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EXHIBIT 10.1
CMHC ACQUISITION CORPORATION
$130,000,000 10 3/4% Senior Notes due 2006
PURCHASE AGREEMENT
November 22, 1996
JEFFERIES & COMPANY, INC.
11100 Santa Monica Boulevard
10th Floor
Los Angeles, California 90025
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
CMHC Acquisition Corporation (to be renamed CLARK Material
Handling Company ), a Delaware corporation (the "ISSUER"), hereby agrees with
each of you as follows:
1. ISSUANCE OF SECURITIES. The Issuer proposes to issue
and sell to the purchasers listed on Schedule A hereto (the "PURCHASERS") (each
such Purchaser in the amount set forth opposite its name on Schedule A hereto)
$130,000,000 aggregate principal amount of 10 3/4% Senior Notes due 2006,
Series A (the "SERIES A NOTES"). The Series A Notes will be issued pursuant to
an indenture (the "INDENTURE") to be dated as of November 27, 1996 between the
Issuer and United States Trust Company of New York, as trustee (the "TRUSTEE").
The Series A Notes are being sold in connection with the
acquisition (the "ACQUISITION") of substantially all of the assets and certain
liabilities of Clark Material Handling Company ("CMH") and all of the
outstanding capital stock of certain of its affiliates (the "CMH AFFILIATES")
pursuant to the Stock and Asset Purchase and Sale Agreement dated as of
November 9, 1996 among Terex Corporation, certain of its subsidiaries and the
Issuer (the "ACQUISITION AGREEMENT"). Based on information provided to the
Issuer by CMH and its counsel in connection with the Acquisition, immediately
prior to the Acquisition CMH and the CMH Affiliates will take the actions set
forth on Schedule B hereto (the "CMH ROLL-UP").
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Concurrently with the Acquisition, the Issuer will enter into a revolving
credit facility with Congress Financial Corporation providing for borrowings of
up to $30,000,000 (the "NEW CREDIT FACILITY"). The transactions described
above, together with the offering and sale of the Series A Notes contemplated
by this Agreement, are collectively referred to as the "TRANSACTIONS."
The Series A Notes will be offered and sold to the Purchasers
pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "ACT"). The Issuer has prepared a
preliminary offering circular, dated November 11, 1996 (the "PRELIMINARY
OFFERING CIRCULAR"), and a final offering circular, dated November 22, 1996,
which has been furnished to the Purchasers for use in connection with the
offering of the Series A Notes (the "OFFERING CIRCULAR"), relating to the offer
and sale of the Series A Notes.
Upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the Act, the
Series A Notes shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE THAT IS THREE YEARS (OR SUCH SHORTER PERIOD THAT MAY
HEREAFTER BE PROVIDED UNDER RULE 144(K) AS PERMITTING RESALES
BY NON-AFFILIATES OF RESTRICTED SECURITIES WITHOUT
RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH CMHC ACQUISITION CORPORATION (THE
"COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A)
TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A,
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TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS PURCHASING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and agreements contained herein, and subject to
the terms and conditions hereof, the Issuer agrees to sell to each of the
Purchasers and each of the Purchasers agrees, severally and not jointly, to
purchase from the Issuer, the aggregate principal amount of Series A Notes set
forth opposite its name on Schedule A hereto. The purchase price for the
Series A Notes shall be 97% of the principal amount thereof.
3. TERMS OF OFFERING. The Purchasers have advised the
Issuer that the Purchasers will make offers to sell (the "EXEMPT RESALES") some
or all of the Series A Notes purchased by the Purchasers hereunder on the terms
set forth in the Offering Circular, as amended or supplemented, solely to (i)
persons whom the Purchasers reasonably believe to be "qualified institutional
buyers" as defined in Rule 144A under the Act ("QIBS") and (ii) a limited
number of institutional "accredited investors," as defined in Rule 501(a)(1),
(2), (3) or
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(7) under the Act ("ACCREDITED INVESTORS") (such persons specified in clauses
(i) and (ii) being referred to herein as the "ELIGIBLE PURCHASERS").
Holders of the Series A Notes (including subsequent
transferees) will have the registration rights set forth in the registration
rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be executed on and
dated as of the Closing Date. Pursuant to the Registration Rights Agreement,
the Issuer will agree, among other things, to file with the Securities and
Exchange Commission (the "COMMISSION") (i) a registration statement under the
Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to, among other
things, the 10 3/4% Senior Notes due 2006, Series B, of the Issuer (the "SERIES
B NOTES" and, together with the Series A Notes, the "NOTES"), identical in all
material respects to the Series A Notes (except that the Series B Notes shall
have been registered pursuant to such registration statement) to be offered in
exchange for the Series A Notes (such offer to exchange being referred to as
the "REGISTERED EXCHANGE OFFER") and/or (ii) under certain circumstances, a
shelf registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT") relating to the resale by certain holders of the
Series A Notes.
This Agreement, the Indenture, the Registration Rights
Agreement and the Notes are hereinafter referred to collectively as the
"OPERATIVE DOCUMENTS." The Operative Documents, the Acquisition Agreement, the
Service Agreement and the Revolving Credit Facility (each as defined in the
Offering Circular), and all material documents or instruments executed by the
Issuer or any of the Subsidiaries in connection with any of them or the
Transactions are referred to herein as the "DOCUMENTS."
4. DELIVERY AND PAYMENT. Delivery to the Purchasers of and
payment for the Series A Notes shall be made at a Closing (the "CLOSING") to be
held at 9:00 A.M., New York time, on November 27, 1996 (the" CLOSING DATE") at
the offices of Dechert Price & Rhoads, 477 Madison Avenue, New York, New York
10022. The Closing Date and the location of delivery of and the form of
payment for the Series A Notes may be varied by agreement between the
Purchasers and the Issuer. The Purchasers may withhold from the purchase price
for the Series A Notes a fee of $325,000 for financial advisory services
rendered in connection with the Acquisition.
The Issuer shall deliver to the Purchasers (i) one or more
certificates representing the Series A Notes (the "GLOBAL SECURITIES"), each in
definitive form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), or such other names as the Purchasers may
request upon at least two business day's notice to the Issuer, in an amount
corresponding to the aggregate principal amount of the Series A Notes sold
pursuant to Exempt Resales to QIBs, and (ii) one or more certificates
representing the Series A Notes (the "INDIVIDUAL SECURITIES") in definitive
form, registered in such names and denominations as the
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Purchasers may so request, in an aggregate amount corresponding to the
aggregate principal amount of Series A Notes sold pursuant to Exempt Resales to
Accredited Investors, in each case against payment by the Purchasers of the
purchase price therefor by immediately available Federal funds bank wire
transfer to such bank account as the Issuer shall designate at least two
business days prior to the Closing. In compensation of delivery of payment by
the Purchasers in same day funds, the Company hereby acknowledges that the
Purchasers will deduct from the purchase price an amount equal to Jefferies'
cost of funds with respect thereto.
The Global Securities and the Individual Securities in
definitive form shall be made available to the Purchasers for inspection at the
New York offices of Dechert Price & Rhoads (or such other place as shall be
acceptable to the Purchasers) not later than 9:30 A.M. on the business day
immediately preceding the Closing Date.
5. AGREEMENTS OF THE ISSUER. The Issuer hereby agrees with
each of the Purchasers as follows:
(a) The Issuer shall (i) advise the Purchasers
promptly after obtaining knowledge (and, if requested by the
Purchasers, confirm such advice in writing) of (A) the issuance by any
state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Notes for
offering or sale in any jurisdiction, or the initiation of any
proceeding for such purpose by any state securities commission or
other regulatory authority, or (B) the happening of any event that
makes any statement of a material fact made in the Offering Circular
untrue or that requires the making of any additions to or changes in
the Offering Circular in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading,
(ii) use its best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemption from qualification of
any of the Notes under any state securities or Blue Sky laws, and
(iii) if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of any of the Notes under any such
laws, use its best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
(b) The Issuer shall (i) furnish the Purchasers,
without charge, as many copies of the Offering Circular, and any
amendments or supplements thereto, as the Purchasers may request and
(ii) promptly prepare, upon the Purchasers' request, any amendment or
supplement to the Offering Circular that the Purchasers deem may be
reasonably necessary in connection with Exempt Resales. The Issuer
hereby consents to the use of the Offering Circular, and any
amendments and supplements thereto, by the Purchasers in connection
with Exempt Resales.
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(c) The Issuer shall not amend or supplement the
Offering Circular prior to the Closing Date unless the Purchasers
shall previously have been advised thereof and shall not have
reasonably objected thereto within two business days after being
furnished a copy thereof.
(d) So long as either of the Purchasers shall hold
any Series A Notes, (i) if any event shall occur as a result of which,
in the reasonable judgment of the Issuer or the Purchasers, it becomes
necessary or advisable to amend or supplement the Offering Circular in
order to make the statements therein, in the light of the
circumstances under which they were made not misleading, or if it is
necessary to amend or supplement the Offering Circular to comply with
applicable law, the Issuer shall forthwith prepare an appropriate
amendment or supplement to the Offering Circular (in form and
substance reasonably satisfactory to the Purchasers) so that (A) as so
amended or supplemented the Offering Circular will not include an
untrue statement of material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (B) the
Offering Circular will comply with applicable law and (ii) if it
becomes necessary or advisable to amend or supplement the Offering
Circular so that the Offering Circular will contain all of the
information specified in, and meet the requirements of, Rule
144(A)(d)(4) of the Act, the Issuer shall forthwith prepare an
appropriate amendment or supplement to the Offering Circular (in form
and substance reasonably satisfactory to the Purchasers) so that the
Offering Circular, as so amended or supplemented, will contain the
information specified in, and meet the requirements of, such Rule.
(e) The Issuer shall cooperate with the Purchasers
and the Purchasers' counsel in connection with the qualification of
the Series A Notes under the securities or Blue Sky laws of such
jurisdictions as the Purchasers may reasonably request and continue
such qualification in effect so long as reasonably required for Exempt
Resales; provided, however, that the Issuer shall not be required in
connection therewith to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction where it is not now so qualified or to subject itself
to taxation in respect of doing business in any jurisdiction in which
it is not otherwise so subject.
(f) Whether or not any of the Transactions are
consummated or this Agreement is terminated, the Issuer shall pay (i)
all costs, expenses and fees incident to and in connection with: (A)
the preparation, printing and distribution of the Preliminary Offering
Circular and the Offering Circular and all amendments and supplements
thereto (including, without limitation, financial statements and
exhibits), and all preliminary and final Blue Sky memoranda and all
other agreements, memoranda, correspondence and
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other documents prepared and delivered in connection herewith, (B) the
printing, processing and distribution (including, without limitation,
word processing and duplication costs) and delivery of each of the
Operative Documents, (C) the issuance and delivery of the Notes,
including the fees of the Trustee and the cost of its personnel, (D)
the qualification of the Notes for offer and sale under the securities
or Blue Sky laws of the several states (including, without limitation,
the reasonable fees and disbursements of the Purchasers' counsel
relating to such registration or qualification), (E) furnishing such
copies of the Preliminary Offering Circular and the Offering Circular,
and all amendments and supplements thereto, as may reasonably have
been or be requested for use by the Purchasers, and (F) the
preparation of the Notes (including, without limitation, printing and
engraving thereof), (ii) all fees and expenses of the counsel and
accountants of the Issuer, (iii) all expenses and listing fees in
connection with the application for quotation of the Notes in the
National Association of Securities Dealers, Inc. ("NASD") Automated
Quotation System - PORTAL ("PORTAL"), (iv) all fees and expenses
(including fees and expenses of counsel) of the Issuer in connection
with approval of the Notes by DTC for "book-entry" transfer, and (v)
all fees charged by rating agencies in connection with the rating of
the Notes.
(g) The Issuer shall use the proceeds from the sale
of the Series A Notes in the manner described in the Offering Circular
under the caption "Use of Proceeds."
(h) To the extent it may lawfully do so, the Issuer
shall not insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension, usury or other
law, wherever enacted, now or at any time hereafter in force, that
would prohibit or forgive the payment of all or any portion of the
principal of or interest on the Notes, or that may affect the
covenants or the performance of the Indenture. To the extent that it
may lawfully do so, the Issuer hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort
to any such law, hinder, delay or impede the execution of any power
granted to the Trustee in the Indenture but shall suffer and permit
the execution of every such power as though no such law had been
enacted.
(i) The Issuer shall do and perform all things
required to be done and performed under the Documents by it prior to
and after the Closing Date.
(j) The Issuer shall not, and shall ensure that no
affiliate (as defined in Rule 501(b) of the Act) of the Issuer will,
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 in a manner that would
require the regis-
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tration under the Act of the sale to the Purchasers or to the Eligible
Purchasers of the Series A Notes.
(k) For so long as any of the Series A Notes remain
outstanding and are "restricted securities" within the meaning of Rule
144(a)(3) under the Act, during any period in which it is not subject
to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), the Issuer shall make available, upon
request, to any owner of the Series A Notes in connection with any
sale thereof and any prospective Eligible Purchaser of such Series A
Notes from such owner, the information required by Rule 144A(d)(4)
under the Act.
(l) The Issuer shall comply with all of its
agreements set forth in the representation letter of the Issuer to DTC
relating to the approval of the Notes by DTC for "book entry"
transfer.
(m) The Issuer shall use its best efforts to
effect the inclusion of the Series A Notes in PORTAL.
(n) The Issuer shall, so long as the Notes are
outstanding, and whether or not it is required to do so by the rules
and regulations of the Commission, furnish to the Trustee and deliver
or cause to be delivered to the holders of the Notes and each
Purchaser (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on
Forms 10-Q and 10-K if the Issuer were required to file such Forms,
including for each a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by the Issuer's
independent certified public accountants and (ii) all reports that
would be required to be filed with the Commission on Form 8-K if the
Issuer were required to file such reports. From and after the time
the Exchange Offer Registration Statement or the Shelf Registration
Statement, as the case may be, is declared effective by the
Commission, the Issuer will file such information with the Commission,
provided that the Commission will accept such filing.
(o) Except in connection with the Registered
Exchange Offer or the filing of the Shelf Registration Statement, as
the case may be, the Issuer shall not, and shall not authorize or
knowingly permit any person acting on its behalf to, (i) distribute
any offering material in connection with the offering and sale of the
Series A Notes other than the Preliminary Offering Circular and the
Offering Circular and any amendments and supplements to the Offering
Circular prepared in compliance with Section 5(c) hereof or (ii)
solicit any offer to buy or offer to sell the Notes by means of any
form of general solicitation or general advertising (including,
without limitation, as such terms are used
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in Regulation D under the Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Act.
(p) The Issuer shall not, directly or indirectly,
without the prior consent of the Purchasers, offer, sell, grant any
option to purchase, or otherwise dispose (or announce any offer, sale,
grant of any option to purchase or other disposition) of any debt
securities of the Issuer (other than any private loan, credit or
financing agreement with a bank or similar institution) for a period
of 180 days after the date of the Offering Circular, except for the
Series A Notes and the Series B Notes as contemplated by the
Registration Rights Agreement.
(q) For so long as either of the Purchasers shall
hold any Notes, the Issuer shall promptly notify each Purchaser in
writing if the Issuer or any of its Affiliates becomes a party in
interest or a disqualified person with respect to any funded employee
benefit plan. The terms "ERISA," "Affiliates," "party in interest,"
"disqualified person" and "employee benefit plan" shall have the
meanings as set forth in Section 6(v) hereof. Upon the request of the
Issuer, each Purchaser shall promptly notify the Issuer when such
Purchaser no longer owns any Notes.
6. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer
represents and warrants to each of the Purchasers that:
(a) The Preliminary Offering Circular as of its
date did not, and the Offering Circular as of its date does not and as
of the Closing Date will not, contain any untrue statement of a
material fact or omit to state any material fact (except, in the case
of the Preliminary Offering Circular, for pricing terms and other
financial terms intentionally left blank) necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, that the representation and
warranty set forth in this sentence does not apply to statements
contained in the Preliminary Offering Circular or the Offering
Circular made in reliance upon and in conformity with information
relating to the Purchasers furnished in writing by or on behalf of the
Purchasers expressly for use therein. No injunction or order has been
issued that would prevent or suspend the issuance or sale of the Notes
or the use of the Offering Circular, or any amendment or supplement
thereto, in any jurisdiction. Each of the Preliminary Offering
Circular and the Offering Circular, as of their respective dates
contained, and the Offering Circular as of the Closing Date will
contain, all of the information specified in, and meet the
requirements of, Rule 144A(d)(4) under the Act. Except as adequately
disclosed in the Offering Circular, to the knowledge of the Issuer
after due inquiry, there are no related party transactions that would
be required
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to be disclosed in the Offering Circular if the Offering Circular were
a prospectus included in a registration statement on Form S-1 filed
under the Act.
(b) There are no securities of the Issuer
registered under the Exchange Act or listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted in a
United States automated inter-dealer quotation system.
(c) The Issuer and each Subsidiary (as defined
below) has been duly organized, is validly existing and, in the case
of the Issuer, is in good standing under the laws of its jurisdiction
of organization, and the Issuer and each Subsidiary has all requisite
power and authority to carry on the businesses to be conducted by it
upon consummation of the Acquisition as described in the Offering
Circular and to own, lease and operate the properties and assets being
acquired in the Acquisition. The Issuer and, to the Issuer's
knowledge after due inquiry, each Subsidiary is duly qualified or
licensed to do business and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which
the nature of such businesses or the ownership or leasing of such
properties requires such qualification, except where the failure to be
so qualified could not, singly or in the aggregate, have a material
adverse effect on (i) the properties, business, prospects, operations,
or condition (financial or otherwise) of the Issuer and the
Subsidiaries, taken as a whole or (ii) the ability of the Issuer to
perform its obligations under any of the Documents (a "MATERIAL
ADVERSE EFFECT").
(d) Immediately following the Closing, (i) the only
direct or indirect subsidiaries of the Issuer (collectively, the
"SUBSIDIARIES") will be the corporations identified on Schedule 6(d),
each of which is a Foreign Subsidiary (as defined in the Indenture),
and (ii) except as set forth in Schedule 6(d), the Issuer will
directly or indirectly beneficially own 100% of the outstanding shares
of capital stock of each Subsidiary, free and clear of any Lien (as
defined in the Indenture), except for Liens permitted under the
Indenture, and all of such shares of capital stock will be duly
authorized and validly issued, fully paid and nonassessable and not
issued in violation of, or subject to, any preemptive or similar
rights. There are no outstanding (x) securities convertible into or
exchangeable for any capital stock of the Issuer or any of the
Subsidiaries or (y) options, warrants or other rights to purchase or
subscribe to capital stock of the Issuer or any of the Subsidiaries or
securities convertible into or exchangeable for capital stock of the
Issuer or any of the Subsidiaries. Except as set forth on Schedule
6(d), immediately following the Closing, the Issuer will not directly
or indirectly own any capital stock or other equity interest in any
other person.
(e) All of the outstanding shares of capital stock
of the Issuer have been duly authorized and validly issued, are owned
beneficially and of record by CMH
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Holdings Corporation free and clear of Liens, are fully paid and
nonassessable, and were not issued in violation of, and are not
subject to, any preemptive or similar rights. The table under the
caption "Pro Forma Capitalization" in the Offering Circular (including
the footnotes thereto) adequately discloses, as of its date, the
capitalization of the Issuer and its Subsidiaries on a consolidated
pro forma basis, after giving effect to the transactions described in
the Offering Circular. Except as set forth in such table, immediately
following the Closing, neither the Issuer nor any of the Subsidiaries
shall have any liabilities, absolute, accrued, contingent or otherwise
other than any such liabilities that either (x) are reflected in the
Historical Financial Statements (defined below), or (y) were incurred
subsequent to the date thereof in the ordinary course of business and
could not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(f) Except for this Agreement and the Registration
Rights Agreement neither the Issuer nor any of the Subsidiaries has
entered into any agreement (i) to register its securities under the
Act or (ii) to purchase or offer to purchase any securities of the
Issuer, any of the Subsidiaries or any of their respective affiliates.
(g) The Issuer has all requisite power and
authority to enter into, deliver and perform its obligations under the
Documents and to consummate the transactions contemplated hereby and
thereby. The Documents (other than the Notes) have been duly and
validly authorized by the Issuer, and this Agreement is, and when
executed and delivered on the Closing Date each other Document (other
than the Notes) will be, a legal, valid and binding obligation of the
Issuer, enforceable against the Issuer in accordance with its terms,
except that (i) the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer, fraudulent conveyance or other similar laws
relating to or affecting creditors' rights generally, (ii) the
availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether in a
proceeding in equity or at law) and (iii) in the case of the
Registration Rights Agreement, rights to indemnity may be limited by
state or Federal laws relating to securities or by policies underlying
such laws. When executed and delivered, the Indenture, the Series A
Notes, the Registration Rights Agreement and the Acquisition Agreement
will conform in all material respects to the description thereof in
the Offering Circular. 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"), applicable to an
indenture that is required to be qualified under the TIA.
(h) The Series A Notes have been duly and validly
authorized by the Issuer for issuance and sale to the Purchasers
pursuant to this Agreement and, when
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executed and authenticated in accordance with the terms of the
Indenture and delivered to and paid for by the Purchasers in
accordance with the terms hereof, will be legal, valid and binding
obligations of the Issuer, enforceable against the Issuer in
accordance with their terms, except that (i) the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, fraudulent conveyance
or other similar laws relating to or affecting creditors' rights
generally and (ii) the availability of equitable remedies may be
limited by equitable principles of general applicability (regardless
of whether in a proceeding in equity or at law). The Series B Notes
have been duly and validly authorized by the Issuer and, when
executed, authenticated and delivered in accordance with the terms of
the Indenture and the Registration Rights Agreement, will be legal,
valid and binding obligations of the Issuer, enforceable against the
Issuer in accordance with their terms, except that (i) the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer,
fraudulent conveyance or other similar laws relating to or affecting
creditors' rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general
applicability (regardless of whether in a proceeding in equity or at
law).
(i) Neither the Issuer nor any of the Subsidiaries
is (i) in violation of its respective charter or by-laws
(collectively, "CHARTER DOCUMENTS"), other than violations with
respect to Charter Documents of Subsidiaries that could not, singly or
in the aggregate, reasonably be expected to result in a Material
Adverse Effect, (ii) other than violations that could not, singly or
in the aggregate, reasonably be expected to result in a Material
Adverse Effect, in violation of any Federal, state, local or foreign
statute, law (including, without limitation, common law) or ordinance,
or any judgment, decree, rule, regulation or order (collectively,
"APPLICABLE LAW") of any government, governmental or regulatory agency
or body, court or arbitrator, domestic or foreign (each, a
"GOVERNMENTAL AUTHORITY") or (iii) other than breaches or defaults
that could not, singly or in the aggregate, reasonably be expected to
result in a Material Adverse Effect, in breach of or default under
(with the passage of time or otherwise) any bond, debenture, note or
other evidence of indebtedness, indenture, mortgage, deed of trust,
lease or any other agreement or instrument to which any such person is
a party or by which any of them or their respective property is bound
(collectively, "APPLICABLE AGREEMENTS").
(j) Neither the execution, delivery or performance
of the Documents by the Issuer, nor the consummation of the
Transactions shall conflict with, violate, constitute a breach of or a
default (with the passage of time or otherwise) under, or result in
the imposition of a Lien on any assets of the Issuer or any of the
Subsidiaries (except pursuant to the Indenture), or result in an
acceleration of indebtedness of the Issuer or any of the Subsidiaries
pursuant to (i) the Charter Documents of the Issuer or any of the
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Subsidiaries, (ii) any Applicable Agreement, other than such breaches,
violations or defaults that could not, singly or in the aggregate,
result in a Material Adverse Effect or (iii) any material Applicable
Law. Immediately after giving effect to the Transactions, no Default
or Event of Default (as defined in the Indenture) will exist.
(k) No permit, authorization, approval, consent,
license or order of, or filing, registration or qualification with,
any Governmental Authority (collectively, "PERMITS") and no approval
or consent of any other person, is required in connection with, or as
a condition to, the execution, delivery or performance of any of the
Documents by the Issuer or the consummation of any of the Transactions
other than such Permits, approvals and consents (i) as have been made
or obtained on or prior to the Closing Date, (ii) as are not required
to be made or obtained on or prior to the Closing Date that will be
made or obtained when required, (iii) as may be required under the
rules of the NASD by reason of the action of the Purchasers, or (iv)
those the failure of which to make or obtain could not singly or in
the aggregate reasonably be expected to result in a Material Adverse
Effect.
(l) Except as adequately disclosed in the Offering
Circular, there is no action, claim, suit or proceeding (including,
without limitation, an investigation or partial proceeding, such as a
deposition), domestic or foreign (collectively, "PROCEEDINGS"),
pending or, to the knowledge of the Issuer after due inquiry,
threatened against the Issuer, any Subsidiary or, to the knowledge of
the Issuer after due inquiry, any other person, that either (i) seeks
to restrain, enjoin, prevent the consummation of, or otherwise
challenge any of the Documents or any of the Transactions, or (ii)
could, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Neither the Issuer nor any of the
Subsidiaries is subject to any judgment, order, decree, rule or
regulation of any Governmental Authority that could, singly or in the
aggregate, have a Material Adverse Effect (other than any such
judgments, orders, decrees, rules and regulations applicable to the
industry generally).
(m) Immediately following the Closing, the Issuer
and each of the Subsidiaries will have such Permits as are necessary
to own, lease and operate the properties and to conduct the businesses
described in the Offering Circular other than those the failure of
which to have could not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. All such Permits are
in full force and effect. No event has occurred which allows, or
after notice or lapse of time would allow, the imposition of any
material penalty, or the revocation or termination by the issuer
thereof, or that results or will result in any material impairment of
the rights of the holder of any such Permits. To the knowledge of the
Issuer after due inquiry, no issuer is considering limiting,
suspending or revoking any such Permit.
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(n) Immediately following the Closing, the Issuer
and the Subsidiaries (i) will have good and marketable title, free and
clear of all Liens (except for Liens permitted under the Indenture),
to all property and assets described in the Offering Circular as being
owned by them and (ii) will enjoy, in all material respects, peaceful
and undisturbed possession under all real property leases to which it
is a party as lessee. Immediately following the Closing, all
Applicable Agreements will be in full force and effect and legal,
valid and binding obligations of the Issuer, the Subsidiaries and to
the knowledge of the Issuer after due inquiry, all other parties
thereto, and no default by the Issuer, any of the Subsidiaries, or to
the knowledge of the Issuer after due inquiry, any other person, will
have occurred or be continuing thereunder, other than such defaults
that could not, singly or in the aggregate, have a Material Adverse
Effect. Immediately following the Closing, the Issuer and the
Subsidiaries will have insurance (including self-insurance consistent
with prior practice as adequately disclosed in the Offering Circular)
covering their properties, operations, personnel and businesses
against such losses and risks as they reasonably deem adequate in
accordance with customary industry practice.
(o) All tax returns required to be filed by the
Issuer and the Subsidiaries in any jurisdiction (including foreign
jurisdictions) have been filed and when filed by the Issuer or its
Subsidiaries, as the case may be, were accurate in all material
respects. All taxes, assessments, fees and other charges (including,
without limitation, withholding taxes, penalties and interest) due or
claimed to be due from such entities have been paid, other than those
being contested in good faith by appropriate proceedings, or those
that are currently payable without penalty or interest and, in each
case, for which an adequate reserve or accrual has been established on
the books and records of the Issuer in accordance with generally
accepted accounting principles of the United States, consistently
applied ("GAAP") or in respect of which the Issuer has the right to be
indemnified. There is no actual or proposed additional tax
assessments for any fiscal period against the Issuer or any of the
Subsidiaries that could, singly or in the aggregate, have a Material
Adverse Effect. The charges, accruals and reserves on the books of
each of the Issuer and the Subsidiaries in respect of any income and
tax liability for any years not finally determined are adequate to
meet any assessments or re-assessments for additional income tax for
any years not finally determined.
(p) Immediately following the Closing, the Issuer
and each of the Subsidiaries will own, or be licensed under, and have
the right to use, all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names
(collectively, "INTELLECTUAL PROPERTY") currently used in the conduct
of the business as set forth in the Offering Circular. No
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claims have been asserted in writing or to the knowledge of the Issuer
after due inquiry, otherwise by any person challenging the use of any
such Intellectual Property by the Issuer or any of the Subsidiaries or
questioning the validity or effectiveness of any license or agreement
related thereto, there is no valid basis for any such claim (other
than any claims that would not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect), and the use of such
Intellectual Property by the Issuer and the Subsidiaries will not
infringe on the Intellectual Property rights of any other person.
(q) The combined financial statements and related
notes contained in the Offering Circular (the "HISTORICAL FINANCIAL
STATEMENTS") present fairly in all material respects the combined
financial position, results of operations and cash flows of the
entities named therein as of the respective dates and for the
respective periods to which they apply and have been prepared in
accordance with GAAP (except as disclosed therein) and the
requirements of Regulation S-X that would be applicable if the
Offering Circular were a prospectus included in a registration
statement on Form S-1 filed under the Act.
The unaudited pro forma financial statements and
related notes set forth under the caption "Unaudited Pro Forma
Combined Financial Information" included in the Offering Circular (the
"PRO FORMA FINANCIAL STATEMENTS" and together with the Historical
Financial Statements, the "FINANCIAL STATEMENTS") (i) have been
derived from the Historical Financial Statements and comply with the
rules and guidelines of the Commission with respect to pro forma
financial statements and (ii) in the Issuer's reasonable opinion, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
Transactions and the circumstances referred to therein. Except as
adequately disclosed in the Offering Circular, the summary and
selected pro forma financial data included in the Offering Circular
have been derived from the Pro Forma Financial Statements.
All other financial data included in the Offering
Circular are fairly and accurately presented in all material respects
and are derived from or prepared on a basis consistent with the
Historical Financial Statements and the books and records of the
Issuer, except as otherwise disclosed in the Offering Circular. Price
Waterhouse LLP are independent public accountants under Rule 101 of
AICPA's Code of Professional Conduct and its interpretations and
rulings.
(r) Subsequent to the respective dates as of which
information is given in the Offering Circular, except as adequately
disclosed in the Offering Circular, there has not been any material
adverse change in the properties, business, prospects, operations or
condition (financial or otherwise) of the Issuer and the Subsidiaries
taken
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as a whole (a "MATERIAL ADVERSE CHANGE"). To the knowledge of the
Issuer after due inquiry, there is no event that is reasonably likely
to occur, which if it were to occur, could, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
except such events that have been adequately disclosed in the Offering
Circular.
(s) Immediately following the Closing, after giving
effect to the Transactions (i) the present fair salable value of the
assets of the Issuer will exceed the amount that will be required to
be paid on or in respect of the then existing debts and other
liabilities (including contingent liabilities) of the Issuer as they
become absolute and matured and (ii) the Issuer will not have an
unreasonably small capital to carry on the businesses proposed to be
conducted by it. The Issuer does not intend to, and does not believe
that it will, incur debts beyond its ability to pay such debts as they
mature.
(t) Except as contemplated by this Agreement,
neither the Issuer nor any of its affiliates has (i) taken, directly
or indirectly, any action designed to cause or to result in, or that
has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the
Issuer to facilitate the sale or resale of any of the Notes or (ii)
except as disclosed in the Offering Circular, (A) sold, bid for,
purchased, or paid anyone any compensation for soliciting purchases
of, any of the Notes or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities
of the Issuer.
(u) No registration under the Act, and no
qualification of the Indenture under the TIA is required for the sale
of the Series A Notes to the Purchasers as contemplated hereby or for
the Exempt Resales, assuming (i) that the Eligible Purchasers who buy
the Series A Notes in the Exempt Resales are QIBs or institutional
Accredited Investors, (ii) the accuracy of the Purchasers'
representations contained herein regarding the absence of general
solicitation in connection with the sale of the Series A Notes to the
Purchasers and the Exempt Resales, and (iii) the accuracy of the
representations made by each Accredited Investor who purchases the
Series A Notes pursuant to an Exempt Resale as set forth in the
letters of representation in the form of Annex A to the Offering
Circular. No form of general solicitation or general advertising was
used by the Issuer or any of its affiliates or any of their
representatives in connection with the offer and sale of any of the
Series A Notes or in connection with Exempt Resales including, but not
limited to, the methods described in Rule 502(c) of Regulation D under
the Act. No securities of the same class as any of the Notes have
been offered, issued or sold by the Issuer or any of its affiliates
within the six-month period immediately prior to the date hereof.
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(v) Neither the Issuer nor any of its
"Affiliates" is a "party in interest" or a "disqualified person" with
respect to any funded employee benefit plans. No condition exists or
event or transaction has occurred in connection with any employee
benefit plan that could result in the Issuer or any such "Affiliate"
incurring any liability, fine or penalty that could, singly or in the
aggregate, have a Material Adverse Effect. The terms "employee benefit
plan" and "party in interest" shall have the meanings assigned to such
terms in Section 3 of the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations promulgated thereunder
("ERISA"), the term "Affiliate" shall have the meaning assigned to
such term in Section 407(d)(7) of ERISA, and the term "disqualified
person" shall have the meaning assigned to such term in section 4975
of the Internal Revenue Code of 1986, as amended, and the rules,
regulations and published interpretations promulgated thereunder the
("CODE")
(w) None of the Transactions will violate or result
in a violation of Section 7 of the Exchange Act (including, without
limitation, 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). Neither the Issuer nor any
of the Subsidiaries is, or after giving effect to the Offering and the
other Transactions contemplated by the Documents, will be (i) an
"investment company" or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company Act of
1940, as amended, and the rules and regulations and interpretations
promulgated thereunder or (ii) subject to any Federal or state statute
or regulation limiting its ability to incur or assume indebtedness for
borrowed money. The Issuer has complied with all provisions of
Florida H.B. 1771, codified as Section 517.075 of the Florida
Statutes, and all regulations promulgated thereunder relating to
issuers doing business with the Government of Cuba or with any person
or any affiliate located in Cuba.
(x) The Issuer has not dealt with any broker,
finder, commission agent or other person (other than the Purchasers)
in connection with the Transactions and neither the Issuer nor any of
the Subsidiaries is under any obligation to pay any broker's fee or
commission in connection with such transactions (other than
commissions and fees to the Purchasers as set forth in the Offering
Circular).
(y) Except as adequately disclosed in the Offering
Circular, there is (i) no unfair labor practice complaint or other
proceeding pending or, to the knowledge of the Issuer after due
inquiry, threatened against the Issuer or any of the Subsidiaries
before the National Labor Relations Board or any state, local or
foreign labor relations board or any industrial tribunal, and no
grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending or threatened, (ii) no
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strike, labor dispute, slowdown or stoppage pending or, to the
knowledge of the Issuer after due inquiry, threatened against the
Issuer or any of the Subsidiaries, and (iii) no union representation
question existing with respect to the employees of the Issuer or any
of the Subsidiaries, and, to the Issuer's knowledge after due inquiry,
no union organizing activities are taking place, that, in the case of
each of such clauses (i), (ii) or (iii) could, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(z) Except as adequately disclosed in the Offering
Circular or as otherwise could not reasonably be likely to, singly or
in the aggregate, have a Material Adverse Effect:
(1) no real property or facility to be owned,
used, operated, leased or managed by the Issuer or any of the
Subsidiaries upon consummation of the Closing (the "Real
Property") is listed or proposed for listing on the National
Priorities List or the Comprehensive Environmental Response,
Compensation, and Liability Information System, both
promulgated under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"),
or on any other state or local list established pursuant to
any Environmental Law, and neither the Issuer nor any of the
Subsidiaries has received any notification of potential or
actual liability or request for information under CERCLA or
any comparable state or local law;
(2) no underground storage tank, or related
piping, is located on any of the Real Property;
(3) there have been no releases (i.e., any
past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping, on-site or, to the knowledge
of the Issuer after due inquiry, off-site) of Hazardous
Materials (as defined below) by the Issuer, any of the
Subsidiaries or to the knowledge of the Issuer after due
inquiry, any person or entity whose liability for any such
release of Hazardous Materials, the Issuer or any of the
Subsidiaries has retained or assumed either contractually or
by operation of law at, on, under, or migrating from or into
any of the Real Property;
(4) to the knowledge of the Issuer after due
inquiry, no person or entity whose liability the Issuer or any
of the Subsidiaries has retained or assumed either
contractually or by operation of law (a "Third Party"), has
any liability, absolute or contingent, under any Environmental
Law, which has been retained or assumed by the Issuer or any
of the Subsidiaries; there is no civil, criminal or
administrative Proceeding, hearing, notice of violation or
deficiency, notice or
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demand letter pending or threatened against the Issuer or any
of the Subsidiaries or, to the knowledge of the Issuer after
due inquiry, any Third Party under any Environmental Law; and
(5) there are no events, activities, or
actions by the Issuer or any of the Subsidiaries or conditions
of any of the Real Property, that are reasonably likely to
prevent compliance by the Issuer or any of the Subsidiaries
with any Environmental Law, or that are reasonably likely to
give rise to any liability under any Environmental Laws.
"ENVIRONMENTAL LAWS" means all Applicable
Laws relating to pollution or protection of human health or
the environment, including, without limitation, laws relating
to (1) emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous constituents, substances or wastes, including,
without limitation, asbestos or asbestos-containing materials,
polychlorinated biphenyls, petroleum or any constituents
relating to or arising out of any oil production activities,
including crude oil or any fraction thereof, or any petroleum
product or other wastes, chemicals or substances regulated by
any Environmental Law (collectively referred to as "HAZARDOUS
MATERIALS"), into the environment (including, without
limitation, ambient air, surface water, ground water, land
surface or subsurface strata), (2) the manufacture,
processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of Hazardous Materials and (3)
underground storage tanks, and related piping, and emissions,
discharges, releases or threatened releases therefrom.
(aa) No representation or warranty made by the
Issuer, or to the knowledge of the Issuer after due inquiry, any other
person in any of the Documents, was or will be, when made, inaccurate,
untrue or incorrect in any material respect.
7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.Each
Purchaser severally and not jointly represents and warrants with respect to
itself that:
(a) It is a QIB.
(b) It (i) is not acquiring the Series A Notes with
a view to any distribution thereof that would violate the Act or the
securities laws of any state of the United States or any other
applicable jurisdiction and (ii) will be soliciting offers for the
Series A Notes only from, and will be reoffering and reselling the
Series A Notes only to (A) persons in the United States whom it
reasonably believes to be QIBs in reliance on the exemption from the
registration requirements of the Act provided by and in transactions
meeting the requirements of Rule 144A, and (B) a limited number of
institutional
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Accredited Investors that execute and deliver to the Issuer and the
Purchasers a letter containing certain representations and agreements
in the form attached as Annex A to the Offering Circular.
(c) No form of general solicitation or general
advertising in violation of the Securities Act has been or will be
used by such Purchaser or any of its representatives in connection
with the offer and sale of any of the Series A Notes.
(d) In connection with the Exempt Resales, it will
solicit offers to buy the Series A Notes only from, and will offer and
sell the Series A Notes only to, Eligible Purchasers who, in
purchasing such Series A Notes, will be deemed to have represented and
agreed to the matters set forth under the caption "Notice to
Investors" in the Offering Circular.
(e) It has all requisite power and authority to
enter into, deliver and perform its obligations under this Agreement
and the Registration Rights Agreement and each of this Agreement and
the Registration Rights Agreement has been duly and validly authorized
by it.
8. INDEMNIFICATION.
(a) The Issuer shall, without limitation as to
time, indemnify and hold harmless each Purchaser and each person, if
any, who controls (within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) either Purchaser (any of such
persons being hereinafter referred to as a "controlling person"), and
the respective officers, directors, partners, employees,
representatives and agents of each Purchaser and any such controlling
person, to the fullest extent lawful, from and against any and all
losses, claims, damages, liabilities, costs (including, without
limitation, costs of preparation and reasonable attorneys' fees) and
expenses (including, without limitation, reasonable costs and expenses
incurred in connection with investigating, preparing, pursuing or
defending against any of the foregoing) (collectively, "LOSSES"), as
incurred, directly or indirectly caused by, related to, based upon,
arising out of or in connection with (i) any untrue statement or
alleged untrue statement of a material fact contained in the
Preliminary Offering Circular or the Offering Circular (or any
amendment or supplement thereto), or any omission or alleged omission
to state therein a 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 to the
extent any such untrue statement is based upon and made in conformity
with information furnished in writing by such Purchaser expressly for
use in the Offering Circular or (ii) the advice or services rendered
to the Issuer pursuant to this Agreement or in connection with the
Transactions or any indemnified person's actions or inactions in
connection with any such advice or services, provided, that (A) the
Issuer shall not be liable to any indemnified
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party for any Losses that arise solely from the gross negligence or
willful misconduct of such indemnified party and (B) with respect to
any untrue statement or omission or alleged untrue statement or
omission made in the Preliminary Offering Circular, the indemnity
agreement contained in this Section 8(a) shall not inure to the
benefit of any indemnified party to the extent that the sale to the
person asserting any such Losses was an initial resale of Series A
Notes by a Purchaser and such Losses of such indemnified party result
from the fact that there was not sent or given to such person, at or
prior to the written confirmation of the sale of such Series A Notes
to such person, if required by law to have been sent or given, a copy
of the Offering Circular if copies of the Preliminary Offering
Circular had previously been furnished to such Purchaser and the
Offering Circular corrected such untrue statement or omission or
alleged untrue statement or omission. The Issuer shall notify the
Purchasers promptly of the institution, threat or assertion of any
Proceeding of which the Issuer or any Subsidiary is aware in
connection with the matters addressed by this Agreement which involves
the Issuer, any of the Subsidiaries or any of the indemnified parties;
provided, that the failure to so notify the Purchasers shall not be
actionable hereunder except to the extent (but only to the extent)
that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal) that
either Purchaser has been prejudiced materially by such failure. In
no event shall the indemnifying parties be liable for the fees and
expenses of more than one counsel (in addition to local counsel) for
all indemnified parties in connection with any one action or separate
but similar or related actions in the same jurisdiction arising out of
the same set of allegations or circumstances. The counsel with
respect to which fees and expenses shall be so reimbursed shall be
designated in writing by Jefferies & Company, Inc. in the case of
parties indemnified pursuant to Section 8(a) and by the Issuer in the
case of parties indemnified pursuant to Section 8(c).
(b) If any Proceeding shall be brought or asserted
against any person entitled to indemnification hereunder (an
"Indemnified Party"), such Indemnified Party shall give prompt written
notice to the indemnifying party; provided, that the failure to so
notify the indemnifying party shall not relieve the indemnifying party
from any obligation or liability except to the extent (but only to the
extent) that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal) that the
indemnifying party has been prejudiced materially by such failure. No
indemnifying party shall be liable for any settlement of any
Proceeding effected without its prior written consent, which consent
shall not be unreasonably withheld.
Without the consent of the Purchasers, which consent
shall not be unreasonably withheld, neither the Issuer nor any of its
Subsidiaries shall consent to entry of any judgment in or enter into
any settlement of any pending or threatened Proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not any Indemnified Party is a party thereto) unless such judgment
or settlement includes as an unconditional term thereof the giving by
the claimant or plaintiff to each
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Indemnified Party of a release, in form and substance satisfactory to
the Purchasers, from all Losses that may arise from such Proceeding or
the subject matter thereof.
(c) Each of the Purchasers agrees, severally and
not jointly, to indemnify and hold harmless the Issuer and each
person, if any, who controls (within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act) the Issuer (any of such
persons being hereinafter referred to as a "controlling person"), and
the officers, directors, partners, employees, representatives and
agents of the Issuer and any such controlling person to the same
extent as the foregoing indemnity from the Issuer to each of the
Indemnified Parties, but only with respect to claims and actions based
on information relating to such Purchaser in the Offering Memorandum
that is made in reliance on and in conformity with information
furnished in writing by such Purchaser expressly for use in the
Offering Circular.
The Issuer hereby acknowledges that the statements
relating to the Purchasers contained in the third and fourth
paragraphs under the "Plan of Distribution" section of the Preliminary
Offering Circular and the Offering Circular constitute the only
information furnished in writing by any of the Purchasers to the
Issuer for all purposes hereof.
(d) If the indemnification provided for in this
Section 8 is unavailable to an Indemnified Party or is insufficient to
hold such Indemnified Party harmless for any Losses in respect of
which this Section 8 would otherwise apply by its terms (other than by
reason of exceptions provided in this Section 8), 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 (i) in such proportion as is
appropriate to reflect the relative benefits received by the Issuer,
on the one hand, and the Purchasers, on the other hand, from the
offering of the Series A Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Issuer, on the one hand, and the Purchasers, on the other hand, in
connection with the actions, statements or omissions that resulted in
such Losses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuer, on the one hand, and the
Purchasers, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering (before
deducting expenses) received by the Issuer, and the total discounts
and commissions received by the Purchasers, bear to the total price of
the Series A Notes in Exempt Resales in each case as set forth in the
table on the cover page of the Offering Circular. The relative fault
of the Issuer, on the one hand, and the Purchasers, on the other hand,
shall be determined by reference to, among other things, whether any
untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information
supplied by the Issuer, on the one hand, or the Purchasers, on the
other
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hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by an Indemnified Party as a
result of any Losses shall be deemed to include any legal or other
fees or expenses incurred by such party in connection with any
Proceeding, to the extent such party would have been indemnified for
such fees or expenses if the indemnification provided for in this
Section 8 was available to such party.
Each party hereto agrees that it would not be just
and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. Notwithstanding the
provisions of this Section 8(d), the Purchasers shall not be required
to contribute, in the aggregate, any amount in excess of the amount by
which the total discounts and commissions received by them with
respect to the Series A Notes exceeds the amount of any damages that
the Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The indemnity and contribution agreements
contained in this Section 8 are in addition to any liability that any
party hereto may otherwise have to the Indemnified Parties.
9. CONDITIONS.
(a) The obligation of the Purchasers to purchase
the Series A Notes under this Agreement is subject to the satisfaction
or waiver of each of the following conditions:
(i) All the representations and warranties
of the Issuer in this Agreement shall be true and correct in all
material respects (other than representations and warranties with a
materiality qualifier, which shall be true and correct as written) at
and as of the Closing Date after giving effect to the Transactions
with the same force and effect as if made on and as of such date. On
or prior to the Closing Date, the Issuer shall have performed or
complied in all material respects with all of the agreements and
satisfied in all material respects all conditions on its part to be
performed, complied with or satisfied pursuant to the Documents; and
nothing shall have come to the attention of the Issuer to lead it to
believe that any other party to the Documents (other than the
Purchasers) has not performed or complied in all material respects
with all of the agreements and satisfied in all material respects all
conditions on their respective parts to be performed, complied with or
satisfied pursuant to the Documents.
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(ii) The Offering Circular shall have been
printed and copies made available to the Purchasers not later than
12:00 noon, New York City time, on the first business day following
the date of this Agreement or at such later date and time as the
Purchasers may approve.
(iii) No injunction, restraining order or
order of any nature by a Governmental Authority shall have been issued
as of the Closing Date that would prevent or interfere with the
issuance and sale of the Series A Notes; and no stop order suspending
the qualification or exemption from qualification of any of the Series
A Notes in any jurisdiction shall have been issued and no Proceeding
for that purpose shall have been commenced or be pending or
contemplated as of the Closing Date.
(iv) No action shall have been taken and no
Applicable Law shall have been enacted, adopted or issued that would,
as of the Closing Date, prevent the issuance or sale of the Series A
Notes. No Proceeding shall be pending or threatened other than
Proceedings that (A) if adversely determined could not, singly or in
the aggregate, adversely affect the issuance or marketability of the
Series A Notes or (B) could not reasonably be expected to have a
Material Adverse Effect.
(v) The Notes shall have (A) been
designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the PORTAL
market, and (B) received a rating of B+ and B1 from Standard & Poor's
Corporation and Moody's Investors Services, Inc., respectively.
(vi) The Purchasers shall have received on
the Closing Date (A) certificates dated the Closing Date, signed by
(1) the Chief Executive Officer and (2) the principal financial or
accounting officer of the Issuer, on behalf of the Issuer, (x)
confirming the matters set forth in paragraphs (i) through (iv) of
this Section 9(a) and (y) certifying as to such other matters as the
Purchasers may reasonably request, (B) a certificate, dated the
Closing Date, signed by the Secretary of the Issuer, certifying such
matters as the Purchasers may reasonably request and (C) a
certificate, dated the Closing Date, signed by the principal financial
or accounting officer of the Issuer substantially in the form
previously approved by the Purchasers.
(vii) The Purchasers shall have received on
the Closing Date an opinion and a letter (each reasonably satisfactory
in form and substance to the Purchasers and counsel to the
Purchasers), dated the Closing Date, of
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Dechert Price & Rhoads, special counsel to the Issuer, substantially
in the form of Exhibits A-1 and A-2 hereto.
(viii) The Purchasers shall have received
on the Closing Date an opinion, dated the Closing Date, of Skadden,
Arps, Slate, Meagher & Flom LLP, in form and substance reasonably
satisfactory to the Purchasers covering such matters as are
customarily covered in such opinions.
(ix) The Purchasers and the Issuer shall
have received from Price Waterhouse (i) a customary comfort letter,
dated the date of the Offering Circular, in form and substance
reasonably satisfactory to the Purchasers, with respect to the
financial statements and certain financial information contained in
the Offering Circular, and (ii) a customary comfort letter, dated the
Closing Date, in form and substance reasonably satisfactory to the
Purchasers, to the effect that they reaffirm the statements made in
the letter furnished pursuant to clause (i), except that the specified
date referred to shall be a date not more than five days prior to the
Closing Date.
(x) The Documents shall have been executed
and delivered by all parties thereto and the Purchasers shall have
received a fully executed original of each Document.
(xi) On or prior to the Closing Date, the
Transactions shall have been duly consummated. The Purchasers shall
have received copies of all opinions, certificates, letters and other
documents delivered under or in connection with the Transactions,
including without limitation the Acquisition Agreement, and letters to
the effect that the Purchasers may rely on such opinions, as if
addressed to the Purchasers.
(xii) The Purchasers shall have received
copies of (A) all UCC-3 termination statements and mortgage releases
and other collateral releases and terminations each in form and
substance reasonably satisfactory to the Purchasers, duly executed and
delivered by United States Trust Company of New York relating to
collateral securing the 13 1/4% Senior Secured Notes due 2002 of Terex
Corporation to be acquired by the Issuer pursuant to the Acquisition
and (B) all payoff letters, UCC-3 termination statements and other
collateral releases and terminations, each in form and substance
satisfactory to the Purchasers, duly executed and delivered by
Congress Financial Corporation and/or Foothill Capital Corporation, as
necessary, relating to the Loan and Security Agreement dated as of May
9, 1995 among Terex, such parties and the other parties thereto (the
"EXISTING CREDIT FACILITY AGREEMENT") evidencing the termination and
release
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of collateral securing any of the Existing Credit Facility Agreement
to be acquired by the Issuer pursuant to he acquisition and each
public filing related thereto.
(xiii) Counsel to the Purchasers shall have
been furnished with such documents as they may reasonably require for
the purpose of enabling them to review or pass upon the matters
referred to in this Section 9 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
(b) The obligation of the Issuer to sell the Series
A Notes under this Agreement is subject to the satisfaction or waiver
of each of the following conditions:
(i) The Purchasers shall have delivered payment
to the Issuer for the Series A Notes pursuant
to Sections 2 and 4 of this Agreement.
(ii) All of the representations and warranties of
the Purchasers in this Agreement shall be
true and correct in all material respects at
and as of the Closing Date, with the same
force and effect as if made on and as of such
date. On or prior to the Closing Date, the
Purchasers shall have performed or complied
with all of the agreements and satisfied all
conditions on their part to be performed,
complied with or satisfied pursuant to this
Agreement.
(iii) No injunction, restraining order or order of
any nature by a Governmental Authority shall
have been issued as of the Closing Date that
would prevent or interfere with the issuance
and sale of the Series A Notes; and no stop
order suspending the qualification or
exemption from qualification of any of the
Series A Notes in any jurisdiction shall have
been issued and no Proceeding for that
purpose shall have been commenced or be
pending or contemplated as of the Closing
Date. No action shall have been taken and no
Applicable Law shall have been enacted,
adopted or issued that would, as of the
Closing Date, prevent the issuance or sale of
the Series A Notes.
10. TERMINATION. The Purchasers may terminate this
Agreement at any time prior to the Closing Date by written notice to the Issuer
if any of the following has occurred:
(a) since the date as of which information is given
in the Offering Circular, any material adverse effect or development
involving a prospective adverse effect on the properties, business,
prospects, operations or condition (financial or otherwise), of the
Issuer or any Subsidiary, whether or not arising in the ordinary
course
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of business, that could, in the Purchasers' judgment, (i) make it
impracticable or inadvisable to proceed with the offering or delivery
of the Series A Notes on the terms and in the manner contemplated in
the Offering Circular or (ii) materially impair the investment quality
of any of the Notes;
(b) the failure of the Issuer to satisfy the
conditions contained in Section 9(a) hereof on or prior to the third
business day following the date of this Agreement;
(c) any outbreak or escalation of hostilities or
other national or international calamity or crisis or material adverse
change in economic conditions in or the financial markets of the
United States, if the effect of such outbreak, escalation, calamity,
crisis or material adverse change in the economic conditions in or in
the financial markets of the United States could make it, in the
Purchasers' judgment, impracticable or inadvisable to market or
proceed with the offering or delivery of the Series A Notes on the
terms and in the manner contemplated in the Offering Circular or to
enforce contracts for the sale of any of the Series A Notes;
(d) the suspension or limitation of trading
generally in securities on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market or any setting of
limitations on prices for securities on any such exchange or NASDAQ
National Market;
(e) any securities of the Issuer shall have been
downgraded or placed on any "watch list" for possible downgrading by
any "nationally recognized statistical rating organization", as such
term is defined for purposes of Rule 431(g)(2) under the Act; or
(f) the declaration of a banking moratorium by any
Governmental Authority; or the taking of any Governmental Authority
after the date hereof in respect of its monetary or fiscal affairs
that in the Purchasers' opinion could have a material adverse effect
on the financial markets in the United States.
If this Agreement shall be terminated by the Purchasers
pursuant to clause (b) of this Section 10 or because of the failure or refusal
on the part of the Issuer to comply with the terms or to fulfill any of the
conditions of this Agreement, the Issuer shall promptly reimburse the
Purchasers for all reasonable out-or-pocket expenses incurred by the Purchasers
in connection with this Agreement. Without limiting the foregoing,
notwithstanding any termination of this Agreement, the Issuer shall be liable
(i) for all expenses that it has agreed to pay pursuant to Section 5(f) hereof,
and (ii) pursuant to Section 8 hereof.
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11. DEFAULT BY PURCHASER. If any of the Purchasers shall
fail or refuse to purchase the Series A Notes that it has agreed to purchase
hereunder on the Closing Date and arrangements satisfactory to the other
Purchaser and the Issuer for the purchase of such Series A Notes are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of the non-defaulting Purchaser(s) or the Issuer, except
as otherwise provided in Section 10 hereof. Nothing herein shall relieve a
defaulting Purchaser from liability for its default.
12. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Issuer, 172
Trade Street, Lexington, Kentucky 40508 Attention: Chief Executive
Officer, with a copy to Dechert Price & Rhoads, 477 Madison Avenue,
New York, New York 10022, Attention: Bruce B. Wood and (ii) if to the
Purchasers, to Jefferies & Company, Inc., 11100 Santa Monica
Boulevard, 10th Floor, Los Angeles, California 90025, Attention:
Jerry M. Gluck, Esq., with a copy to (a) Bear, Stearns & Co. Inc., 245
Park Avenue, New York, New York 10167, Attention: Phil Berney, and (b)
Skadden, Arps, Slate, Meagher & Flom LLP, 300 S. Grand Avenue, Suite
3400, Los Angeles, California 90071, Attention: Michael A. Woronoff
(provided that any notice pursuant to Section 8 hereof will be mailed,
delivered, telegraphed or telecopied and confirmed to the party to be
notified and its counsel), or in any case to such other address as the
person to be notified may have requested in writing.
(b) This Agreement has been and is made solely for
the benefit of and shall be binding upon the Issuer, the Purchasers
and, to the extent provided in Section 8 hereof, the controlling
persons officers, directors, partners, employees, representatives and
agents referred to in Section 8 and their respective heirs, executors,
administrators, 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 Purchasers merely because of such purchase.
Notwithstanding the foregoing, it is expressly understood and agreed
that each purchaser who purchases Series A Notes from either Purchaser
is intended to be a beneficiary of the Issuer's covenants contained in
the Registration Rights Agreement to the same extent as if the Notes
were sold and those covenants were made directly to such purchaser by
the Issuer, and each such purchaser shall have the right to take
action against the Issuer to enforce, and obtain damages for any
breach of, those covenants.
(c) THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED
AND THE RIGHTS OF THE PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCI-
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PLES OF CONFLICTS OF LAW. THE ISSUER HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE
BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.
THE ISSUER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE ISSUER
IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE ISSUER AT THE ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF ANY OF THE PURCHASERS TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE ISSUER IN ANY OTHER JURISDICTION.
(d) This Agreement may be signed in various
counterparts which together shall constitute one and the same
instrument.
(e) The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(f) If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
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(g) This Agreement may be amended, modified or
supplemented, and waivers or consents to departures from the
provisions hereof may be given, provided that the same are in writing
and signed by each of the signatories hereto.
(h) The indemnities, contribution and expense
reimbursement provisions set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and
will survive delivery 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 any party hereto, (ii) acceptance of the Series A
Notes, and payment for them hereunder, and (iii) any termination of
this Agreement.
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Please confirm that the foregoing correctly sets forth the
agreement between the Issuer and the Purchasers.
Very truly yours,
CMHC ACQUISITION CORPORATION
By: /s/
---------------------------------
Name:
Title:
Accepted and Agreed to:
JEFFERIES & COMPANY, INC.
By: /s/
------------------------------------
Name:
Title:
BEAR, STEARNS & CO. INC.
By: /s/
------------------------------------
Name:
Title:
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EXHIBIT A
Form of Dechert Price & Rhoads Opinion (Exhibit Omitted)
A-1
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Schedule A
Principal Amount
Purchaser of Series A Notes
- --------- -----------------
Jefferies & Company, Inc. 78,000,000
52,000,000
Bear, Stearns & Co. Inc.
------------------
TOTAL $130,000,000
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Schedule B
First Step
- ----------
- Clark Material Handling Company ("CMHC") adopts a plan of
liquidation providing, among other things, for the distribution
of all assets and liabilities (the "Clark Business") to be sold
to or assumed by CMHC Acquisition Corporation ("Buyer") to
Terex Corporation ("Terex")
Second Step
- -----------
- CMH Acquisition Corp. merges into Terex
- CMH Acquisition International Corp. merges into Terex
Third Step
- ----------
- Clark Material Handling International, Inc. merges into Terex
Closing Date
- ------------
- Terex transfers the Clark Business to Buyer by way of letter of
direction in lieu of having the Clark Business distributed
directly to Terex as per the CMHC plan of liquidation
- Terex (as successor by merger) transfers the German Shares, the
Canadian Shares and the Korean Shares to Buyer
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Schedule 6(d)
Subsidiaries
I. Subsidiaries of the Issuer
Percentage Jurisdiction of
Ownership Organization
--------- --------------
Clark Material Handling GmbH 100% Germany
Clark Material Handling of Canada, Ltd. 100% Canada
Clark Forklift Korea, Inc. 100% Korea
Clark Empilhaderas do Brasil Ltda. 100% Brazil
Clark Material Handling France 99.997% France
Clark Maquinaria S.A. 100% Spain
II. Other Equity Interests
Percentage Jurisdiction of
Ownership Organization
--------- ---------------
Flandres Manutention S.A.* 40% France
Clarklift of Washington/Alaska, Inc.** 37.2% Washington
- ------------------
* In process of being sold.
** May be acquired in connection with the Acquisition.