EXHIBIT 4.17
$150,000,000
Pacer International, Inc.
11 3/4% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
May 24, 1999
May 24, 1999
Morgan Stanley & Co. Incorporated
BT Alex. Brown Incorporated
Credit Suisse First Boston Corporation
Credit Lyonnais Securities (USA) Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
Each of Pacer International, Inc., a Tennessee corporation (f/k/a APL
Land Transport Services, Inc., the "Company"), and the subsidiary guarantors
listed on Schedule A hereto (the "Guarantors" and, together with the Company,
the "Issuers"), propose to issue and sell to the several purchasers named in
Schedule B hereto (the "Placement Agents") $150,000,000 aggregate principal
amount of the Company's 11 3/4% Senior Subordinated Notes due 2007 (the "Notes")
which Notes will be jointly and severally guaranteed (the "Guarantees" and,
together with the Notes, the "Securities") on a senior subordinated basis by the
Guarantors. The Notes are to be issued pursuant to the provisions of an
indenture to be dated as of May 28, 1999 (the "Indenture") by and among the
Company, the Guarantors and Wilmington Trust Company, as trustee (the
"Trustee").
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), to qualified
institutional buyers in compliance with the exemption from registration provided
by Rule 144A under the Securities Act and in offshore transactions in reliance
on Regulation S under the Securities Act ("Regulation S").
Securities issued in book-entry form will be issued to Cede & Co. as
nominee of The Depositary Trust Company ("DTC") pursuant to a letter agreement
(the "DTC Agreement"), to be dated as of the Closing Date (as defined in Section
4), among the Company, the Guarantors, the Trustee and DTC.
The Placement Agents and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement, substantially in
the form attached hereto as Exhibit A, dated as of the Closing Date among the
Company, the Guarantors and the Placement Agents (the "Registration Rights
Agreement").
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum dated May 7, 1999 (the "Preliminary
Memorandum") and will prepare a final offering memorandum dated May 24, 1999
(the "Final Memorandum" and each of the Final Memorandum and the Preliminary
Memorandum, a "Memorandum")
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including or incorporating by reference a description of the terms of the
Securities, the terms of the offering of the Securities and a description of the
Company.
The offering of the Securities is part of the financing that will be
used to consummate the recapitalization of the Company (the "Recapitalization")
which will be effected through (i) the purchase of shares of the Company's
outstanding common stock by Coyote Acquisition LLC ("Coyote"), an entity formed
by certain affiliates of Apollo Management L.P. ("Apollo"), (ii) the redemption
by the Company of certain of its shares of common stock held by APL Limited and
(iii) the formation of a transitory subsidiary which will be merged with and
into Pacer Logistics, Inc. (f/k/a Pacer International, Inc., "Pacer") whereby
Pacer will become a wholly-owned subsidiary of the Company.
In connection with the Recapitalization, the Company will execute an
agreement (the "Credit Agreement") with Bankers Trust Company, Morgan Stanley &
Co. Incorporated and Credit Suisse First Boston Corporation, as agents, and
certain other lenders to provide the Company a loan commitment of up to
$235,000,000. Additionally, in connection with the Recapitalization, certain
affiliates of Apollo Management, L.P. and APL Limited shall make an equity
investment in the Company, as described in the Final Memorandum (the "Equity
Investment").
The offering of the Securities, the Recapitalization, the Equity
Investment and the related borrowings under the Credit Agreement are
collectively referred to herein as the "Transactions." This agreement (this
"Agreement" or the "Purchase Agreement"), the Indenture, the Notes, the
Guarantees, the Securities, the Registration Rights Agreement and the DTC
Agreement and each of the Exchange Notes and the Private Exchange Notes (as
defined in the Registration Rights Agreement) and the related guarantees thereof
are referred to collectively as the "Operative Documents."
This Agreement is being entered into by Coyote on the date hereof.
Simultaneously with the closing of the Transactions (each of which is deemed to
have occurred simultaneously with the closing of the others), each of the
Issuers shall enter into the Joinder Agreement, substantially in the form of
Exhibit C, (the "Joinder Agreement") pursuant to which each such Issuer will
observe and perform all of the rights, obligations and liabilities of an Issuer
as provided in this Agreement as if it were an original signatory hereto. Upon
the execution and delivery of the Joinder Agreement, Coyote shall be fully,
unconditionally, and irrevocably released from all rights, obligations and
liabilities hereunder.
1. Representations and Warranties. Coyote and each of the Issuers,
jointly and severally, represents and warrants to, and agrees with, each
Placement Agent that:
(a) Neither the Final Memorandum nor any amendment or supplement
thereto, as of the date thereof and the Closing Date, contains or will
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not
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misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the Final
Memorandum (or any such amendment or supplement thereto) based upon
information relating to any Placement Agent furnished to the Company in
writing by or on behalf of such Placement Agent expressly for use therein.
(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the requisite corporate power and authority to own or
lease its property and to conduct its business as now conducted and as
described in the Final Memorandum and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
business, condition (financial or other), or results of operations of the
Issuers and their respective subsidiaries, taken as a whole (a "Material
Adverse Effect").
(c) Each Guarantor and its material subsidiaries has been duly
organized, is validly existing as a corporation or limited liability
company in good standing under the laws of the jurisdiction of its
organization, has the requisite power and authority to own its property and
to conduct its business as described in the Final Memorandum, if at all,
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not result in a
Material Adverse Effect.
(d) This Agreement has been duly authorized, executed and delivered
by Coyote and as of the Closing Date by each of the Issuers.
(e) As of the Closing Date, the Notes, the Exchange Notes and the
Private Exchange Notes will have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions of the
Indenture and, in the case of the Notes, delivered to and paid for by the
Placement Agents in accordance with the terms of this Agreement, will be
valid and legally binding obligations of the Company, enforceable against
the Company in accordance with their terms, subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought (regardless of
whether such enforcement is considered in a proceeding in equity or at law)
and (iii) public policy considerations, and will be entitled to the
benefits of the Indenture and the Registration Rights Agreement. No holder
of securities of any of the Issuers will be entitled to have such
securities registered under the
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registration statements required to be filed by any of the Issuers pursuant
to the Registration Rights Agreement, other than as expressly permitted
thereby.
(f) As of the Closing Date, the Guarantees will have been duly
authorized by each of the Guarantors and, upon the execution,
authentication and delivery of the Notes and payment therefor in accordance
with the terms of this Agreement, will have been duly executed and
delivered, will be entitled to the benefits of the Indenture and will
constitute a valid and legally binding obligation of each of the
Guarantors, enforceable against each of the Guarantors in accordance with
their terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws now or hereafter in effect relating to creditor's
rights generally, (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought (regardless
of whether such enforcement is considered in a proceeding in equity or at
law) and (iii) public policy considerations.
(g) As of the Closing Date, each of the Indenture and Registration
Rights Agreement will have been duly authorized by each of the Issuers and
when executed and delivered by each of the Issuers (with respect to the
Indenture, assuming the due authorization, execution, and delivery thereof
by the Trustee) in accordance with the terms of this Agreement will be,
valid and legally binding obligations of each of the Issuers, enforceable
against each of the Issuers in accordance with its respective terms, (A)
subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, (ii) general principles of equity
and the discretion of the court before which any proceeding therefor may be
brought (regardless of whether such enforcement is considered in a
proceeding in equity or at law) and (iii) public policy considerations and
(B) except as rights to indemnification and contribution under the
Registration Rights Agreement may be limited by federal and state
securities laws and public policy considerations.
(h) The execution and delivery by each of the Issuers of, and the
performance by each of the Issuers of the Transactions and its respective
obligations under the Operative Documents, will not contravene any
provision of applicable law or the certificate of incorporation, by-laws or
other organizational document of any of the Issuers or any of the
Agreements and Instruments (as defined in Section 1(o)) binding upon any of
the Issuers that is material to any of the Issuers, or any judgment, order
or decree of any governmental body, agency or court having jurisdiction
over any of the Issuers, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for
the performance by any of the Issuers of the Transactions or their
respective obligations under any of the Operative Documents, which, if
contravened, individually or in the aggregate, would have a Material
Adverse Effect, and except such as may be required by the Securities Act,
state securities or
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"Blue Sky" laws in connection with the purchase and initial resale of the
Securities by the Placement Agents other than as contemplated by the
Registration Rights Agreement.
(i) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform each of its obligations under
this Agreement and the other Operative Documents and to consummate the
Transactions and any other transactions contemplated hereby and thereby,
including, without limitation, the power and authority to issue, sell and
deliver the Securities as contemplated by this Agreement.
(j) As of the Closing Date, the Company will have the authorized,
issued and outstanding capital stock as set forth under the caption
"Capitalization" in the Final Memorandum. All of the shares of issued and
outstanding capital stock of each of the Issuers have been duly authorized
and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of any of the Issuer was issued in
violation of any preemptive or other similar rights of any securityholder
of any such Issuer; and except as disclosed in the Final Memorandum, all of
the outstanding shares of capital stock of each of the Issuers are owned
free and clear of all liens, encumbrances, equities and claims or
restrictions on transferability or voting (other than those imposed by the
Securities Act, the securities or "Blue Sky" laws of certain jurisdictions
and the Shareholders Agreements dated as of the Closing Date, among (i) APL
Limited, Coyote Acquisition LLC, Coyote Acquisition II LLC and the Company,
(ii) certain management shareholders, Coyote Acquisition LLC, Coyote
Acquisition II LLC and the Company and (iii) certain affiliates of certain
of the Placement Agents, Coyote Acquisition LLC, Coyote Acquisition II LLC
and the Company. The Company does not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities or have
any equity interest in any firm, partnership, joint venture or other entity
other than interests in its subsidiaries or as described in the Final
Memorandum.
(k) Subsequent to the respective dates as of which information is
given in the Final Memorandum and except as described therein (A) none of
the Issuers will have incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, not in the
ordinary course of business and (B) there shall not be any material change
in the capital stock (other than changes in the ordinary course of
business) or long-term indebtedness of any of the Issuers.
(l) Except as described in the Final Memorandum, there is not pending
or, to the knowledge of any Issuer, threatened, any action, suit,
proceeding, inquiry or investigation to which any Issuer is a party, or to
which the property of any Issuer is subject, before or brought by any court
or governmental agency or body, which could reasonably be expected to have
a Material Adverse Effect.
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(m) Except as would not, singly or in the aggregate, have a Material
Adverse Effect (A) each of the Issuers is in compliance with applicable
Environmental Laws (as defined below), (B) each of the Issuers has made all
filings and provided all notices required under any applicable
Environmental Law, and has and is in compliance with all permits required
under any applicable Environmental Laws and each of them is in full force
and effect, (C) there is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for information pending or, to the
knowledge of any of the Issuers, threatened against any of the Issuers
under any Environmental Law, (D) no lien, charge, encumbrance or
restriction has been recorded under any Environmental Law with respect to
any assets, facility or property owned, operated, leased or controlled by
any of the Issuers, (E) none of the Issuers has received notice that it has
been identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or any comparable state law and (F) no property or facility of
any of the Issuers is (i) listed or proposed for listing on the National
Priorities List under CERCLA or (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public or
employee health and safety or the environment, including, without
limitation, laws relating to (i) emissions, discharges, releases or
threatened releases of hazardous materials into the environment (including,
without limitation, ambient air, surface water, ground water, land surface
or subsurface strata), (ii) the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling of
hazardous materials, and (iii) underground and above ground storage tanks
and related piping, and emissions, discharges, releases or threatened
releases therefrom.
(n) Each of the Operative Documents will conform in all material
respects to the respective statements relating thereto contained in the
Final Memorandum; the statements in the Final Memorandum under the caption
"Certain United States Federal Income Tax Considerations," insofar as such
statements constitute a summary of the United States federal tax laws
referred to therein, are accurate and fairly summarize in all material
respects the United States federal tax laws referred to therein.
(o) None of the Issuers is in violation of its charter, by-laws or
other organizational document or in violation of any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over any of the Issuers or any of their
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respective properties or assets or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which any of the Issuers is
a party or by which any of them may be bound, or to which any of the
property or assets of any of the Issuers is subject (collectively,
"Agreements and Instruments") except for such violations and defaults that
would not result in a Material Adverse Effect.
(p) No strike, labor dispute, slowdown or work stoppage with the
employees of any of the Issuers exists or, to the knowledge of any of the
Issuers, is pending or threatened which may reasonably be expected to
result in a Material Adverse Effect.
(q) Each of the Issuers owns or possesses all licenses or other
rights to use all material patents, trademarks, service marks, trade names,
copyrights and know-how necessary to conduct the businesses now or proposed
to be operated by it as described in the Final Memorandum, and none of the
Issuers has received any notice of infringement of or conflict with (or
knows of any such infringement of or conflict with) asserted rights of
others with respect to any patents, trademarks, service marks, trade names,
copyrights or know-how which, if such assertion of infringement or conflict
were sustained, would have a Material Adverse Effect.
(r) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by any of
the Issuers of their respective obligations hereunder, in connection with
the offering, issuance or sale of the Securities, the Exchange Notes or the
Private Exchange Notes (and the related guarantees thereof), for the
performance by any of the Issuers of their respective obligations under the
Operative Documents, or the consummation of the Transactions or any other
transactions contemplated hereby or thereby or for the due execution,
delivery or performance by the Issuers of the Operative Documents, except
such as may be required by the Securities Act, state securities or "Blue
Sky" laws in connection with the purchase and initial resale of the
Securities by the Placement Agents, other than as contemplated by the
Registration Rights Agreement.
(s) Each of the Issuers has obtained or has applied for all licenses,
franchises and other governmental authorizations necessary to conduct the
business now operated or proposed to be operated as described in the Final
Memorandum, the lack of which would result in a Material Adverse Effect.
(t) Each of the Issuers has good and marketable title to all real
property and good title to all personal property described in the Final
Memorandum as being owned by it and good and marketable title to a
leasehold estate in the real and personal property described in the Final
Memorandum as being leased by it (except for those
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leases of real property in which such Issuer has good title and that would
be marketable but for the requirement that the landlord consent to an
assignment or sublease of the lease), free and clear of all liens, charges,
encumbrances or restrictions, except, in each case to the extent the
failure to have such title or the existence of such liens, charges,
encumbrances or restrictions would not result in Material Adverse Effect.
(u) None of the Issuers has incurred any liability for any prohibited
transaction or funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other plan which
is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), to which any Issuer makes or ever has made a
contribution and in which any employee of any Issuer is or has ever been a
participant, which, individually or in the aggregate, could reasonably be
expected to have or result in a Material Adverse Effect; and with respect
to such plans, each of the Issuers is in compliance in all respects with
all applicable provisions of ERISA, except where the failure to so comply
would not, singly or in the aggregate, reasonably be expected to result in
a Material Adverse Effect.
(v) Each of the Issuers has filed all necessary federal, state, local
and foreign income and franchise tax returns that are required to be filed
or have duly requested extensions thereof, except where such failure would
not have a Material Adverse Effect, and have paid all taxes required to be
paid by any of them and any related assessments, fines or penalties, except
for any such tax, assessment, fine or penalty that is of a de minimus
amount or that is being contested in good faith and by appropriate
proceedings and for which adequate reserves have been made in accordance
with GAAP; and each of the Issuers believes charges, accruals and reserves
adequate in all material respects have been provided for in the financial
statements included in the Final Memorandum in respect of all federal,
state, local and foreign taxes for all periods as to which the tax
liability of any of the Issuers has not been finally determined or remains
open to examination by applicable taxing authorities.
(w) Each of the Issuers carry or are entitled to the benefits of
insurance, including self-insurance with financially sound and reputable
insurers other than with respect to self-insurance, in such amounts and
covering such risks as is generally maintained by companies of established
repute engaged in the same or similar business, and all such insurance is
in full force and effect.
(x) Each of the Issuers has reviewed its operations and that of its
respective subsidiaries to evaluate the extent to which the business or
operations of the Issuers or any of their subsidiaries will be affected by
the Year 2000 Problem (that is, any significant risk that computer hardware
or software applications used by the Issuers and their respective
subsidiaries will not, in the case of dates or time periods occurring after
December 31, 1999, function at least as effectively as in the case of dates
or times periods occurring prior to January 1, 2000); as a result of such
review, the Issuers do
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not believe, that (A) there are any issues related to this preparedness to
address the Year 2000 Problem that are of a character required to be
described or referred to in the Final Memorandum which have not been
accurately described in the Final Memorandum and (B) except as discussed in
the Final Memorandum, the Year 2000 Problem will have a Material Adverse
Effect.
(y) The fair value and present fair saleable value of the assets of
each of the Issuers exceeds the sum of its stated liabilities and
identified contingent liabilities; and after giving effect to the
Transactions and the consummation of the transactions contemplated thereby
and by the Final Memorandum, none of the Issuers will be (a) left with
unreasonably small capital with which to carry on its business as it is
proposed to be conducted, (b) unable to pay its debts (contingent or
otherwise) as they mature or (c) insolvent.
(z) The statistical and market-related data included in the Final
Memorandum are based on or derived from independent sources which the
Issuers believe to be reliable in all material respects or represent the
Issuers' good faith estimates based on information they believe to be
reliable.
(aa) The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Memorandum will not be, an "investment company" or
an entity "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended.
(bb) Neither any of the Issuers nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") of any of
the Issuers has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security
(as defined in the Securities Act) which is or will be integrated with the
sale of the Securities in a manner that would require the registration
under the Securities Act of the Securities or (ii) engaged in any form of
general solicitation or general advertising in connection with the offering
of the Securities, (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(cc) None of the Issuers, their respective Affiliates or any person
acting on their behalf has engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the
Securities; and the Issuers and their respective Affiliates and any person
acting on their behalf have complied and will comply with the offering
restrictions requirement of Regulation S, except no representation,
warranty or agreement is made by the Issuers in this paragraph with respect
to the Placement Agents.
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(dd) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Placement Agents in the manner
contemplated by this Agreement to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended.
(ee) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(ff) No securities of the Company or any subsidiary are of the same
class (within the meaning of Rule 144A under the Act) as the Securities and
listed on a national securities exchange registered under Section 6 of the
Exchange Act, or quoted in a U.S. automated inter-dealer quotation system.
(gg) Neither the consummation of the Transactions or any other
transactions contemplated hereby nor the sale, issuance, execution or
delivery of the Securities, nor the application of the proceeds therefrom
(applied as described in the Final Memorandum under the caption "Use of
Proceeds"), will violate Regulation T (12 C.F.R. Part 220), U (12 C.F.R.
Part 221) or X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System.
(hh) Neither any of the Issuers nor any of their respective
Affiliates, officers, directors or controlling persons has taken, directly
or indirectly, any action designed to cause or to result in, or that has
constituted or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of any of the
Issuers to facilitate the sale or resale of the Securities.
(ii) Except pursuant to this Agreement, there are no contracts,
agreements or understandings between any of the Issuers and any other
person that would give rise to a valid claim against the Issuers or the
Placement Agents for a brokerage commission, finder's fee or like payment
in connection with the issuance, purchase and sale of the Securities.
(jj) The audited and unaudited consolidated financial statements and
related notes of each of the Company and its consolidated subsidiaries and
Pacer and its consolidated subsidiaries included in the Final Memorandum
present fairly, in all material respects, the consolidated financial
position, results of operations and cash flows of the Company and its
consolidated subsidiaries and Pacer and its consolidated subsidiaries,
respectively, at the dates and for the periods to which they relate and
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis. Arthur Andersen LLP, which has
audited the consolidated financial statements as set forth in its reports
included in the Final Memorandum, is an independent public accounting firm
as required by the Act and the rules and regulations promulgated
thereunder.
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(kk) The unaudited pro forma condensed consolidated balance sheet and
statements of operations (including the notes thereto) included in the
Final Memorandum (A) have been prepared in all material respects in
accordance with applicable requirements of Regulation S-X promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
(B) have been properly computed on the bases described therein. The
assumptions used in the preparation of the unaudited pro forma condensed
consolidated balance sheet and statements of income and other pro forma
condensed consolidated financial information included in the Final
Memorandum are reasonable and the adjustments used therein are appropriate
to give effect to the transactions or circumstances referred to therein.
(ll) Each of the Transactions conforms in all material respects to the
description thereof in the Final Memorandum.
(mm) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
business, condition (financial or other), or results of operations of the
Issuers and their respective subsidiaries, taken as a whole, from that set
forth in the Final Memorandum (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(nn) The Company has delivered to counsel for the Placement Agents a
true and correct copy of each of the documents contemplated by the
Transactions, together with all related agreements and all schedules and
exhibits thereto, and there shall have been no material amendments,
alterations, modifications or waivers of any of the provisions of any such
documents since their respective dates of execution, other than any such
amendments, alterations, modifications and waivers as to which the
Placement Agents have been advised in writing and which would be required
to be disclosed in the Final Memorandum; and to the best knowledge of the
Issuers there exists no event or condition which would constitute a default
or an event of default under any of the documents contemplated by the
Transactions which would result in a Material Adverse Effect or materially
adversely affect the ability of the Issuers to consummate the Transactions.
2. Agreements to Sell and Purchase. Coyote agrees to cause the
Issuers, and as of the Closing Date, the Issuers agree, to sell to the several
Placement Agents, and each Placement Agent, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Issuers the respective principal amount of Securities set forth in Schedule B
hereto opposite its name at a purchase price of 100% of the principal amount
thereof (the "Purchase Price") plus accrued interest, if any, to the Closing
Date.
Coyote hereby agrees not to permit the Company to, and as of the
Closing Date the Company agrees that, without the prior written consent of the
Placement Agents, it will
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not, during the period beginning on the date hereof and continuing to and
including the Closing Date, offer, sell, contract to sell or otherwise dispose
of any debt of the Company or warrants to purchase debt of the Company
substantially similar to the Securities (other than the sale of the Securities
under this Agreement).
3. Terms of Offering. The Placement Agents have advised Coyote and
the Issuers that they will make an offering of the Securities purchased by them
hereunder on the terms to be set forth in the Final Memorandum, as soon as
practicable after this Agreement is entered into as in the Placement Agents'
judgment is advisable.
4. Payment and Delivery. Payment for the Securities shall be made
to the Company in immediately available funds in New York City against delivery
of such Securities for the respective accounts of the several Placement Agents
at 10:00 a.m., New York City time, on May 28, 1999 or such other time as shall
be agreed upon by the Placement Agents and Coyote, such time and date
hereinafter referred to as the "Closing Date."
Certificates for the Securities shall be in definitive form or global
form, as specified by the Placement Agents, and registered in such names and in
such denominations as the Placement Agents shall request in writing not later
than one full business day prior to the Closing Date. The certificates
evidencing the Securities shall be delivered to the Placement Agents on the
Closing Date for the respective accounts of the several Placement Agents, with
any transfer taxes payable in connection with the transfer of the Securities to
the Placement Agents duly paid, against payment of the Purchase Price therefor
plus accrued interest, if any, to the date of payment and delivery.
5. Conditions to the Placement Agents' Obligations. The several
obligations of the Placement Agents to purchase and pay for the Securities on
the Closing Date are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading, in
the rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition (financial or
otherwise), or in the earnings, business or operations of the Issuers,
taken as a whole, from that set forth in the Final Memorandum
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement) that, in the judgment of the Placement Agents,
is material and adverse and that makes it, in the
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judgment of the Placement Agents, impracticable to market the
Securities on the terms and in the manner contemplated in the Final
Memorandum.
(b) The Placement Agents shall have received on the Closing Date a
certificate, dated the Closing Date and signed by at least two executive
officers of each of the Issuers, to the effect set forth in Section 5(a)(i)
and to the effect that the representations and warranties of the Issuers
contained in this Agreement are true and correct as of the Closing Date
(other than to the extent any such representation or warranty is expressly
made to a certain date) and that each of the Issuers has performed, in all
material respects, all covenants and agreements and satisfied, in all
material respects, all of the conditions on their part to be performed or
satisfied hereunder on or before the Closing Date.
The executive officers signing and delivering such certificate may
rely upon the best of their knowledge as to proceedings threatened.
(c) The Placement Agents shall have received on the Closing Date an
opinion of Dewey Ballantine LLP, special counsel for the Issuers, and other
special counsel to the Issuers, dated the Closing Date, substantially in
the form of Exhibit B hereto. Such opinion shall be rendered to the
Placement Agents and the Trustee at the request of the Issuers and shall so
state therein.
(d) The Placement Agents shall have received on the Closing Date an
opinion of Cahill Gordon & Reindel, counsel for the Placement Agents, dated
the Closing Date, with respect to certain legal matters relating to this
Agreement and such other related matters as the Placement Agents may
require. In rendering such opinion, Cahill Gordon & Reindel shall have
received and may rely upon such certificates and other documents and
information as they may reasonably request to pass upon such matters. In
addition, in rendering their opinion, Cahill Gordon & Reindel may state
that their opinion is limited to matters of New York law, Delaware
corporations law and federal law.
(e) The Placement Agents shall have received on each of the date
hereof and the Closing Date letters, dated the date hereof or the Closing
Date, as the case may be, in form and substance reasonably satisfactory to
the Placement Agents, from Pricewaterhouse Coopers and Arthur Andersen,
LLP, independent public accountants, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Final
Memorandum.
(f) The representations and warranties of Coyote and the Issuers, as
the case may be, contained in this Agreement shall be true and correct in
all material respects as of the date hereof and as of the Closing Date
(other than to the extent any
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such representation or warranty is expressly made as of a certain date);
the Issuers shall have complied in all material respects with all covenants
and agreements and satisfied all conditions on their part to be performed
or satisfied hereunder at or prior to the Closing Date; and subsequent to
the date of the most recent financial statements in the Final Memorandum,
there shall have been no material adverse change in the business, condition
(financial or other), results of operations or prospects of the Issuers,
taken as a whole, except as set forth in, or contemplated by, the Final
Memorandum.
(g) Subsequent to the date as of which information is given in the
Final Memorandum, except as described in the Final Memorandum, none of the
Issuers shall have incurred any liabilities or obligations, direct or
contingent (other than in the ordinary course of business) that are
material to the Issuers, taken as a whole, or entered into any transactions
not in the ordinary course of business that are material to the business,
condition (financial or other), results of operations or prospects of the
Issuers, taken as a whole, and, other than as described in the Final
Memorandum, there shall not have been any change in the capital stock
(other than changes in the ordinary course of business) or long-term
indebtedness of any Issuer that is material to the business, condition
(financial or other), results of operations or prospects of the Issuers,
taken as a whole.
(h) Subsequent to the date as of which information is given in the
Final Memorandum, the conduct of the business and operations of the Issuers
or any of their respective subsidiaries has not been interfered with by
strike, fire, flood, hurricane, accident or other calamity (whether or not
insured) or by any court or governmental action, order or decree, and,
except as otherwise stated therein, the properties of the Issuers or any of
their respective subsidiaries have not sustained any loss or damage
(whether or not insured) as a result of any such occurrence, except any
such interference, loss or damage which would not have a Material Adverse
Effect.
(i) On the Closing Date, the Placement Agents shall have received the
Registration Rights Agreement executed by each of the Issuers and such
agreement shall be in full force and effect on the Closing Date.
(j) The Recapitalization and the other Transactions shall have been
consummated concurrently with the offering of the Securities and the
Placement Agents shall have received a true and correct copy of the (i)
Stock Purchase Agreement, dated as of March 15, 1999 by and between APL
Limited and Coyote Acquisition LLC and (ii) the Agreement and Plan of
Merger dated as of February 22, 1999 by and among Mile High Acquisition
Corp., Pacer and the stockholders of Pacer.
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(k) The Credit Agreement shall have been executed and delivered by
all parties thereto and the Placement Agents shall have received a true and
correct copy thereof.
(l) On the Closing Date, the Company shall have, to the extent a
party thereto, complied in all material respects with all agreements and
covenants in all documents contemplated by the Transactions and satisfied
or waived all conditions specified therein to be complied with or performed
at or prior to the Closing Date, and each of the documents contemplated by
the Transactions shall be in full force and effect.
(m) On the Closing Date, the Placement Agents shall have received the
Joinder Agreement executed by each of the Issuers and such agreement shall
be in full force and effect on the Closing Date.
(n) On or before the Closing Date, the Placement Agents and counsel
for the Placement Agents shall have received such further documents,
opinions, certificates and schedules or instruments relating to the
business, corporate, legal and financial affairs of the Issuers as they
shall have heretofore reasonably requested from the Issuers and Coyote.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Placement Agents and counsel for the Placement Agents. The Company shall
furnish to the Placement Agents such conformed copies of such opinions,
certificates, letters, schedules, documents and instruments in such quantities
as the Placement Agents shall reasonably request.
6. Covenants of the Issuers. In further consideration of the
agreements of the Placement Agents contained in this Agreement, Coyote and, as
of the Closing Date, the Issuers covenant with each Placement Agent as follows:
(a) To furnish to the Placement Agents in New York City, without
charge, as soon as practicable after the date of this Agreement and during
the period mentioned in Section 6(c), as many copies of the Preliminary
Memorandum, the Final Memorandum, any documents incorporated by reference
therein and any supplements and amendments thereto as the Placement Agents
may reasonably request.
(b) Before amending or supplementing either Memorandum, to furnish to
the Placement Agents a copy of each such proposed amendment or supplement
and not to use any such proposed amendment or supplement to which the
Placement Agents reasonably object.
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(c) If, during such period after the date hereof and prior to the
date on which all of the Securities shall have been sold by the Placement
Agents, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Final Memorandum in order to make the
statements therein, in the light of the circumstances when the Final
Memorandum is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Placement Agents, it is necessary to amend or
supplement the Final Memorandum to comply with applicable law, forthwith to
prepare and furnish, at its own expense, to the Placement Agents, either
amendments or supplements to the Final Memorandum so that the statements in
the Final Memorandum as so amended or supplemented will not, in the light
of the circumstances when the Final Memorandum is delivered to a purchaser,
be misleading or so that the Final Memorandum, as amended or supplemented,
will comply with applicable law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Placement
Agents may designate and will continue such qualifications in effect for as
long as may be reasonably necessary to complete the resale of the
Securities; provided, however, that in connection therewith, none of the
Issuers shall be required to qualify as a foreign corporation or to execute
a general consent to service of process in any jurisdiction or subject
itself to taxation in any such jurisdiction where it is not so subject.
(e) Whether or not the Transactions or the other transactions
contemplated in this Agreement are consummated or this Agreement is
terminated, to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) the
fees, disbursements and expenses of the Issuers' counsel and the Issuers'
accountants in connection with the issuance and sale of the Securities and
all other fees or expenses in connection with the preparation of each
Memorandum and all amendments and supplements thereto, including all
printing costs associated therewith, and the delivering of copies thereof
to the Placement Agents, in the quantities herein above specified, (ii) all
costs and expenses related to the transfer and delivery of the Securities
to the Placement Agents, including any transfer or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of the
Securities under state securities laws and all expenses in connection with
the qualification of the Securities for offer and sale under state
securities laws as provided in Section 6(d) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Placement
Agents in connection with such qualification and in connection with the
Blue Sky or legal investment memorandum, (iv) any fees charged by rating
agencies for the rating of the Securities, (v) all document production
charges and expenses of counsel to the Placement Agents (but not including
their fees for professional services) in connection with the preparation of
this Agreement, (vi) the fees and expenses, if any, incurred in connection
with the admission of the Securities for trading in PORTAL or any
appropriate market system, (vii) the costs and charges of the Trustee and
any transfer agent, regis-
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trar or depositary, (viii) the cost of the preparation, issuance and
delivery of the Securities, (ix) the costs and expenses of the Issuers
relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Securities, including,
without limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Issuers, travel and lodging expenses of the representatives and officers of
the Issuers and any such consultants, and the cost of any aircraft
chartered in connection with the road show, and (x) all other costs and
expenses incident to the performance of the obligations of the Issuers
hereunder for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 8,
and the last paragraph of Section 10, the Placement Agents will pay all of
their costs and expenses, including fees and disbursements of their
counsel, transfer taxes payable on resale of any of the Securities by them
and any advertising expenses connected with any offers they may make.
(f) Neither the Issuers nor any Affiliate will sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Securities Act) which could be integrated with the sale
of the Securities in a manner which would require the registration under
the Securities Act of the Securities.
(g) Not to solicit any offer to buy or offer or sell the Securities
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.
(h) While any of the Securities remain "restricted securities" within
the meaning of the Securities Act, to make available, upon request, to any
seller of such Securities the information specified in Rule 144A(d)(4)
under the Securities Act, unless the Company is then subject to Section 13
or 15(d) of the Exchange Act.
(i) To use their commercially reasonable efforts to permit the
Securities to be designated PORTAL securities in accordance with the rules
and regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in the PORTAL Market.
(j) None of the Issuers, their Affiliates or any person acting on
their behalf (other than the Placement Agents) will engage in any directed
selling efforts (as that term is defined in Regulation S) with respect to
the Securities, and the Issuers and their Affiliates and each person acting
on their behalf (other than the Placement Agents) will comply with the
offering restrictions requirement of Regulation S.
(k) During the period of two years after the Closing Date, the
Issuers will not, and will not permit any of their affiliates (as defined
in Rule 144 under the Secu-
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rities Act) to resell any of the Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them.
(l) The Company will apply the net proceeds from the sale of the
Securities substantially as set forth under "Use of Proceeds" in the Final
Memorandum.
(m) For so long as the Securities remain outstanding, the Issuers
will furnish to the Placement Agents copies of all reports and other
communications (financial or otherwise) furnished by the Issuers to the
Trustee or to the holders of the Securities and, as soon as available,
copies of any reports or financial statements furnished to or filed by the
Company with the Commission or any national securities exchange on which
any class of securities of the Company may be listed.
(n) Prior to the Closing Date, the Company will furnish to the
Placement Agents, as soon as practicable after they have been prepared, a
copy of any unaudited interim consolidated financial statements of the
Company for any period subsequent to the period covered by the most recent
financial statements appearing in the Final Memorandum.
7. Offering of Securities; Restrictions on Transfer. (a) Each
Placement Agent, severally and not jointly, represents and warrants that such
Placement Agent is a qualified institutional buyer as defined in Rule 144A under
the Securities Act (a "QIB"). Each Placement Agent, severally and not jointly,
agrees with the Issuers that (i) it has not and will not solicit offers for, or
offer or sell, such Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (ii) it has and will solicit offers for such
Securities only from, and will offer such Securities only to, persons that it
reasonably believes to be (A) in the case of offers inside the United States,
QIBs and (B) in the case of offers outside the United States, to persons other
than U.S. persons ("foreign purchasers," which term shall include dealers or
other professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust)); provided,
however, that, in the case of this clause (B), in purchasing such Securities
such persons are deemed to have represented and agreed as provided in the Final
Memorandum under the caption "Transfer Restrictions."
(b) Each Placement Agent, severally and not jointly, represents,
warrants, and agrees with respect to offers and sales outside the United States
that:
(i) such Placement Agent understands that no action has been or will
be taken in any jurisdiction by the Issuers that would permit a public
offering of the Securities, or possession or distribution of either
Memorandum or any other offering or publicity material relating to the
Securities, in any country or jurisdiction where action for that purpose is
required;
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(ii) such Placement Agent will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells or
delivers Securities or has in its possession or distributes either
Memorandum or any such other material, in all cases at its own expense;
(iii) the Securities have not been registered under the Securities
Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in accordance with Rule 144A
or Regulation S under the Securities Act or pursuant to another exemption
from the registration requirements of the Securities Act;
(iv) such Placement Agent has offered the Securities and will offer
and sell the Securities (A) as part of their distribution at any time and
(B) otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 of
Regulation S or as otherwise permitted in Section 7(a); accordingly, no
Placement Agent, its Affiliates nor any persons acting on its or their
behalf have engaged or will engage in any directed selling efforts (within
the meaning of Regulation S) with respect to the Securities, and any such
Placement Agent, its Affiliates and any such persons have complied and will
comply with the offering restrictions requirement of Regulation S;
(v) such Placement Agent has (A) not offered or sold and, prior to
the date six months after the Closing Date, will not offer or sell any
Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995; (B) complied
and will comply with all applicable provisions of the Financial Services
Act 1986 with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (C) only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the Securities to a person
who is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1996 (as amended) or is
a person to whom such document may otherwise lawfully be issued or passed
on;
(vi) such Placement Agent understands that the Securities have not
been and will not be registered under the Securities and Exchange Law of
Japan, and represents that it has not offered or sold, and agrees not to
offer or sell, directly or indirectly, any Securities in Japan or for the
account of any resident thereof except pursuant to any exemption from the
registration requirements of the Securities and Exchange Law of Japan and
otherwise in compliance with applicable provisions of Japanese law; and
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(vii) such Placement Agent agrees that, at or prior to confirmation
of sales of the Securities, it will have sent to each distributor, dealer
or person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the restricted period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and the closing
date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used
above have the meaning given to them by Regulation S."
Terms used in this Section 7(b) have the meanings given to them by
Regulation S.
8. Indemnity and Contribution. (a) Each of the Issuers and,
subject to the last sentence of the ninth introductory paragraph of this
Agreement, Coyote, jointly and severally, agrees to indemnify and hold harmless
each Placement Agent, its directors, officers and each person, if any, who
controls such Placement Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in either Memorandum (as
amended or supplemented if the Issuers shall have furnished any amendments or
supplements thereto to the Placement Agents), or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission that is based upon information relating to any Placement Agent
furnished to the Issuers in writing by such Placement Agent expressly for use
therein; provided, however, that the foregoing indemnity agreement with respect
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to any Preliminary Memorandum shall not inure to the benefit of any Placement
Agent from whom the person asserting any such losses, claims, damages or
liabilities purchased Securities, or any person controlling such Placement
Agent, if a copy of the Final Memorandum (as then amended or supplemented if the
Issuers shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Placement Agent to such person, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of the Securities to such person, and if the Final Memorandum (as so
amended or supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Issuers with Section 6(a) hereof.
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(b) Each Placement Agent agrees, severally and not jointly, to
indemnify and hold harmless each of the Issuers and Coyote, its directors,
officers and each person, if any, who controls such Issuer or Coyote within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Issuers and Coyote to
such Placement Agent, but only with reference to information relating to such
Placement Agent furnished to the Issuers in writing by such Placement Agent
expressly for use in either Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a) or 8(b), such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Placement Agents, in the case of parties
indemnified pursuant to Section 8(a), and by the Issuers and Coyote, in the case
of parties indemnified pursuant to Section 8(b). The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the 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, 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 (x) includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding and
(y) does not include any statement as to an admission of fault, culpability or
failure to act by or on behalf of such indemnified party.
(d) To the extent the indemnification provided for in Section 8(a) or
8(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of
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indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Issuers and Coyote on the one hand and the
Placement Agents on the other hand from the offering of the Securities or (ii)
if the allocation provided by clause 8(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Issuers and Coyote on the one hand and of the Placement Agents on
the other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Issuers and
Coyote on the one hand and the Placement Agents on the other hand in connection
with the offering of the Securities shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Securities (before
deducting expenses) received by the Issuers and Coyote and the total discounts
and commissions received by the Placement Agents, in each case as set forth in
the Final Memorandum, bear to the aggregate offering price of the Securities.
The relative fault of the Issuers and Coyote on the one hand and of the
Placement Agents on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Issuers or Coyote, or by the Placement Agents and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Placement Agents'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the respective principal amount of Securities they have purchased
hereunder, and not joint.
(e) The Issuers, Coyote and the Placement Agents agree that it would
not be just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Placement Agents were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in Section 8(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 8(d) shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Placement Agent shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities resold by
it in the initial placement of such Securities were offered to investors exceeds
the amount of any damages that such Placement Agent has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
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(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Issuers and Coyote, as the case may be, contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Placement Agent or
any person controlling any Placement Agent or by or on behalf of the Issuers,
their respective officers or directors or any person controlling any of the
Issuers and (iii) acceptance of and payment for any of the Securities.
9. Termination. This Agreement shall be subject to termination by
notice given by the Placement Agents to Coyote, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the Nasdaq
National Market, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or other
domestic or international calamity or any crisis or change in political or
economic conditions or in the financial markets or any calamity or crisis that,
in the judgment of the Placement Agents, is material and adverse and (b) in the
case of any of the events specified in clauses 9(a)(i) through 9(a)(iv), such
event, singly or together with any other such event, makes it, in the judgment
of the Placement Agents, impracticable or inadvisable to market the Securities
on the terms and in the manner contemplated in the Final Memorandum.
Termination of this Agreement pursuant to this Section 9 shall be without
liability of any party to any other party except as provided in Section 6(e) and
8(f).
10. Effectiveness; Defaulting Placement Agents. (a) This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
(b) If, on the Closing Date, any one or more of the Placement Agents
shall fail or refuse to purchase Securities that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Placement Agent or Placement Agents agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date, the other Placement
Agents shall be obligated, severally in the proportions that the principal
amount of Securities set forth opposite their respective names in Schedule B
bears to the aggregate principal amount of Securities set forth opposite the
names of all such non-defaulting Placement Agents, or in such other proportions
as you may specify, to purchase the Securities which such defaulting Placement
Agent or Placement Agents agreed but failed or refused to purchase on such date;
provided that in no event shall the principal amount of Securities that any
Placement Agent has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 10(b) by an amount in excess of one-ninth of such
principal amount of Securities
-24-
without the written consent of such Placement Agent. If, on the Closing Date,
any Placement Agent or Placement Agents shall fail or refuse to purchase
Securities which it or they have agreed to purchase hereunder on such date and
the aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities to
be purchased on such date, and arrangements satisfactory to the Placement Agents
and the Issuers for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Placement Agent or of the Issuers. In any such case,
either the Placement Agents or the Issuers shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Final Memorandum or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Placement Agent from liability in respect of any default
of such Placement Agent under this Agreement.
If this Agreement shall be terminated by the Placement Agents, or any
of them, because of any failure or refusal on the part of any of the Issuers to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason any of the Issuers shall be unable to perform their respective
obligations under this Agreement, the Issuers will reimburse the Placement
Agents or such Placement Agents as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of Cahill Gordon & Reindel, counsel for the Placement
Agents) reasonably incurred by such Placement Agents in connection with this
Agreement or the offering contemplated hereunder.
11. Notices. All communications hereunder shall be in writing and,
if sent to the Issuers, shall be mailed or delivered (a) to the Company at:
Pacer International, Inc.
3746 Mt. Diablo Blvd.
Suite 110
Lafayette, CA 94549
Telecopy: (925) 299-1939
Attention: Donald C. Orris
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Telecopy: (212) 259-6333
Attention: Morton A. Pierce, Esq.
Douglas L. Getter, Esq.
-25-
or (b) to the Placement Agents at:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Telecopy: (212) 761-4000
Attention: Joel Feldmann
BT Alex. Brown Incorporated
130 Liberty Street
New York, New York 10006
Telecopy: (212) 250-7200
Attention: Larry Zimmerman
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010-3629
Telecopy: (212) 325-8018
Attention: Mark W. Kennelley
Credit Lyonnais Securities (USA) Inc.
1301 Avenue of the Americas
New York, New York 10019-6022
Telecopy: (212) 261-4190
Attention: Michael E. Sohr
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Telecopy: (212) 269-5420
Attention: John A. Tripodoro, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; and one business
day after being timely delivered to a next-day air courier; and when receipt is
acknowledged by addressee, if telecopied.
12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
-26-
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
giving effect to any provisions thereof relating to conflicts of law.
14. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
-27-
Very truly yours,
COYOTE ACQUISITION LLC
By: /s/ Joshua Harris
__________________________
Joshua Harris
Vice President
-28-
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Clifton E. Strain
____________________________
Name: Clifton E. Strain
Title: Principal
BT ALEX. BROWN INCORPORATED
By: /s/ Bruce Tully
____________________________
Name: Bruce Tully
Title: Managing Director
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Harold W. Bogle
____________________________
Name: Harold W. Bogle
Title: Managing Director
CREDIT LYONNAIS SECURITIES (USA) INC.
By: /s/ David C. Travis
____________________________
Name: David C. Travis
Title: Managing Director
-29-
SCHEDULE A
GUARANTORS
Name State of Incorporation
- ---- ----------------------
Pacer Logistics, Inc. Delaware
Cross Con Transport, Inc. Illinois
Cross Con Terminals, Inc. Delaware
Pacer International Rail Services LLC Colorado
Pacer International Consulting LLC Colorado
Pacer Rail Services LLC Colorado
Pacific Motor Transport Company California
Pacer Express, Inc. California
Pacer Integrated Logistics, Inc. Delaware
PLM Acquisition Corporation Delaware
Manufacturers Consolidation Service, Inc. Tennessee
Levcon, Inc. Tennessee
Manufacturers Consolidation Service of Canada, Inc. Delaware
Interstate Consolidation Service, Inc. California
Interstate Consolidation, Inc. California
Intermodal Container Service, Inc. California
Keystone Terminals Acquisition Corp. Delaware
SCHEDULE B
Principal Amount of
Placement Agents Securities to be Purchased
---------------- --------------------------
Morgan Stanley & Co. Incorporated................ $ 57,000,000
BT Alex. Brown Incorporated...................... $ 57,000,000
Credit Suisse First Boston Corporation........... $ 28,500,000
Credit Lyonnais Securities (USA) Inc............ 7,500,000
Total.................................. $ 150,000,000
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT B
OPINION OF COUNSEL FOR THE ISSUERS AND COYOTE
The opinion of the counsel for the Issuers and Coyote, to be delivered
pursuant to Section 5(c) of the Purchase Agreement shall be to the effect that:
A. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own or lease its
property and to conduct its business as described in the Final Memorandum and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect.
B. Each Guarantor and its material subsidiaries has been duly
organized, is validly existing as a corporation or limited liability company in
good standing under the laws of the jurisdiction of its organization, has the
requisite power and authority to own its property and to conduct its business as
described in the Final Memorandum, if at all, and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not result in a Material Adverse Effect.
C. The Purchase Agreement has been duly authorized, executed and
delivered by Coyote and each of the Issuers.
D. The Notes, the Exchange Notes and the Private Exchange Notes have
been duly authorized by the Company and, when executed and authenticated in
accordance with the provisions of the Indenture and, in the case of the Notes,
delivered to and paid for by the Placement Agents in accordance with the terms
of the Purchase Agreement, will be valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and (iii) public
policy considerations, and will be entitled to the benefits of the Indenture and
the Registration Rights Agreement. No holder of securities of any of the
Issuers will be entitled to have such securities registered under the
registration statements required to be filed by any of the Issuers pursuant to
the Registration Rights Agreement, other than as expressly permitted thereby.
E. The Guarantees have been duly authorized, executed and delivered
by each of the Guarantors, and, upon the execution, authentication and delivery
of the Notes and payment therefor in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture and will constitute
a valid and legally binding obligation of each of the Guarantors, enforceable
against each of the Guarantors in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditor's rights generally, (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is considered in
a proceeding in equity or at law) and (iii) public policy considerations.
F. Each of the Indenture and the Registration Rights Agreement has
been duly authorized, executed and delivered by each of the Issuers, and are
valid and legally binding obligations of each of the Issuers, enforceable
against each of the Issuers in accordance with its respective terms, (A) subject
to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and (iii) public
policy considerations and (B) except as rights to indemnification and
contribution under the Registration Rights Agreement may be limited by federal
and state securities laws and public policy considerations.
G. The execution and delivery by each of the Issuers of, and the
performance by each of the Issuers of the Transactions and its respective
obligations under the Operative Documents will not contravene any provision of
applicable law or the certificate of incorporation, by-laws or other
organizational documents of any of the Issuers or, any of the Agreements or
Instruments, known to us, binding upon any of the Issuers that is material to
any of the Issuers or, to our knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over any of the Issuers,
and no consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by any of the
Issuers of the Transactions or their respective obligations under any of the
Operative Documents, which, if contravened, individually or in the aggregate,
would have a Material Adverse Effect, and except such as may be required by the
Securities Act, state securities or "Blue Sky" laws in connection with the
purchase and initial resale of the Securities by the Placement Agents, other
than as contemplated by the Registration Rights Agreement.
H. Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform each of its obligations under the
Purchase Agreement and the other Operative Documents and to consummate the
Transactions and any other transactions contemplated thereby, including, without
limitation, the power and authority to issue, sell and deliver the Securities as
contemplated by the Purchase Agreement.
I. As of the Closing Date, the Company will have the authorized,
issued and outstanding capital stock as set forth under the caption
"Capitalization" in the Final Memorandum. All of the shares of issued and
outstanding capital stock of each of the Issuers have been duly authorized and
validly issued and are fully paid and non-assessable; none of the outstanding
shares of capital stock of any of the Issuers was issued in violation of any
preemptive or, to the best of our knowledge, other similar rights of any
securityholder of any such Issuer; and except as disclosed in the Final
Memorandum, all of the outstanding shares of capital stock of each of the
Issuers are owned free and clear of all liens, encumbrances, equities and claims
or restrictions on transferability or voting (other than those imposed by the
Securities Act, the securities or "Blue Sky" laws of certain jurisdictions and
the Shareholders Agreement dated as of the Closing Date, among (i) APL Limited,
Coyote Acquisition LLC, Coyote Acquisition II LLC and the Company, (ii) certain
management shareholders, Coyote Acquisition LLC, Coyote Acquisition II LLC and
the Company and (iii) certain affiliates of certain of the Placements Agents,
Coyote Acquisition LLC, Coyote Acquisition II LLC and the Company.
J. To our best knowledge, except as described in the Final
Memorandum, there is not pending or, to the knowledge of any Issuer, threatened,
any action, suit, proceeding, inquiry or investigation to which any Issuer is a
party, or to which the property of any Issuer is subject, before or brought by
any court or governmental agency or body, which could reasonably be expected to
have a Material Adverse Effect.
K. Each of the Transactions conforms in all material respects to the
descriptions thereof in the Final Memorandum.
L. Each of the Operative Documents conforms in all material respects
to the respective statements relating thereto contained in the Final Memorandum;
the statements in the Final Memorandum under the caption "Certain United States
Federal Income Tax Considerations," insofar as such statements constitute a
summary of the United States federal tax laws referred to therein, are accurate
and fairly summarize in all material respects the United States federal tax laws
referred to therein.
M. To our best knowledge, none of the Issuers is in violation of its
charter, by-laws or other organizational document or in violation of any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over any of the Issuers or any of their respective properties or
assets or in default in the performance or observance of any Agreements and
Instruments except for such violations and defaults that would not result in a
Material Adverse Effect.
N. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by any of the
Issuers of their respective obligations under
the Purchase Agreement, in connection with the offering, issuance or sale of the
Securities, the Exchange Notes or the Private Exchange Notes (and the related
guarantees thereof), for the performance by any of the Issuers of their
respective obligations under the Operative Documents, or the consummation of the
Transactions or any other transactions contemplated thereby or for the due
execution, delivery or performance by the Issuers of the Operative Documents,
except such as may be required by the Securities Act, state securities or "Blue
Sky" laws in connection with the purchase and initial resale of the Securities
by the Placement Agents, other than as contemplated by the Registration Rights
Agreement.
O. The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Final Memorandum will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
P. It is not necessary in connection with the offer, sale and
delivery of the Securities to the Placement Agents in the manner contemplated by
the Purchase Agreement to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended.
Q. The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
R. Neither the consummation of the Transactions or any other
transactions contemplated by the Purchase Agreement nor the sale, issuance,
execution or delivery of the Securities, nor the application of the proceeds
therefrom (applied as described in the Final Memorandum under the caption "Use
of Proceeds"), will violate Regulation T (12 C.F.R. Part 220), U (12 C.F.R. Part
221) or X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve
System.
In addition, we have participated in conferences with directors and
other representatives of the Issuers, representatives of the independent
certified public accountants for the Issuers, and your representatives, at which
the contents of the Final Memorandum and related matters were discussed and,
although we are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained in the Final
Memorandum and have not made any independent check or verification thereof
(other than as expressly described in paragraphs K and L above), during the
course of such participation (relying as to materiality to the extent we have
deemed appropriate upon the statements of officers and other representatives of
the Issuers), no facts came to our attention that caused us to believe that the
Final Memorandum, as of its date or as the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; it being understood that we express no
belief with respect to the finan-
cial statements, including the notes thereto, pro forma financial statements and
other financial and statistical data included in the Final Memorandum.
EXHIBIT C
FORM OF JOINDER AGREEMENT
Reference is hereby made to the Purchase Agreement, dated May 24, 1999 (the
"Agreement"), between Coyote Acquisition LLC ("Coyote") and the Placement Agents
named therein. Unless otherwise defined herein, terms defined in the Agreement
and used herein shall have the meanings given them in the Agreement.
Each of the undersigned parties hereby unconditionally and irrevocably expressly
assumes, confirms and agrees to perform and observe as an Issuer each and any of
the covenants, agreements, terms, conditions, obligations, appointments, duties,
promises and liabilities of an Issuer under the Agreement as if it were an
original signatory thereto.
Each of the undersigned hereby agrees to promptly execute and deliver any and
all further documents and take such further action as any other undersigned
party or the Placement Agents may reasonably require to effect the purpose of
this Joinder Agreement.
This Joinder Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to conflict of law principles
thereof.
B-1
IN WITNESS WHEREOF, the undersigned have executed this Joinder Agreement this
28th day of May 1999.
PACER INTERNATIONAL, INC.
PACER LOGISTICS, INC.
CROSS CON TRANSPORT, INC.
CROSS CON TERMINALS, INC.
PACIFIC MOTOR TRANSPORT COMPANY
PACER EXPRESS, INC.
PACER INTEGRATED LOGISTICS, INC.
PLM ACQUISITION CORPORATION
INTERSTATE CONSOLIDATION SERVICE, INC.
INTERSTATE CONSOLIDATION, INC.
MANUFACTURERS CONSOLIDATION SERVICE, INC.
INTERMODAL CONTAINER SERVICE, INC.
LEVCON, INC.
MANUFACTURERS CONSOLIDATION SERVICE OF CANADA, INC.
KEYSTONE TERMINALS ACQUISITION CORP.
By: _____________________________________
Name:
Title:
PACER INTERNATIONAL RAIL SERVICES LLC
PACER INTERNATIONAL CONSULTING LLC
PACER RAIL SERVICES LLC
By: PACER LOGISTICS, INC.,
as Manager
By: _____________________________________
Name:
Title: