preliminary Offering Memorandum, as
of its date, did not, and the Offering Memorandum as of the Closing Date, will
not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company and the Guarantors make no representation or warranty with respect to
any statements or omissions made in reliance upon and in conformity with
information relating to any Initial Purchaser furnished to the Company in
writing by or on behalf of such Initial Purchaser for use in the Preliminary
Offering Memorandum or the Offering Memorandum.
(b) Incorporated Documents. The documents incorporated by
reference in the Preliminary Offering Memorandum and the Offering Memorandum,
when filed with the Commission, conformed or will conform, as the case may be,
in all material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder, and did not and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(c) Financial Statements. The financial statements and the
related notes thereto included or incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum present fairly the financial
position of the Company and its subsidiaries as of the dates indicated and the
results of their operations and the changes in their cash flows for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby; and the other financial information
included or incorporated by reference in the Preliminary Offering Memorandum and
the Offering Memorandum has been derived from the accounting records of the
Company and its subsidiaries and presents fairly the information shown thereby.
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(d) No Material Adverse Change. Since the date of the most
recent financial statements of the Company included or incorporated by reference
in the Preliminary Offering Memorandum and the Offering Memorandum, (i) there
has not been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries that is material, or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the Company on any class
of capital stock, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business, properties,
management, financial position, results of operations or prospects of the
Company and its subsidiaries taken as a whole; (ii) neither the Company nor any
of its subsidiaries has entered into any transaction or agreement that is
material to the Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to the Company
and its subsidiaries taken as a whole; and (iii) neither the Company nor any of
its subsidiaries has sustained any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except in each case as otherwise disclosed in the Preliminary Offering
Memorandum and the Offering Memorandum.
(e) Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
management, financial position, results of operations or prospects of the
Company and its subsidiaries taken as a whole or on the performance by the
Company and the Guarantors of their obligations under the Securities and the
Guarantees (a "Material Adverse Effect"). The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
the subsidiaries listed in Schedule 3 to this Agreement.
(f) Capitalization. The Company has an authorized
capitalization as set forth in the Preliminary Offering Memorandum and the
Offering Memorandum under the heading "Capitalization"; and all the outstanding
shares of capital stock or other equity interests of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of any lien, charge, encumbrance, security interest, restriction on voting
or transfer or any other claim of any third party.
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(g) Due Authorization. The Company and each of the Guarantors
have full right, power and authority to execute and deliver this Agreement, the
Securities, the Indenture (including each Guarantee set forth therein), the
Exchange Securities and the Registration Rights Agreement (collectively, the
"Transaction Documents") and to perform their respective obligations hereunder
and thereunder; and all action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction Documents and
the consummation of the transactions contemplated thereby has been duly and
validly taken.
(h) The Indenture. The Indenture has been duly authorized by
the Company and each of the Guarantors and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute a
valid and legally binding agreement of the Company and each of the Guarantors
enforceable against the Company and each of the Guarantors in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability (collectively,
the "Enforceability Exceptions").
(i) The Notes and the Guarantees. The Notes have been duly
authorized by the Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein, will be
duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company enforceable against the Company in accordance
with their terms, subject to the Enforceability Exceptions, and will be entitled
to the benefits of the Indenture; and the Guarantees have been duly authorized
by each of the Guarantors and, when the Notes have been duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for as
provided herein, will be valid and legally binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in accordance with their
terms, subject to the Enforceability Exceptions, and will be entitled to the
benefits of the Indenture.
(j) The Exchange Securities. On the Closing Date, the Exchange
Securities and the related Guarantees will have been duly authorized by the
Company, as issuer, and each of the Guarantors, as guarantors, and, when duly
executed, authenticated, issued and delivered as contemplated by the
Registration Rights Agreement, will be duly and validly issued and outstanding
and will constitute valid and legally binding obligations of the Company, as
issuer, and each of the Guarantors, as guarantor, enforceable against the
Company and each of the Guarantors in accordance with their terms, subject to
the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
(k) Purchase and Registration Rights Agreements. This Agreement
and the Registration Rights Agreement, when duly executed and delivered in
accordance with their terms by each of the parties thereto, will constitute a
valid and legally binding agreement of the
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Company and each of the Guarantors enforceable against the Company and each of
the Guarantors in accordance with their terms, subject to the Enforceability
Exceptions, and except that rights to indemnity and contribution thereunder may
be limited by applicable law and public policy.
(l) Descriptions of the Transaction Documents. Each Transaction
Document conforms in all material respects to the description thereof contained
in the Preliminary Offering Memorandum and the Offering Memorandum.
(m) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject; or
(iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Material
Adverse Effect.
(n) No Conflicts. The execution, delivery and performance by
the Company and each of the Guarantors of each of the Transaction Documents to
which each is a party, the issuance and sale of the Securities (including the
Guarantees) and compliance by the Company and each of the Guarantors with the
terms thereof and the consummation of the transactions contemplated by the
Transaction Documents will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its subsidiaries pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, (ii)
result in any violation of the provisions of the charter or by-laws or similar
organizational documents of the Company or any of its subsidiaries or (iii)
result in the violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (i) and (iii) above, for any such conflict,
breach or violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(o) No Consents Required. No consent, approval, authorization,
order, registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution, delivery and
performance by the Company and each of the
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Guarantors of each of the Transaction Documents to which each is a party, the
issuance and sale of the Securities (including the Guarantees) and compliance by
the Company and each of the Guarantors with the terms thereof and the
consummation of the transactions contemplated by the Transaction Documents,
except for such consents, approvals, authorizations, orders and registrations or
qualifications as may be required (i) under applicable state securities laws in
connection with the purchase and resale of the Securities by the Initial
Purchasers and (ii) with respect to the Exchange Securities (including the
related guarantees) under the Securities Act and applicable state securities
laws as contemplated by the Registration Rights Agreement.
(p) Legal Proceedings. Except as described in the Preliminary
Offering Memorandum and the Offering Memorandum, there are no legal,
governmental or regulatory investigations, actions, suits or proceedings pending
to which the Company or any of its subsidiaries is or may be a party or to which
any property of the Company or any of its subsidiaries is or may be the subject
that, individually or in the aggregate, if determined adversely to the Company
or any of its subsidiaries, would have a Material Adverse Effect; and no such
investigations, actions, suits or proceedings are threatened or, to the best
knowledge of the Company and each of the Guarantors, contemplated by any
governmental or regulatory authority or threatened by others.
(q) Independent Accountants. Ernst & Young LLP, who have
certified certain financial statements of the Company and its subsidiaries are,
to the Company's knowledge, independent public accountants with respect to the
Company and its subsidiaries within the meaning of Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public Accountants
and its interpretations and rulings thereunder.
(r) Title to Real and Personal Property. The Company and its
subsidiaries have good and marketable title to, or have valid rights to lease or
otherwise use, all items of real and personal property that are material to the
respective businesses of the Company and its subsidiaries taken as a whole, in
each case free and clear of all liens, encumbrances, claims and defects and
imperfections of title except those that (i) are disclosed in the Preliminary
Offering Memorandum or Offering Memorandum or (ii) would not, individually or in
the aggregate, have a Material Adverse Effect.
(s) Title to Intellectual Property. The Company and its
subsidiaries own or possess adequate rights to use, or can acquire on reasonable
terms, all material patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
currently employed by them in connection with their respective businesses as
currently operated, and the Company and its subsidiaries have not received any
notice of any claim of in-
8
fringement of or conflict with any such rights of others that would,
individually or in the aggregate, have a Material Adverse Effect.
(t) Investment Company Act. Neither the Company nor any of its
subsidiaries is an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission thereunder
(collectively, "Investment Company Act").
(u) Public Utility Holding Company Act. Neither the Company nor any
of its subsidiaries is a "holding company" or a "subsidiary company" of a
holding company or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(v) Licenses and Permits. The Company and its subsidiaries
possess all licenses, certificates, permits and other authorizations issued by,
and have made all declarations and filings with, the appropriate federal, state,
local or foreign governmental or regulatory authorities that are necessary for
the ownership or lease of their respective properties or the conduct of their
respective businesses as described in the Preliminary Offering Memorandum and
the Offering Memorandum, except where the failure to possess or make the same
would not, individually or in the aggregate, have a Material Adverse Effect; and
except as described in the Preliminary Offering Memorandum and the Offering
Memorandum, neither the Company nor, to the Company's knowledge, any of its
subsidiaries has received notice of any revocation or modification of any such
license, certificate, permit or authorization or has any reason to believe that
any such license, certificate, permit or authorization will not be renewed in
the ordinary course.
(w) No Labor Disputes. No material labor disturbance by or dispute
with employees of the Company or any of its subsidiaries exists or, to the best
knowledge of the Company and each of the Guarantors, is contemplated or
threatened.
(x) Compliance With Environmental Laws. The Company and its
subsidiaries (i) are in compliance with any and all applicable federal, state,
local and foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, "Environmental
Laws"); (ii) have received and are in material compliance with all permits,
licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses; and (iii) have not received notice of
any actual or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except in the case of clauses (i), (ii) and (iii) above, as would
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.
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(y) Compliance With ERISA. Each employee benefit plan, within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), that is maintained, administered or contributed to
by the Company or any of its affiliates for employees or former employees of the
Company and its affiliates has been maintained in material compliance with its
terms and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue Code of
1986, as amended (the "Code"); no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred, that would have
a Material Adverse Effect, individually or in the aggregate, on the Company,
with respect to any such plan excluding transactions effected pursuant to a
statutory or administrative exemption; and for each such plan that is subject to
the funding rules of Section 412 of the Code or Section 302 of ERISA; no
"accumulated funding deficiency" as defined in Section 412 of the Code has been
incurred, whether or not waived.
(z) Accounting Controls. The Company and its subsidiaries
maintain systems of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(aa) Insurance. The Company and its subsidiaries have insurance
covering their respective properties, operations, personnel and businesses,
which the Company believes is in amounts and insures against such losses and
risks as are prudent and customary in the businesses in which they are engaged;
and neither the Company nor any of its subsidiaries has any reason to believe
that it will not be able to renew or obtain replacement insurance coverage as
and when such coverage expires.
(bb) No Restrictions on Subsidiaries. No subsidiary of the Company
is currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary's properties or
assets to the Company or any other subsidiary of the Company.
(cc) No Broker's Fees. Neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding with any
person (other than this Agreement) that would give rise to a valid claim against
any Initial Purchaser for a brokerage com-
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mission, finder's fee or like payment in connection with the offering and sale
of the Securities.
(dd) Rule 144A Eligibility. On the Closing Date, the Securities will
not be of the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in an automated
inter-dealer quotation system; and each of the Preliminary Offering Memorandum
and the Offering Memorandum, as of its respective date, contains or will contain
all the information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act.
(ee) No Integration. Neither the Company nor any of its affiliates
(as defined in Rule 501(b) of Regulation D) has, directly or through any agent,
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(ff) No General Solicitation or Directed Selling Efforts. None of
the Company or any of its affiliates or any other person acting on its or their
behalf (other than the Initial Purchasers, as to which no representation is
made) has (i) solicited offers for, or offered or sold, the Securities by means
of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act or (ii) engaged in any
directed selling efforts within the meaning of Regulation S under the Securities
Act ("Regulation S"), and all such persons have complied with the offering
restrictions requirement of Regulation S.
(gg) Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained in Section
1(b) (including Annex A hereto) and their compliance with their agreements set
forth therein, it is not necessary, in connection with the issuance and sale of
the Securities to the Initial Purchasers and the offer, resale and delivery of
the Securities by the Initial Purchasers in the manner contemplated by this
Agreement and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.
(hh) No Stabilization. Neither the Company nor any of the Guarantors
has taken, directly or indirectly, any action designed to or that would
reasonably be expected to cause or result in any stabilization or manipulation
of the price of the Securities.
(ii) Margin Rules. Neither the issuance, sale and delivery of the
Securities nor the application of the proceeds thereof by the Company as
described in the Offering
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Memorandum will violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System.
(jj) Forward-Looking Statements. No forward-looking statement
(within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained in the Preliminary Offering Memorandum and the Offering
Memorandum has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
4. Further Agreements of the Company and the Guarantors. The
Company and each of the Guarantors jointly and severally covenant and agree with
each Initial Purchaser that:
(a) Delivery of Copies. The Company will deliver to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum and the
Offering Memorandum (including all amendments and supplements thereto) as the
Representative may reasonably request.
(b) Amendments or Supplements. Before making or distributing
any amendment or supplement to the Preliminary Offering Memorandum or the
Offering Memorandum or filing with the Commission any document that will be
incorporated by reference therein, the Company will furnish to the
Representative and counsel for the Initial Purchasers a copy of the proposed
amendment or supplement or document to be incorporated by reference therein for
review, and will not distribute any such proposed amendment or supplement or
file any such document with the Commission to which the Representative
reasonably objects.
(c) Notice to the Representative. Prior to completion of the
resale of the Securities by the Initial Purchasers, the Company will advise the
Representative promptly, and, if requested, confirm such advice in writing, (i)
of the issuance by any governmental or regulatory authority of any order
preventing or suspending the use of the Preliminary Offering Memorandum or the
Offering Memorandum or the initiation or threatening of any proceeding for that
purpose; (ii) of the occurrence of any event a result of which the Offering
Memorandum as then amended or supplemented would include any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt
by the Company of any notice with respect to any suspension of the qualification
of the Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order preventing or
suspending the use of the Preliminary Offering Memorandum or the Offering
Memorandum or suspending any such
12
qualification of the Securities and, if any such order is issued, to obtain as
soon as possible the withdrawal thereof.
(d) Ongoing Compliance of the Offering Memorandum. If at any
time prior to the completion of the initial offering of the Securities (i) any
event shall occur or condition shall exist as a result of which the Offering
Memorandum as then amended or supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances existing when the
Offering Memorandum is delivered to a purchaser, not misleading or (ii) it is
necessary to amend or supplement the Offering Memorandum to comply with law, the
Company will immediately notify the Initial Purchasers thereof and forthwith
prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers
such amendments or supplements to the Offering Memorandum (or any document to be
filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in the Offering Memorandum as so amended or
supplemented (or including such document to be incorporated by reference
therein) will not, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that the Offering
Memorandum will comply with law.
(e) Blue Sky Compliance. The Company will qualify the Securities
for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Representative shall reasonably request and will continue such
qualifications in effect so long as required for the offering and resale of the
Securities; provided that neither the Company nor any of the Guarantors shall be
required to (i) qualify as a foreign corporation or other entity or as a dealer
in securities in any such jurisdiction where it would not otherwise be required
to so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it
is not otherwise so subject.
(f) Clear Market. During the period from the date hereof
through and including the date that is 90 days after the date hereof, the
Company and each of the Guarantors will not, without the prior written consent
of the Representative, offer, sell, contract to sell or otherwise dispose of any
debt securities issued or guaranteed by the Company or any of the Guarantors and
having a tenor of more than one year.
(g) Use of Proceeds. The Company will apply the net proceeds
from the sale of the Securities as described in the Offering Memorandum under
the heading "Use of proceeds".
(h) Supplying Information. While the Securities remain
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
under the Securities Act, the Company and each of the Guarantors will, during
any period in which the Company is not
13
subject to and in compliance with Section 13 or 15(d) of the Exchange Act,
furnish to holders of the Securities and prospective purchasers of the
Securities designated by such holders, upon the request of such holders or such
prospective purchasers, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.
(i) PORTAL and DTC. The Company will assist the Initial
Purchasers in arranging for the Securities to be designated Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL Market and
for the Securities to be eligible for clearance and settlement through The
Depository Trust Company ("DTC").
(j) No Resales by the Company. Until the issuance of the
Exchange Securities, the Company will not, and will not permit any of its
affiliates (as defined in Rule 144 under the Securities Act) to, resell any of
the Securities that have been acquired by any of them, except for Securities
purchased by the Company or any of its affiliates and resold in a transaction
registered under the Securities Act.
(k) No Integration. Neither the Company nor any of its
affiliates (as defined in Rule 501(b) of Regulation D) will, directly or through
any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(l) No General Solicitation or Directed Selling Efforts. None
of the Company or any of its affiliates or any other person acting on its or
their behalf (other than the Initial Purchasers, as to which no covenant is
given) will (i) solicit offers for, or offer or sell, the Securities by means of
any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act or (ii) engage in any directed
selling efforts within the meaning of Regulation S, and all such persons will
comply with the offering restrictions requirement of Regulation S.
(m) No Stabilization. Neither the Company nor any of the Guarantors
will take, directly or indirectly, any action designed to or that would
reasonably be expected to cause or result in any stabilization or manipulation
of the price of the Securities.
5. Conditions of Initial Purchasers' Obligations. The
obligation of each Initial Purchaser to purchase Securities on the Closing Date
as provided herein is subject to the performance by the Company and each of the
Guarantors of their respective covenants and other obligations hereunder and to
the following additional conditions:
14
(a) Representations and Warranties. The representations and
warranties of the Company and the Guarantors contained herein shall be true and
correct on the date hereof and on and as of the Closing Date; and the statements
of the Company, the Guarantors and their respective officers made in any
certificates delivered pursuant to this Agreement shall be true and correct on
and as of the Closing Date.
(b) No Downgrade. Subsequent to the execution and delivery of
this Agreement and prior to the Closing Date, (i) no downgrading shall have
occurred in the rating accorded the Securities or any other debt securities or
preferred stock issued or guaranteed by the Company or any of the Guarantors by
any "nationally recognized statistical rating" organization, as such term is
defined by the Commission for purposes of Rule 436(g)(2) under the Securities
Act; and (ii) no such organization shall have publicly announced that it has
under surveillance or review, or has changed its outlook with respect to, its
rating of the Securities or of any other debt securities or preferred stock
issued or guaranteed by the Company or any of the Guarantors (other than an
announcement with positive implications of a possible upgrading).
(c) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement and prior to the Closing Date, no event or condition
of a type described in Section 3(d) hereof shall have occurred or shall exist,
which event or condition is not described in the Offering Memorandum (excluding
any amendment or supplement thereto or any document filed with the Commission
after the date hereof and incorporated by reference therein) and the effect of
which in the judgment of the Representative makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement and the Offering
Memorandum.
(d) Officer's Certificate. The Representative shall have
received on and as of the Closing Date a certificate of an executive officer of
the Company and of each Guarantor who has specific knowledge of the Company's or
such Guarantor's financial matters (i) confirming that to the knowledge of such
officer, the representation set forth in Section 3(a) hereof is true and
correct, (ii) confirming that the other representations and warranties of the
Company and the Guarantors in this Agreement are true and correct and that the
Company and the Guarantors have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied hereunder at or prior to
the Closing Date and (iii) to the effect set forth in paragraphs (b) and (c)
above.
(e) Comfort Letters. On the date of this Agreement and on the
Closing Date, Ernst & Young LLP shall have furnished to the Representative, at
the request of the Company, letters, dated the respective dates of delivery
thereof and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, containing statements and
information of the type customarily included in accountants' "comfort letters"
15
to underwriters with respect to the financial statements and certain financial
information contained in the Preliminary Offering Memorandum and the Offering
Memorandum; provided that the letter delivered on the Closing Date shall use a
"cut-off" date no more than three business days prior to the Closing Date.
(f) Opinion of Counsel for the Company. Xxxx Xxxxx LLP, counsel
for the Company, shall have furnished to the Representative, at the request of
the Company, their written opinion, dated the Closing Date and addressed to the
Initial Purchasers, in form and substance reasonably satisfactory to the
Representative, to the effect set forth in Annex B hereto.
(g) Opinion of Counsel for the Initial Purchasers. The
Representative shall have received on and as of the Closing Date an opinion of
Xxxxxx Xxxxxx & Xxxxxxx llp, counsel for the Initial Purchasers, with respect to
such matters as the Representative may reasonably request, and such counsel
shall have received such documents and information as they may reasonably
request to enable them to pass upon such matters.
(h) No Legal Impediment to Issuance. No action shall have been
taken and no statute, rule, regulation or order shall have been enacted, adopted
or issued by any federal, state or foreign governmental or regulatory authority
that would, as of the Closing Date, prevent the issuance or sale of the
Securities or the issuance of the Guarantees; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Securities or the issuance of
the Guarantees.
(i) Good Standing. The Representative shall have received on
and as of the Closing Date satisfactory evidence of the good standing of the
Company and each of the Guarantors in their respective jurisdictions of
organization, in each case in writing or any standard form of telecommunication,
from the appropriate governmental authorities of such jurisdictions.
(j) Registration Rights Agreement. The Initial Purchasers shall
have received a counterpart of the Registration Rights Agreement that shall have
been executed and delivered by a duly authorized officer of the Company and each
of the Guarantors.
(k) Indenture. The Indenture shall have been duly executed and
delivered by the Company, the Guarantors and the Trustee, and the Securities
shall have been duly executed and delivered by the Company and the Guarantors
and duly authenticated by the Trustee.
16
(l) PORTAL and DTC. The Securities shall have been approved by the
NASD for trading in the PORTAL Market and shall be eligible for clearance and
settlement through DTC.
(m) Additional Documents. On or prior to the Closing Date, the
Company and the Guarantors shall have furnished to the Representative such
further certificates and documents as the Representative may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
6. Indemnification and Contribution.
(a) Indemnification of the Initial Purchasers. The Company and each
of the Guarantors jointly and severally agree to indemnify and hold harmless
each Initial Purchaser, its affiliates, officers, directors, employees,
representatives and agents and each person, if any, who controls such Initial
Purchaser within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses incurred in
connection with any suit, action or proceeding or any claim asserted, as such
fees and expenses are incurred), joint or several, that arise out of, or are
based upon, any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Memorandum or the Offering Memorandum (or
any amendment or supplement thereto) or caused by any omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to any Initial Purchaser furnished to the Company
in writing by such Initial Purchaser through the Representative expressly for
use therein; provided, that with respect to any such untrue statement in or
omission from the Preliminary Offering Memorandum, the indemnity agreement
contained in this paragraph (a) shall not inure to the benefit of any Initial
Purchaser to the extent that the sale to the person asserting any such loss,
claim, damage or liability was an initial resale by such Initial Purchaser and
any such loss, claim, damage or liability of or with respect to such Initial
Purchaser results from the fact that both (i) a copy of the Offering Memorandum
(excluding any documents incorporated by reference therein) was not sent or
given to such person at or prior to the written confirmation of the sale of such
Securities to such person and (ii) the untrue statement in or omission from such
Preliminary Offering Memorandum was corrected in the Offering Memorandum unless,
in either case, such failure to deliver the
17
Offering Memorandum was a result of non-compliance by the Company with the
provisions of Section 4 hereof.
(b) Indemnification of the Company. Each Initial Purchaser agrees,
severally and not jointly, to indemnify and hold harmless the Company, each of
the Guarantors, their respective directors, officers and each person, if any,
who controls the Company or any of the Guarantors within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the indemnity set forth in paragraph (a) above, but only with respect
to any losses, claims, damages or liabilities that arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information relating to such
Initial Purchaser furnished to the Company in writing by or on behalf of such
Initial Purchaser for use in the Preliminary Offering Memorandum and the
Offering Memorandum (or any amendment or supplement thereto), it being
understood and agreed that the only such information consists of the following:
the third paragraph and the fifth sentence of the eighth paragraph under "Plan
of distribution."
(c) Notice and Procedures. If any suit, action, proceeding (including
any governmental or regulatory investigation), claim or demand shall be brought
or asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 6 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying
Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 6. If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others entitled to indemnification pursuant to this
Section 6 that the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person 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 Person unless (i) the Indemnifying Person and
the Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the In-
18
demnifying Person and the Indemnified Person and the Indemnified Person is
advised by counsel that representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood and agreed that the Indemnifying Person shall not, in connection
with any proceeding or related proceeding 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 Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. Any such separate firm for any Initial
Purchaser, its affiliates, directors and officers and any control persons of
such Initial Purchaser shall be designated in writing by X.X. Xxxxxx Securities
Inc. and any such separate firm for the Company, the Guarantors and any control
persons of the Company and the Guarantors shall be designated in writing by the
Company. The Indemnifying Person 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
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. No Indemnifying Person
shall, without the written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification could have
been sought hereunder by such Indemnified Person, unless such settlement (x)
includes an unconditional release of such Indemnified Person, in form and
substance reasonably satisfactory to such Indemnified Person, from all liability
on claims that are the subject matter of such proceeding and (y) does not
include any statement as to or any admission of fault, culpability or a failure
to act by or on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs
(a) and (b) above is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person 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 Company and the Guarantors on the one hand and the
Initial Purchasers on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and the
Guarantors on the one hand and the Initial Purchasers on the other 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 Company and the Guarantors on the one hand and
the Initial Purchasers on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the
Company from the sale of the Securities and the total discounts and commissions
received by the Initial Purchasers in connection therewith, as provided in this
Agreement, bear to the ag-
19
gregate offering price of the Securities. The relative fault of the Company and
the Guarantors on the one hand and the Initial Purchasers on the other 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 or any Guarantor
or by the Initial Purchasers and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
(e) Limitation on Liability. The Company, the Guarantors and the
Initial Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 6 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this
Section 6, in no event shall an Initial Purchaser be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by such Initial Purchaser with respect to the offering of the
Securities exceeds the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. 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 Initial Purchasers' obligations to contribute
pursuant to this Section 6 are several in proportion to their respective
purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section
6 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any Indemnified Person at law or in equity.
7. Termination. This Agreement may be terminated in the absolute
discretion of the Representative, by notice to the Company, if after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on the New
York Stock Exchange or the over-the-counter market; (ii) trading of any
securities issued or guaranteed by the Company or any of the Guarantors shall
have been suspended on any exchange or in any over-the-counter market; (iii) a
general moratorium on commercial banking activities shall have been declared by
federal or New York State authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis, either within or outside the United States, that, in the
judgment of the Representative, is material and adverse and makes it im-
20
practicable or inadvisable to proceed with the offering, sale or delivery of the
Securities on the terms and in the manner contemplated by this Agreement and the
Offering Memorandum.
8. Defaulting Initial Purchaser. (a) If, on the Closing Date, any
Initial Purchaser defaults on its obligation to purchase the Securities that it
has agreed to purchase hereunder, the non-defaulting Initial Purchasers may in
their discretion arrange for the purchase of such Securities by other persons
satisfactory to the Company on the terms contained in this Agreement. If, within
36 hours after any such default by any Initial Purchaser, the non-defaulting
Initial Purchasers do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Initial Purchasers to
purchase such Securities on such terms. If other persons become obligated or
agree to purchase the Securities of a defaulting Initial Purchaser, either the
non-defaulting Initial Purchasers or the Company may postpone the Closing Date
for up to five full business days in order to effect any changes that in the
opinion of counsel for the Company or counsel for the Initial Purchasers may be
necessary in the Offering Memorandum or in any other document or arrangement,
and the Company agrees to promptly prepare any amendment or supplement to the
Offering Memorandum that effects any such changes. As used in this Agreement,
the term "Initial Purchaser" includes, for all purposes of this Agreement unless
the context otherwise requires, any person not listed in Schedule 1 hereto that,
pursuant to this Section 8, purchases Securities that a defaulting Initial
Purchaser agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
all the Securities, then the Company shall have the right to require each
non-defaulting Initial Purchaser to purchase the principal amount of Securities
that such Initial Purchaser agreed to purchase hereunder plus such Initial
Purchaser's pro rata share (based on the principal amount of Securities that
such Initial Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Initial Purchaser or Initial Purchasers for which such arrangements
have not been made.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate principal amount of such Securities that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the
Securities, or if the Company shall not exercise the right described in
paragraph (b) above, then this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers. Any termination of this
Agreement pursuant to this Section 8 shall be without liability on the part of
the Company or the Guarantors, except that the Com-
21
pany and each of the Guarantors will continue to be liable for the payment of
expenses as set forth in Section 9 hereof and except that the provisions of
Section 6 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company, the Guarantors or any
non-defaulting Initial Purchaser for damages caused by its default.
9. Payment of Expenses. (a) Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company and each of the Guarantors jointly and severally agree to pay or
cause to be paid all costs and expenses incident to the performance of their
respective obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the
Securities and any taxes payable in that connection; (ii) the costs incident to
the preparation and printing of the Preliminary Offering Memorandum and the
Offering Memorandum (including any amendment or supplement thereto) and the
distribution thereof; (iii) the costs of reproducing and distributing each of
the Transaction Documents; (iv) the fees and expenses of the Company's and the
Guarantors' counsel and independent accountants; (v) the fees and expenses
incurred in connection with the registration or qualification and determination
of eligibility for investment of the Securities under the laws of such
jurisdictions as the Representative may designate and the preparation, printing
and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Initial Purchasers); (vi) any fees charged by rating
agencies for rating the Securities; (vii) the fees and expenses of the Trustee
and any paying agent (including related fees and expenses of any counsel to such
parties); (viii) all expenses and application fees incurred in connection with
the application for the inclusion of the Securities on the PORTAL Market and the
approval of the Securities for book-entry transfer by DTC; and (ix) all expenses
incurred by the Company in connection with any "road show" presentation to
potential investors.
(b) If (i) this Agreement is terminated pursuant to Section 7, (ii)
the Company for any reason fails to tender the Securities for delivery to the
Initial Purchasers or (iii) the Initial Purchasers decline to purchase the
Securities for any reason permitted under this Agreement, the Company and each
of the Guarantors jointly and severally agrees to reimburse the Initial
Purchasers for all out-of-pocket costs and expenses (including the fees and
expenses of their counsel) reasonably incurred by the Initial Purchasers in
connection with this Agreement and the offering contemplated hereby.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and any controlling persons referred to herein, and the
affiliates, officers and directors of each Initial Purchaser referred to in
Section 6 hereof. Nothing in this Agreement is intended or shall
22
be construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
No purchaser of Securities from any Initial Purchaser shall be deemed to be a
successor merely by reason of such purchase.
11. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Company, the Guarantors or the Initial Purchasers pursuant to this Agreement
or any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf
of the Company, the Guarantors or the Initial Purchasers.
12. Certain Defined Terms. For purposes of this Agreement, (a) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act; (b) the term "business day" means
any day other than a day on which banks are permitted or required to be closed
in New York City; (c) the term "Exchange Act" means the Securities Exchange Act
of 1934, as amended; and (d) the term "subsidiary" has the meaning set forth in
Rule 405 under the Securities Act.
13. Miscellaneous. (a) Authority of the Representative. Any action by
the Initial Purchasers hereunder may be taken by X.X. Xxxxxx Securities Inc. on
behalf of the Initial Purchasers, and any such action taken by X.X. Xxxxxx
Securities Inc. shall be binding upon the Initial Purchasers.
(b) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
and confirmed by any standard form of telecommunication. Notices to the Initial
Purchasers shall be given to the Representative c/o X.X. Xxxxxx Securities Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000); Attention:
Xxxxxx X. Xxxxxx. Notices to the Company and the Guarantors shall be given to
them at Westinghouse Air Brake Technologies Corporation, 0000 Xxx Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000, (fax: (000) 000-0000); Attention: Xx. Xxxxxx
Xxxxxx-Xxxxx.
(c) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which
may include counterparts delivered by any standard form of telecommunication),
each of which shall be an original and all of which together shall constitute
one and the same instrument.
23
(e) Amendments or Waivers. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
(f) Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
24
If the foregoing is in accordance with your understanding, please
indicate your acceptance of this Agreement by signing in the space provided
below.
Very truly yours,
The Issuer:
WESTINGHOUSE AIR BRAKE
TECHNOLOGIES CORPORATION
By: /s/ Xxxxxx Xxxxxx-Xxxxx
------------------------------------
Name: Xxxxxx Xxxxxx-Xxxxx
Title: Senior Vice President
The Guarantors:
MOTIVEPOWER, INC.
RAILROAD FRICTION PRODUCTS CORPORATION
RFPC HOLDING CORPORATION
WABTEC CORPORATION
WABTEC DISTRIBUTION COMPANY
WABTEC HOLDING CORP.
WABTEC TRANSPORTATION TECHNOLOGIES, INC.
YOUNG TOUCHSTONE COMPANY
By: /s/ Xxxxxx Xxxxxx-Xxxxx
------------------------------------
Name: Xxxxxx Xxxxxx-Xxxxx
Title: Vice President
25
Accepted as of the date first written above.
X.X. XXXXXX SECURITIES INC.
For itself and on behalf of the
several Initial Purchasers listed in
Schedule 1 hereto.
By: /s/ Xxxxxxxx Xxx-Xxxxx
----------------------------------
Authorized Signatory
Name: Xxxxxxxx Xxx-Xxxxx
Title: Vice-President
26
Schedule 1
Initial Purchaser Principal Amount
----------------- ----------------
X.X. Xxxxxx Securities Inc. $ 60,000,000
Xxxxxx Xxxxxxx & Co. Incorporated $ 30,000,000
BNY Capital Markets, Inc. $ 15,000,000
Xxxxxx Xxxxxx & Company, Inc. $ 15,000,000
ABN AMRO Incorporated $ 7,500,000
BB&T Capital Markets,
a division of Xxxxx & Xxxxxxxxxxxx,Inc. $ 7,500,000
NatCity Investments, Inc. $ 7,500,000
PNC Capital Markets, Inc. $ 7,500,000
----------------
Total $ 150,000,000
Schedule 2
Guarantors
----------
MotivePower, Inc.
Railroad Friction Products Corporation
RFPC Holding Corporation
Wabtec Corporation
Wabtec Distribution Company
Wabtec Holding Corp.
Wabtec Transportation Technologies, Inc.
Young Touchstone Company
Schedule 3
Subsidiaries
------------
Allied Friction Products Australia Pty Ltd.
Cobra Europe X.X.
Xxxxx Pty, Ltd.
F.I.P. Pty Ltd.
H.P. srl
Jinhu Control Systems Co., Ltd.
Milufab Inc.
MotivePower Foreign Sales Corporation
MotivePower, Inc.
Pioneer Friction Limited
Railroad Friction Products Corp.
RFPC Holding Corporation
Stone U.K. Limited
Vapor Rail Inc.
Vapor Stone U.K. Limited
Wabco Freight Car Products Limited
Wabtec de Mexico, S.A. de X.X. de C.V.
Wabtec Australia Pty Limited
Wabtec Corporation
Wabtec Distribution Company
Wabtec Foundry Limited
Wabtec Holding Corp.
Wabtec Rail Limited
Wabtec Railway Electronics Corporation
Wabtec Railway Products India Private Ltd.
Wabtec Servicios Administrativos, S.A. de C.V.
Wabtec Transportation Technologies, Inc.
Westinghouse Int'l Corporation
Westinghouse Railway Holdings (Canada), Inc.
Young Touchstone Company
30
ANNEX A
Restrictions on Offers and Sales Outside the United States
----------------------------------------------------------
In connection with offers and sales of Securities outside the United
States:
(a) Each Initial Purchaser acknowledges that the Securities have not
been registered under the Securities Act and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons except
pursuant to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act.
(b) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) Such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of their distribution at
any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the Closing Date, only
in accordance with Regulation S under the Securities Act ("Regulation S")
or Rule 144A or any other available exemption from registration under the
Securities Act.
(ii) None of such Initial Purchaser or any of its
affiliates or any other person acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to
the Securities, and all such persons have complied and will comply
with the offering restrictions requirement of Regulation S.
(iii) At or prior to the confirmation of sale of any Securities
sold in reliance on Regulation S, such Initial Purchaser will have
sent to each distributor, dealer or other person receiving a selling
concession, fee or other remuneration that purchase Securities from it
during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"),
and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering of the Securities
and the date of original issuance of the Securities, except in
accordance with Regulation S or Rule 144A or any other available
A-1
exemption from registration under the Securities Act. Terms used
above have the meanings given to them by Regulation S."
(iv) Such Initial Purchaser has not and will not enter into any
contractual arrangement with any distributor with respect to the
distribution of the Securities, except with its affiliates or with the
prior written consent of the Company.
Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in
this Agreement have the meanings given to them by Regulation S.
(c) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) it has not offered or sold and, prior to the date six
months after the Closing Date, will not offer or sell any Securities
to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom within
the meaning of the United Kingdom Public Offers of Securities
Regulations 1995 (as amended);
(ii) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
Section 21 of the United Kingdom Financial Services and Markets Act
2000 (the "FSMA")) received by it in connection with the issue or sale
of any Securities in circumstances in which Section 21(1) of the FSMA
does not apply to the Company or the Guarantors; and
(iii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation
to the Securities in, from or otherwise involving the United Kingdom.
(d) Each Initial Purchaser acknowledges that no action has been or
will be taken by the Company that would permit a public offering of the
Securities, or possession or distribution of the Preliminary Offering
Memorandum, the Offering Memorandum or any other offering or publicity material
relating to the Securities, in any country or jurisdiction where action for that
purpose is required.
A-2
Annex B
[Form of Opinion of Counsel for the Company]
--------------------------------------------
(a) The Company and each of its subsidiaries have been duly organized
and are validly existing and in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a Material Adverse Effect.
(b) The Company has an authorized capitalization as set forth in the
Offering Memorandum under the heading "Capitalization"; and all the outstanding
shares of capital stock or other equity interests of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable.
(c) The Company and each of the Guarantors have full right, power and
authority to execute and deliver each of the Transaction Documents to which each
is a party and to perform their respective obligations thereunder; and all
action required to be taken for the due and proper authorization, execution and
delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby has been duly and validly taken.
(d) The Indenture has been duly authorized, executed and delivered by
the Company and each of the Guarantors and, assuming due execution and delivery
thereof by the Trustee, constitutes a valid and legally binding agreement of the
Company and each of the Guarantors enforceable against the Company and each of
the Guarantors in accordance with its terms, subject to the Enforceability
Exceptions; and the Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations of the
Commission applicable to an indenture that is qualified thereunder.
(e) The Notes have been duly authorized, executed and delivered by
the Company and, when duly authenticated as provided in the Indenture and paid
for as provided in this Agreement, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture; and the Guarantees have been duly authorized by each of the
Guarantors and, when the Notes have been duly executed, authenticated, issued
and delivered as provided in the Indenture and paid for as provided in this
Agreement, will be valid and legally binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in
B-1
accordance with their terms, subject to the Enforceability Exceptions, and will
be entitled to the benefits of the Indenture.
(f) The Exchange Securities (including the related guarantees) have
been duly authorized by the Company and each of the Guarantors and, when duly
executed, authenticated, issued and delivered as contemplated by the
Registration Rights Agreement, will be duly and validly issued and outstanding
and will constitute valid and legally binding obligations of the Company, as
issuer, and each of the Guarantors, as guarantor, enforceable against the
Company and each of the Guarantors in accordance with their terms, subject to
the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
(g) The Purchase Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors; and the Registration Rights
Agreement has been duly authorized, executed and delivered by the Company and
each of the Guarantors and, when duly executed and delivered by the other
parties thereto, will constitute a valid and legally binding agreement of the
Company and each of the Guarantors enforceable against the Company and each of
the Guarantors in accordance with its terms, subject to the Enforceability
Exceptions, and except that rights to indemnity and contribution thereunder may
be limited by applicable law and public policy.
(h) Each Transaction Document conforms in all material respects to
the description thereof contained in the Preliminary Offering Memorandum and the
Offering Memorandum.
(i) The execution, delivery and performance by the Company and each
of the Guarantors of each of the Transaction Documents to which each is a party,
the issuance and sale of the Securities (including the Guarantees) and
compliance by the Company and each of the Guarantors with the terms thereof and
the consummation of the transactions contemplated by the Transaction Documents
will not (i) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any violation of
the provisions of the charter or by-laws or similar organizational documents of
the Company or any of its subsidiaries or (iii) result in the violation of any
law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of
clauses (i) and (iii) above, for any such conflict, breach or violation that
would not, individually or in the aggregate, have a Material Adverse Effect.
(j) No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the
B-2
execution, delivery and performance by the Company and each of the Guarantors of
each of the Transaction Documents to which each is a party, the issuance and
sale of the Securities (including the Guarantees) and compliance by the Company
and each of the Guarantors with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required (i) under applicable state securities laws in connection with
the purchase and resale of the Securities by the Initial Purchasers and (ii)
with respect to the Exchange Securities (including the related guarantees) under
the Securities Act and applicable state securities laws as contemplated by the
Registration Rights Agreement.
(k) To the best knowledge of such counsel, except as described in the
Offering Memorandum, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or
any of its subsidiaries is or may be a party or to which any property of the
Company or any of its subsidiaries is or may be the subject that, individually
or in the aggregate, if determined adversely to the Company or any of its
subsidiaries, would have a Material Adverse Effect; and no such investigations,
actions, suits or proceedings are threatened or, to the best knowledge of such
counsel, contemplated by any governmental or regulatory authority or threatened
by others.
(l) The descriptions in the Offering Memorandum of statutes, legal,
governmental and regulatory proceedings and contracts and other documents are
accurate in all material respects; and the statements in the Offering Memorandum
under the heading "Certain federal income tax considerations" and "Descriptions
of certain debt", to the extent that they constitute summaries of matters of law
or regulation or legal conclusions, fairly summarize the matters described
therein in all material respects.
(m) The documents incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum (other than the financial
statements and other financial information contained therein, as to which such
counsel need express no opinion), when filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
(n) Neither the Company nor any of its subsidiaries is, and after
giving effect to the offering and sale of the Securities and the application of
the proceeds thereof as described in the Offering Memorandum none of them will
be, an "investment company" or an entity "controlled" by an "investment company"
within the meaning of the Investment Company Act.
(o) Neither the issuance, sale and delivery of the Securities nor the
application of the proceeds thereof by the Company as described in the Offering
Memorandum will violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.
B-3
(p) Assuming the accuracy of the representations, warranties and
agreements of the Company, the Guarantors and the Initial Purchasers contained
in this Agreement, it is not necessary, in connection with the issuance and sale
of the Securities to the Initial Purchasers and the offer, resale and delivery
of the Securities by the Initial Purchasers in the manner contemplated by this
Agreement and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.
Such counsel shall also state that they have participated in
conferences with representatives of the Company and with representatives of its
independent accountants and counsel at which conferences the contents of the
Preliminary Offering Memorandum and the Offering Memorandum and any amendment
and supplement thereto and related matters were discussed and, although such
counsel assume no responsibility for the accuracy, completeness or fairness of
the Preliminary Offering Memorandum and the Offering Memorandum and any
amendment or supplement thereto (except as expressly provided above), nothing
has come to the attention of such counsel to cause such counsel to believe that
the Preliminary Offering Memorandum, as of its date, contained any untrue
statement of a material fact or omitted to state a material fact or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or that the Offering Memorandum or any amendment or
supplement thereto, as of its date and the Closing Date, contained or contains
any untrue statement of a material fact 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 (other than, in each case, the
financial statements and other financial information contained or incorporated
by reference therein, as to which such counsel need express no belief).
In rendering such opinion, such counsel may rely as to matters of fact
on certificates of responsible officers of the Company and the Guarantors and
public officials that are furnished to the Initial Purchasers.
The opinion of Xxxx Xxxxx LLP described above shall be rendered to the
Initial Purchasers at the request of the Company and shall so state therein.
B-4
Exhibit A
[Form of Registration Rights Agreement]
---------------------------------------
