EXHIBIT 4.14
$125,000,000 EXECUTION COPY
NATIONAL EQUIPMENT SERVICES, INC.
10% SENIOR SUBORDINATED NOTES DUE 2004, SERIES C
PURCHASE AGREEMENT
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December 8, 1998
Xxxxxxx Xxxxx Xxxxxx Inc.
First Union Capital Markets Corp.
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
National Equipment Services, Inc., a Delaware corporation (the
"Company"), proposes, upon the terms and conditions set forth herein, to issue
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and sell to you, as the initial purchasers (the "Initial Purchasers"),
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$125,000,000 in aggregate principal amount of its 10% Senior Subordinated Notes
due 2004, Series C (the "Senior Subordinated Notes"). The Senior Subordinated
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Notes will (i) have the terms and provisions which are summarized in the
Offering Memorandum (as defined herein), (ii) be in the forms specified by the
Initial Purchasers pursuant to Section 3 hereof, and (iii) be issued pursuant to
the provisions of an Indenture, to be dated as of December 11, 1998 (the
"Indenture"), among the Company, each of the subsidiaries of the Company noted
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on Schedule I hereto (the "Subsidiary Guarantors") and Xxxxxx Trust and Savings
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Bank, as trustee (the "Trustee"). The Senior Subordinated Notes will be
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guaranteed on a senior subordinated basis by the Subsidiary Guarantors pursuant
to their guarantee (the "Subsidiary Guarantees").
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The Company and the Subsidiary Guarantors wish to confirm as follows
their agreement with the Initial Purchasers in connection with the purchase and
resale of the Senior Subordinated Notes.
1. Offering Memorandum. The Senior Subordinated Notes will be
offered and sold to the Initial Purchasers without registration under the
Securities Act of 1933, as amended (the "Act"), in reliance on an exemption
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pursuant to Section 4(2) under the Act. The Company has prepared an offering
memorandum, dated December 8, 1998, (the "Offering Memorandum"), setting forth
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information regarding the Company, the Senior Subordinated Notes and the
Exchange Notes (as defined herein). Any references herein to the Offering
Memorandum shall be deemed to include all amendments and supplements thereto, if
any. The Company hereby confirms that it has authorized the use of the Offering
Memorandum in connection with the offering and resale of the Senior Subordinated
Notes by the Initial Purchasers.
The Company understands that the Initial Purchasers propose to make
offers and sales (the "Exempt Resales") of the Senior Subordinated Notes
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purchased by the Initial Purchasers hereunder only on the terms and in the
manner set forth in the Offering Memorandum, and Section 2 hereof, as soon as
the Initial Purchasers deem advisable after this Agreement has been executed and
delivered, solely to
persons whom the Initial Purchasers reasonably believe to be qualified
institutional buyers ("Qualified Institutional Buyers") as defined in Rule 144A
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under the Act, as such rule may be amended from time to time ("Rule 144A"), in
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transactions under Rule 144A. Such Qualified Institutional Buyers are being
referred to herein as "Eligible Purchasers."
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It is understood and acknowledged that upon original issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the Act, the Senior Subordinated Notes (and all securities
issued in exchange therefor or in substitution thereof) shall bear the following
legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF
THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR")
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
It is also understood and acknowledged that holders (including
subsequent transferees) of the Senior Subordinated Notes will have the
registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date (as defined
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herein), in substantially the form of Exhibit A hereto, for so long as such
Senior Subordinated Notes constitute "Transfer Restricted
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Securities" (as defined in the Registration Rights Agreement) and subject to the
other terms of the Registration Rights Agreement. Pursuant to the Registration
Rights Agreement, the Company will agree to file with the Securities and
Exchange Commission (the "Commission") under the circumstances set forth
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therein, (i) a registration statement on the appropriate form under the Act
relating to the Company's 10% Senior Subordinated Notes due 2004, Series D (the
"Exchange Notes") to be offered in exchange for the Senior Subordinated Notes
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(the "Registered Exchange Offer") and (ii) under certain limited circumstances,
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a shelf registration statement pursuant to Rule 415 under the Act relating to
the resale by certain holders of the Senior Subordinated Notes, and to use its
commercially reasonable best efforts to cause such registration statements to be
declared effective. As used herein, the Senior Subordinated Notes and the
Exchange Notes are hereinafter referred to collectively as the "Notes." This
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Agreement, the Indenture and the Registration Rights Agreement are hereinafter
referred to collectively as the "Operative Documents."
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Capitalized terms used herein without definition have the respective
meanings specified therefor in the Indenture or the Offering Memorandum.
2. Agreements to Sell, Purchase and Resell. (a) The Company hereby
agrees, subject to all the terms and conditions set forth herein, to issue and
sell to the Initial Purchasers and, upon the basis of the representations,
warranties and agreements of the Company and the Subsidiary Guarantors herein
contained and subject to all the terms and conditions set forth herein, each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 95.330% of the principal amount thereof, the
principal amount of Senior Subordinated Notes set forth opposite the name of
such Initial Purchaser in Schedule II hereto.
(b) The Initial Purchasers have advised the Company that they propose
to offer the Senior Subordinated Notes for sale upon the terms and conditions
set forth in this Agreement and in the Offering Memorandum. Each Initial
Purchaser hereby represents and warrants to, and agrees with, the Company that
such Initial Purchaser (i) is purchasing the Senior Subordinated Notes pursuant
to a private sale exempt from registration under the Act, (ii) will not solicit
offers for, or offer or sell, the Senior Subordinated Notes by means of any form
of general solicitation or general advertising or in any manner involving a
public offering within the meaning of Section 4(2) of the Act, and (iii) will
solicit offers for the Senior Subordinated Notes only from, and will offer, sell
or deliver the Senior Subordinated Notes as part of their initial offering, only
to persons whom the Initial Purchasers reasonably believe 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 Purchasers 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, in each
case, in transactions under Rule 144A. The Initial Purchasers have advised the
Company that they will offer the Senior Subordinated Notes to Eligible
Purchasers at a price initially equal to 97.830% of the principal amount
thereof, plus accrued interest, if any, from the date of issuance of the Senior
Subordinated Notes. Such price may be changed by the Initial Purchasers at any
time thereafter without notice.
The Initial Purchasers understand that the Company and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Sections
7(c) and 7(d) hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations, warranties and agreements and the Initial Purchasers hereby
consent to such reliance.
3. Delivery of the Senior Subordinated Notes and Payment Therefor.
Delivery to the Initial Purchasers of and payment for the Senior Subordinated
Notes shall be made at the office of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M., New York City time, on December
11, 1998 (the "Closing Date"). The place of closing for the Senior Subordinated
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Notes
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and the Closing Date may be varied by agreement between the Initial Purchasers
and the Company.
The Senior Subordinated Notes will be delivered to the Initial
Purchasers against payment of the purchase price therefor in immediately
available funds. The Senior Subordinated Notes will be evidenced by one or more
global securities in definitive form (the "Global Note"), and will be registered
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in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC").
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The Senior Subordinated Notes to be delivered to the Initial Purchasers shall be
made available to the Initial Purchasers in New York City for inspection and
packaging not later than 9:30 A.M., New York City time, on the business day next
preceding the Closing Date.
4. Agreements of the Company and the Subsidiary Guarantors. The
Company and the Subsidiary Guarantors, jointly and severally, agree with the
Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by
them, will confirm such advice in writing, within the period of time
referred to in paragraph (e) below, of any material change in the Company's
condition (financial or other), business, properties, net worth or results
of operations, or of the happening of any event which makes any statement
made in the Offering Memorandum (as then amended or supplemented) untrue in
any material respect or which requires the making of any additions to or
changes in the Offering Memorandum (as then amended or supplemented) in
order to make the statements therein not misleading, or of the necessity to
amend or supplement the Offering Memorandum (as then amended or
supplemented) to comply with any law.
(b) To furnish to the Initial Purchasers, without charge, as of the
date of the Offering Memorandum, such number of copies of the Offering
Memorandum as may then be amended or supplemented as they may reasonably
request.
(c) Not to make any amendment or supplement to the Offering
Memorandum of which the Initial Purchasers shall not previously have been
advised or to which they shall reasonably object after being so advised.
(d) The Company consents to the use of the Offering Memorandum (and
of any amendment or supplement thereto) in accordance with the securities
or Blue Sky laws of the jurisdictions in which the Senior Subordinated
Notes are offered by the Initial Purchasers and by all dealers to whom
Senior Subordinated Notes may be sold, in connection with the offering and
sale of the Senior Subordinated Notes.
(e) If, at any time prior to completion of the distribution of the
Senior Subordinated Notes by the Initial Purchasers to Eligible Purchasers,
any event shall occur that in the judgment of the Company or in the opinion
of counsel for the Initial Purchasers should be set forth in the Offering
Memorandum (as then amended or supplemented) in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the
Offering Memorandum in order to comply with any law, the Company will
forthwith prepare an appropriate supplement or amendment thereto or such
document, and will expeditiously furnish to the Initial Purchasers and
dealers a reasonable number of copies thereof.
(f) To cooperate with the Initial Purchasers and with their counsel
in connection with
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the qualification of the Senior Subordinated Notes for offering and sale by
the Initial Purchasers and by dealers under the securities or Blue Sky laws
of such jurisdictions as the Initial Purchasers may designate and will file
such consents to service of process or other documents necessary or
appropriate in order to effect such qualification; provided that in no
event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Senior Subordinated Notes, in any
jurisdiction where it is not now so subject.
(g) So long as any of the Senior Subordinated Notes are outstanding,
the Company will furnish to the Initial Purchasers (i) as soon as
available, a copy of each report of the Company mailed to stockholders or
filed with any stock exchange or regulatory body and (ii) from time to time
such other publicly available information concerning the Company as the
Initial Purchasers may reasonably request.
(h) If this Agreement shall terminate or shall be terminated after
execution and delivery pursuant to any provisions hereof (otherwise than by
the Initial Purchasers terminating this Agreement pursuant to Section 10
hereof) or if this Agreement shall be terminated by the Initial Purchasers
because of any failure or refusal on the part of the Company or the
Subsidiary Guarantors to comply with the terms or fulfill any of the
conditions of this Agreement, the Company and the Subsidiary Guarantors
agree to reimburse the Initial Purchasers for all out-of-pocket expenses
(including reasonable fees and expenses of their counsel) reasonably
incurred by them in connection herewith, but without any further obligation
on the part of the Company or the Subsidiary Guarantors for loss of profits
or otherwise.
(i) To apply the net proceeds from the sale of the Senior
Subordinated Notes to be sold by the Company hereunder substantially in
accordance with the description set forth in the Offering Memorandum.
(j) Without the prior consent of the Initial Purchasers, prior to the
expiration of 180 days after the date of the Offering Memorandum neither
the Company nor the Subsidiary Guarantors will offer, sell, contract to
sell or otherwise dispose of any fixed income obligation substantially
similar to the Senior Subordinated Notes and having a maturity of more than
one year (other than borrowings under the Credit Facility).
(k) Except as stated in this Agreement and in the Offering Memorandum
neither the Company nor the Subsidiary Guarantors have taken, nor will any
of them take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation
(within the meaning of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of the price of the Senior Subordinated Notes to
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facilitate the sale or resale of the Senior Subordinated Notes. Neither the
Company nor the Subsidiary Guarantors will distribute any offering material
in connection with the Exempt Resales in violation of the Act.
(l) To use their respective commercially reasonable best efforts to
cause the Senior Subordinated Notes to be designated Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market securities
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in accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. relating to trading in the PORTAL
Market and to permit the Senior Subordinated Notes to be eligible for
clearance and settlement through DTC.
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(m) From and after the Closing Date, so long as any of the Senior
Subordinated Notes are outstanding and are "Restricted Securities" within
the meaning of the Rule 144(a)(3) under the Act or, if earlier, until two
years after the Closing Date, and during any period in which the Company is
not subject to Section 13 or 15(d) of the Exchange Act, the Company will
furnish to holders of the Senior Subordinated Notes and prospective
purchasers of Senior Subordinated Notes designated by such holders, upon
request of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Act to
permit compliance with Rule 144A in connection with resale of the Senior
Subordinated Notes.
(n) The Company has complied and will comply with all provisions of
Florida Statutes Section 517.075 relating to issuers doing business with
Cuba.
(o) Not to sell, offer for sale or solicit offers to buy any security
(as defined in the Act) that would be integrated with the sale of the
Senior Subordinated Notes in a manner that would require the registration
under the Act of the sale to the Initial Purchasers or the Eligible
Purchasers of the Senior Subordinated Notes.
(p) To comply, in all material respects, to the extent applicable,
with all the terms and conditions of the Registration Rights Agreement and
all agreements set forth in the representation letter of the Company to DTC
relating to the approval of the Senior Subordinated Notes by DTC for "book
entry" transfer.
(q) Concurrently with any registration of the Senior Subordinated
Notes pursuant to the Registration Rights Agreement, or at such earlier
time as may be required, the Indenture shall be qualified under the Trust
Indenture Act of 1939 (the "1939 Act") and any necessary supplemental
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indentures will be entered into in connection therewith.
(r) Not to voluntarily claim, and will resist actively all attempts
to claim, the benefit of any usury laws against holders of the Senior
Subordinated Notes.
(s) To do and perform all things reasonably required or necessary to
be done and performed under this Agreement by them prior to the Closing
Date, and to satisfy all conditions precedent to the Initial Purchasers'
obligations hereunder to purchase the Senior Subordinated Notes.
5. Representations and Warranties of the Company and the Subsidiary
Guarantors. The Company and the Subsidiary Guarantors, jointly and severally,
represent and warrant to the Initial Purchasers that:
(a) The Offering Memorandum with respect to the Senior Subordinated Notes has
been prepared by the Company for use by the Initial Purchasers in connection
with the Exempt Resales. No order or decree preventing the use of the Offering
Memorandum or any amendment or supplement thereto, or any order asserting that
the transactions contemplated by this Agreement are subject to the registration
requirements of the Act has been issued and no proceeding for that purpose has
commenced or is pending or, to the knowledge of the Company or the Subsidiary
Guarantors, is overtly contemplated.
(b) The Offering Memorandum as of its date and as of the Closing
Date, did not or
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will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except that this representation and
warranty does not apply to statements in or omissions from the Offering
Memorandum made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company in writing by
or on behalf of the Initial Purchasers expressly for use therein.
(c) The Indenture has been duly and validly authorized by the Company
and the Subsidiary Guarantors and, upon its execution, delivery and
performance by the Company and the Subsidiary Guarantors and assuming due
authorization, execution, delivery and performance by the Trustee, will be
a valid and binding agreement of the Company and the Subsidiary Guarantors,
enforceable in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency or other similar laws affecting
creditors' rights generally and subject to the applicability of general
principles of equity and conforms in all material respects to the
description thereof in the Offering Memorandum; no qualification of the
Indenture under the 1939 Act is required in connection with the offer and
sale of the Senior Subordinated Notes contemplated hereby or in connection
with the Exempt Resales.
(d) The Senior Subordinated Notes have been duly authorized by the
Company and, when executed by the Company and authenticated by the Trustee
in accordance with the Indenture and delivered to the Initial Purchasers
against payment therefor in accordance with the terms hereof, will have
been validly issued and delivered, and will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable in accordance with their terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights generally and subject to the
applicability of general principles of equity, and the description of the
Senior Subordinated Notes in the Offering Memorandum will conform in all
material respects to the Senior Subordinated Notes.
(e) The Subsidiary Guarantees to be endorsed on the Senior
Subordinated Notes have been duly authorized by the Subsidiary Guarantors
and, when executed by the Subsidiary Guarantors and when the Senior
Subordinated Notes are issued and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms hereof, such Subsidiary Guarantees
will have been validly issued and delivered and will constitute valid and
binding obligations of the Subsidiary Guarantors entitled to the benefits
of the Indenture and enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and
subject to the applicability of general principles of equity, and the
description of such Subsidiary Guarantees in the Offering Memorandum will
conform in all material respects to such Subsidiary Guarantees.
(f) The Exchange Notes have been duly authorized by the Company and,
when executed by the Company and authenticated by the Trustee and delivered
in accordance with the Registered Exchange Offer and the Indenture, will
have been validly issued and delivered, and will constitute valid and
binding obligations of the Company entitled to the benefits of the
Indenture and enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and
subject to the applicability of general principles of equity, and the
description of the Exchange Notes in the Offering Memorandum will conform
in all material respects to the Exchange Notes.
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(g) The Subsidiary Guarantees to be endorsed on the Exchange Notes
have been duly authorized by the Subsidiary Guarantors and, when executed
by the Subsidiary Guarantors and when the Exchange Notes are issued and
authenticated in accordance with the terms of the Registered Exchange Offer
and the Indenture, such Subsidiary Guarantees will have been validly issued
and delivered and will constitute valid and binding obligations of the
Subsidiary Guarantors entitled to the benefits of the Indenture and
enforceable in accordance with their terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws affecting
the enforcement of creditors' rights generally and subject to the
applicability of general principles of equity, and the description of such
Subsidiary Guarantees in the Offering Memorandum will conform in all
material respects to such Subsidiary Guarantees.
(h) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable; the authorized capital stock of the Company conforms to the
description thereof in the Offering Memorandum.
(i) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the state of Delaware with full
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Offering Memorandum, and is
duly registered and qualified to conduct its business and is in good
standing in each jurisdiction or place where the nature of its properties
or the conduct of its business requires such registration or qualification,
except where the failure so to register or qualify does not have a material
adverse effect on the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries (as hereinafter defined) taken as a whole (a "Material Adverse
----------------
Effect").
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(j) All the Company's subsidiaries (as defined in the Act) are
referred to herein individually as a "Subsidiary" and collectively as the
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"Subsidiaries." Each Subsidiary is a corporation duly organized, validly
------------
existing and in good standing in the jurisdiction of its incorporation
(except Falconite Equipment, Inc. and Falconite, Inc. are not in good
standing in their respective jurisdictions of incorporation), with full
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Offering Memorandum, and is
duly registered and qualified to conduct its business and is in good
standing in each jurisdiction or place where the nature of its properties
or the conduct of its business requires such registration or qualification,
except where the failure so to register or qualify or be in good standing
does not have a Material Adverse Effect. All the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable, and are wholly owned by
the Company directly or indirectly through one of the other Subsidiaries,
free and clear of any lien, adverse claim, security interest, equity or
other encumbrance, except pursuant to and otherwise permitted by the Credit
Facility as described in the Offering Memorandum.
(k) Schedule III hereto lists the only jurisdictions or places where
the nature of the properties or the conduct of the businesses of the
Company and the Subsidiary Guarantors requires the Company and the
Subsidiary Guarantors to be duly registered, qualified and in good
standing, except where the failure to so register, qualify or be in good
standing would not have a Material Adverse Effect.
(l) There are no legal or governmental proceedings pending or, to the
knowledge of the Company or the Subsidiary Guarantors, overtly threatened,
against the Company or any of the Subsidiaries or to which the Company or
any of the Subsidiaries or to which any of their
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respective properties, is subject, that are not disclosed in the Offering
Memorandum and which are reasonably likely to cause a Material Adverse
Effect or to materially affect the issuance of the Senior Subordinated
Notes or the consummation of the transactions contemplated by this
Agreement. There are no material agreements, contracts, indentures or
leases that should be properly described or disclosed in a summary fashion
in the Offering Memorandum that are not so described or disclosed. Neither
the Company nor any Subsidiary is involved in any strike, job action or
labor dispute with any group of employees, and, to the Company's and the
Subsidiary Guarantors' knowledge, no such action or dispute is overtly
threatened.
(m) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate or articles of incorporation or by-laws or
other organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of the Subsidiaries except
where any such violation or violations in the aggregate would not have a
Material Adverse Effect or (ii) in default in any respect in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
agreement, indenture, lease or other instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, except as may be disclosed in the
Offering Memorandum or where any such default or defaults in the aggregate
would not have a Material Adverse Effect.
(n) None of the issuance, offer, sale or delivery of the Senior
Subordinated Notes, the execution, delivery or performance of this
Agreement or the Indenture or the Registration Rights Agreement by the
Company or the Subsidiary Guarantors or the consummation by the Company and
the Subsidiary Guarantors of the transactions contemplated hereby or
thereby (i) requires any consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official
(except such as may be required in connection with the registration under
the Act of the Senior Subordinated Notes in accordance with the
Registration Rights Agreement, qualification of the Indenture under the
1939 Act and compliance with the securities or Blue Sky laws of various
jurisdictions), or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company
or any of the Subsidiary Guarantors or (ii) conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under, in any
material respect, any material agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiary Guarantors is a
party or by which any of them or any of their respective properties may be
bound, or violates or will violate in any material respect any statute,
law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of the Subsidiary Guarantors or any of
their respective properties, or will result in the creation or imposition
of any material lien, charge or encumbrance upon any property or assets of
the Company or any of the Subsidiary Guarantors pursuant to the terms of
any agreement or instrument to which any of them is a party or by which any
of them may be bound or to which any of the property or assets of any of
them is subject.
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(o) The accountants, PricewaterhouseCoopers LLP, Price Waterhouse
LLP, Xxxxxxxx, Xxxxxxxxx Xxxx Xxxxx & Co. P.C., Xxxxx, Xxxxxxx & Xxxxxxx,
Coopers & Xxxxxxx L.L.P., KPMG Peat Marwick L.L.P and Wolf & Company, P.C.,
who have certified or shall certify the financial statements included as
part of the Offering Memorandum (or any amendment or supplement thereto),
are, to the Company's knowledge, independent public accountants under Rule
101 of the AICPA's Code of Professional Conduct, and its interpretation and
rulings.
(p) The financial statements (historical and pro forma), together
with related schedules and notes forming part of the Offering Memorandum
(and any amendment or supplement thereto), present fairly in all material
respects the consolidated financial position, results of operations and
changes in stockholders' equity and cash flows of the Company and the
Subsidiaries on the basis stated in the Offering Memorandum at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; the
assumptions used in preparing the pro forma financial information and
related notes and schedules included in the Offering Memorandum are
reasonable; and the other financial and statistical information and data
set forth in the Offering Memorandum (and any amendment or supplement
thereto) is accurately presented and, to the extent such information and
data is derived from the financial books and records of the Company, is
prepared on a basis consistent with such financial statements and the books
and records of the Company.
(q) The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement and the
Registration Rights Agreement; the execution and delivery of, and the
performance by the Company of its obligations under, this Agreement and the
Registration Rights Agreement have been duly and validly authorized by the
Company, and this Agreement and the Registration Rights Agreement have been
duly executed and delivered by the Company and constitute the valid and
legally binding agreements of the Company, enforceable against the Company
in accordance with their terms, except as the enforcement hereof and
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and subject to the
applicability of general principles of equity, and except as rights to
indemnity and contribution hereunder and thereunder may be limited by
Federal or state securities laws or principles of public policy.
(r) Each of the Subsidiary Guarantors has all requisite power and
authority to execute, deliver and perform its obligations under this
Agreement and the Registration Rights Agreement; the execution and delivery
of, and the performance by each Subsidiary Guarantor of its obligations
under, this Agreement and the Registration Rights Agreement have been duly
and validly authorized by each Subsidiary Guarantor, and this Agreement and
the Registration Rights Agreement have been duly executed and delivered by
each Subsidiary Guarantor and constitute the valid and legally binding
agreements of each Subsidiary Guarantor, enforceable against each
Subsidiary Guarantor in accordance with their terms, except as the
enforcement hereof and thereof may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally
and subject to the applicability of general principles of equity, and
except as rights to indemnity and contribution hereunder and thereunder may
be limited by Federal or state securities laws or principles of public
policy.
(s) Except as disclosed in the Offering Memorandum (or any amendment
or supplement thereto), subsequent to the date as of which such information
is given in the Offering Memorandum (or any amendment or supplement
thereto), neither the Company nor any of the
10
Subsidiaries has incurred any liability or obligation, or entered into any
transaction, not in the ordinary course of business, that is material to
the Company and the Subsidiaries taken as a whole, and there has not been
any material change in the capital stock, or material increase in the
short-term or long-term debt, of the Company or any of the Subsidiaries or
any material adverse change, or any development involving or which could
reasonably be expected to involve a prospective material adverse change, in
the financial condition, business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole.
(t) Each of the Company and the Subsidiaries has good and marketable
title to all property (real and personal) described in the Offering
Memorandum as being owned by it, free and clear of all liens, claims,
security interests or other encumbrances except pursuant to and otherwise
permitted by the Credit Facility as described in a summary fashion in the
Offering Memorandum; and all the property described in the Offering
Memorandum as being held under lease by each of the Company and the
Subsidiaries is held by it under valid, subsisting and enforceable leases,
with only such exceptions as in the aggregate are not materially burdensome
and do not interfere in any material respect with the conduct of the
business of the Company and the Subsidiaries taken as a whole.
(u) Neither the Company nor the Subsidiary Guarantors have
distributed and, prior to the later to occur of the Closing Date and
completion of the distribution of the Senior Subordinated Notes, will not
distribute any offering material in violation of the Act in connection with
the offering and sale of the Senior Subordinated Notes.
(v) Each of the Company and the Subsidiaries have such permits,
licenses, franchises, certificates of need and other approvals or
authorizations of governmental or regulatory authorities ("Permits") as are
-------
necessary under applicable law to own their respective properties and to
conduct their respective businesses in the manner described in the Offering
Memorandum, except to the extent that the failure to have such Permits
would not have a Material Adverse Effect; the Company and each of the
Subsidiaries have fulfilled and performed in all material respects, all
their respective material obligations with respect to the 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, subject in each
case to such qualification as may be set forth in the Offering Memorandum
and except to the extent that any such revocation or termination would not
have a Material Adverse Effect; and, except as described in the Offering
Memorandum, none of the Permits contains any restriction that is materially
burdensome to the Company or any of the Subsidiaries.
(w) The Company and the Subsidiary Guarantors maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(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 existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) Neither the Company nor any of the Subsidiaries nor, to the
Company's or the Subsidiary Guarantors' knowledge, any employee or agent of
the Company or any Subsidiary has made any payment of funds of the Company
or any Subsidiary or received or retained any funds
11
in violation of any law, rule or regulation, which violation would have a
Material Adverse Effect.
(y) Except as disclosed in the Offering Memorandum, the Company and
each of the Subsidiaries have filed all tax returns required to be filed,
which returns are true and correct in all material respects, and neither
the Company nor any Subsidiary is in default in the payment of any taxes
which were payable pursuant to said returns or any assessments with respect
thereto, except where the failure to file such returns and make such
payments would not have a Material Adverse Effect and except for the
payment of any amounts that are being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP have been established.
(z) No holder of any security of the Company has any right to request
or demand registration of shares of Common Stock or any other security of
the Company because of the consummation of the transactions contemplated by
this Agreement or the Registration Rights Agreement, except as have been
waived.
(aa) The Company and each of the Subsidiaries own or possess all
patents, trademarks, trademark registration, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Offering Memorandum as being owned by any of
them or necessary for the conduct of their respective businesses, and
neither the Company nor the Subsidiary Guarantors are aware of any claim to
the contrary or any challenge by any other person to the rights of the
Company and the Subsidiaries with respect to the foregoing, except for such
claims or challenges that would not individually or in the aggregate be
reasonably expected to result in a Material Adverse Effect.
(bb) The Company is not and, upon sale of the Senior Subordinated
Notes to be issued and sold thereby in accordance herewith and the
application of the net proceeds to the Company of such sale as described in
the Offering Memorandum under the caption "Use of Proceeds," will not be an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(cc) When the Senior Subordinated Notes are issued and delivered
pursuant to this Agreement, such Senior Subordinated Notes will not be of
the same class (within the meaning of Rule 144A(d)(3) under the Act) as any
security of the Company that is listed on a national securities exchange
registered under Section 6 of the Exchange Act or that is quoted in a
United States automated interdealer quotation system.
(dd) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D ("Regulation D") under the Act) of the Company has
directly, or through any agent (provided that no representation is made as
to the Initial Purchasers or any person acting on their behalf), (i) sold,
offered for sale, solicited offers to buy, any security (as defined in the
Act) which is or properly would be integrated with the offering and sale of
the Senior Subordinated Notes in a manner that would require the
registration of the Senior Subordinated Notes under the Act or (ii) engaged
in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offering of the Senior
Subordinated Notes.
(ee) Assuming (i) that the representations and warranties in Section
2(b) hereof are true, (ii) the Initial Purchasers comply with the covenants
set forth in Section 2(b) hereof and (iii) that each person to whom the
Initial Purchasers offer, sell or deliver the Senior Subordinated Notes is
12
a QIB, the purchase and sale of the Senior Subordinated Notes pursuant
hereto (including the Initial Purchasers' proposed offering of the Senior
Subordinated Notes on the terms and in the manner set forth in the Offering
Memorandum and Section 2 hereof) is exempt from the registration
requirements of the Act.
(ff) The Company and each of its Subsidiaries have fulfilled their
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974 ("ERISA")
-----
and the regulations and published interpretations thereunder with respect
to each "plan" (as defined in ERISA and such regulations and published
interpretations) in which employees of the Company and its Subsidiaries are
eligible to participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such
regulations and published interpretations, and has not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title
IV of ERISA.
(gg) The execution and delivery of this Agreement, the other Operative
Documents and the sale of the Senior Subordinated Notes to the Initial
Purchasers or by the Initial Purchasers to Eligible Purchasers will not
involve any prohibited transaction within the meaning of Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"). The representation made by the Company and the Subsidiary
----
Guarantors in the preceding sentence is made in reliance upon and subject
to the accuracy of, and compliance with, the representations and covenants
made or deemed made by the Eligible Purchasers as set forth in the Offering
Memorandum under the section entitled "Notice to Investors."
(hh) (i) The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which they
are engaged; (ii) all policies of insurance insuring the Company or any of
its Subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; (iii) the Company and
its Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and (iv) there are no material claims
by the Company or any of its Subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause.
(ii) The Company and each of its Subsidiaries (i) are and at all times
have been, in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
------------------
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses
or approvals would not, singly or in the aggregate, have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries has been named as a
"potentially responsible party" under the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended, or any similar
state statute.
(jj) In connection with its acquisition of businesses, the Company
typically conducts a review of the effect of Environmental Laws on the
business, operations and properties of the acquired businesses, in the
course of which it identifies and evaluates associated costs and
liabilities
13
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably concluded
that such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect.
6. Indemnification and Contribution. (a) The Company and the
Subsidiary Guarantors agree jointly and severally to indemnify and hold harmless
each Initial Purchaser and each person, if any, who controls any Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Offering Memorandum or in any amendment or supplement thereto,
or arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to such Initial Purchaser furnished in writing to the
Company by or on behalf of such Initial Purchaser expressly for use in
connection therewith. The foregoing indemnity agreement shall be in addition to
any liability which the Company or the Subsidiary Guarantors may otherwise have.
(b) If any action, suit or proceeding shall be brought against an
Initial Purchaser or any person controlling such Initial Purchaser in respect of
which indemnity may be sought against the Company or the Subsidiary Guarantors,
the Initial Purchaser or such controlling person shall promptly notify the
parties against whom indemnification is being sought (the "indemnifying
parties"), and such indemnifying parties shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses. The
Initial Purchaser or any such controlling person shall have the right to employ
separate counsel in any such action, suit or proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Initial Purchaser or such controlling person unless (i) the
indemnifying parties have agreed in writing to pay such fees and expenses, (ii)
the indemnifying parties have failed to assume the defense and employ counsel,
or (iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both the Initial Purchaser or such controlling person
and the indemnifying parties and the Initial Purchaser or such controlling
person shall have been advised by its counsel that representation of such
indemnified party and any indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying party
shall not have the right to assume the defense of such action, suit or
proceeding on behalf of the Initial Purchaser or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection with any
one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to one separate
firm of attorneys per jurisdiction acting as local counsel) at any time for the
Initial Purchasers and controlling persons not having actual or potential
differing interests with the Initial Purchasers or among themselves, which firm
shall be designated in writing by Xxxxxxx Xxxxx Xxxxxx Inc., and that all such
fees and expenses shall be reimbursed on a monthly basis as provided in
paragraph (a) hereof. The indemnifying parties shall not be liable for any
settlement of any such action, suit or proceeding effected without their written
consent, but if settled with such written consent, or if there shall be a final
judgment for the plaintiff in any such action,
14
suit or proceeding, the indemnifying parties agree to indemnify and hold
harmless the Initial Purchasers, to the extent provided in paragraph (a), and
any such controlling person from and against any loss, claim, damage, liability
or expense by reason of such settlement or judgment.
(c) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Company and the Subsidiary Guarantors, and their
respective directors and officers, and any person who controls the Company or
any Subsidiary Guarantor within the meaning of Section 15 of the Act or Section
20 of the Exchange Act to the same extent as the indemnity from the Company and
the Subsidiary Guarantors to the Initial Purchasers set forth in paragraph (a)
hereof, but only with respect to information relating to such Initial Purchaser
furnished in writing by or on behalf of such Initial Purchaser expressly for use
in the Offering Memorandum or any amendment or supplement thereto. If any
action, suit or proceeding shall be brought against the Company or the
Subsidiary Guarantors, any of their respective directors or officers, or any
such controlling person based on the Offering Memorandum, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against the
Initial Purchasers pursuant to this paragraph (c), the Initial Purchasers shall
have the rights and duties given to the Company by paragraph (b) above (except
that if the Company shall have assumed the defense thereof the Initial
Purchasers shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the Initial Purchasers' expense), and the Company and
the Subsidiary Guarantors, their respective directors and officers, and any such
controlling person shall have the rights and duties given to the Initial
Purchasers by paragraph (b) above. The foregoing indemnity agreement shall be in
addition to any liability which the Initial Purchasers may otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under paragraph (a) or (c) hereof in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then an indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Subsidiary Guarantors on the one hand and the Initial Purchasers
on the other hand from the offering of the Senior Subordinated Notes, or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Subsidiary 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, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Subsidiary Guarantors on the one hand and the Initial Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
discounts and commissions received by the Initial Purchasers. The relative fault
of the Company and the Subsidiary Guarantors on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Subsidiary Guarantors on the one hand or by the
Initial Purchasers on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company, the Subsidiary Guarantors and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to this
Section 6 were determined by a pro rata allocation 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 party as
a result of the
15
losses, claims, damages, liabilities and expenses referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 6, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price of the Senior Subordinated Notes underwritten by it and
distributed to the public exceeds the amount of any damages which 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 6 shall be paid on a monthly basis, by the indemnifying party to the
indemnified party as such losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements contained in this Section 6
and the representations and warranties of the Company and the Subsidiary
Guarantors set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of the
Initial Purchasers or any person controlling the Initial Purchasers, the
Company, any Subsidiary Guarantor, their respective directors or officers or any
person controlling the Company or any Subsidiary Guarantor, (ii) acceptance of
any Senior Subordinated Notes and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to an Initial Purchaser or any person
controlling such Initial Purchaser, or to the Company, any Subsidiary Guarantor,
their respective directors or officers or any person controlling the Company or
any Subsidiary Guarantor, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 6.
(g) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is a party
and indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such action, suit or
proceeding.
7. Conditions of the Initial Purchasers' Obligation. The obligations
of the Initial Purchasers to purchase the Senior Subordinated Notes hereunder
are subject to the following conditions:
(a) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Offering Memorandum or any
amendment or supplement thereto, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending or, to the knowledge of the Company or the
Subsidiary Guarantors, be overtly contemplated. No stop order suspending the
sale of the Senior Subordinated Notes in any jurisdiction designated by the
Initial Purchasers shall have been issued and no proceedings for that purpose
shall have been commenced or shall be pending or, to the knowledge of the
Company or the Subsidiary Guarantors, shall be contemplated.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the financial condition, business, properties, net
worth, or results of operations of the Company or the Subsidiaries not
contemplated by the Offering Memorandum, which in the opinion of the Initial
Purchasers, would
16
materially adversely affect the market for the Senior Subordinated Notes, or
(ii) any event or development relating to or involving the Company or any
officer or director of the Company which makes any statement made in the
Offering Memorandum untrue in any material respect or which, in the opinion of
the Company and its counsel or the Initial Purchasers and their counsel,
requires the making of any addition to or change in the Offering Memorandum in
order to state a material fact required by any law to be stated therein or
necessary in order to make the statements therein not misleading, if amending or
supplementing the Offering Memorandum to reflect such event or development
would, in the opinion of the Initial Purchasers, materially adversely affect the
market for the Senior Subordinated Notes.
(c) The Initial Purchasers shall have received on the Closing Date
an opinion of Xxxxxxxx & Xxxxx, counsel for the Company, dated the Closing Date
and addressed to the Initial Purchasers, in substantially the form of Exhibit B
hereto.
(d) The Initial Purchasers shall have received on the Closing Date
an opinion of Xxxxxx & Xxxxxxx, counsel for the Initial Purchasers, dated the
Closing Date, and addressed to the Initial Purchasers, with respect to the
Offering Memorandum and such other related matters as the Initial Purchasers may
reasonably request, and such counsel shall have received such certificates,
documents and information as they may reasonably request to enable them to pass
upon such matters.
(e) The Initial Purchasers shall have received letters addressed to
the Initial Purchasers, and dated the date hereof and the Closing Date, from
PricewaterhouseCoopers LLP, independent certified public accountants,
substantially in the forms heretofore approved by the Initial Purchasers.
(f)(i) There shall not have been any change in the capital stock of
the Company and the Subsidiary Guarantors nor any material increase in the
short-term or long-term debt of the Company and the Subsidiary Guarantors (other
than in the ordinary course of business) from that set forth or contemplated in
the Offering Memorandum (or any amendment or supplement thereto); (ii) there
shall not have been, since the respective dates as of which information is given
in the Offering Memorandum (or any amendment or supplement thereto), except as
may otherwise be stated in the Offering Memorandum (or any amendment or
supplement thereto), any material adverse change in the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole; (iii) the Company and the
Subsidiaries shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company and the Subsidiaries, taken as a whole, other than those reflected in
the Offering Memorandum (or any amendment or supplement thereto); and (iv) all
the representations and warranties of the Company and the Subsidiary Guarantors
contained in this Agreement shall be true and correct in all material respects
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, and the Initial Purchasers shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief accounting officer of the Company and the Subsidiary Guarantors
(or such other officers as are acceptable to the Initial Purchasers), to the
effect set forth in this Section 7(f) and in Section 7(g) and 7(l) hereof.
(g) The Company and the Subsidiary Guarantors shall not have failed
at or prior to the Closing Date to have performed or complied with any of their
agreements herein contained and required to be performed or complied with by
them hereunder at or prior to the Closing Date.
(h) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of Rule
436(g) under the Act, that (i) it is downgrading its rating assigned to any
class of securities of the Company, or (ii) it is reviewing its ratings
17
assigned to any class of securities of the Company with a view to possible
downgrading, or with negative implications, or direction not determined.
(i) The Senior Subordinated Notes shall have been approved for
trading on PORTAL.
(k) The Company shall have furnished or caused to be furnished to the
Initial Purchasers such further certificates and documents as the Initial
Purchasers shall have requested.
(l) Falconite Inc. shall be in good standing in its jurisdiction of
incorporation. Falconite Equipment, Inc. shall be in good standing in its
jurisdiction of incorporation, or the Company shall represent to the Initial
Purchasers that Falconite Equipment, Inc. is not a material subsidiary of the
Company.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchasers and counsel for the
Initial Purchasers.
8. Expenses. The Company and the Subsidiary Guarantors agree to pay
the following costs and expenses and all other costs and expenses incurred by
them incident to the performance by them of any of their obligations hereunder:
(i) the preparation, printing and reproduction of the Offering Memorandum
(including, without limitation, financial statements thereto), and each
amendment or supplement thereto; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Offering Memorandum and all amendments or
supplements thereto as may be reasonably requested for use in connection with
the offering and sale of the Senior Subordinated Notes; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Senior
Subordinated Notes, including any stamp taxes in connection with the original
issuance and sale of the Senior Subordinated Notes; (iv) the printing (or
reproduction) and delivery of this Agreement and the Blue Sky Memorandum; (v)
the application for quotation of the Senior Subordinated Notes on the PORTAL
Market; (vi) the qualification of the Senior Subordinated Notes for offer and
sale under the securities or Blue Sky laws of the several states as provided in
Section 4(f) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Initial Purchasers relating to the preparation, printing or
reproduction, and delivery of the Blue Sky Memorandum and such qualification),
provided that the fees referred to in this clause (vi) shall not exceed $10,000;
(vii) the performance by the Company and the Subsidiary Guarantors of their
obligations under the Registration Rights Agreement; (viii) fees and expenses of
the Trustee and its counsel; (ix) the transportation and other expenses, if any,
incurred by or on behalf of the Company representatives in connection with
presentations to prospective purchasers of the Senior Subordinated Notes; and
(x) the fees and expenses of the Company's accountants and the fees and expenses
of counsel (including local and special counsel, if any) for the Company. The
Company and the Subsidiary Guarantors hereby agree that they will pay in full on
the Closing Date the fees and expenses referred to in clause (vi) of this
Section 8 by delivering to counsel for the Initial Purchasers on such date a
check payable to such counsel in the requisite amount.
9. Effective Date of Agreement. This Agreement shall become
effective upon the execution and delivery hereof by all the parties hereto.
10. Termination of Agreement. (a) This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, without
liability on the part of the Initial Purchasers to the Company or the Subsidiary
Guarantors, by notice to the Company, if prior to the Closing Date, (i) trading
in securities generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq
18
National Market shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall have been
declared, or (iii) there shall have occurred any outbreak or escalation of
hostilities involving the United States or other domestic, foreign or
international calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in the reasonable judgment of the Initial Purchasers,
impracticable or inadvisable to commence or continue the offering of the Senior
Subordinated Notes on the terms set forth on the cover page of the Offering
Memorandum or to enforce contracts for the resale of the Senior Subordinated
Notes by the Initial Purchasers. Notice of such termination may be given to the
Company by telegram, telecopy or telephone and shall be subsequently confirmed
by letter.
(b) If on the Closing Date any one or more of the Initial Purchasers
shall fail or refuse to purchase the Senior Subordinated Notes which it or they
have agreed to purchase hereunder on such date and the amount of Senior
Subordinated Notes which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to purchase is not
more than one-tenth of the total amount of Senior Subordinated Notes to be
purchased on such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated severally, in the proportion which the aggregate
principal amount of such securities set forth opposite its name in Schedule II
bears to the total amount of such Senior Subordinated Notes which all the non-
defaulting Initial Purchasers, as the case may be, have agreed to purchase, or
in such other proportion as the Initial Purchasers may specify, to purchase the
securities which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase on such date; provided
that in no event shall the aggregate principal amount of such securities which
any Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such aggregate amount of such Senior Subordinated Notes without the written
consent of such Initial Purchaser. If on the Closing Date any Initial Purchaser
or Initial Purchasers shall fail or refuse to purchase such Senior Subordinated
Notes and the aggregate amount of Senior Subordinated Notes with respect to
which such default occurs is more than one-tenth of the total amount of Senior
Subordinated Notes to be purchased by all Initial Purchasers and arrangements
satisfactory to the Initial Purchasers and the Company for the purchase of such
securities are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Initial Purchaser
and the Company. In any such case which does not result in termination of this
Agreement, either the Initial Purchasers or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Offering Memorandum or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Initial Purchaser from liability in respect of
any default of any such Initial Purchaser under this Agreement.
11. Information Furnished by the Initial Purchasers. The statements
set forth in the fifth and last paragraph of the cover page of the Offering
Memorandum and the last paragraph on the inside cover page of the Offering
Memorandum and the second sentence of the fourth paragraph under the caption
"Plan of Distribution" in the Offering Memorandum, constitute the only
information furnished by or on behalf of the Initial Purchasers as such
information is referred to in Sections 5(b) and 6 hereof.
12. Miscellaneous. Except as otherwise provided in Sections 4 and 10
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 0000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Chief
Financial Officer with a copy, which shall not constitute notice, to Xxxxxxxx &
Xxxxx, 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: H. Xxxx xxx
Xxxxxx, or (ii) if to the Initial Purchasers, addressed to Xxxxxxx Xxxxx Barney
Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Manager, Investment
Banking Division, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx,
00
XX 00000, Attention: Xxxx Xxxxxxx.
This Agreement has been and is made solely for the benefit of the
Initial Purchasers, the Company, the Subsidiary Guarantors and their respective
directors, officers and controlling persons referred to in Section 6 hereof and
their respective successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns" as
used in this Agreement shall include a purchaser from the Initial Purchasers of
any of the Senior Subordinated Notes in his status as such purchaser.
13. Applicable Law; Counterparts This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York and without
regard to the conflicts of law principles thereof.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
[signature page follows]
20
Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Subsidiary Guarantors and the Initial Purchasers.
Very truly yours,
National Equipment Services, Inc.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Albany Ladder Company, Inc.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
BAT Acquisition Corp.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
NES Acquisition Corp.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
NES East Acquisition Corp.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
NES Michigan Acquisition Corp.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Falconite, Inc.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Carl's Mid South Rent-All Center
Incorporated
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Falconite Aviation, Inc.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Falconite Equipment, Inc.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Falconite Rebuild Center, Inc.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
M&M Properties, Inc.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
XxXxxxx & Falconite Equipment Co., Inc.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Rebel Studio Rentals, Inc.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Xxxxxxxxxxx Crane Service, Inc.
By:/s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
Confirmed as of the date first
above mentioned.
Xxxxxxx Xxxxx Xxxxxx Inc.
By:/s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Director
First Union Capital Markets Corp., a division of Wheat First Securities, Inc.
By:/s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
SCHEDULE I
SUBSIDIARY GUARANTORS
---------------------
Albany Ladder Company, Inc.
BAT Acquisition Corp.
NES Acquisition Corp.
NES East Acquisition Corp.
NES Michigan Acquisition Corp.
Falconite, Inc.
Carl's Mid South Rent-All Center Incorporated
Falconite Aviation, Inc.
Falconite Equipment, Inc.
Falconite Rebuild Center, Inc.
M&M Properties, Inc.
XxXxxxx & Falconite Equipment Co., Inc.
Rebel Studio Rentals, Inc.
Xxxxxxxxxxx Xxxxx Service, Inc.
SCHEDULE II
PRINCIPAL AMOUNT OF
SENIOR SUBORDINATED NOTES
INITIAL PURCHASERS TO BE PURCHASED
------------------ -------------------------
Xxxxxxx Xxxxx Barney Inc....................... $ 87,500,000
First Union Capital Markets Corp.,
a division of Wheat First Securities, Inc..... $ 37,500,000
------------
Total.................................... $125,000,000
============
SCHEDULE III
Jurisdictions Where Qualified to Do Business
NAME OF ENTITY STATE OF INCORPORATION STATES OF FOREIGN QUALIFICATION
-------------- ---------------------- --------------------------------
National Equipment Services, Inc. Delaware Illinois
Albany Ladder Company, Inc. New York Connecticut, Massachusetts, New
Hampshire, Pennsylvania and
Vermont
BAT Acquisition Corp. Delaware Nevada
NES Acquisition Corp. Delaware Alabama, Louisiana and Texas
NES East Acquisition Corp. Delaware Connecticut, Georgia, Louisiana,
Maine, Massachusetts, New York,
New Hampshire, Pennsylvania,
Vermont and Virginia
NES Michigan Acquisition Corp. Delaware Michigan
Falconite, Inc. Illinois Kentucky
Carl's Mid South Rent-All Center Tennessee none
Incorporated
Falconite Aviation, Inc. Delaware none
Falconite Equipment, Inc. Illinois Indiana, Kentucky, Michigan,
Missouri, Ohio and Tennessee
Falconite Rebuild Center, Inc. Kentucky none
M&M Properties, Inc. Alabama Florida, Georgia, Louisiana and
Mississippi
XxXxxxx & Falconite Equipment Alabama none
Co., Inc.
Rebel Studio Rentals, Inc. California none
Xxxxxxxxxxx Crane Service, Inc. Massachusetts New Hampshire, New Jersey and
Rhode Island
Exhibit A
---------
Form of Registration Rights Agreement
Exhibit B
---------
Form of Opinion of Xxxxxxxx & Xxxxx
