EXHIBIT 10.17
EXECUTION COPY
THE IT GROUP, INC.
THE GUARANTORS NAMED HEREIN
$225,000,000
11 1/4 % Senior Subordinated Notes due 2009
Purchase Agreement
April 6, 1999
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
SALOMON SMITH BARNEY
$225,000,000
Series A Senior Subordinated Notes due 2009
The IT Group, Inc.
PURCHASE AGREEMENT
April 6, 1999
Donaldson, Lufkin & Jenrette Securities Corporation
Salomon Smith Barney
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
The IT Group, Inc., a Delaware corporation (the "Company"), proposes
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to issue and sell to Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ")
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and Salomon Smith Barney (each, an "Initial Purchaser" and collectively, the
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"Initial Purchasers") an aggregate of $225,000,000 in principal amount of its 11
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1/4 % Series A Senior Subordinated Notes due 2009 (the "Series A Notes"),
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subject to the terms and conditions set forth herein. The Series A Notes are to
be issued pursuant to the provisions of an indenture (the "Indenture"), to be
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dated as of the Closing Date (as defined below), among the Company, the
Guarantors (as defined below) and The Bank of New York, N.A., as trustee (the
"Trustee"). The Series A Notes and the Series B Notes (as defined below)
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issuable in exchange therefor are collectively referred to herein as the
"Notes." The Notes will be guaranteed (the "Subsidiary Guarantees") by each of
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the entities listed on Schedule A hereto (each, a "Guarantor" and collectively
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the "Guarantors"). Capitalized terms used but not defined herein shall have the
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meanings given to such terms in the Indenture.
Pursuant to the terms of an Asset Purchase Agreement, dated as of
March 8, 1999 (the "Asset Purchase Agreement"), by and between the Company and
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ICF Kaiser International, Inc., ("ICFK") the Company agreed to purchase
specified assets and assume specified liabilities (including all of the issued
and outstanding stock of certain subsidiaries of ICFK (the "EFM
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Subsidiaries"))("EFM") of ICFK Environment and Facilities Management Group (the
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"EFM Acquisition"). In addition, pursuant to the terms of a Share Purchase
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Agreement, dated February 5, 1999 (the "Roche Purchase Agreement" and, together
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with the Asset Purchase Agreement, the "Acquisition Agreements"), by and between
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the Company and the parties listed therein, the Company agreed to purchase all
of the issued and outstanding capital stock of Roche Limited, Consulting Group
(the "Roche Acquisition" and, together with the EFM Acquisition, the
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"Acquisitions"). Following the Acquisitions and subject to certain conditions
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and other provisions contained in the Acquisition Agreements, Roche Limited,
Consulting Group ("Roche") and the EFM Subsidiaries will be wholly-owned
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subsidiaries of the Company.
1. Offering Memorandum. The Series A Notes will be offered and sold to
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the Initial Purchasers pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "Act"). The
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Company and the Guarantors (other than Roche and the EFM Subsidiaries) have
prepared a preliminary offering memorandum, dated March 19, 1999 (together with
any information incorporated by reference therein, collectively, the
"Preliminary
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Offering Memorandum") and a final offering memorandum, dated April 6, 1999
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(together with any information incorporated by reference therein, collectively,
the "Offering Memorandum"), relating to the Series A Notes and the Subsidiary
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Guarantees.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (the "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER:
(1) REPRESENTS THAT (i) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (as
defined in Rule 144A under the Act)(a "QIB"), (ii) IT HAS ACQUIRED THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
ACT OR (iii) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (as defined in
Rule 501(A)(1), (2), (3) OR (7) of Regulation D under the Act (an "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(i) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (ii) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (iii) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR 904 OF THE ACT, (iv) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE ACT, (v) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (the form of which
can be obtained from the Trustee) AND AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE ACT, (vi) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY)
OR (vii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
2. Agreements to Sell and Purchase. On the basis of the
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representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained
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herein, the Company agrees to issue and sell to the Initial Purchasers, and each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company, the principal amount of Series A Notes set forth opposite the name of
such Initial Purchaser on Schedule B hereto at a purchase price equal to 11 1/4
% of the principal amount thereto (the "Purchase Price").
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3. Terms of Offering. The Initial Purchasers have advised the Company
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that the Initial Purchasers will make offers (the "Exempt Resales") of the
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Series A Notes purchased hereunder on the terms set forth in the Offering
Memorandum, as amended or supplemented, solely to (i) persons whom the Initial
Purchasers reasonably believe to be "qualified institutional buyers" as defined
in Rule 144A under the Act ("QIBs") and (ii) persons permitted to purchase the
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Series A Notes in offshore transactions in reliance upon Regulation S under the
Act (each, a "Regulation S Purchaser") (such persons specified in clauses (i)
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and (ii) being referred to herein as the "Eligible Purchasers"). The Initial
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Purchasers will offer the Series A Notes to Eligible Purchasers initially at a
price equal to 100.0% of the principal amount thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, in substantially
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the form of Exhibit A hereto, for so long as such Series A Notes constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
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Agreement). Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will agree to file with the Securities and Exchange Commission (the
"Commission") under the circumstances set forth therein, (i) a registration
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statement under the Act (the "Exchange Offer Registration Statement") relating
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to the Company's Series B Senior Subordinated Notes due 2009 (the "Series B
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Notes"), to be offered in exchange for the Series A Notes (such offer to
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exchange being referred to as the "Exchange Offer") and the Subsidiary
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Guarantees thereof or (ii) a shelf registration statement pursuant to Rule 415
under the Act (the "Shelf Registration Statement" and, together with the
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Exchange Offer Registration Statement, the "Registration Statements") relating
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to the resale by certain holders of the Series A Notes and to use its best
efforts to cause such Registration Statements to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. This Agreement, the Indenture,
the Notes, the Subsidiary Guarantees, the Registration Rights Agreement, the
Asset Purchase Agreement and the Roche Purchase Agreement are hereinafter
sometimes referred to collectively as the "Operative Documents."
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4. Delivery and Payment.
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(a) Delivery of, and payment of the Purchase Price for, the Series A
Notes shall be made at the offices of Gibson, Dunn & Crutcher LLP, 1050
Connecticut Avenue, N.W., Washington, D.C. 20036 or such other location as may
be mutually acceptable. Such delivery and payment shall be made at 9:00 a.m.
New York City time, on April 9, 1999 or at such other time on the same date or
such other date as shall be agreed upon by the Initial Purchasers and the
Company in writing. The time and date of such delivery and the payment for the
Series A Notes are herein called the "Closing Date."
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(b) One or more of the Series A Notes in definitive global form,
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the aggregate
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principal amount of the Series A Notes (collectively, the "Global Note"), shall
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be delivered by the Company to the Initial Purchasers (or as the Initial
Purchasers direct) in each case with any transfer taxes thereon duly paid by the
Company against payment by the Initial Purchasers of the Purchase Price thereof
by wire transfer in same day funds to the order of the
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Company. The Global Note shall be made available to the Initial Purchasers for
inspection not later than 9:30 a.m., New York City time, on the business day
immediately preceding the Closing Date.
5. Agreements of the Company and the Guarantors. As of the date
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hereof, each of the Company and the Guarantors (other than the EFM Subsidiaries)
and, as of the consummation of the EFM Acquisition, each of the EFM
Subsidiaries, hereby agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, confirm such advice in writing, (i) to the extent the
Company is aware, of the issuance by any state securities commission of any stop
order suspending the qualification or exemption from qualification of any Series
A Notes for offering or sale in any jurisdiction designated by the Initial
Purchasers pursuant to Section 5(e) hereof, or the initiation of any proceeding
by any state securities commission or any other federal or state regulatory
authority for such purpose and (ii) of the happening of any event during the
period referred to in Section 5(c) below that makes any statement of a material
fact made in the Preliminary Offering Memorandum or the Offering Memorandum
untrue or that requires any additions to or changes in the Preliminary Offering
Memorandum or the Offering Memorandum in order to make the statements therein
not misleading. The Company and the Guarantors shall use all commercially
reasonable efforts to prevent the issuance of any stop order or order suspending
the qualification or exemption of any Series A Notes under any state securities
or Blue Sky laws and, if at any time any state securities commission or other
federal or state regulatory authority shall issue an order suspending the
qualification or exemption of any Series A Notes under any state securities or
Blue Sky laws, the Company and the Guarantors shall use all commercially
reasonable efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Company as many copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments or supplements
thereto, as the Initial Purchasers may reasonably request for the time period
specified in Section 5(c). Subject to the Initial Purchasers' compliance with
their respective representations and warranties and agreements set forth in
Section 7 hereof, the Company consents to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) During such period as in the opinion of counsel for the Initial
Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers and in connection with
market-making activities of the Initial Purchasers for so long as any Series A
Notes are outstanding, (i) 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 the Initial Purchasers shall reasonably object after
being so advised and (ii) to prepare promptly upon the Initial Purchasers'
reasonable request, any amendment or supplement to the Offering Memorandum which
may be necessary or advisable in connection with such Exempt Resales or such
market-making activities.
(d) If, during the period referred to in Section 5(c) above, any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel to the Initial Purchasers, it becomes necessary to amend or supplement
the Offering Memorandum in order to make the statements therein, in the light of
the circumstances when such Offering Memorandum is delivered to an Eligible
Purchaser, not misleading, or if, in the opinion of counsel to the Initial
Purchasers, it is necessary to amend or supplement the Offering Memorandum to
comply with any applicable law, and to prepare an appropriate amendment or
supplement to such Offering Memorandum so that the statements therein, as so
amended or supplemented, will not, in the light of the circumstances when it is
so delivered, be
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misleading, or so that such Offering Memorandum will comply with applicable law,
and to furnish to the Initial Purchasers and such other persons as the Initial
Purchasers may designate such number of copies thereof as the Initial Purchasers
may reasonably request.
(e) Prior to the sale of all Series A Notes pursuant to Exempt Resales
as contemplated hereby, to cooperate with the Initial Purchasers and counsel to
the Initial Purchasers in connection with the registration or qualification of
the Series A Notes for offer and sale to the Initial Purchasers and pursuant to
Exempt Resales under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchasers may request and to continue such registration or
qualification in effect so long as required for Exempt Resales and to file such
consents to service of process or other documents as may be necessary in order
to effect such registration or qualification; provided, however, that neither
the Company nor any Guarantor shall be required in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general consent to
service of process or taxation other than as to matters and transactions
directly relating to the Preliminary Offering Memorandum, the Offering
Memorandum or Exempt Resales, in any jurisdiction in which it is not now so
subject.
(f) For five years from the date hereof, to furnish to the Initial
Purchasers as soon as available copies of all reports or other communications
furnished by the Company or any of the Guarantors to its security holders or
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company or any of the Guarantors is listed
and such other publicly available information concerning the Company and/or its
subsidiaries, including without limitation, press releases, as the Initial
Purchasers may reasonably request.
(g) So long as any of the Series A Notes remain outstanding and during
any period in which the Company and the Guarantors are not subject to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
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Act"), to make available to any holder of Series A Notes in connection with any
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sale thereof and any prospective purchaser of such Series A Notes from such
holder, the information ("Rule 144A Information") required by Rule 144A(d)(4)
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under the Act.
(h) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the obligations of the Company and the
Guarantors under this Agreement, including: (i) the fees, disbursements and
expenses of counsel to the Company and the Guarantors and accountants of the
Company and the Guarantors in connection with the sale and delivery of the
Series A Notes to the Initial Purchasers and pursuant to Exempt Resales, and all
other fees and expenses in connection with the preparation, printing, filing and
distribution of the Preliminary Offering Memorandum, the Offering Memorandum and
all amendments and supplements to any of the foregoing (including financial
statements), including the mailing and delivering of copies thereof to the
Initial Purchasers and persons designated by them in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Series A Notes to the Initial Purchasers and pursuant to Exempt Resales,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement, the other Operative Documents and any
other agreements or documents in connection with the offering, purchase, sale or
delivery of the Series A Notes, (iv) all expenses in connection with the
registration or qualification of the Series A Notes and the Subsidiary
Guarantees for offer and sale under the securities or Blue Sky laws of the
several states and all costs of printing or producing any preliminary and
supplemental Blue Sky memoranda in connection therewith (including the filing
fees and reasonable fees and disbursements of counsel for the Initial Purchasers
in connection with such registration or qualification and memoranda relating
thereto), (v) the cost of printing certificates representing the Series A Notes
and the Subsidiary Guarantees, (vi) all expenses and listing fees in connection
with the application for quotation of the Series A Notes in the National
Association of Securities Dealers, Inc.
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("NASD") Automated Quotation System -PORTAL ("PORTAL"), (vii) the fees and
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expenses of the Trustee and the Trustee's counsel in connection with the
Indenture, the Notes and the Subsidiary Guarantees, (viii) the costs and charges
of any transfer agent, registrar and/or depositary (including DTC), (ix) any
fees charged by rating agencies for the rating of the Notes, (x) all costs and
expenses of the Exchange Offer and any Registration Statement, as set forth in
the Registration Rights Agreement, and (xi) and all other costs and expenses
incident to the performance of the obligations of the Company and the Guarantors
hereunder for which provision is not otherwise made in this Section.
(i) To use all commercially reasonable efforts to effect the inclusion
of the Series A Notes in PORTAL and to maintain the listing of the Series A
Notes on PORTAL for so long as the Series A Notes are outstanding.
(j) To use all commercially reasonable efforts to obtain the approval
of DTC for "book-entry" transfer of the Notes, and to comply with all of its
agreements set forth in the representation letters of the Company and the
Guarantors to DTC relating to the approval of the Notes by DTC for "book-entry"
transfer.
(k) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or any
Guarantor or any warrants, rights or options to purchase or otherwise acquire
debt securities of the Company or any Guarantor substantially similar to the
Notes and the Subsidiary Guarantees (other than (i) the Notes and the Subsidiary
Guarantees and (ii) commercial paper issued in the ordinary course of business),
without the prior written consent of the Initial Purchasers.
(l) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Series A Notes to the Initial Purchasers or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Series A Notes under the Act.
(m) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes and the
related Subsidiary Guarantees.
(n) To cause the Exchange Offer to be made in the appropriate form to
permit Series B Notes and guarantees thereof by the Guarantors registered
pursuant to the Act to be offered in exchange for the Series A Notes and the
Subsidiary Guarantees and to comply with all applicable federal and state
securities laws in connection with the Exchange Offer.
(o) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(p) To use all commercially reasonable efforts to do and perform all
things required or necessary to be done and performed under this Agreement by it
prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Series A Notes and the Subsidiary Guarantees.
6. Representations, Warranties and Agreements of the Company and the
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Guarantors. As of the date hereof, each of the Company and the Guarantors (other
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than the EFM Subsidiaries) and, upon consummation of the EFM Acquisition, each
of the EFM Subsidiaries, represents and warrants to, and agrees with, the
Initial Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering Memorandum do
not, and any supplement or amendment to them will not, contain any untrue
statement of a material
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fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties contained in this paragraph (a) shall not apply to statements in or
omissions from the Preliminary Offering Memorandum or the Offering Memorandum
(or any supplement or amendment thereto) based upon information relating to the
Initial Purchasers furnished to the Company in writing by the Initial Purchasers
expressly for use therein. No stop order preventing the use of the Preliminary
Offering Memorandum or the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act, has been
issued.
(b) Except as would not have a Material Adverse Effect (as defined
below), each of the Company and its subsidiaries has been, and immediately after
consummation of the Acquisitions will have been, duly incorporated, is, and
immediately after consummation of the Acquisitions will be, validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation and has, and immediately after consummation of the Acquisitions
will have, the corporate power and authority to carry on its business as
described in the Preliminary Offering Memorandum and the Offering Memorandum and
to own, lease and operate its properties, and each is, and immediately after
consummation of the Acquisitions will be, duly qualified and in good standing as
a foreign corporation authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, or draw into
question the validity of this Agreement or the other Operative Documents (a
"Material Adverse Effect").
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(c) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights.
(d) Immediately following the consummation of the Acquisitions, the
entities listed on Schedule B hereto will be the only subsidiaries, direct or
indirect, of the Company. All of the outstanding shares of capital stock of
each of the Company's subsidiaries have been duly authorized and validly issued
and are fully paid and non-assessable, and, except as set forth in the Offering
Memorandum, are owned by the Company, directly or indirectly through one or more
subsidiaries, free and clear of any security interest, claim, lien, encumbrance
or adverse interest of any nature (each, a "Lien").
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(e) This Agreement has been duly authorized, executed and delivered by
the Company and each of the Guarantors.
(f) The Indenture has been duly authorized by the Company and each of
the Guarantors and, on the Closing Date, will have been validly executed and
delivered by the Company and each of the Guarantors. When the Indenture has
been duly executed and delivered by the Company and each of the Guarantors, the
Indenture will be a valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in accordance with
its terms except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency or similar laws affecting creditors' rights generally (including,
without limitation, the effects of bankruptcy or other laws regarding fraudulent
transfers or preferential transfers) and (ii) equitable principles of general
applicability. On the Closing Date, the Indenture will conform in all material
respects to the requirements of the Trust Indenture Act of 1939, as amended (the
"TIA" or "Trust Indenture Act"), and the rules and regulations of the Commission
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applicable to an indenture which is qualified thereunder.
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(g) The Series A Notes have been duly authorized and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Series A Notes have been issued, executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Series A Notes
will be entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms except as
the enforceability thereof may be limited by (i) bankruptcy, insolvency or
similar laws affecting creditors' rights generally (including, without
limitation, the effects of bankruptcy or other laws regarding fraudulent
transfers or preferential transfers) and (ii) equity principles of general
applicability. On the Closing Date, the Series A Notes will conform as to legal
matters to the description thereof contained in the Offering Memorandum.
(h) On the Closing Date, the Series B Notes will have been duly
authorized by the Company. When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) (including, without limitation, the effects
of bankruptcy or other laws regarding fraudulent transfers or preferential
transfers) equity principles of general applicability.
(i) The Subsidiary Guarantee to be endorsed on the Series A Notes by
each Guarantor has been duly authorized by such Guarantor and, on the Closing
Date, will have been duly executed and delivered by each such Guarantor. When
the Series A Notes have been issued, executed and authenticated in accordance
with the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, the Subsidiary Guarantee of each
Guarantor endorsed thereon will be entitled to the benefits of the Indenture and
will be the valid and binding obligation of each such Guarantor, enforceable
against such Guarantor in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) (including, without
limitation, the effects of bankruptcy or other laws regarding fraudulent
transfers or preferential transfers) equitable principles of general
applicability. On the Closing Date, the Subsidiary Guarantees to be endorsed on
the Series A Notes will conform as to legal matters to the description thereof
contained in the Offering Memorandum.
(j) The Subsidiary Guarantee to be endorsed on the Series B Notes by
each Guarantor has been duly authorized by each such Guarantor and, when issued,
will have been duly executed and delivered by each such Guarantor. When the
Series B Notes have been issued, executed and authenticated in accordance with
the terms of the Exchange Offer and the Indenture, the Subsidiary Guarantee of
each Guarantor endorsed thereon will be entitled to the benefits of the
Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) (including, without
limitation, the effects of bankruptcy or other laws regarding fraudulent
transfers or preferential transfers) equitable principles of general
applicability. When the Series B Notes are issued, authenticated and delivered,
the Subsidiary Guarantees to be endorsed on the Series B Notes will conform as
to legal matters to the description thereof in the Offering Memorandum.
(k) The Registration Rights Agreement has been duly authorized by the
Company and each of the Guarantors and, on the Closing Date, will have been duly
executed and delivered by the Company and each of the Guarantors. When the
Registration Rights Agreement has been duly executed and delivered, the
Registration Rights Agreement will be a valid and binding agreement of the
Company and each of the Guarantors, enforceable against the Company and each
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Guarantor in accordance with its terms except as the enforceability thereof may
be limited by (i) bankruptcy, insolvency or similar laws affecting creditors'
rights generally (including, without limitation, the effects of bankruptcy or
other laws regarding fraudulent transfers or preferential transfers) and (ii)
equitable principles of general applicability. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters to the
description thereof in the Offering Memorandum.
(l) The Acquisition Agreements have been duly authorized, executed and
delivered by the Company and are valid and binding agreements of the Company
enforceable against the Company in accordance with their terms except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency or similar
laws affecting creditors' rights generally (including, without limitation, the
effects of bankruptcy or other laws regarding fraudulent transfers or
preferential transfers) and (ii) equitable principles of general applicability.
(m) Neither the Company nor any of its subsidiaries is, or after
consummation of the Acquisitions will be, in violation of its respective charter
or by-laws or, to the Company's knowledge, in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that in each case is
reasonably likely to be material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or their respective property is bound.
(n) The execution, delivery and performance of this Agreement and the
other Operative Documents by the Company and each of the Guarantors, compliance
by the Company and each of the Guarantors with all provisions hereof and thereof
and the consummation of the transactions contemplated hereby and thereby will
not (i) require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as may
be required under the securities or Blue Sky laws of the various states or as
have otherwise been obtained), (ii) conflict with or constitute a breach of any
of the terms or provisions of, or a default under, the charter or by-laws of the
Company or any of its subsidiaries or any indenture, loan agreement, mortgage,
lease or other agreement or instrument that in each case is reasonably likely to
be material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (iii) violate or
conflict in any material respect with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company, any of its subsidiaries or their
respective property, (iv) result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any 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 or their respective property is bound, or (v) result
in the termination, suspension or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or result in any other
impairment of the rights of the holder of any such Authorization that in each
case is reasonably likely to be material to the Company and its subsidiaries,
taken as a whole.
(o) Except as set forth in the Offering Memorandum, there are, and
immediately after consummation of the Acquisitions there will be, no legal or
governmental proceedings pending or, to the Company's knowledge, threatened to
which the Company or any of its subsidiaries is or could be a party or to which
any of their respective property is or could be subject, which might result,
singly or in the aggregate, in a Material Adverse Effect.
(p) Neither the Company nor any of its subsidiaries has, and, to the
Company's knowledge, immediately after consummation of the Acquisitions will
have, violated any foreign, federal, state or local law or regulation relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
-------------
9
Laws"), any provisions of the Employee Retirement Income Security Act of 1974,
- ----
as amended ("ERISA"), or any provisions of the Foreign Corrupt Practices Act or
-----
the rules and regulations promulgated thereunder, except for such violations
which, singly or in the aggregate, would not have a Material Adverse Effect.
(q) Except as set forth in the Offering Memorandum or as not
reasonably likely to have a Material Adverse Effect, in connection with the
Company's and its subsidiaries' contracts (including those contracts to be
assumed in connection with the Acquisitions) with the United States, any agency,
department or body thereof, or any state or local governmental entity (the
"Government"), or with any prime contractor or any upper-tier subcontractor
- -----------
relating to a program in which the Government is a party, there are (i) no
default notices, cure notices, notices of noncompliance, or known instances of
noncompliance, (ii) no subpoenas or Governmental investigations, (iii) no
internal investigations or voluntary disclosures by the Company or any of its
subsidiaries, (iv) no notices or indications of any pending or proposed
suspension or debarment and (v) no "whistleblower lawsuits."
(r) Except as set forth in the Offering Memorandum, there are no costs
or existing liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any Authorization, any
related constraints on operating activities and any potential liabilities to
third parties) which are reasonably likely to have, singly or in the aggregate,
a Material Adverse Effect.
(s) Except for those contracts acquired in the EFM Acquisition and
listed on a schedule to the Asset Purchase Agreement, each of the Company and
its subsidiaries has, and immediately after consummation of the Acquisitions
will have, such permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, an "Authorization") of, and has made
-------------
all filings with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals, including
without limitation, under any applicable Environmental Laws, as are necessary to
own, lease, license and operate its respective properties and to conduct its
business, except where the failure to have any such Authorization or to make any
such filing or notice would not, singly or in the aggregate, have a Material
Adverse Effect. Each such Authorization is, and, to the Company's knowledge,
after consummation of the Acquisitions will be, valid and in full force and
effect and each of the Company and its subsidiaries is, and after consummation
of the Acquisitions will be, in compliance with all the terms and conditions
thereof and with the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any authority or
governing body) which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such Authorization or
results or, after notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome to the Company or any
of its subsidiaries; except where such failure to be valid and in full force and
effect or to be in compliance, the occurrence of any such event or the presence
of any such restriction is not reasonably likely to have, singly or in the
aggregate, have a Material Adverse Effect.
(t) The accountants, Ernst & Young LLP, PricewaterhouseCoopers LLP and
Mallette Maheu General Partnership Chartered Accountants, that have certified
the financial statements and supporting schedules included in the Preliminary
Offering Memorandum and the Offering Memorandum, are independent public
accountants with respect to the Company and its subsidiaries (including EFM and
Roche), as required by the Act and the Exchange Act. The historical financial
statements, together with related schedules and notes, set forth in the
Preliminary Offering Memorandum and the Offering Memorandum comply as to form in
all material respects with the requirements applicable to registration
statements under the Act.
10
(u) The historical financial statements, together with related
schedules and notes forming part of the Offering Memorandum (and any amendment
or supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of the Company and its
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; and the other financial and statistical
information and data set forth in the Offering Memorandum (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(v) The pro forma financial statements included in the Preliminary
Offering Memorandum and the Offering Memorandum have been prepared on a basis
consistent with the historical financial statements of the Company and its
subsidiaries and give effect to assumptions used in the preparation thereof on a
reasonable basis and in good faith and present fairly the historical and
proposed transactions contemplated by the Preliminary Offering Memorandum and
the Offering Memorandum; and such pro forma financial statements comply as to
form in all material respects with the requirements applicable to pro forma
financial statements included in registration statements on Form S-1 under the
Act. The other pro forma financial and statistical information and data included
in the Offering Memorandum are, in all material respects, accurately presented
and prepared on a basis consistent with the pro forma financial statements.
(w) The Company is not and, after giving effect to the offering and
sale of the Series A Notes and the application of the net proceeds thereof as
described in the Offering Memorandum, will not be, an "investment company," as
such term is defined in the Investment Company Act of 1940, as amended.
(x) Except as disclosed in the Offering Memorandum or Schedule G,
there are no contracts, agreements or understandings between the Company or any
Guarantor and any person granting such person the right to require the Company
or such Guarantor to file a registration statement under the Act with respect to
any securities of the Company or such Guarantor or to require the Company or
such Guarantor to include such securities with the Notes and Subsidiary
Guarantees registered pursuant to any Registration Statement.
(y) Neither the Company nor any of its subsidiaries nor any agent
thereof acting on the behalf of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Series A
Notes to violate Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part
221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System.
(z) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or
has informed the Company or any Guarantor that it is considering imposing) any
condition (financial or otherwise) on the Company's or any Guarantor's retaining
any rating assigned to the Company or any Guarantor, any securities of the
Company or any Guarantor or (ii) has indicated to the Company or any Guarantor
that it is considering (a) the downgrading, suspension, or withdrawal of, or any
review for a possible change that does not indicate the direction of the
possible change in, any rating so assigned or (b) any change in the outlook for
any rating of the Company, any Guarantor or any securities of the Company or any
Guarantor.
(aa) Since the respective dates as of which information is given in
the Offering Memorandum other than as set forth in the Offering Memorandum
(exclusive of any
11
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change or any development that,
singly or in the aggregate, is reasonably likely to have a material adverse
effect on the condition, financial or otherwise, or the earnings, business,
management or operations of the Company and its subsidiaries, taken as a whole,
(ii) there has not been any material adverse change or any development that,
singly or in the aggregate, is reasonably likely to have a material adverse
effect on the capital stock or in the long term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or contingent.
(bb) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Act.
(cc) When the Series A Notes and the Subsidiary Guarantees are issued
and delivered pursuant to this Agreement, neither the Series A Notes nor the
Subsidiary Guarantees will be of the same class (within the meaning of Rule 144A
under the Act) as any security of the Company or the Guarantors 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 inter-dealer quotation system.
(dd) No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Company, the Guarantors
or any of their respective representatives (other than the Initial Purchasers,
as to whom the Company and the Guarantors make no representation) in connection
with the offer and sale of the Series A Notes contemplated hereby, including,
but not limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as the
Series A Notes have been issued and sold by the Company within the six-month
period immediately prior to the date hereof.
(ee) None of the Company, the Guarantors nor any of their respective
affiliates or any person acting on its or their behalf (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no representation)
has engaged or will engage in any directed selling efforts within the meaning of
Regulation S under the Act ("Regulation S") with respect to the Series A Notes
------------
or the Subsidiary Guarantees.
(ff) The sale of the Series A Notes pursuant to Regulation S is not
part of a plan or scheme to evade the registration provisions of the Act.
(gg) The Company, the Guarantors and their respective affiliates and
all persons acting on their behalf (other than the Initial Purchaser, as to whom
the Company and the Guarantors make no representation) have complied with and
will comply with the offering restrictions requirements of Regulation S in
connection with the offering of the Series A Notes outside the United States
and, in connection therewith, the Offering Memorandum will contain the
disclosure required by Rule 902(g)(2).
(hh) Each of the Company and the Guarantors is a "reporting
issuer", as defined in Rule 902 under the Act.
(ii) No registration under the Act of the Series A Notes or the
Subsidiary Guarantees is required for the sale of the Series A Notes and the
Subsidiary Guarantees to the Initial
12
Purchasers as contemplated hereby or for the Exempt Resales assuming the
accuracy of the Initial Purchasers' representations and warranties and
agreements set forth in Section 7 hereof.
(jj) Each certificate signed by any officer of the Company or any
Guarantor and delivered to the Initial Purchasers or counsel for the Initial
Purchasers shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Initial Purchasers as to the matters covered thereby.
(kk) There is, and, to the Company's knowledge, immediately after
consummation of the Acquisitions will be, no (i) significant unfair labor
practice complaint, grievance or arbitration proceeding pending or threatened
against the Company or any of its subsidiaries before the National Labor
Relations Board or any state or local labor relations board, (ii) strike, labor
dispute, slowdown or stoppage pending or threatened against the Company or any
of its subsidiaries or (iii) union representation question existing with respect
to the employees of the Company or any of its subsidiaries, except in the case
of clauses (i), (ii) and (iii) for such actions which, singly or in the
aggregate, is not reasonably likely to have a Material Adverse Effect. To the
Company's knowledge, no collective bargaining organizing activities are taking
place with respect to the Company or any of its subsidiaries.
(ll) The Company and each of its subsidiaries maintains, and
immediately after consummation of the Acquisitions will maintain, a system 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.
(mm) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been, and immediately after
consummation of the Acquisitions will have been, filed, other than those filings
being contested in good faith, and all material taxes, including withholding
taxes, penalties and interest, assessments, fees and other charges due pursuant
to such returns or pursuant to any assessment received by the Company or any of
its subsidiaries have been paid, other than those being contested in good faith
and for which adequate reserves have been provided.
(nn) All indebtedness of the Company and the Guarantors that will be
repaid with the proceeds of the issuance and sale of the Series A Notes was
incurred, and the indebtedness represented by the Series A Notes is being
incurred, for proper purposes and in good faith and each of the Company and the
Guarantors was, at the time of the incurrence of such indebtedness that will be
repaid with the proceeds of the issuance and sale of the Series A Notes, and
will be on the Closing Date (after giving effect to the application of the
proceeds from the issuance of the Series A Notes) solvent, and had at the time
of the incurrence of such indebtedness that will be repaid with the proceeds of
the issuance and sale of the Series A Notes and will have on the Closing Date
(after giving effect to the application of the proceeds from the issuance of the
Series A Notes) sufficient capital for carrying on their respective business and
were, at the time of the incurrence of such indebtedness that will be repaid
with the proceeds of the issuance and sale of the Series A Notes, and will be on
the Closing Date (after giving effect to the application of the proceeds from
the issuance of the Series A Notes) able to pay their respective debts as they
mature.
(oo) No action has been taken and no law, statute, rule or regulation
or order has been enacted, adopted or issued by any governmental agency or body
which prevents the execution, delivery and performance of any of the Operative
Documents, the issuance of the Series A Notes or the
13
Subsidiary Guarantees, or suspends the sale of the Series A Notes or the
Subsidiary Guarantees in any jurisdiction referred to in Section 5(e); and no
injunction, restraining order or other order or relief of any nature by a
federal or state court or other tribunal of competent jurisdiction has been
issued with respect to the Company or any of its subsidiaries which would
prevent or suspend the issuance or sale of the Series A Notes or the Subsidiary
Guarantees in any jurisdiction referred to in Section 5(e).
(pp) The jurisdictions listed on Schedule D attached hereto are the
----------
jurisdictions in which it is material for the Company and the Guarantors to be
qualified to do business. The Company and the Guarantors listed on Schedule D
are qualified to do business in each of the jurisdictions listed on Schedule D.
(qq) On the Closing Date, the EFM Subsidiaries shall be formally
dissolved under the Delaware General Corporation Law, and all of the assets and
liabilities of such subsidiaries shall be contributed to IT Environmental and
Facilities, Inc., a Delaware corporation.
The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 9
hereof, counsel to the Company and the Guarantors and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. Initial Purchasers' Representations and Warranties. Each of the
--------------------------------------------------
Initial Purchasers, severally and not jointly, represents and warrants to the
Company and the Guarantors, and agrees that:
(a) Such Initial Purchaser is either a QIB or an Accredited
Institution, in either case, with such knowledge and experience in financial and
business matters as is necessary in order to evaluate the merits and risks of an
investment in the Series A Notes.
(b) Such Initial Purchaser (A) is not acquiring the Series A Notes
with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Series A Notes only to (x) QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A or (y) in offshore
transactions in reliance upon Regulation S under the Act.
(c) Such Initial Purchaser agrees that no form of general solicitation
or general advertising (within the meaning of Regulation D under the Act) has
been or will be used by such Initial Purchaser or any of its representatives in
connection with the offer and sale of the Series A Notes pursuant hereto,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with Exempt
Resales, such Initial Purchaser will solicit offers to buy the Series A Notes
only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Each Initial Purchaser further agrees that it will offer to sell
the Series A Notes only to, and will solicit offers to buy the Series A Notes
only from (A) Eligible Purchasers that the Initial Purchaser reasonably believes
are QIBs, and (B) Regulation S Purchasers, in each case, that agree that (x) the
Series A Notes purchased by them may be resold, pledged or otherwise transferred
within the time period referred to under Rule 144(k) (taking into account the
provisions of Rule 144(d) under the Act, if applicable) under the Act, as in
effect on the date of the transfer of such Series A Notes, only (I) to the
Company or any of its subsidiaries, (II) to a person whom the seller
14
reasonably believes is a QIB purchasing for its own account or for the account
of a QIB in a transaction meeting the requirements of Rule 144A under the Act,
(III) in an offshore transaction (as defined in Rule 902 under the Act) meeting
the requirements of Rule 904 of the Act, (IV) in a transaction meeting the
requirements of Rule 144 under the Act, (V) to an Accredited Institution that,
prior to such transfer, furnishes the Trustee a signed letter containing certain
representations and agreements relating to the registration of transfer of such
Series A Note (the form of which can be obtained from the Trustee and an opinion
of counsel acceptable to the Company that such transfer is in compliance with
the Act, (VI) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel acceptable to the
Company) or (VII) pursuant to an effective registration statement and, in each
case, in accordance with the applicable securities laws of any state of the
United States or any other applicable jurisdiction and (y) they will deliver to
each person to whom such Series A Notes or an interest therein is transferred a
notice substantially to the effect of the foregoing.
(e) Such Initial Purchaser and its affiliates or any person acting on
its or their behalf have not engaged or will not engage in any directed selling
efforts within the meaning of Regulation S with respect to the Series A Notes or
the Subsidiary Guarantees.
(f) The Series A Notes offered and sold by such Initial Purchaser
pursuant hereto in reliance on Regulation S have been and will be offered and
sold only in offshore transactions.
(g) The sale of the Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S is not part of a plan or
scheme to evade the registration provisions of the Act.
(h) Such Initial Purchaser agrees that it has not offered or sold and
will not offer or sell the Series A Notes in the United States or to, or for the
benefit or account of, a U.S. Person (other than a distributor), in each case,
as defined in Rule 902 under the Act (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering of the Series A Notes pursuant hereto and the Closing Date, other than
in accordance with Regulation S of the Act or another exemption from the
registration requirements of the Act. Such Initial Purchaser agrees that,
during such 40-day distribution compliance period, it will not cause any
advertisement with respect to the Series A Notes (including any "tombstone"
advertisement) to be published in any newspaper or periodical or posted in any
public place and will not issue any circular relating to the Series A Notes,
except such advertisements as are permitted by and include the statements
required by Regulation S.
(i) Such Initial Purchaser agrees that, at or prior to confirmation of
a sale of Series A Notes by it to any distributor, dealer or person receiving a
selling concession, fee or other remuneration during the 40-day distribution
compliance period referred to in Rule 903(c)(2) under the Act, it will send to
such distributor, dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following effect:
"The Series A Notes covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of your distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
Offering and the Closing Date, except in either case in accordance with
Regulation S under the Securities Act (or Rule 144A or to Accredited
Institutions in transactions that are exempt from the registration
requirements of the Securities Act), and in connection with any subsequent
sale by you of the Series A Notes covered hereby in reliance on Regulation
S during the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you
15
must deliver a notice to substantially the foregoing effect. Terms used
above have the meanings assigned to them in Regulation S."
Such Initial Purchaser acknowledges that the Company and the
Guarantors and, for purposes of the opinions to be delivered to each Initial
Purchaser pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchaser will rely upon the accuracy and
truth of the foregoing representations and Such Initial Purchaser hereby
consents to such reliance.
8. Indemnification.
----------------
(a) The Company and each Guarantor agree, jointly and severally, to
indemnify and hold harmless the Initial Purchasers, their directors, their
officers and each person, if any, who controls such 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 judgments
(including, without limitation, any reasonable legal or other expenses incurred
in connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), the Preliminary Offering Memorandum or any Rule 144A
Information provided by the Company or any Guarantor to any holder or
prospective purchaser of Series A Notes pursuant to Section 5(h) or caused by
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 judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to an Initial Purchaser furnished in
writing to the Company by such Initial Purchaser; provided, however, that the
foregoing indemnity agreement with respect to any Preliminary Offering
Memorandum shall not inure to the benefit of any Initial Purchaser who failed to
deliver a Final Offering Memorandum, as then amended or supplemented, (so long
as the Offering Memorandum and any amendment or supplement thereto was provided
by the Company to the several Initial Purchasers in the requisite quantity and
on a timely basis to permit proper delivery on or prior to the Closing Date) to
the person asserting any losses, claims, damages, liabilities or judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum, or caused by 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, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Offering Memorandum, as so amended or supplemented.
(b) Each of the Initial Purchasers, severally and not jointly, agrees
to indemnify and hold harmless the Company and the Guarantors, and their
respective directors and officers and each person, if any, who controls (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the
Company or the Guarantors, to the same extent as the foregoing indemnity from
the Company and the Guarantors to the Initial Purchaser but only with reference
to information relating to such Initial Purchaser furnished in writing to the
Company by such Initial Purchaser expressly for use in the Preliminary Offering
Memorandum or the Offering Memorandum, and not with respect to the information
provided by any other Initial Purchaser.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
- ------------ -----
against whom such indemnity may be sought (the "indemnifying party") in writing
------------------
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of
16
which indemnity may be sought pursuant to both Sections 8(a) and 8(b), the
Initial Purchasers shall not be required to assume the defense of such action
pursuant to this Section 8(c), but may employ separate counsel and participate
in the defense thereof, but the reasonable fees and expenses of such counsel,
except as provided below, shall be at the expense of the Initial Purchasers).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such reasonable fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Donaldson, Lufkin & Jenrette Securities Corporation, in the case of the parties
indemnified pursuant to Section 8(a), and by the Company, in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall indemnify and
hold harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with its written consent or (ii) effected without its written consent
if the settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying party) and, prior to the
date of such settlement, the indemnifying party shall have failed to comply with
such reimbursement request. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
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 and judgments (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 hand from the offering of the Series A Notes or (ii) if the allocation
provided by clause 8(d)(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 8(d)(i) above but also the relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchasers on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, 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 hand, shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Series A Notes (after underwriting discounts and commissions,
but before deducting expenses) received by the Company, and the total discounts
and commissions received by the Initial Purchasers bear to the total price to
investors of the
17
Series A Notes, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault of the Company and the 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 or the Guarantors,
on the one hand, or 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.
The Company and the Guarantors, and the Initial Purchasers agree that
it would not be just and equitable if contribution pursuant to this Section 8(d)
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
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such indemnified party in connection with investigating or defending any
matter, including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, the Initial Purchasers shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchasers exceeds the amount of any damages which the Initial
Purchasers have 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. The Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Series A Notes purchased by each of the Initial Purchasers
hereunder and not joint.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
9. Conditions of Initial Purchaser's Obligations. The obligations of
---------------------------------------------
the Initial Purchasers to purchase the Series A Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date.
(b) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, (i) there shall not have occurred any downgrading,
suspension or withdrawal of, nor shall any notice have been given of any
potential or intended downgrading, suspension or withdrawal of, or of any review
(or of any potential or intended review) for a possible change that does not
indicate the direction of the possible change in, any rating accorded any
securities of the Company or any Guarantor (including, without limitation, the
placing of any of the foregoing ratings on credit watch with negative or
developing implications or under review with an uncertain direction) by any
"nationally recognized statistical rating organization" as such term is defined
for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have occurred
any change, nor shall any notice have been given of any potential or intended
change, in the outlook for any rating of the Company or any Guarantor or any
securities of the Company or any Guarantor by any such rating organization and
(iii) no such rating organization shall
18
have given notice that it has assigned (or is considering assigning) a lower
rating to the Notes than that on which the Notes were marketed.
(c) Since the respective dates as of which information is given in the
Offering Memorandum, other than as set forth in the Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change or any development
that, singly or in the aggregate, is reasonably likely to have a material
adverse effect on the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development that,
singly or in the aggregate, is reasonably likely to have a material adverse
effect on the capital stock or in the long term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries shall
have incurred any liability or obligation, direct or contingent, the effect of
which, in any such case described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in
your judgment, is material and adverse and, in your judgment, makes it
impracticable to market the Series A Notes on the terms and in the manner
contemplated in the Offering Memorandum.
(d) You shall have received on the Closing Date (a) a certificate
dated the Closing Date, signed by the Vice President and Treasurer of the
Company and (b) certificates dated the Closing Date, signed by the Vice
President and Treasurer of each of the Guarantors, which certificates shall
confirm the matters set forth in Sections 6(q), 6(aa), 9(a) and 9(b) and state
that each of the Company and the Guarantors has complied with all the agreements
and satisfied all of the conditions herein contained and required to be complied
with or satisfied on or prior to the Closing Date.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of Gibson, Dunn & Crutcher LLP, counsel for the Company and the
Guarantors, to the effect that:
(i) the Company and IT Corporation and Groundwater
Technology, Inc. (together, the "Covered Entities"; and IT
----------------
Corporation and Groundwater Technology, Inc. together being the
"Covered Guarantors") have been duly incorporated, are validly
-------------------
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation and have the corporate
power and authority to carry on their respective businesses as
described in the Offering Memorandum and to own, lease and
operate their respective properties;
(ii) the Company is duly qualified and in good standing as a
foreign corporation authorized to do business in the
jurisdictions listed under its name on Schedule D attached
hereto;
(iii) the Series A Notes have been duly authorized and,
when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will
be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company, enforceable in accordance
with their terms except as the enforceability thereof may be
limited by (x) bankruptcy, insolvency or similar laws affecting
creditors' rights generally (including, without limitation, the
effect of statutory or other laws regarding fraudulent transfers
or preferential transfers) and (y) equitable principles of
general applicability;
19
(iv) the Indenture (including, without limitation, with
respect to each Subsidiary Guarantor, the Subsidiary Guarantee
set forth in Article 11 therein) has been duly authorized,
executed and delivered by the Company and each of the Covered
Entities and, assuming the due authorization, execution and
delivery by each of the Guarantors listed on Schedule A hereto
other than Covered Guarantors (collectively, the "Foreign
-------
Guarantors") (and that each Foreign Guarantor has requisite
----------
corporate power), is a valid and binding agreement of the Company
and the Guarantors that is enforceable against the Company, and
the Guarantors in accordance with its terms except as the
enforceability thereof may be limited by (x) bankruptcy,
insolvency or similar laws affecting creditors' rights generally
(including, without limitation, the effect of statutory or other
laws regarding fraudulent transfers or preferential transfers)
and (y) equitable principles of general applicability;
(v) this Agreement has been duly authorized, executed and
delivered by each of the Covered Entities;
(vi) the Registration Rights Agreement has been duly
authorized, executed and delivered by each of the Covered
Entities and, assuming the due authorization, execution and
delivery by each of the Foreign Guarantors, is a valid and
binding agreement of the Company, and the Guarantors (and that
each Foreign Guarantor has requisite corporate power),
enforceable against the Company and the Guarantors in accordance
with its terms, except as the enforceability thereof may be
limited by (x) bankruptcy, insolvency or similar laws affecting
creditors' rights generally (including, without limitation, the
effect of statutory or other laws regarding fraudulent transfers
or preferential transfers) and (y) equitable principles of
general applicability;
(vii) the Series B Senior Notes have been duly authorized
by the Company;
(viii) the statements under the captions "Description of
Capital Stock," "Federal Income Tax Considerations for Non-U.S.
Holders," and "Description of Notes" in the Offering Memorandum,
insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly
present in all material respects such legal matters, documents
and proceedings;
(ix) the execution, delivery and performance of this
Agreement and the other Operative Documents by the Covered
Entities, the compliance by each of the Covered Entities with all
provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) require
any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky
laws of the various states), (ii) conflict with or constitute a
breach of any of the terms or provisions of, or a default under,
the charter or by-laws of any of the Covered Entities or any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that has been identified by the Company to such
counsel as being material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries
is a party or by which the Company's or any of its subsidiaries'
20
respective property is bound, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree
of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their
respective property, which is reasonably likely to have a
Material Adverse Effect, (iv) result in the imposition or
creation of (or the obligation to create or impose) a Lien under
any 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 or their respective property is bound, and that is
known to such counsel, which is reasonably likely to have a
Material Adverse Effect, or (v) result in the termination,
suspension or revocation of any Authorization (as defined below)
of the Company or any of its subsidiaries.
(x) the Company is not and, after giving effect to the
offering and sale of the Series A Notes and the application of
the net proceeds thereof as described in the Offering Memorandum,
will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended;
(xi) the Indenture complies as to form in all material
respects with the requirements of the TIA, and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder. It is not necessary in connection with the
offer, sale and delivery of the Series A Notes to the Initial
Purchasers in the manner contemplated by this Agreement or in
connection with the Exempt Resales to qualify the Indenture under
the TIA.
(xii) no registration under the Act of the Series A Notes
is required for the sale of the Series A Notes to the Initial
Purchasers as contemplated by this Agreement or for the Exempt
Resales assuming that (i) each Initial Purchaser is a QIB or a
Regulation S Purchaser, (ii) the accuracy of, and compliance
with, the Initial Purchasers' respective representations and
agreements contained in Section 7 of this Agreement and (iii) the
accuracy of the representations of the Company and the Guarantors
set forth in Sections 6(dd), (ee) and (ff) of this Agreement.
In addition, Gibson, Dunn & Crutcher LLP shall state that, in the
course of the preparation by the Company of the Offering Memorandum, such
counsel has participated in conferences and discussions with officers and other
representatives of the Company and others at which the contents of the Offering
Memorandum were discussed. Although such counsel has not independently
verified, is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements and information included in
the Offering Memorandum, no facts have come to such counsel's attention which
cause such counsel to believe that the Offering Memorandum (except for any
financial statements and notes and schedules thereto, pro form financial
information or other financial or accounting data contained or incorporated by
reference therein, as to all of which such counsel makes no comment), as of the
date thereof and as of the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading.
The opinion of Gibson, Dunn & Crutcher LLP described in Section 9(e)
above shall be rendered to you at the request of the Company and the Guarantors
and shall so state therein.
21
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of James M. Redwine, Senior Corporate Counsel of the Company and the
Guarantors, to the effect that:
(i) each of the Foreign Guarantors, other than the Covered
Guarantors, Beneco Enterprises Inc. ("Beneco") and OHM
------
Remediation Services Corp. ("OHM Remediation"), has been duly
---------------
incorporated, is validly existing as a corporation, is in good
standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority to carry on its respective
businesses as described in the Offering Memorandum and to own,
lease and operate its respective properties;
(ii) each of the Guarantors is duly qualified and in good
standing as a foreign corporation authorized to do business in
the jurisdictions listed under its name on Schedule D attached
hereto;
(iii) all of the outstanding shares of capital stock of
each of the Guarantors has been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by
the Company;
(iv) the Indenture (including without limitation, with
respect to each Subsidiary Guarantor, the Subsidiary Guarantees
set forth in Article 11 therein) has been duly authorized,
executed and delivered by the Foreign Guarantors, other than the
Covered Entities, Beneco and OHM Remediation;
(v) this Agreement has been duly authorized, executed and
delivered by the Foreign Guarantors, other than the Covered
Entities, Beneco and OHM Remediation;
(vi) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Foreign Guarantors,
other than the Covered Entities, Beneco and OHM Remediation;
(vii) to the best of such counsel's knowledge, none of the
Guarantors is in violation of its respective charter or by-laws,
and none of the Guarantors is in default in the performance of
any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is listed as an Exhibit to the Company's Annual
Report on Form 10-K for the year ended December 25, 1998, which
default, individually or in the aggregate, would be reasonably
likely to have a Material Adverse Effect;
(viii) the execution, delivery and performance of this
Agreement and the other Operative Documents by the Guarantors,
other than the Covered Guarantors, the compliance by each of the
Guarantors, other than the Covered Guarantors, with all
provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) require
any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky
laws of the various states), (ii) conflict with or constitute a
breach of any of the terms or provisions of, or a default under,
the charter or by-
22
laws of the Company or any of its subsidiaries or any indenture,
loan agreement, mortgage, lease or other agreement or instrument
that is material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their
respective property is bound, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree
of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their
respective property, (iv) result in the imposition or creation of
(or the obligation to create or impose) a Lien under any
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 or their respective property is bound, or (v) result
in the termination, suspension or revocation of any Authorization
(as defined below) of the Company or any of its subsidiaries or
result in any other impairment of the rights of the holder of any
such Authorization.
(ix) except as disclosed in the Offering Memorandum, after
due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is or could be a party or to
which any of their respective property is or could be subject,
which might result, singly or in the aggregate, in a Material
Adverse Effect.
(x) to the knowledge of such counsel, neither the Company
nor any of its subsidiaries has violated any Environmental Law or
any provisions of ERISA, any provisions of the Foreign Corrupt
Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect;
(xi) each of the Company and its subsidiaries has such
Authorizations of, and has made all filings with and notices to,
all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including
without limitation, under any applicable Environmental Laws, as
are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure
to have any such Authorization or to make any such filing or
notice would not, singly or in the aggregate, have a Material
Adverse Effect. To the best of such counsel's knowledge, (a)
each such Authorization is valid and in full force and effect and
each of the Company and its subsidiaries is in compliance with
all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having
jurisdiction with respect thereto; (b) no event has occurred
(including the receipt of any notice from any authority or
governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any
such Authorization or results or, after notice or lapse of time
or both, would result in any other impairment of the rights of
the holder of any such Authorization; (c) and such Authorizations
contain no restrictions that are burdensome to the Company or any
of its subsidiaries; except where such failure to comply with
clauses (a), (b) or (c) would not, singly or in the aggregate, be
reasonably expected to have a Material Adverse Effect;
23
(xii) to the best of such counsel's knowledge after due
inquiry, and except as disclosed in the Offering Memorandum there
are no contracts, agreements or understandings between the
Company or any Guarantor and any person granting such person the
right to require the Company or such Guarantor to include such
securities with the Notes and Subsidiary Guarantees registered
pursuant to any Registration Statement;
In addition, such counsel shall state that, in the course of the
preparation by the Company and the Guarantors of the Offering Memorandum, such
counsel has participated in conferences and discussions with officers and other
representatives of the Company and others at which the contents of the Offering
Memorandum were discussed. Although such counsel has not independently
verified, is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements and information included in
the Offering Memorandum, no facts have come to such counsel's attention which
cause such counsel to believe that the Offering Memorandum (except for any
financial statements and notes and schedules thereto, pro form financial
information or other financial or accounting data contained or incorporated by
reference therein, as to all of which such counsel make no comment), as of the
date thereof and as of the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading.
(g) You shall have received on the Closing Date an opinion
(satisfactory to counsel for the Initial Purchasers), dated the Closing Date, of
local counsel for each of Beneco and OHM Remediation to the effect that:
(i) Such Guarantor has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation and has the corporate
power and authority to carry on its business as described in the
Offering Memorandum and to own, lease and operate its properties;
(ii) the Subsidiary Guarantees have been duly authorized,
executed and delivered by each of Beneco and OHM Remediation (as
applicable);
(iii) the Indenture has been duly authorized, executed and
delivered by each of Beneco and OHM Remediation (as applicable);
(iv) this Agreement and the Registration Rights Agreement
has been duly authorized, executed and delivered by each of
Beneco and OHM Remediation;
(v) the execution, delivery and performance of this
Agreement and the other Operative Documents (as applicable) by
each of Beneco and OHM Remediation (as applicable), the
compliance by Beneco and OHM Remediation with all provisions
hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not conflict with or
constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of Beneco and OHM
Remediation (as applicable), and
(vi) the Series B Notes have been duly authorized by each of
Beneco and OHM Remediation (as applicable).
24
(h) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of Latham & Watkins, counsel for the
Initial Purchasers, in form and substance reasonably satisfactory to the Initial
Purchasers.
(i) The Initial Purchasers shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof or
the Closing Date, as the case may be, in form and substance satisfactory to the
Initial Purchasers from Ernst & Young LLP, Pricewaterhouse Coopers LLP and
Mallette Maheu General Partnership Chartered Accountants, independent public
accountants, containing the information and statements of the type ordinarily
included in accountants' "comfort letters" to the Initial Purchasers with
respect to the financial statements and certain financial information contained
in the Offering Memorandum.
(j) The Series A Notes shall have been approved by the NASD for
trading and duly listed in PORTAL.
(k) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company, the Guarantors and the Trustee.
(l) The Company and the Guarantors shall have executed the
Registration Rights Agreement and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company and the Guarantors.
(m) Neither the Company nor the Guarantors shall have failed at
or prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Company or
the Guarantors, as the case may be, at or prior to the Closing Date.
(n) Any defaults or violations under or in connection with any
Credit Facilities (as such term is defined in the Offering Memorandum) to which
Roche or any of its subsidiaries is a party shall be waived or cured, except for
such defaults or violations that would not, singly or in the aggregate, have a
Material Adverse Effect.
(o) Any guarantees of any indebtedness to which any of the EFM
Subsidiaries are a party shall have been released.
(p) The Credit Agreement (as such term is defined in the Offering
Memorandum) shall have been amended in a manner satisfactory to the Initial
Purchasers.
(q) Each condition to the closing of the Acquisitions shall have
been satisfied or waived. There shall exist at and as of the Closing Date no
conditions that would constitute a default under the Acquisition Agreements. On
the Closing Date, the Acquisitions shall have been consummated on terms that
conform in all material respects to the description thereof in the Offering
Memorandum and the Initial Purchasers shall have received evidence satisfactory
to the Initial Purchasers of the consummation thereof.
10. Effectiveness of Agreement and Termination. This Agreement shall
------------------------------------------
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Company if any
of the following has occurred: (i) any
25
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in the Initial Purchasers' judgment, is
material and adverse and, in the Initial Purchasers' judgment, makes it
impracticable to market the Series A Notes on the terms and in the manner
contemplated in the Offering Memorandum, (ii) the suspension or material
limitation of trading in securities or other instruments on the New York Stock
Exchange, the American Stock Exchange, the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange, the Chicago Board of Trade or the Nasdaq
National Market or limitation on prices for securities or other instruments on
any such exchange or the Nasdaq National Market, (iii) the suspension of trading
of any securities of the Company or any Guarantor on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority that in the opinion of the Initial
Purchasers materially and adversely affects, or will materially and adversely
affect, the business, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs that in the opinion of the Initial Purchasers has a
material adverse effect on the financial markets in the United States.
If on the Closing Date any one or more of the Initial Purchasers shall
fail or refuse to purchase the Series A Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of the Series
A 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 aggregate principal amount of the Series A 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 principal amount of the Series
A Notes set forth opposite its name in Schedule B bears to the aggregate
principal amount of the Series A Notes which all the non-defaulting Initial
Purchasers, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Series A Notes 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 the Series A Notes 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 principal amount of
the Series A 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 the Series A Notes and the aggregate principal amount of the
Series A Notes with respect to which such default occurs is more than one-tenth
of the aggregate principal amount of the Series A Notes to be purchased by all
Initial Purchasers and arrangements satisfactory to the Initial Purchasers and
the Company for purchase of such the Series A Notes 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 you 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. Dissolution of Certain Subsidiaries. The Company shall use all
-----------------------------------
commercially reasonable efforts to dissolve the subsidiaries listed on Schedule
E attached hereto as soon as practicable after the date hereof.
12. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (i) if to the Company or any Guarantor,
to The IT Group, Inc., 2790 Mosside Boulevard, Monroeville, Pennsylvania 15146-
2792, Attention: General Counsel and (ii) if to the Initial
26
Purchasers, Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park
Avenue, New York, New York 10172, Attention: Syndicate Department, or in any
case to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Guarantors and the Initial
Purchases set forth in or made pursuant to this Agreement shall remain operative
and in full force and effect, and will survive delivery of and payment for the
Series A Notes, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Initial Purchasers, the officers or
directors of the Initial Purchasers, any person controlling the Initial
Purchasers, the Company, any Guarantor, the officers or directors of the Company
or any Guarantor, or any person controlling the Company or any Guarantor, (ii)
acceptance of the Series A Notes and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Series A Notes are not delivered by or on behalf
of the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 10), the Company and each Guarantor, jointly
and severally, agree to reimburse the Initial Purchasers for all reasonable out-
of-pocket expenses (including the reasonable fees and disbursements of counsel)
incurred by them. Notwithstanding any termination of this Agreement, the
Company shall be liable for all expenses which it has agreed to pay pursuant to
Section 5(i) hereof. The Company and each Guarantor also agree, jointly and
severally, to reimburse the Initial Purchasers and their respective officers,
directors and each person, if any, who controls such Initial Purchasers within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act for any
and all reasonable fees and expenses (including without limitation the
reasonable fees and expenses of counsel) incurred by them in connection with
enforcing their rights under this Agreement (including without limitation its
rights under Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Guarantors,
the Initial Purchasers, the Initial Purchasers' respective directors and
officers, any controlling persons referred to herein, the directors of the
Company and the Guarantors and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors
and assigns" shall not include a purchaser of any of the Series A Notes from the
Initial Purchasers merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.
27
Very truly yours,
THE IT GROUP, INC.
By:
-----------------------------------------------
Name: James G. Kirk
Title: Vice President, General Counsel and
Secretary
ALASKA REMEDIATION SERVICES CORP.
BENECO ENTERPRISES, INC.
FLUOR DANIEL ENVIRONMENTAL SERVICES, INC.
GCAP SERVICES, INC.
GRADIENT CORPORATION
GROUNDWATER TECHNOLOGY, INC.
IT C&V OPERATIONS, INC.
IT CORPORATION
IT CORPORATION OF NORTH CAROLINA
IT E&C OPERATIONS, INC.
IT ENVIRONMENTAL AND FACILITIES, INC.
IT INTERNATIONAL HOLDINGS, INC.
IT INTERNATIONAL INVESTMENTS, INC.
IT INTERNATIONAL OPERATIONS, INC.
IT INVESTMENT HOLDINGS, INC.
IT JAPAN SERVICES, INC.
IT KOREA SERVICES, INC.
IT TULSA HOLDINGS, INC.
JELLINEK, SCHWARTZ AND CONNOLLY, INC.
JSC INTERNATIONAL, INC.
LANDBANK, INC.
LANDBANK REMEDIATION CORP.
PACIFIC ENVIRONMENTAL GROUP INC.
PHR ENVIRONMENTAL CONSULTANTS, INC.
SIELKEN, INC.
OHM CORPORATION.
OHM REMEDIATION SERVICES, CORP.
37-02 COLLEGE POINT BOULEVARD, LLC
EMPIRE STATE I, LLC
EMPIRE STATE II, LLC
KATO ROAD LLC
LANDBANK ENVIRONMENTAL PROPERTIES LLC
NORTHEAST RESTORATION COMPANY, LLC
THE DORCHESTER GROUP
28
By:
-----------------------------------------------
Name: James G. Kirk
Title: Vice President and General Counsel
29
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Donaldson, Lufkin & Jenrette Securities Corporation
By:
-------------------------------------
Name:
Title:
Salomon Smith Barney
By:
-------------------------------------
Name:
Title:
30
SCHEDULE A
Guarantors
ALASKA REMEDIATION SERVICES CORP., an Alaska corporation
BENECO ENTERPRISES, INC., a Utah corporation
FLUOR DANIEL ENVIRONMENTAL SERVICES, INC., a California corporation (name to be
changed)
GCAP SERVICES, INC., a Delaware corporation
GRADIENT CORPORATION, a Massachusetts corporation
GROUNDWATER TECHNOLOGY, INC., a Delaware corporation
IT C&V OPERATIONS, INC., a Delaware corporation
IT CORPORATION, a California corporation
IT CORPORATION OF NORTH CAROLINA, a North Carolina corporation
IT E&C OPERATIONS, INC., a Delaware corporation
IT ENVIRONMENTAL AND FACILITIES, INC., a Delaware corporation
IT INTERNATIONAL HOLDINGS, INC., a Delaware corporation
IT INTERNATIONAL INVESTMENTS, INC., a Delaware corporation
IT INTERNATIONAL OPERATIONS, INC., a Delaware corporation
IT INVESTMENT HOLDINGS, INC., a Delaware corporation
IT JAPAN SERVICES, INC., a Delaware corporation
IT KOREA SERVICES, INC., a Delaware corporation
IT TULSA HOLDINGS, INC., an Oklahoma corporation
JELLINEK, SCHWARTZ AND CONNOLLY, INC., a District Columbia corporation
JSC INTERNATIONAL, INC., a District of Columbia corporation
LANDBANK, INC., a Delaware corporation
LANDBANK REMEDIATION CORP., a Delaware corporation
PACIFIC ENVIRONMENTAL GROUP INC., a California corporation
31
PHR ENVIRONMENTAL CONSULTANTS, INC., a Delaware corporation
SIELKEN, INC., a Texas corporation
OHM CORPORATION., an Ohio corporation
OHM REMEDIATION SERVICES, CORP., an Ohio corporation
37-02 COLLEGE POINT BOULEVARD, LLC, a Delaware LLC
EMPIRE STATE I, LLC, a Delaware LLC
EMPIRE STATE II, LLC, a Delaware LLC
KATO ROAD LLC, a California LLC
LANDBANK ENVIRONMENTAL PROPERTIES LLC, a Delaware LLC
NORTHEAST RESTORATION COMPANY, LLC, a Delaware LLC
THE DORCHESTER GROUP, a Delaware LLC
32
SCHEDULE B
Subsidiaries
OHM Corporation (Ohio)
Beneco Enterprises Inc.
OHM Remediation Services Corp.
OHM Remediation Services of Canada, Ltd.
Alaska Remediation Services Corp.
Groundwater Technology, Inc.
IT International Investments, Inc.
Fluor Daniel Environmental Services, Inc.
IT Environmental (Australia) PTY, Ltd.
IT Group Infrastructure and Environmental, Ltd.
GTI Italia, S.R.L.
IT Korea Services, Inc.
IT Japan Services, Inc.
International Technology Europe Ltd.
IT International Operations, Inc.
IT International Holdings, Inc.
IT-Tulsa Holdings, Inc.
IT Corporation
Universal Professional Insurance Company
IT-International Technology Espana S.A.
IT E&C Operations, Inc.
IT-Europe Pollution Control Engineering, Ltd.
Chi Mei International Technology Co., Ltd.
Chi Mei Entech Co., Ltd.
PHR Environmental Consultants, Inc.
33
IT Environmental and Facilities, Inc.
IT Corporation Korea Branch
Gradient Corporation
Pacific Environmental Group, Inc.
IT Corporation Limited
KOHAP-IT Ltd.
IT Corporation De Mexico
IT Corporation of North Carolina
IT C&V Operations, Inc.
IT Investment Holdings, Inc.
Jellinek, Schwartz and Connolly, Inc.
GCAP Services, Inc.
Landbank, Inc.
Sielken, Inc.
JSC International, Inc.
JSC International, Ltd.
Landbank Environmental Properties LLC
Kato Road LLC
Landbank Remediation Corp.
Northeast Restoration Company, LLC
Empire State I, LLC
Empire State II, LLC
The Dorchester Group (Delaware LLC)
37-02 College Point Boulevard, LLC
Roche Ltee, Groupe Conseil / Roche Ltd., Consulting Group
3280365 Canada Inc.
Amikwiche Construction Ltee
34
CFCL Roche International Limited
Evaluation J.M. Fournier Inc.
Les Impressions Integrales Inc.
Les Consultants En Environnement Argus 2000 Inc.
Roche Construction Inc.
Rosaire Despres & Associes Inc.
Soderoc Developpement Ltee
Proton Technology Company Limited
Evimbec LtEe
Chevalier, Hughes & Associes (1992) Inc.
Roche International Inc.
A.C.T. International Inc.
Groupe Conseil Forchemex LtEe
Roche Gestion Services Publics Inc.
35
SCHEDULE C
Principal Amount
Initial Purchasers of Notes
------------------ -----------------
Donaldson, Lufkin & Jenrette
Securities Corporation............................................ $112,500,000
Salomon Smith Barney.................................................. $112,500,000
------------
Total........................................................... $225,000,000
============
36
SCHEDULE D
Jurisdictions where Qualified
to do Business as a Foreign Corporation
OHM Remediation Services, Inc.
- ------------------------------
California
Hawaii
Massachusetts
Pennsylvania
Virginia
IT CORPORATION
- --------------
Alaska
Florida
Illinois
Kentucky
Louisiana
Maryland
Michigan
New Jersey
New Mexico
Nevada
New York
Ohio
South Carolina
Tennessee
Texas
Virginia
Groundwater Technology, Inc.
- ----------------------------
California
New York
Texas
37
SCHEDULE E
Subsidiaries to be Dissolved
1. Environmental Financial Services Corporation, a Delaware corporation
2. Environmental Treatment and Technology Corporation, a Delaware corporation
3. Groundwater Technology Government Services, Inc., a Delaware corporation
4. Groundwater Technology Overseas Corp., a Delaware corporation
5. GTI Investment Company, a Delaware corporation
6. Isobar, Inc., a California corporation
7. IT Hanford, Inc., a Washington corporation
8. OHM Corporation, a Nevada corporation
9. OHM Environmental Resources Management Corp., an Ohio corporation
10. OHM International, Inc., a Delaware corporation
11. OHM Savannah River Corp., an Ohio corporation
12. ICF Kaiser Defense Programs, Inc. (to be dissolved simultaneously with the
consummation of the EFM Acquisition)
13. ICF Kaiser Remediation Company (to be dissolved simultaneously with the
consummation of the EFM Acquisition)
14. ICF Kaiser Logistics, Inc. (to be dissolved simultaneously with the
consummation of the EFM Acquisition)
15. ICF Kaiser Logistics Oak Ridge, Inc. (to be dissolved simultaneously with
the consummation of the EFM Acquisition)
16. ICF Kaiser Site Solutions, Inc. (to be dissolved simultaneously with the
consummation of the EFM Acquisition)
38
SCHEDULE G
Registration Rights
1. The Carlyle Group has registration rights under the Registration Rights
Agreement International Technology and certain investors signatory thereto,
dated November 20, 1996.
2. The IT Group, Inc. currently has an effective shelf registration statement
on file (File No. 333-07647) in connection with its acquisition of the
Gradient Corporation.
3. Pursuant to the terms of the acquisition agreements in connection with the
acquisition of Jellinek, Schwartz and Connolly, Inc., PHR Environmental
Consultants, Inc., Pacific Environmental Group Inc., Landbank, Inc., and
Beneco Enterprises, Inc., the sellers are entitled to receive post-closing
earn-out payments in the form of cash or stock, in the Company's
discretion. If stock is given, the sellers have registration rights with
respect to such stock.
39