1
EXHIBIT 4.8
EXECUTION COPY
NEENAH CORPORATION
$45,000,000
11-1/8 % SERIES C SENIOR SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
June 26, 1997
CHASE SECURITIES INC.
270 Park Avenue, 4th floor
New York, New York 10017
Ladies and Gentlemen:
Neenah Corporation, a Wisconsin corporation (the "Company"),
proposes to issue and sell $45,000,000 aggregate principal amount of its 11-1/8%
Series C Senior Subordinated Notes due 2007 (the "Notes"). The Notes will be
issued pursuant to an Indenture to be dated as of July 1, 1997 (the "Indenture")
between the Company and United States Trust Company of New York, as trustee (the
"Trustee") and will be guaranteed on an unsecured senior subordinated basis (the
"Guarantees", and together with the Notes, the "Securities") by the principal
operating subsidiaries of the Company (collectively, the "Guarantors"). The
Company confirms its agreement with Chase Securities Inc., (the "Initial
Purchaser") concerning the purchase of the Securities from the Company by the
Initial Purchaser.
The Securities will be offered and sold to the Initial
Purchaser without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon an exemption therefrom. The Company has
prepared an offering memorandum dated the date hereof (the "Offering
Memorandum") setting forth information concerning the Company, the Guarantors
and the Securities. Copies of the Offering Memorandum will be delivered by the
Company to the Initial Purchaser pursuant to the terms of this Agreement. Any
references herein to the Offering Memorandum shall be deemed to include all
amendments and supplements thereto, unless otherwise noted. The Company hereby
confirms that it has authorized the use of the Offering Memorandum in connection
with the offering and resale of the Securities by the Initial Purchaser in
accordance with Section 2.
Holders of the Securities (including the Initial Purchaser and
its direct and indirect transferees) will be entitled to the benefits of an
Exchange and Registration Rights Agreement, substantially in the form attached
hereto as Annex A (the "Registration Rights Agreement"), pursuant to which the
Company and the Guarantors
2
2
will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of senior
subordinated notes of the Company (the "Exchange Securities") which are
identical in all material respects to the Securities (except that the Exchange
Securities will not contain terms with respect to transfer restrictions) and
(ii) under certain circumstances, a shelf registration statement pursuant to
Rule 415 under the Securities Act (the "Shelf Registration Statement").
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company.
The Company represents and warrants to, and agrees with, the Initial Purchaser
on and as of the date hereof and the Closing Date (as defined in Section 3)
that:
(a) The Offering Memorandum, as of the date hereof does not,
and on the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided that the Company makes no representation or warranty as to
information contained in or omitted from the Offering Memorandum in
reliance upon and in conformity with written information relating to
the Initial Purchaser furnished to the Company by or on behalf of the
Initial Purchaser specifically for use therein (the "Initial
Purchaser's Information").
(b) The Offering Memorandum, as of the date hereof, contains
all of the information that, if requested by a prospective purchaser of
the Securities, would be required to be provided to such prospective
purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and
warranties of the Initial Purchaser contained in Section 2 and its
compliance with the agreements set forth therein, it is not necessary,
in connection with the issuance and sale of the Securities to the
Initial Purchaser and the offer, resale and delivery of the Securities
by the Initial Purchaser in the manner contemplated by this Agreement
and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act").
(d) NFC Castings, Inc., a Delaware corporation ("Holdings")
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware and the Company
and each of the Company's subsidiaries have been duly incorporated and
are validly existing as corporations under the laws of the State of
Wisconsin; and each of the Company, Holdings, and each of the Company's
subsidiaries are duly qualified to do business and are in good standing
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
3
3
businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged and to take the
actions necessary to consummate each of the transactions contemplated
by this Agreement and the Offering Memorandum (the "Transactions"),
except where the failure to so qualify or have such power or authority
would not, singularly or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect").
(e) The Company has a capitalization as set forth in the
Offering Memorandum under the heading "Capitalization"; all of the
outstanding shares of capital stock of Holdings, the Company, and each
of the Company's Subsidiaries have been duly and validly authorized and
issued and are fully paid and non-assessable, except as set forth in
Section 180.0622(2)(b) of the Wisconsin statutes, as judicially
interpreted; and conform in all material respects to the description
thereof contained in the Offering Memorandum. All of the outstanding
shares of capital stock of the Company and its subsidiaries will be
owned directly or indirectly by Holdings, free and clear of any lien,
charge, encumbrance, security interest, restriction upon voting or
transfer or any other claim of any third party, other than liens
arising under the Senior Bank Facilities.
(f) Each of the Company and the Guarantors have full right,
power and authority to execute and deliver any of this Agreement, the
Indenture, the Registration Rights Agreement and the Securities
(collectively, the "Transaction Documents") to which it is or will be a
party and to perform its respective obligations hereunder and
thereunder; and all corporate action required to be taken for the due
and proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions
contemplated thereby have been duly and validly taken.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors and constitutes a
valid and legally binding agreement of the Company and each of the
Guarantors.
(h) The Registration Rights Agreement has been or will be duly
authorized by the Company and each of the Guarantors and, when duly
executed and delivered in accordance with its terms by the Company, the
Guarantors and the Initial Purchaser, will constitute a valid and
legally binding agreement of the Company and each of the Guarantors,
enforceable against the Company and each of the Guarantors in
accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law).
4
4
(i) The Indenture has been duly authorized by the Company and
each of the Guarantors and, when duly executed and delivered in
accordance with its terms by the Company and the Trustee, will
constitute a valid and legally binding agreement of the Company and
each of the Guarantors enforceable against the Company and each of the
Guarantors in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable
principles (whether considered in a proceeding in equity or at law). On
the Closing Date, the Indenture will conform in all material respects
to the requirements of the Trust Indenture Act and the rules and
regulations of the Commission applicable to an indenture which is
qualified thereunder.
(j) The Securities have been duly authorized by the Company
and each of the Guarantors and, when duly executed, authenticated,
issued and delivered as provided in the Indenture and paid for as
provided herein, will be duly and validly issued and outstanding and
will constitute valid and legally binding obligations of the Company,
as primary obligor, and of each of the Guarantors, as note guarantors
entitled to the benefits of the Indenture and enforceable against the
Company and each of the Guarantors, in accordance with their terms,
except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
(k) Each Transaction Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum.
(l) The execution, delivery and performance by the Company,
and each of the Guarantors of each of the Transaction Documents to
which it is or will be a party, the issuance, authentication, sale and
delivery of the Securities and compliance by the Company, and each of
the Guarantors with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents (i) will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Company's subsidiaries pursuant to,
any material indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which any of them is a party
or by which any of them is bound or to which any of their respective
properties or assets are subject, except where such conflict, breach,
violation or default would not (A) result in a Material Adverse Effect
on the Company or any of the Company's subsidiaries, or (B) have a
material adverse effect on the Company's ability to perform its
obligations under any of the Transaction Documents to which it is a
party, and (ii) such actions will not result in any violation of (A)
the provisions of the charter or by-laws of the Company or any of the
Company's subsidiaries or (B) to the Company's best knowledge, any
statute or any judgment, order, decree, rule or regulation of any court
or arbitrator or governmental agency or body
5
5
having jurisdiction over the Company or any of the Company's
subsidiaries or any of their properties or assets; and no consent,
approval, authorization or order of, or filing or registration with,
any such court or arbitrator or governmental agency or body under any
such statute, judgment, order, decree, rule or regulation is required
for the execution, delivery and performance by the Company and each of
the Guarantors of each of the Transaction Documents to which it is or
will be a party, the issuance, authentication, sale and delivery of the
Securities and compliance by the Company and each of the Guarantors (as
applicable) with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, filings, registrations or
qualifications (i) which shall have been obtained or made prior to the
Closing Date and (ii) as may be required to be obtained or made under
the Securities Act and applicable state securities laws as provided in
the Registration Rights Agreement.
(m) Ernst & Young LLP are independent certified public
accountants with respect to the Company and its subsidiaries within the
meaning of Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants ("AICPA") and its
interpretations and rulings thereunder. The historical financial
statements (including the related notes) contained in the Offering
Memorandum comply in all material respects with the requirements
applicable to a registration statement on Form S-1 under the Securities
Act (except that certain consolidated financial statement schedules and
net income per common share data are omitted); such financial
statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
covered thereby and fairly present the financial position of the
entities purported to be covered thereby at the respective dates
indicated and the results of their operations and their cash flows for
the respective periods indicated; and the financial information
contained in the Offering Memorandum under the headings
"Summary--Summary Consolidated Financial and Other Data",
"Capitalization", "Selected Consolidated Financial and Other Data",
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Management--Compensation of Executive
Officers" are derived from the accounting records of the Company and
its subsidiaries and fairly present the information purported to be
shown thereby. The pro forma financial information contained in the
Offering Memorandum has been prepared on a basis consistent with the
historical financial statements contained in the Offering Memorandum
(except for the pro forma adjustments specified therein), includes all
material adjustments to the historical financial information required
by Rule 11-02 of Regulation S-X under the Securities Act and the
Exchange Act to reflect the transactions described in the Offering
Memorandum, gives effect to assumptions made on a reasonable basis and
fairly presents the historical and proposed transactions contemplated
by the Offering Memorandum and the Transaction Documents. The other
historical financial and statistical information and data included in
the Offering Memorandum are, in all material respects, fairly
presented.
6
6
(n) There are no legal or governmental proceedings pending to
which the Company or any of the Company's subsidiaries is a party or of
which any of their respective property or assets is the subject which,
singularly or in the aggregate, if determined adversely to the Company
or any of the Company's subsidiaries, could reasonably be expected to
have a Material Adverse Effect; and to the best knowledge of the
Company, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(o) To the best knowledge of the Company, no action has been
taken and no statute, rule, regulation or order has been enacted,
adopted or issued by any governmental agency or body which prevents the
issuance of the Securities or suspends the sale of the Securities in
any jurisdiction; to the best knowledge of the Company, no injunction,
restraining order or order of any nature by any federal or state court
of competent jurisdiction has been issued with respect to the Company
or any of the Company's subsidiaries which would prevent or suspend the
issuance or sale of the Securities or the use of the Offering
Memorandum in any jurisdiction; no action, suit or proceeding is
pending against or, to the best knowledge of the Company, threatened
against or affecting the Company or any of the Company's subsidiaries
before any court or arbitrator or any governmental agency, body or
official, domestic or foreign, which could reasonably be expected to
interfere with or adversely affect the issuance of the Securities or in
any manner draw into question the validity or enforceability of any of
the Transaction Documents or any action taken or to be taken pursuant
thereto; and the Company has complied with any and all requests by any
securities authority in any jurisdiction for additional information to
be included in the Offering Memorandum.
(p) None of the Company, Holdings or any of the Company's
subsidiaries is (i) in violation of its charter or by-laws, (ii) in
default in any material respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets are subject or (iii)
in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its
properties or assets may be subject, except for any violation or
default under clauses (ii) or (iii) that would not have a Material
Adverse Effect.
(q) The Company and each of its subsidiaries possess all
material licenses, certificates, authorizations and permits issued by,
and have made all declarations and filings with, the appropriate
federal, state or foreign regulatory agencies or bodies which are
necessary or desirable for the ownership of their respective properties
or the conduct of their respective businesses as described in the
Offering Memorandum, except where the failure to possess or make the
same would not, singularly or in the aggregate, have a Material Adverse
Effect, and none of the Company or any of its subsidiaries has received
notification of any revocation or modification of any such license,
certificate, authorization or
7
7
permit or has any reason to believe that any such license, certificate,
authorization or permit will not be renewed in the ordinary course.
(r) The Company and each of its subsidiaries have filed all
federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof and have paid all taxes
due thereon, and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has had (nor does the Company
have any knowledge of any tax deficiency which, if determined adversely
to the Company or any of its subsidiaries, could reasonably be expected
to have) a Material Adverse Effect.
(s) None of the Company, or any of its subsidiaries is (i) an
"investment company" or a company "controlled by" an investment company
within the meaning of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and the rules and regulations of the
Commission thereunder or (ii) a "holding company" or a "subsidiary
company" of a holding company or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(t) The Company and each of its subsidiaries 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.
(u) The Company and each of its subsidiaries have insurance
covering their respective properties, operations, personnel and
businesses, which insurance is in amounts and insures against such
losses and risks as are adequate to protect the Company and its
subsidiaries and their respective businesses. Neither the Company nor
any of its subsidiaries has received notice from any insurer or agent
of such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such insurance.
(y) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses; and the
Company has no reason to believe that the conduct of their respective
businesses will conflict in any material respect with, and the Company
and its subsidiaries have not received any notice of any claim of
conflict with, any such rights of others.
8
8
(v) The Company and each of its subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real and personal property which are
material to the business of the Company and its subsidiaries, in each
case free and clear of all liens (other than liens arising under the
Senior Bank Facilities), encumbrances, claims and defects and
imperfections of title except such as (i) do not materially interfere
with the use made and proposed to be made of such property by the
Company and its subsidiaries or (ii) could not reasonably be expected
to have a Material Adverse Effect.
(aa) No material labor disturbance by or dispute with the
employees of the Company or any of its subsidiaries exists or, to the
best knowledge of the Company, is contemplated or threatened.
(bb) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan of
the Company or any of its subsidiaries which could reasonably be
expected to have a Material Adverse Effect; each such employee benefit
plan is in compliance in all material respects with applicable law,
including ERISA and the Code; the Company and each of its subsidiaries
have not incurred and do not expect to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from, any
pension plan for which the Company or any of its subsidiaries would
have any liability; and each such pension plan that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which could reasonably be expected to cause the loss of
such qualification.
(cc) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release of
any kind of toxic or other wastes or other hazardous substances by, due
to or caused by the Company or any of its subsidiaries (or, to the best
knowledge of the Company, any other entity (including any predecessor)
for whose acts or omissions the Company or any of the Company's
subsidiaries is or could reasonably be expected to be liable) upon any
of the property now or previously owned or leased by the Company or any
of its subsidiaries, or upon any other property, in violation of any
statute or any ordinance, rule, regulation, order, judgment, decree or
permit or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or
liability could not reasonably be expected to have, singularly or in
the aggregate with all such violations and liabilities, a Material
Adverse Effect; and there has been no disposal, discharge, emission or
other release of any kind onto such property or
9
9
into the environment surrounding such property of any toxic or other
wastes or other hazardous substances with respect to which the Company
has knowledge, except for any such disposal, discharge, emission or
other release of any kind which could not reasonably be expected to
have, singularly or in the aggregate with all such discharges and other
releases, a Material Adverse Effect.
(dd) Neither the Company nor, to the best knowledge of the
Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
(ee) On and immediately after the Closing Date, the Company
(on a consolidated basis, after giving effect to the issuance of the
Securities and to the other Transactions as described in the Offering
Memorandum) will be Solvent. As used in this paragraph, the term
"Solvent" means, with respect to a particular date, that on such date
(i) the present fair market value (or present fair saleable value) of
the assets of the Company is not less than the total amount required to
pay the probable liabilities of the Company on its total existing debts
and liabilities (including contingent liabilities) as they become
absolute and matured, (ii) the Company is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations
and commitments as they mature and become due in the normal course of
business, (iii) assuming the sale of the Securities as contemplated by
this Agreement and the Offering Memorandum, the Company is not
incurring debts or liabilities beyond its ability to pay as such debts
and liabilities mature and (iv) the Company is not engaged in any
business or transaction, and is not about to engage in any business or
transaction, for which its property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which the Company is engaged. In computing the amount
of such contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
(ff) Except as described in the Offering Memorandum, there are
no outstanding subscriptions, rights, warrants, calls or options to
acquire, or instruments convertible into or exchangeable for, or
agreements or understandings with respect to the sale or issuance of,
any shares of capital stock of or other equity or other ownership
interest in Holdings, the Company, or any of the Company's
subsidiaries.
(gg) Neither the Company nor any of its subsidiaries owns any
"margin securities" as that term is defined in Regulations G and U of
the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), and
10
10
none of the proceeds of the sale of the Securities will be used,
directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation G, T, U or X of the Federal Reserve Board.
(hh) None of the Company or any of the Company's subsidiaries
is a party to any contract, agreement or understanding with any person
that would give rise to a valid claim against the Company or the
Initial Purchaser for a brokerage commission, finder's fee or like
payment in connection with the offering and sale of the Securities.
(ii) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(jj) None of the Company any of its affiliates or any person
acting on behalf of any of them has engaged or will engage in any
directed selling efforts (as such term is defined in Regulation S under
the Securities Act ("Regulation S")), and all such persons have
complied and will comply with the offering restrictions requirement of
Regulation S to the extent applicable.
(kk) None of the Company or any of its affiliates has,
directly or through any agent, sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as such
term is defined in the Securities Act), which is or will be integrated
with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(ll) None of the Company or any of its affiliates or any other
person acting on behalf of any of them has engaged, in connection with
the offering of the Securities, in any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the
Securities Act.
(mm) There are no securities of the Company registered under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or listed on a national securities exchange or quoted in a U.S.
automated inter-dealer quotation system.
(nn) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange
Act in connection with the offering of the Securities.
(oo) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Offering Memorandum has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good
faith.
11
11
(pp) None of the Company or any of its subsidiaries does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Florida Statutes Section 517.075.
(qq) Since the date as of which information is given in the
Offering Memorandum, except as contemplated by the Transactions, (i)
there has been no material adverse change or any development involving
a prospective material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, management or business
prospects of the Company or any of its subsidiaries, whether or not
arising in the ordinary course of business, (ii) neither the Company
nor any of the subsidiaries have incurred any material liability or
obligation, direct or contingent, other than in the ordinary course of
business, (iii) neither the Company nor any of its subsidiaries have
entered into any material transaction other than in the ordinary course
of business and (iv) there has not been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries, or any
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
2. Purchase and Resale of the Securities. (a) On the basis of
the representations, warranties and agreements contained herein, and subject to
the terms and conditions set forth herein, the Company agrees to issue and sell
to the Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Company, $45,000,000 principal amount of Securities at a purchase price equal to
103.75% of the principal amount thereof. The Company shall not be obligated to
deliver any of the Securities except upon payment for all of the Securities to
be purchased as provided herein.
(b) The Initial Purchaser has advised the Company that it
proposes to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. The Initial
Purchaser, represents and warrants to, and agrees with, the Company that (i) it
is purchasing the Securities pursuant to a private sale exempt from registration
under the Securities Act, (ii) it has not solicited offers for, or offered or
sold, and will not solicit offers for, or offer or sell, the Securities by means
of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D under the Securities Act ("Regulation D") or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act and (iii) it has solicited and will solicit offers for the
Securities only from, and has offered or sold and will offer, sell or deliver
the Securities, as part of its initial offering, only to persons whom it
reasonably believes to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the Securities Act, or if
any such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
it that each such account is a Qualified Institutional Buyer to whom notice has
been given that such sale or delivery is being made in reliance on Rule 144A and
in each case, in transactions in accordance with Rule 144A. In addition to the
foregoing, the Initial Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be delivered to the Initial Purchaser pursuant
to Sections 5(d) and (e), counsel for the Company and for the Initial
12
12
Purchaser, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchaser and their compliance with their agreements
contained in this Section 2, and Initial Purchaser hereby consents to such
reliance.
(c) The Company acknowledges and agrees that the Initial
Purchaser may sell Securities to any affiliate of the Initial Purchaser and that
any such affiliate may sell Securities purchased by it to the Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of
and payment for the Securities shall be made at the offices of Cravath, Swaine &
Moore ("CSM"), New York, New York, or at such other place as shall be agreed
upon by the Initial Purchaser and the Company, at 10:00 A.M., New York City
time, on July 1 1997, or at such other time or date, not later than seven full
business days thereafter, as shall be agreed upon by the Initial Purchaser and
the Company (such date and time of payment and delivery being referred to herein
as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchaser of the
certificates evidencing the Notes. Time shall be of the essence, and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligations of the Initial Purchaser hereunder. Upon delivery, the Notes
shall be in global form, registered in such names and in such denominations as
the Initial Purchaser shall have requested in writing not less than two full
business days prior to the Closing Date. The Company agrees to make one or more
global certificates evidencing the Notes available for inspection by the Initial
Purchaser in New York, New York at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company. The Company agrees with
the Initial Purchaser:
(a) to advise the Initial Purchaser promptly and, if
requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made in the Offering
Memorandum untrue or which requires the making of any additions to or
changes in the Offering Memorandum (as amended or supplemented from
time to time) in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; to advise
the Initial Purchaser promptly of any order preventing or suspending
the use of the Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any
jurisdiction and of the initiation or threatening of any proceeding for
any such purpose; and to use its best efforts to prevent the issuance
of any such order preventing or suspending the use of the Offering
Memorandum or suspending any such qualification and, if any such
suspension is issued, to obtain the lifting thereof at the earliest
possible time;
13
13
(b) to furnish promptly to the Initial Purchaser and counsel
for the Initial Purchaser, without charge, as many copies of the
Offering Memorandum (and any amendments or supplements thereto) as may
be reasonably requested;
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to the Initial Purchaser
and counsel for the Initial Purchaser and not to effect any such
amendment or supplement to which the Initial Purchaser shall reasonably
object by notice to the Company after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchaser, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel
for the Initial Purchaser or counsel for the Company, to amend or
supplement the Offering Memorandum in order that the Offering
Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Offering Memorandum to comply with applicable
law, to promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the
Offering Memorandum, as so amended or supplemented, will comply with
applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act and are not saleable pursuant to Rule 144(k) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon request
of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, unless the Company is then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act (the foregoing agreement
being for the benefit of the holders from time to time of the
Securities and prospective purchasers of the Securities designated by
such holders);
(f) for so long as the Securities are outstanding, to furnish
to the Initial Purchaser copies of any annual reports, quarterly
reports and current reports filed by the Company with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be
designated by the Commission, and such other documents, reports and
information as shall be furnished by the Company to the Trustee or to
the holders of the Securities pursuant to the Indenture or the Exchange
Act or any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the
Initial Purchaser may reasonably request to qualify the Securities for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchaser may designate and to continue
such qualifications in effect for so long as required for the resale of
the Securities; and to arrange for the determination of the eligibility
for investment of the Securities under the laws of such
14
14
jurisdictions as the Initial Purchaser may reasonably request; provided
that the Company and the Company's subsidiaries shall not be obligated
to qualify as foreign corporations in any jurisdiction in which they
are not so qualified or to file a general consent to service of process
in any jurisdiction;
(h) to assist the Initial Purchaser in arranging for the
Securities to be designated Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") Market securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL
Market and for the Securities to be eligible for clearance and
settlement through the Depository Trust Company ("DTC");
(i) not to, and to cause their affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as such term is defined in the Securities Act) which
could be integrated with the sale of the Securities in a manner which
would require registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause their affiliates not to, and not to
authorize or knowingly permit any person acting on their behalf to,
solicit any offer to buy or offer to sell the Securities by means of
any form of general solicitation or general advertising within the
meaning of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; and not to
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section
4(2) of the Securities Act to cease to be applicable to the offering
and sale of the Securities as contemplated by this Agreement and the
Offering Memorandum;
(k) for a period of 180 days from the date of the Offering
Memorandum, not to offer for sale, sell, contract to sell or otherwise
dispose of, directly or indirectly, or file a registration statement
for, or announce any offer, sale, contract for sale of or other
disposition of any debt securities issued or guaranteed by the Company
or any of its subsidiaries (other than the Securities or the Exchange
Securities) without the prior written consent of the Initial Purchaser;
(l) during the period from the Closing Date until two years
after the Closing Date, without the prior written consent of the
Initial Purchaser, not to, and not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities that have been reacquired by them, except for Securities
purchased by the Company or any of its affiliates and resold in a
transaction registered under the Securities Act;
(m) not to, for so long as the Securities are outstanding, be
or become, or be or become owned by, an open-end investment company,
unit investment
15
15
trust or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act, and to not be
or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder;
(n) in connection with the offering of the Securities, until
the Initial Purchaser has notified the Company of the completion of the
resale of the Securities, not to, and to use its reasonable best
efforts to cause its affiliated purchasers (as defined in Rule 100 of
Regulation M under the Exchange Act) not to, directly or indirectly,
either alone or with one or more other persons, bid for, purchase, or
attempt to induce any person to bid for or purchase, a covered security
during the applicable restricted period;
(o) in connection with the offering of the Securities, to make
the officers, employees, independent accountants and legal counsel of
the Company, Holdings and the Company's subsidiaries reasonably
available upon request by the Initial Purchaser;
(p) to furnish to the Initial Purchaser on the date hereof a
copy of the independent accountants' report included in the Offering
Memorandum signed by the accountants rendering such report;
(q) to do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use its best efforts to satisfy
all conditions precedent to the delivery of the Securities;
(r) to not take, and to use best efforts to cause Holdings,
the Company and each of the Company's subsidiaries to not take, any
action prior to the execution and delivery of the Indenture which, if
taken after such execution and delivery, would have violated any of the
covenants contained in the Indenture;
(s) to not take, and to use best efforts to cause Holdings,
the Company and each of the Company's subsidiaries to not take, any
action prior to the Closing Date which would require the Offering
Memorandum to be amended or supplemented pursuant to Section 4(d);
(t) prior to the Closing Date, not to issue, and to use best
efforts to cause Holdings, the Company and each of the Company's
subsidiaries not to issue, any press release or other communication
directly or indirectly or hold any press conference with respect to the
Company or the Company's subsidiaries, their respective conditions,
financial or otherwise, or earnings, business affairs or business
prospects (except for routine oral marketing communications in the
ordinary course of business and consistent with the past practices of
the Company and of which the Initial Purchaser is notified), without
the prior written consent of the Initial Purchaser, unless in the
judgment of the Company and its counsel, and after notification to the
Initial Purchaser, such press release or communication is required by
law; and
16
16
(u) to apply the net proceeds from the sale of the Securities
as set forth in the Offering Memorandum under the heading "Use of
Proceeds".
5. Conditions of Initial Purchaser's Obligation. The
obligation of the Initial Purchaser hereunder is subject to (i) the accuracy, on
and as of the date hereof and the Closing Date, of the representations and
warranties of the Company contained herein, (ii) the accuracy of the statements
of the Company and the Guarantors and their respective officers made in any
certificates delivered pursuant hereto, (iii) the performance by the Company and
each of the Guarantors of their respective obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchaser as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial
Purchaser and the Company may agree; and no stop order suspending the
sale of the Securities in any jurisdiction shall have been issued and
no proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(b) The Initial Purchaser shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the
Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of counsel for the
Initial Purchaser, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of the Transaction
Documents and the Offering Memorandum, and all other legal matters
relating to the Transaction Documents and the transactions contemplated
thereby, shall be satisfactory in all material respects to the Initial
Purchaser, and the Company, Holdings and the Guarantors shall have
furnished to the Initial Purchaser all documents and information that
they or their counsel may reasonably request to enable them to pass
upon such matters.
(d) Kirkland & Ellis ("K&E"), as counsel to the Company, and
Foley & Lardner, as counsel for the Company and the Guarantors, shall
have furnished to the Initial Purchaser their written opinions,
addressed to the Initial Purchaser and dated the Closing Date, each in
form and substance reasonably satisfactory to the Initial Purchaser.
(e) The Initial Purchaser shall have received from CSM, such
opinion or opinions, dated the Closing Date, with respect to such
matters as the Initial Purchaser may reasonably require, and the
Company, Holdings and the Guarantors shall have furnished to such
counsel such documents and information as CSM requests for the purpose
of enabling them to pass upon such matters.
17
17
(f) The Company shall have furnished to the Initial Purchaser
a letter (the "Initial Letter") of Ernst & Young LLP, addressed to the
Initial Purchaser and dated June 26, 1997, in form and substance
satisfactory to the Initial Purchaser, substantially to the effect set
forth in Annex B hereto.
(g) The Company shall have furnished to the Initial Purchaser
a letter (the "Bring-Down Letter") of Ernst & Young LLP, addressed to
the Initial Purchaser and dated the Closing Date (i) confirming that
they are independent public accountants with respect to the Company and
its subsidiaries within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings
thereunder, (ii) stating, as of the date of the Bring-Down Letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Offering Memorandum, as of a date not more than three business
days prior to the date of the Bring-Down Letter), that the conclusions
and findings of such accountants with respect to the financial
information and other matters covered by the Initial Letter are
accurate and (iii) confirming in all material respects the conclusions
and findings set forth in the Initial Letter. In addition, The Company
shall have received letters from such accountants consenting to the
use, in connection with the offering of the Securities, of the audited
consolidated financial statements of The Company prepared by such
accountants and included in the Offering Memorandum.
(h) Each of the Company and the Guarantors shall have
furnished to the Initial Purchaser a certificate, dated the Closing
Date, of its chief executive officer or president and its chief
financial officer stating that (A) such officers have carefully
examined the Offering Memorandum, (B) in their opinion, the Offering
Memorandum, as of its date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, and since the date of the Offering Memorandum, no event has
occurred which should have been set forth in a supplement or amendment
to the Offering Memorandum so that the Offering Memorandum (as so
amended or supplemented) would not include any untrue statement of a
material fact and would not omit to state a material fact required to
be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading and (C) as of the Closing Date, the representations and
warranties of the Company and each of the Guarantors in this Agreement
are true and correct in all material respects, the Company and each of
the Guarantors have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied hereunder on or
prior to the Closing Date, and subsequent to the date of the most
recent financial statements contained in the Offering Memorandum, there
has been no material adverse change in the financial position or
results of operation of The Company or any of its subsidiaries, or any
change, or any development including a prospective change, in or
affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole.
18
18
(i) The Indenture shall have been duly executed and delivered
by the Company and each of the Guarantors and the Trustee, and the
Notes shall have been duly executed and delivered by the Company and
duly authenticated by the Trustee.
(j) The Securities shall have been approved by the NASD for
trading in the PORTAL Market.
(k) If any event shall have occurred that requires the Company
under Section 4(d) to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchaser shall have been given a reasonable
opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchaser reasonably in advance of the Closing
Date.
(l) There shall not have occurred any invalidation of Rule
144A under the Securities Act by any court or any withdrawal or
proposed withdrawal of any rule or regulation under the Securities Act
or the Exchange Act by the Commission or any amendment or proposed
amendment thereof by the Commission which in the judgment of the
Initial Purchaser would materially impair the ability of the Initial
Purchaser to purchase, hold or effect resales of the Securities as
contemplated hereby.
(m) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the
Offering Memorandum (exclusive of any amendment or supplement thereto),
there shall not have been any change in the capital stock or long-term
debt or any change, or any development involving a prospective change,
in or affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole, the effect of which, in any such case described
above, is, in the judgment of the Initial Purchaser, so material and
adverse as to make it impracticable or inadvisable to proceed with the
sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement and the Offering Memorandum (exclusive
of any amendment or supplement thereto).
(n) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the
Securities.
(o) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Securities or the Company's 11-1/8% Senior Subordinated Notes due 2007
(the "Old Notes") by any "nationally recognized statistical rating
organization", as such term is defined by the Commission for purposes
of Rule 436(g)(2) of the rules and
19
19
regulations of the Commission under the Securities Act and (ii) no such
organization shall have publicly announced that it has under
surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of the Securities or
the Old Notes.
(p) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange, the NASDAQ market or the over-the-counter market shall have
been suspended or limited, or minimum prices shall have been
established on any such exchange or market by the Commission, by any
such exchange or by any other regulatory body or governmental authority
having jurisdiction, or (ii) any moratorium on commercial banking
activities shall have been declared by federal or New York state
authorities or (iii) an outbreak or escalation of hostilities or a
declaration by the United States of a national emergency or war or (iv)
a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) the effect of which, in the
case of this clause (iv), is, in the judgment of the Initial Purchaser,
so material and adverse as to make it impracticable or inadvisable to
proceed with the sale or the delivery of the Securities on the terms
and in the manner contemplated by this Agreement and in the Offering
Memorandum (exclusive of any amendment or supplement thereto).
(q) Substantially simultaneously with the sale of the
Securities hereunder (i) the bank waiver allowing the issuance of the
Notes contemplated by the Offering Memorandum shall have been obtained;
and (ii) the Initial Purchaser shall have received a counterpart of the
Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of the Company and each of the
Guarantors.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchaser.
6. Termination. The obligations of the Initial Purchaser
hereunder may be terminated by the Initial Purchaser, in its absolute
discretion, by notice given to and received by the Company prior to delivery of
and payment for the Securities if, prior to that time, any of the events
described in Section 5(l), (m), (n), (o) or (p) shall have occurred and be
continuing.
7. Reimbursement of Initial Purchaser's Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchaser for
any reason permitted under this Agreement or (c) the Initial Purchaser shall
decline to purchase the Securities for any reason permitted under this
Agreement, the Company shall reimburse the Initial Purchaser for such
out-of-pocket expenses (including reasonable fees and disbursements
20
20
of counsel) as shall have been reasonably incurred by the Initial Purchaser in
connection with this Agreement and the proposed purchase and resale of the
Securities.
8. Indemnification. (a) The Company shall indemnify and hold
harmless the Initial Purchaser, its affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls the Initial Purchaser within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 8(a) and
Section 9 as the Initial Purchaser), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of the Securities), to which the Initial Purchaser may
become subject, whether commenced or threatened, under the Securities Act, the
Exchange Act, any other federal or state statutory law or regulation, at common
law or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum or in any
amendment or supplement thereto or in the Initial Purchaser's information
provided by the Company pursuant to Section 4(e) or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and shall reimburse
the Initial Purchaser promptly upon demand for any legal or other expenses
reasonably incurred by the Initial Purchaser in connection with investigating or
defending or preparing to defend against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with the Initial Purchaser's Information; and
provided, further, that with respect to any such untrue statement in or omission
from the Preliminary Offering Memorandum, the indemnity agreement contained in
this Section 8(a) shall not inure to the benefit of the Initial Purchaser to the
extent that the sale to the person asserting any such loss, claim, damage,
liability or action was an initial resale by the Initial Purchaser and any such
loss, claim, damage, liability or action of or with respect to the Initial
Purchaser results from the fact that to the extent required by applicable law, a
copy of the Offering Memorandum was not sent or given to such person at or prior
to the written confirmation of the sale of such Securities to such person unless
such failure to deliver the Offering Memorandum was a result of non-compliance
by the Company with Section 4(b).
(b) The Initial Purchaser shall indemnify and hold harmless
the Company, its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 8(b) and Section 9 as the Company),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
21
21
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Offering Memorandum or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with the Initial Purchaser's Information, and shall
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 8(a) or 8(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 8 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
22
22
fees, disbursements and other charges of more than one separate firm of
attorneys (in addition to any local counsel) at any one time for all such
indemnified party or parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 8(a) and 8(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. No indemnifying party shall be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
The obligations of the Company and the Initial Purchaser in
this Section 8 and in Section 9 are in addition to any other liability that the
Company or the Initial Purchaser, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
9. Contribution. If the indemnification provided for in
Section 8 is unavailable or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Initial Purchaser on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Initial Purchaser on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchaser on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities purchased under this Agreement (before deducting expenses)
received by or on behalf of the Company, on the one hand, and the total
discounts and commissions received by the Initial Purchaser with respect to the
Securities purchased under this Agreement, on the other, bear to the total gross
proceeds from the sale of the Securities under this Agreement. The relative
fault 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 the Company or information supplied
by the Company on the one hand or to the Initial Purchaser's Information on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Initial Purchaser agree that it would not be just
and equitable if
23
23
contributions pursuant to this Section 9 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 9 shall be deemed
to include, for purposes of this Section 9, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending or preparing to defend any such action or claim. Notwithstanding
the provisions of this Section 9, the Initial Purchaser shall not be required to
contribute any amount in excess of the amount by which the total discounts and
commissions received by the Initial Purchaser with respect to the Securities
purchased by it under this Agreement exceeds the amount of any damages which the
Initial Purchaser has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
10. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchaser, the
Company and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 8 and 9 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Company and
the Initial Purchaser and in Section 4(e) with respect to holders and
prospective purchasers of the Securities. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons referred to in
this Section 10, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
11. Expenses. The Company agrees with the Initial Purchaser to
pay (a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that connection; (b) the
costs incident to the preparation, printing and distribution of the Offering
Memorandum and any amendments or supplements thereto; (c) the costs of
reproducing and distributing each of the Transaction Documents; (d) the costs
incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (e) the fees and expenses of the
Company's counsel and independent accountants; (f) the fees and expenses of
qualifying the Securities under the securities laws of the several jurisdictions
as provided in Section 4(h) and of preparing, printing and distributing Blue Sky
Memoranda (including related fees and expenses of counsel for the Initial
Purchaser); (g) any fees charged by rating agencies for rating the Securities;
(h) the fees and expenses of the Trustee and any paying agent (including related
fees and expenses of any counsel to such parties); (i) all expenses and
application fees incurred in connection with the application for the inclusion
of the Securities on the PORTAL Market and the approval of the Securities for
book-entry transfer by DTC; and (j) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement which are not
otherwise specifically provided for in this Section 11; provided, however, that
except as
24
24
provided in this Section 11 and Section 7, the Initial Purchaser shall pay its
own costs and expenses.
12. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company and the
Initial Purchaser contained in this Agreement or made by or on behalf of the
Company or the Initial Purchaser pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
13. Notices, etc.. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent by
mail or telecopy transmission to Chase Securities Inc., 270 Park
Avenue, New York, New York 10017, Attention: Gerard J. Murray
(telecopier no.: (212) 270-0994); or
(b) if to the Company, shall be delivered or sent by mail or
telecopy transmission to the address of the Company set forth in the
Offering Memorandum, Attention: James K. Hildebrand (telecopier no.:
614-889-8308);
provided that any notice to the Initial Purchaser pursuant to Section 8(c) shall
also be delivered or sent by mail to the Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof.
14. Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
15. Initial Purchaser's Information. The parties hereto
acknowledge and agree that the Initial Purchaser's Information consists solely
of the following information in the Offering Memorandum: (i) the last paragraph
on the front cover page concerning the terms of the offering by the Initial
Purchaser; (ii) the first paragraph on the inside front cover page concerning
over-allotment and trading activities by the Initial Purchaser; and (iii) the
statements concerning the Initial Purchaser contained in the third, fourth,
sixth and seventh paragraphs under the heading "Plan of Distribution".
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
25
25
17. Counterparts. This Agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier) and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
18. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
19. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
26
26
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company, the Guarantors
and the Initial Purchaser in accordance with its terms.
Very truly yours,
NEENAH CORPORATION
By______________________________________
Name:
Title:
NEENAH FOUNDRY COMPANY
By______________________________________
Name:
Title:
HARTLEY CONTROLS CORPORATION
By______________________________________
Name:
Title:
NEENAH TRANSPORT, INC.
By______________________________________
Name:
Title:
Accepted:
CHASE SECURITIES INC.
By____________________________
27
27
Authorized Signatory
Address for notices pursuant to Section 9(c):
1 Chase Plaza, 25th floor
New York, New York 10081
Attention: Legal Department
28
ANNEX A
[Form of Exchange and Registration Rights Agreement]
29
29
ANNEX B-1
[Form of Opinion of Counsel for the Company]
Kirkland & Ellis shall have furnished to the Initial Purchasers
their written opinion, as counsel to the Company, addressed to the Initial
Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
below:
(i) Holdings has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, is
duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its businesses requires such qualification, and
has all power and authority necessary to own or hold its properties and to
conduct the businesses in which it is engaged (except where the failure to
so qualify or have such power or authority would not, singularly or in the
aggregate, have a Material Adverse Effect);
(ii) all of the outstanding shares of capital stock of Holdings have
been, and upon the consummation of the Merger all of the outstanding
shares of capital stock of Holdings will be, duly and validly authorized
and issued and fully paid and non-assessable;
(iii) the statements in the Offering Memorandum under the heading
"Certain United States Federal Income Tax Considerations", to the extent
that they constitute summaries of matters of law or regulation or legal
conclusions, have been reviewed by such counsel and fairly summarize the
matters described therein in all material respects; and such counsel does
not have actual knowledge of any current or pending legal or governmental
actions, suits or proceedings which would be required to be described in
the Offering Memorandum if the Offering Memorandum were a prospectus
included in a registration statement on Form S-1 which are not described
as so required;
(iv) the Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations of
the Commission applicable to an indenture which is qualified thereunder;
(v) Holdings has full right, power and authority to execute and
deliver each of the Transaction Documents to which is a party and to
perform its obligations thereunder; and all corporate action required to
be taken for the due and proper authorization, execution and delivery of
each of the Transaction Documents to which Holdings is a party and the
consummation of the transactions contemplated thereby have been duly and
validly taken;
30
30
(vi) assuming the due authorization, execution and delivery of the
Purchase Agreement by the Company, the Purchase Agreement constitutes a
valid and legally binding agreement of the Company (and, upon the due
authorization, execution, and delivery of the Neenah Letter Agreement by
the parties thereto, of Neenah and the Guarantors) enforceable against the
Company (and Neenah and each of the Guarantors) in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding in
equity or at law) and except to the extent that the indemnification
provisions thereof may be limited by applicable law;
(vii) upon the due authorization, execution and delivery of the
Registration Rights Agreement by Neenah and the Guarantors, the
Registration Rights Agreement will constitute a valid and legally binding
agreement of the Neenah and each of the Guarantors, enforceable against
each of them in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and except to the
extent that the indemnification provisions thereof may be limited by
applicable law;
(viii) assuming the due authorization, execution and delivery of the
Indenture by the Company and the Trustee, the Indenture constitutes a
valid and legally binding agreement of the Company (and, upon the due
authorization, execution and delivery of the Supplemental Indenture by the
parties thereto, of Neenah and the Guarantors) enforceable against the
Company (and Neenah as primary obligor and each of the Guarantors as note
guarantors) in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law);
(ix) assuming the due authorization and execution of the Securities
by the Company and, assuming due authentication thereof by the Trustee and
upon payment and delivery in accordance with the Purchase Agreement, the
Securities constitute valid and legally binding obligations of the Company
(and, upon the due authorization, execution and delivery of the
Supplemental Indenture by the parties thereto, of Neenah and the
Guarantors) entitled to the benefits of the Indenture and enforceable
against the Company (and Neenah as primary obligor and each of the
Guarantors as note guarantors) in accordance with their terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity
or at law);
31
31
(x) the Merger Agreement has been duly authorized, executed and
delivered by Holdings;
(xi) each Transaction Document conforms in all material respects to
the description thereof contained in the Offering Memorandum;
(xii) the execution, delivery and performance by Holdings of each of
the Transaction Documents to which it is a party, the compliance by
Holdings with the terms of each of the Transaction Documents to which it
is a party and the consummation of the Transactions will not conflict with
or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of Holdings
pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which Holdings is a party or by which it
is bound or to which its property or assets is subject, nor will such
actions result in any violation of the provisions of the charter or
by-laws of Holdings or any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body
having jurisdiction over Holdings or any of its properties or assets; and
no consent, approval, authorization or order of, or filing or registration
with, any such court or arbitrator or governmental agency or body under
any such statute, judgment, order, decree, rule or regulation is required
for the execution, delivery and performance by Holdings of each of the
Transaction Documents to which it is a party, the compliance by Holdings
with the terms of each of the Transaction Documents to which it is a party
and the consummation of the Transactions, except for such consents,
approvals, authorizations, filings, registrations or qualifications (i)
which have been obtained or made prior to the Closing Date and (ii) as may
be required to be obtained or made under the Securities Act and applicable
state securities laws as provided in the Registration Rights Agreement;
(xiii) to the best knowledge of such counsel, there are no pending
actions or suits or judicial, arbitral, rule-making, administrative or
other proceedings to which Holdings is a party or of which any property or
assets of Holdings is the subject which (A) singularly or in the
aggregate, if determined adversely to Holdings, could reasonably be
expected to have a Material Adverse Effect or (B) questions the validity
or enforceability of any of the Transaction Documents or any action taken
or to be taken pursuant thereto; and to the best knowledge of such
counsel, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(xiv) Holdings is not (A) in violation of its charter or by-laws,
(B) in default in any material respect, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a party
or by which it is bound or to which any of its property or assets is
subject or (C) in violation in any material respect of any
32
32
law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject;
(xv) neither the consummation of the transactions contemplated by
the Purchase Agreement nor the sale, issuance, execution or delivery of
the Securities will violate Regulation G, T, U or X of the Federal Reserve
Board; and
(xvi) assuming the accuracy of the representations, warranties and
agreements of the Company (and, upon the due authorization, execution and
delivery of the Neenah Letter Agreement, of Neenah and the Guarantors) and
of the Initial Purchasers contained in the Purchase Agreement, the
issuance and sale of the Securities and the offer, resale and delivery of
the Securities in the manner contemplated by the Purchase Agreement and
the Offering Memorandum, are exempt from the registration requirements of
the Securities Act, and it is not necessary to qualify the Indenture under
the Trust Indenture Act.
Such counsel shall also state that they have participated in conferences
with representatives of the Company and Neenah and with representatives of
Neenah's independent accountants and counsel at which conferences the contents
of the Offering Memorandum and any amendment and supplement thereto and related
matters were discussed and, although such counsel assume no responsibility for
the accuracy, completeness or fairness of the Offering Memorandum, any amendment
or supplement thereto (except as expressly provided above), nothing has come to
the attention of such counsel to cause such counsel to believe that the Offering
Memorandum or any amendment or supplement thereto (other than the financial
statements and other financial and statistical information contained therein, as
to which such counsel need express no belief) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent such counsel deems proper, on certificates of responsible officers of
Neenah and public officials which are furnished to the Initial Purchasers.
33
33
ANNEX B-2
[Form of Opinion of Counsel for the Company and Neenah]
Foley & Lardner shall have furnished to the Initial Purchasers their
written opinion, as counsel to the Company and to Neenah, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
below:
(i) The Company has been, and upon consummation of the Merger each
of Neenah and each of the Guarantors will be, duly incorporated and
validly existing as corporations under the laws of the State of Wisconsin;
(ii) all of the outstanding shares of capital stock of the Company
have been, and upon the consummation of the Merger all of the outstanding
shares of capital stock of Neenah will be, duly and validly authorized and
issued and fully paid and non-assessable, except as set forth in Section
180.0622(2)(b) of the Wisconsin Statutes, as judicially interpreted; and
upon the consummation of the Merger and the other Transactions the capital
stock of Neenah will conform in all material respects to the description
thereof contained in the Offering Memorandum;
(iii) each of the Company, Neenah and each of the Guarantors has
full right, power and authority to execute and deliver each of the
Transaction Documents to which is a party and to perform its obligations
thereunder; and all corporate action required to be taken for the due and
proper authorization, execution and delivery of each of the Transaction
Documents to which any of the Company, Neenah or any of the Guarantors is
a party and the consummation of the transactions contemplated thereby have
been duly and validly taken;
(iv) the Purchase Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
agreement of the Company (and, upon the due authorization, execution, and
delivery of the Neenah Letter Agreement by the parties thereto, of Neenah
and the Guarantors) enforceable against the Company (and Neenah and each
of the Guarantors) in accordance with its terms, except to the extent that
such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law) and except to the
extent that the indemnification provisions thereof may be limited by
applicable law;
(v) the Indenture has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution and delivery
thereof by the Trustee, constitutes a valid and legally binding agreement
of the Company (and, upon the due authorization, execution and delivery of
the Supplemental
34
34
Indenture by the parties thereto, of Neenah and the Guarantors)
enforceable against the Company (and Neenah as primary obligor and each of
the Guarantors as note guarantors) in accordance with its terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity
or at law);
(vi) the Securities have been duly authorized and issued by the
Company and, assuming due authentication thereof by the Trustee and upon
payment and delivery in accordance with the Purchase Agreement, will
constitute valid and legally binding obligations of the Company (and, upon
the due authorization, execution and delivery of the Supplemental
Indenture by the parties thereto, of Neenah and the Guarantors) entitled
to the benefits of the Indenture and enforce able against the Company (and
Neenah as primary obligor and each of the Guarantors as note guarantors)
in accordance with their terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law);
(vii) the Merger Agreement has been duly authorized, executed and
delivered by the Company, and assuming due authorization, execution and
delivery by Neenah and Holdings, will constitute a valid and legally
binding agreement of Neenah, the Company and Holdings enforceable against
Neenah, the Company and Holdings in accordance with its terms, except to
the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity
or at law);
(viii) the execution, delivery and performance by each of the
Company, Neenah and each of the Guarantors of each of the Transaction
Documents, the issuance, authentication, sale and delivery of the
Securities by the Company, the compliance by each of the Company, Neenah
and each of the Guarantors with the terms of each of the Transaction
Documents to which each is a party and the consummation of the
Transactions will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company, Neenah or any of the
Guarantors pursuant to any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company, Neenah or
any of the Guarantors is a party or by which any of them are bound or to
which the property or assets of any of them is subject, nor will such
actions result in any violation of the provisions of the charter or
by-laws of any of the Company, Neenah or any of the Guarantors or any
statute or any judgment, order, decree, rule or regulation of any court or
arbitrator or governmental agency or body having jurisdiction over any of
the Company, Neenah or any of the Guarantors or any of their properties or
assets;
35
35
and no consent, approval, authorization or order of, or filing or
registration with, any such court or arbitrator or governmental agency or
body under any such statute, judgment, order, decree, rule or regulation
is required for the execution, delivery and performance by each of the
Company, Neenah and each of the Guarantors of each of the Transaction
Documents to which each is a party, the issuance, authentication, sale and
delivery of the Securities by the Company, the compliance by each of the
Company, Neenah and each of the Guarantors with the terms of each of the
Transaction Documents to which each is a party and the consummation of the
Transactions, except for such consents, approvals, authorizations,
filings, registrations or qualifications (i) which have been obtained or
made prior to the Closing Date and (ii) as may be required to be obtained
or made under the Securities Act and applicable state securities laws as
provided in the Registration Rights Agreement;
(ix) to the best knowledge of such counsel, there are no pending
actions or suits or judicial, arbitral, rule-making, administrative or
other proceedings to which the Company is a party or of which any property
or assets of the Company is the subject which (A) singularly or in the
aggregate, if determined adversely to the Company, could reasonably be
expected to have a Material Adverse Effect or (B) questions the validity
or enforceability of any of the Transaction Documents or any action taken
or to be taken pursuant thereto; and to the best knowledge of such
counsel, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(x) the Company is not (A) in violation of its charter or by-laws,
(B) in default in any material respect, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a party
or by which it is bound or to which any of its property or assets is
subject or (C) in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property
or assets may be subject;
(xi) neither the Company, Neenah nor any of Neenah's subsidiaries is
(A) an "investment company" or a company "controlled by" an investment
company within the meaning of the Investment Company Act and the rules and
regulations of the Commission thereunder, without taking account of any
exemption under the Investment Company Act arising out of the number of
holders of securities of the Company, Neenah or Neenah's subsidiaries or
(B) a "holding company" or a "subsidiary company" of a holding company or
an "affiliate" thereof within the meaning of the Public Utility Holding
Company Act of 1935, as amended;
(xii) each of the Letter Agreement, the Supplemental Indenture and
the Registration Rights Agreement has been duly authorized, executed and
delivered by Neenah and each of the Guarantors, and each of the Letter
Agreement, the Supplemental Indenture and the Registration Rights
36
36
Agreement is enforceable against Neenah and each of the Guarantors in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors' rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law);
(xii) neither the consummation of the transactions contemplated by the
Purchase Agreement nor the assumption of the Notes by Neenah or the guarantee of
the Notes by the Guarantors will violate Regulation G, T, U or X of the Federal
Reserve Board.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent such counsel deems proper, on certificates of responsible officers of
the Company, Neenah and public officials which are furnished to the Initial
Purchasers.
37
37
ANNEX B-3
[Form of Opinion of Counsel for Neenah]
Quarles & Brady shall have furnished to the Initial Purchasers their
written opinion, as counsel to Neenah and the Guarantors, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
below:
(i) Neenah and each of the Guarantors has been duly incorporated and
is validly existing as a corporation under the laws of Wisconsin, is duly
qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which its ownership or lease of property or the
conduct of its businesses requires such qualification, and has all power
and authority necessary to own or hold its properties and to conduct the
businesses in which it is engaged (except where the failure to so qualify
or have such power or authority would not, singularly or in the aggregate,
have a Material Adverse Effect),
(ii) all of the outstanding shares of capital stock of Neenah and
each of the Guarantors have been duly and validly authorized and issued
and are fully paid and non-assessable, except as set forth in Section
180.0622(2)(b) of the Wisconsin Statutes, as judicially interpretated.
Upon consummation of and by virtue of the Merger, each outstanding share
of the Company's common stock, without par value, will be converted into
one share of the Class A Common Stock of Neenah, and each outstanding
share of the Common Stock of Neenah will be converted into cash as
provided in the Merger Agreement;
(iii) to the best knowledge of such counsel, there are not any
current or pending legal or governmental actions, suits or proceedings
which would be required to be described in the Offering Memorandum if the
Offering Memorandum were a prospectus included in a registration statement
on Form S-1 which are not described as so required;
(iv) the Merger Agreement has been duly authorized, executed and
delivered by Neenah, and assuming due authorization, execution and
delivery by the Company and Holdings, will constitute a valid and legally
binding agreement of Neenah enforceable against Neenah in accordance with
its terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally
and by general equitable principles (whether considered in a proceeding in
equity or at law);
(v) the execution, delivery and performance by Neenah of the Merger
Agreement and compliance by Neenah with the terms thereof will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or
38
38
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of Neenah or any
of its subsidiaries pursuant to, any material indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to which
Neenah or any of its subsidiaries is a party or by which Neenah or any of
its subsidiaries is bound or to which any of the property or assets of
Neenah or any of its subsidiaries is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of Neenah or
any of its subsidiaries or any statute or any judgment, order, decree,
rule or regulation of any court or arbitrator or governmental agency or
body having jurisdiction over Neenah or any of its subsidiaries or any of
their properties or assets; and no consent, approval, authorization or
order of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by Neenah of the Merger Agreement, and compliance by Neenah
with the terms thereof and the consummation of the Merger, except for such
consents, approvals, authorizations, filings, registrations or
qualifications which have been obtained or made prior to the Closing Date;
(vi) to the best knowledge of such counsel, there are no pending
actions or suits or judicial, arbitral, rule-making, administrative or
other proceedings to which Neenah or any of its subsidiaries is a party or
of which any property or assets of Neenah or any of its subsidiaries is
the subject which (A) singularly or in the aggregate, if determined
adversely to Neenah or any of its subsidiaries, could reasonably be
expected to have a Material Adverse Effect or (B) questions the validity
or enforceability of any of the Transaction Documents or any action taken
or to be taken pursuant thereto; and to the best knowledge of such
counsel, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(vii) neither Neenah nor any of its subsidiaries is (A) in violation
of its charter or by-laws, (B) in default in any material respect, and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any material indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to
which it is a party or by which it is bound or to which any of its
property or assets is subject or (C) in violation in any material respect
of any law, ordinance, governmental rule, regulation or court decree to
which it or its property or assets may be subject;
[Such counsel shall also state that they have participated in conferences
with representatives of Neenah and with representatives of Neenah's independent
accountants and counsel at which conferences the contents of the Offering
Memorandum and any amendment and supplement thereto and related matters were
discussed and, although such counsel assume no responsibility for the accuracy,
completeness or fairness of the Offering Memorandum, any amendment or supplement
thereto (except as expressly provided above), nothing has come to the attention
of such counsel to cause such counsel to believe that the Offering Memorandum or
any
39
39
amendment or supplement thereto (other than the financial statements and other
financial and statistical information contained therein, as to which such
counsel need express no belief) contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.]
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent such counsel deems proper, on certificates of responsible officers of
Neenah and public officials which are furnished to the Initial Purchasers.
40
40
ANNEX C
[Form of Initial Comfort Letter]
Neenah shall have furnished to the Initial Purchasers a letter of
Ernst & Young LLP, addressed to the Initial Purchasers and dated the date of the
Purchase Agreement, in form and substance satisfactory to the Initial
Purchasers, substantially to the effect set forth below:
(i) they are independent certified public accountants with respect
to the Company within the meaning of Rule 101 of the Code of Professional
Conduct of the AICPA and its interpretations and rulings;
(ii) in their opinion, the audited financial statements and pro
forma financial information included in the Offering Memorandum and
reported on by them comply in form in all material respects with the
accounting requirements of the Exchange Act and the related published
rules and regulations of the Commission thereunder that would apply to the
Offering Memorandum if the Offering Memorandum were a prospectus included
in a registration statement on Form S-1 under the Securities Act (except
that certain supporting schedules are omitted);
(iii) based upon a reading of the latest unaudited financial
statements made available by Neenah, the procedures of the AICPA for a
review of interim financial information as described in Statement of
Auditing Standards No. 71, reading of minutes and inquiries of certain
officials of Neenah who have responsibility for financial and accounting
matters and certain other limited procedures requested by the Initial
Purchasers and described in detail in such letter, nothing has come to
their attention that causes them to believe that (A) any unaudited
consolidated financial statements included in the Offering Memorandum do
not comply as to form in all material respects with applicable accounting
requirements, (B) any material modifications should be made to the
unaudited consolidated financial statements included in the Offering
Memorandum for them to be in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the
audited consolidated financial statements included in the Offering
Memorandum or (C) the information included under the headings
["Summary--Summary Consolidated Financial and Other Data",
"Capitalization", "Selected Consolidated Financial and Other Data",
"Management's Discussion and Analysis of Results of Operations and
Financial Condition" and "Management-Compensation of Executive Officers"]
is not in conformity with the disclosure requirements of Regulation S-K
that would apply to the Offering Memorandum if the Offering Memorandum
were a prospectus included in a registration statement on Form S-1 under
the Securities Act;
41
41
(iv) based upon the procedures detailed in such letter with respect
to the period subsequent to the date of the last available balance sheet,
including reading of minutes and inquiries of certain officials of Neenah
who have responsibility for financial and accounting matters, nothing has
come to their attention that causes them to believe that (A) at a
specified date not more than three business days prior to the date of such
letter, there was any change in capital stock, increase in long-term debt
or decrease in net current assets as compared with the amounts shown in
the December 31, 1996 unaudited balance sheet included in the Offering
Memorandum or (B) for the period from December 31, 1996 to a specified
date not more than three business days prior to the date of such letter,
there were any decreases, as compared with the corresponding period in the
preceding year, in net sales, income from operations, EBITDA or net
income, except in all instances for changes, increases or decreases that
the Offering Memorandum discloses have occurred or which are set forth in
such letter, in which case the letter shall be accompanied by an
explanation by Neenah as to the significance thereof unless said
explanation is not deemed necessary by the Initial Purchasers;
(v) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company) set forth in the Offering Memorandum agrees with the
accounting records of Neenah, excluding any questions of legal
interpretation; and
(vi) on the basis of a reading of the unaudited pro forma financial
information included in the Offering Memorandum, carrying out certain
specified procedures, reading of minutes and inquiries of certain
officials of Neenah who have responsibility for financial and accounting
matters and proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro forma financial
information, nothing came to their attention which caused them to believe
that the pro forma financial information does not comply in form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
information.
42
42
EXHIBIT D
April__, 1997
CHASE SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
c/o CHASE SECURITIES INC.
270 Park Avenue
New York, NY 10017
Dear Sirs:
Reference is hereby made to the Purchase Agreement dated April__, 1997
(the "Purchase Agreement"), between NC Merger Company, a Wisconsin corporation
(the "Company"), and you pursuant to which the Company has agreed to issue and
sell and you have agreed to purchase the Securities described therein on the
terms set forth therein. Capitalized terms used herein but not otherwise defined
herein have meanings assigned thereto in the Purchase Agreement (including by
reference therein to the Offering Memorandum). This is the letter agreement
referred to in Section 5(q) of the Purchase Agreement.
The parties hereto agree that this Letter Agreement is being executed and
delivered in connection with the issue and sale of the Securities pursuant to
the Purchase Agreement and to induce the Initial Purchasers to purchase the
Securities thereunder.
Neenah (as the Company's successor after the Merger) and each of the
Guarantors hereby confirm their agreement with you as follows:
SECTION 1. In accordance with Section 5(q) of the Purchase Agreement,
Neenah and each of the Guarantors by their respective signatures below each
becomes a party to the Purchase Agreement on the same terms and with the same
ongoing obligations and rights as the Company thereunder with the same force and
effect as if originally named therein as a party and Neenah and each of the
Guarantors jointly and severally agrees to all the terms and provisions of the
Purchase Agreement applicable to the Company thereunder including, but not
limited to, under Sections 8, 9, 10 and 12 thereof.
SECTION 2. Neenah and each of the Guarantors hereby represents and
warrants to, and agrees with, each of you as of the date hereof that:
(a) each of them has full right, power and authority to execute and
deliver this Letter Agreement and perform its obligations hereunder and
all
43
43
corporate action required to be taken by each of them for the due and
proper authorization, execution, delivery and performance of this Letter
Agreement and the consummation of the transactions contemplated hereby has
been duly and validly taken and this Letter Agreement has been duly
authorized and validly executed and delivered by each of them and is the
valid and legally binding agreement of each of them enforceable against
each of them in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
and similar laws affecting creditors' rights and remedies generally and to
general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity), and except as rights to indemnity
and contribution may be limited under applicable law;
(b) each of them has full right, power and authority to execute and
deliver the Supplemental Indenture and perform its obligations thereunder
and all corporate action required to be taken by each of them for the due
and proper authorization, execution, delivery and performance of the
Supplemental Indenture and the consummation of the transactions
contemplated thereby have been duly and validly taken; the Supplemental
Indenture has been duly authorized by each of them, and, when duly
executed and delivered in accordance with its terms by each party thereto,
the Supplemental Indenture will constitute the valid and legally binding
agreement of Neenah as primary obligor, and of each of the Guarantors, as
note guarantors, and will be enforceable against Neenah and each of the
Guarantors in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar
laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity); and
(c) the representations, warranties and agreements set forth in
Section 1 of the Purchase Agreement are true and accurate on the date
hereof as if made on such date by Neenah and each of the Guarantors, and
each reference therein to the knowledge of the Company shall be deemed to
be a reference to the knowledge of Neenah and each of the Guarantors.
SECTION 3. THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 4. This Letter Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
SECTION 5. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Letter Agreement.
44
44
If the foregoing is in accordance with your understanding of the agreement
among the parties hereto, kindly indicate your acceptance in the space provided
for that purpose below.
Very truly yours,
NEENAH CORPORATION,
By ______________________
Name:
Title:
NEENAH FOUNDRY COMPANY,
By ______________________
Name:
Title:
HARTLEY CONTROLS
CORPORATION,
By ______________________
Name:
Title:
NEENAH TRANSPORT, INC.,
By ______________________
Name:
Title:
CHASE SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
By CHASE SECURITIES INC.,
By _________________
Name:
Title: