EXHIBIT 1
Execution Copy
JLG Industries, Inc.
$175,000,000
8 3/8% Senior Subordinated Notes Due 2012
PURCHASE AGREEMENT
June 12, 2002
First Union Securities, Inc.
Credit Suisse First Boston Corporation
J.P. Morgan Securities Inc.
Banc One Capital Markets, Inc.
BMO Nesbitt Burns Corp.
BNY Capital Markets, Inc.
Credit Lyonnais Securities (USA) Inc.
c/o First Union Securities, Inc.
First Union Center
301 South College Street, NC 0604
Charlotte, North Carolina 28288-0602
Ladies and Gentlemen:
JLG Industries, Inc., a Pennsylvania corporation (the "Company"), and
the Note Guarantors listed on the signature pages hereto (the "Note Guarantors")
confirm their agreement with First Union Securities, Inc., Credit Suisse First
Boston Corporation, J.P. Morgan Securities Inc., Banc One Capital Markets, Inc.,
BMO Nesbitt Burns Corp., BNY Capital Markets, Inc. and Credit Lyonnais
Securities (USA) Inc. (collectively, the "Initial Purchasers").
1. Notes. The Company proposes to issue and sell (the "Initial
Placement") to the Initial Purchasers $175,000,000 principal amount of its 8
3/8% Senior Subordinated Notes Due 2012 (the "Notes"), guaranteed on a senior
subordinated basis by the Note Guarantors. The Notes are to be issued under an
indenture (the "Indenture") to be dated as of the Issue Date (as defined below)
among the Company, the Note Guarantors and The Bank of New York as trustee (the
"Trustee"). This Agreement, the Registration Rights Agreement, to be dated the
Issue Date, between the Initial Purchasers and the Company (the "Registration
Rights Agreement") and the Indenture are hereinafter collectively referred to as
the "Transaction Documents" and the execution and delivery of the Transaction
Documents and the transactions contemplated herein and therein are hereinafter
referred to as the "Transactions".
The offer and sale of the Notes to the Initial Purchasers will be made
without registration of the Notes (and the related Note Guarantees) under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance upon
certain exemptions from the registration requirements of the
Securities Act. The Initial Purchasers have advised the Company and the Note
Guarantors that they will offer and sell the Notes purchased by them hereunder
in accordance with Section 4 hereof as soon as they deem advisable.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum, dated May 30, 2002 (the "Preliminary
Memorandum"), and a final offering memorandum, dated the date hereof (the "Final
Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum sets
forth certain information concerning the Company, the Notes, the Transaction
Documents and the Transactions. The Company hereby confirms that it has
authorized the use of the Preliminary Memorandum and the Final Memorandum, and
any amendment or supplement thereto, in connection with the offer and sale of
the Notes by the Initial Purchasers. Unless stated to the contrary, all
references herein to the Final Memorandum are to the Final Memorandum as of the
date hereof (the "Execution Date") and are not meant to include any amendment or
supplement, or any information incorporated by reference therein, subsequent to
the Execution Date.
2. Representations and Warranties of the Company and the Note
Guarantors. The Company and the Note Guarantors jointly and severally represent
and warrant to, and agree with, each of the several Initial Purchasers that:
(a) The Preliminary Memorandum, at the date thereof, did not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The Final Memorandum, at the date hereof, does not
and at the Closing Date (as defined in Section 3 hereof) will not (and any
amendment or supplement thereto, at the date thereof and at the Closing Date,
will not), contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the Preliminary Memorandum or the Final Memorandum
(or any amendment or supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any Initial
Purchaser through the Initial Purchasers specifically for inclusion therein, as
specified in Section 12.
(b) Each of the Company and its direct and indirect subsidiaries has
been duly organized and each is validly existing under the laws of the
jurisdiction in which it is chartered or organized. Each of the Company and its
direct and indirect subsidiaries organized in the United States is in good
standing under the laws of the jurisdiction in which it is chartered or
organized and is duly qualified to do business as a foreign corporation under
the laws of each jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business, except in such
jurisdictions in which the failure to be so incorporated or organized and
validly existing or to so qualify, in the aggregate, would not have a Material
Adverse Effect. "Material Adverse Effect" shall mean a material adverse change
in or effect on the business, financial condition, material properties or
prospects, whether or not in the ordinary course of business, of the Company and
its direct and indirect subsidiaries, considered as one enterprise.
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(c) Each of the Company and its direct and indirect subsidiaries has
full power (corporate and other) to own or lease their respective properties and
conduct their respective businesses as described in the Final Memorandum; and
each of the Company and the Note Guarantors has full power (corporate and other)
to enter into the Transaction Documents and to carry out all the terms and
provisions hereof and thereof to be carried out by it.
(d) The Company has an authorized, issued and outstanding capitalization
as set forth in the Final Memorandum. All of the issued shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and nonassessable.
(e) The issued shares of capital stock of each of the Company's direct
and indirect subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and, except as otherwise set forth in the Final
Memorandum, are (i) owned of record and beneficially by the Company, either
directly or through wholly-owned subsidiaries, and (ii) except for the common
stock of Fulton Funding Corporation, are free and clear of any pledge, lien,
encumbrance, security interest, restriction on voting or transfer, preemptive
rights or other defect in title or any claim of any third party.
(f) Except for Fulton Funding Corporation, no direct or indirect
subsidiary of the Company is prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary of the
Company, except as provided by applicable laws or regulations, by the Indenture,
or as described in or contemplated by the Final Memorandum.
(g) Except for employee and director stock options or otherwise as
described in the Final Memorandum, there are no outstanding (i) securities or
obligations of the Company convertible into or exchangeable for any capital
stock of the Company, (ii) warrants, rights or options to subscribe for or
purchase from the Company any such capital stock or any such convertible or
exchangeable securities or obligations or (iii) obligations of the Company to
issue such shares, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(h) Ernst & Young LLP, who has certified certain financial statements of
the Company and delivered its reports with respect to the audited consolidated
financial statements and schedules in the Final Memorandum, is and was, to the
Company's knowledge, an independent public accountant with respect to the
Company within the meaning of the Securities Act and the applicable rules and
regulations thereunder.
(i) The consolidated financial statements (including the notes thereto)
and schedules of the Company and its consolidated subsidiaries included in the
Final Memorandum fairly present in all material respects the financial position
of the Company and its consolidated subsidiaries and the results of operations
as of the dates and for the periods specified therein; since the date of the
latest of such financial statements, there has been no change nor any
development or event involving a prospective change which has had or could
reasonably be expected to have a Material Adverse Effect; such financial
statements and schedules have been prepared in
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accordance with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise expressly noted in the
notes thereto or elsewhere in the Final Memorandum); and the summary or selected
financial information included in the Final Memorandum has been fairly extracted
from the financial statements of the Company and fairly presents in all material
respects, on the basis stated in the Final Memorandum, the information included
therein.
(j) Subsequent to the respective dates as of which information is given
in the Final Memorandum, (i) none of the Company and its direct and indirect
subsidiaries has incurred any material liability or obligation, direct or
contingent, or entered into any material transaction in each case not in the
ordinary course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock other than a $0.005 per share
dividend declared on May 23, 2002; and (iii) there has not been any material
change in the capital stock, short-term debt or long-term debt of each of the
Company and its direct and indirect subsidiaries, except in each case as
described in or contemplated by the Final Memorandum.
(k) Each of the Company and its direct and indirect subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(l) The Transaction Documents have been duly authorized by all necessary
corporate action of the Company and the Note Guarantors and, when duly executed
and delivered by the Company, the Note Guarantors and, as the case may be, by
the Trustee, will constitute legal, valid and binding obligations of the Company
and the Note Guarantors, enforceable against the Company and the Note Guarantors
in accordance with their terms, except as the enforcement thereof may be limited
to bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity.
(m) The Indenture conforms in all material respects to the requirements
of the Trust Indenture Act of 1939, as amended (the "TIA") and to the rules and
regulations of the Commission applicable to an indenture that is qualified
thereunder.
(n) The Notes have been duly authorized by all necessary corporate
action for issuance and sale pursuant to this Agreement and, when executed,
authenticated, issued and delivered in the manner provided for in the Indenture
and sold and paid for as provided in this Agreement, the Notes will constitute
legal, valid and binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in accordance with their terms
and the terms of the Indenture, except as the enforcement thereof may be limited
to bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers),
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reorganization, moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity.
(o) Assuming execution and delivery on or before the Closing Date of the
Amended and Restated Credit Agreement by and among the Company, its subsidiaries
listed therein, First Union National Bank, Bank One, Michigan, and the entities
listed on Schedule 2 therein (the "Bank Credit Facility"), and the Amended and
Restated Financing Agreement by and among the Company, its subsidiaries listed
therein, and Allfirst Bank (the "Amended and Restated Financing Agreement"), the
issuance, offering and sale of the Notes to the Initial Purchasers by the
Company pursuant to this Agreement and the compliance by the Company and the
Note Guarantors with the other provisions of the Transaction Documents herein
and therein set forth do not (i) require the consent, approval, authorization,
order, registration or qualification of, or filing with, any governmental
authority or court, or body or arbitrator having jurisdiction over the Company
or the Note Guarantors, or (ii) conflict with, result in a breach or violation
of, or constitute a default under, any indenture, mortgage, deed of trust or
loan agreement, or material agreement or material instrument to which the
Company or any of its direct or indirect subsidiaries is a party or by which the
Company or any of such subsidiaries or any of their respective properties is
bound, or with the charter or by-laws of the Company or any of such
subsidiaries, or any statute, rule or regulation or any judgment, order or
decree of any governmental authority or court or any arbitrator applicable to
the Company or any of such subsidiaries, except for any statute, rule or
regulation or any judgment, order or decree of any governmental authority or
court or any arbitrator the noncompliance with which would not result in a
Material Adverse Effect or adversely affect the consummation by the Company or
any of the Note Guarantors of the transactions contemplated hereby.
(p) No legal or governmental proceedings or, to the Company's knowledge,
investigations are pending to which the Company or any of its direct and
indirect subsidiaries is a party or to which the property of the Company or any
of such subsidiaries is subject that are not described in the Preliminary
Memorandum or the Final Memorandum, and, to the Company's knowledge, no
governmental proceedings or investigations have been threatened against the
Company or any of such subsidiaries or with respect to any of their respective
properties, except, in each case, for such proceedings or investigations that,
if the subject of an unfavorable decision, ruling or finding, would not, singly
or in the aggregate, result in a Material Adverse Effect.
(q) Except for information required to be disclosed pursuant to Items
402 and 403 of Regulation S-K under the Securities Act, no relationship, direct
or indirect, exists between or among the Company or any of its direct or
indirect subsidiaries, on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, that would be required by the Securities Act to be described
in a prospectus were the Notes being issued and sold in a public offering, that
is not described in the Preliminary Memorandum and the Final Memorandum.
(r) None of the Company and any of the Note Guarantors is now nor after
giving effect to the issuance of the Notes and the execution, delivery and
performance of the Transaction Documents and the consummation of the
transactions contemplated thereby, will be (i) insolvent, (ii) left with
unreasonably small capital with which to engage in its anticipated businesses or
(iii)
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incurring debts or other obligations beyond its ability to pay such debts or
obligations as they become due.
(s) The Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Notes, will not
distribute any offering material in connection with the offering and sale of the
Notes other than the Preliminary Memorandum, the Final Memorandum or any
amendment or supplement thereto.
(t) Since April 30, 2002, there has been no Material Adverse Effect.
(u) Each of the Company and its direct and indirect subsidiaries has
good and marketable title in fee simple to all items of real property and
marketable title to all personal property owned by each of them, in each case
except as set forth in the Final Memorandum or the Company's filings under the
Securities Act or the Securities Exchange Act of 1934 (the "Exchange Act"), free
and clear of any pledge, lien, encumbrance, security interest or other defect or
claim of any third party, except such as do not have a Material Adverse Effect.
Any real property held by the Company or such subsidiaries are held under valid,
subsisting and enforceable leases, with such exceptions as do not have a
Material Adverse Effect.
(v) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the "Code"))
or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(c) of ERISA (other than events with
respect to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred, exists or is reasonably expected to occur with
respect to any employee benefit plan (as defined in Section 3(3) of ERISA) which
the Company or any of the Company's direct or indirect subsidiaries maintains,
contributes to or has any obligation to contribute to, or with respect to which
the Company or any of the Company's direct or indirect subsidiaries has any
liability, direct or indirect, contingent or otherwise (a "Plan") which would
have a Material Adverse Effect; each Plan is in compliance in all material
respects with applicable law, including ERISA and the Code; the Company and the
Company's direct or indirect subsidiaries have not incurred and do not expect to
incur liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any Plan; and each Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or failure to act, which could reasonably be
expected to cause the loss of such qualification. No labor dispute with the
employees of the Company or any of its direct and indirect subsidiaries exists
or is threatened or imminent which could result in a Material Adverse Effect.
(w) No proceeding looking toward merger, consolidation, liquidation or
dissolution of the Company or the sale of all or substantially all of the assets
of the Company or its subsidiaries is pending or contemplated.
(x) Each of the Company and its direct and indirect subsidiaries owns or
otherwise possesses adequate rights to use all material patents, trademarks,
service marks, trade names and copyrights, all applications and registrations
for each of the foregoing, and all other material
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proprietary rights and confidential information necessary to conduct their
respective businesses as currently conducted; and none of the Company and any of
its direct or indirect subsidiaries has received any notice, or is otherwise
aware, of any infringement of or conflict with the rights of any third party
with respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(y) Each of the Company and its direct and indirect subsidiaries is
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts and with such deductibles as are prudent in the
businesses in which they are engaged, except where the failure to have such
would not have a Material Adverse Effect; and none of the Company and any such
subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.
(z) Each of the Company and its direct and indirect subsidiaries
possesses all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, except where the failure to have such would not have a
Material Adverse Effect, and none of the Company and any such subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(aa) Environmental Matters:
(i) Each of the Company and its direct and indirect
subsidiaries is and has been in compliance with all applicable laws,
statutes, ordinances, rules, regulations, orders, judgments, decisions,
decrees, standards, and requirements ("Legal Requirements") relating to:
human health and safety; pollution; management, disposal or release of
any chemical substance, product or waste; and protection, cleanup,
remediation or corrective action relating to the environment or natural
resources ("Environmental Law");
(ii) Each of the Company and its direct and indirect
subsidiaries has obtained and is in compliance with the conditions of
all permits, authorizations, licenses, approvals, and variances
necessary under any Environmental Law for the continued conduct in the
manner now conducted of the business of each of the Company and any such
subsidiary ("Environmental Permits");
(iii) There are no past or present conditions or
circumstances, including but not limited to pending changes in any
Environmental Law or Environmental Permits, that are likely to interfere
with the conduct of the business of each of the Company and its direct
and indirect subsidiaries in the manner now conducted or which would
interfere with compliance with any Environmental Law or Environmental
Permits; and
(iv) There are no past or present conditions or
circumstances at, or arising out of, the business, assets and properties
of each of the Company and its direct and
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indirect subsidiaries or any businesses, assets or properties formerly
leased, operated or owned by each of the Company and any such
subsidiary, including but not limited to on- site or off-site disposal
or release of any chemical substance, product or waste, which may give
rise to: (i) liabilities or obligations for any cleanup, remediation or
corrective action under any Environmental Law; (ii) claims arising under
any Environmental Law for personal injury, property damage, or damage to
natural resources; (iii) liabilities or obligations incurred by the
Company and any such subsidiary to comply with any Environmental Law; or
(iv) fines or penalties arising under any Environmental Law;
except in each case for any noncompliance or conditions or circumstances that,
singly or in the aggregate, would not result in a Material Adverse Effect.
(bb) No default exists, and no event has occurred that, with notice or
lapse of time or both, would constitute a default in the due performance and
observation of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which each of the Company
and any of its direct and indirect subsidiaries is a party or by which the
Company and any such subsidiary, or any of their respective properties, is bound
which would have or which, after notice or lapse of time or both, would have a
Material Adverse Effect.
(cc) Each of the Company and its direct and indirect subsidiaries has
filed all foreign, federal, state and local tax returns that are required to be
filed or have requested extensions thereof and have paid all taxes required to
be paid by them and any other assessment, fine or penalty levied against them,
to the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith and
for which the Company retains adequate reserves and except in each case for any
noncompliance that, singly or in the aggregate, would not result in a Material
Adverse Effect.
(dd) The Company is not an "investment company", and is not a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act"), without taking
account of any exemption arising out of the number of holders of the securities
of the Company.
(ee) None of the Company, any of its Affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act ("Regulation D")), and any
person acting on its or their behalf (other than the Initial Purchasers and
their agents, as to which the Company makes no representation or warranty) has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of the Notes under the Securities Act.
(ff) None of the Company, any of its Affiliates, and any person acting
on its or their behalf (other than the Initial Purchasers and their agents, as
to which the Company makes no representation or warranty) has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Notes in the United
States.
(gg) None of the Company, any of its Affiliates, and any person acting
on its or their
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behalf (other than the Initial Purchasers and their agents, as to which the
Company makes no representation or warranty) has engaged in any directed selling
efforts with respect to the Notes, and each of them has complied with the
offering restrictions requirement of Regulation S under the Securities Act
("Regulation S"). Terms used in this paragraph have the meanings given to them
by Regulation S.
(hh) None of the Company and any of its Affiliates has taken, directly
or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Notes; nor has the Company or any of its
Affiliates paid or agreed to pay to any person any compensation for soliciting
another to purchase any securities of the Company (except as contemplated by
this Agreement).
(ii) The Notes satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act.
(jj) Assuming the accuracy of the representations and warranties of the
Initial Purchasers in Section 4 hereof and compliance by the Initial Purchasers
with the procedures set forth in Section 4 hereof, it is not necessary in
connection with the offer, sale and delivery of the Notes to the Initial
Purchasers in the manner contemplated by this Agreement, the Preliminary
Memorandum and the Final Memorandum to register any of the Notes or the related
Note Guarantees under the Securities Act or to qualify the Indenture under the
Trust Indenture Act.
Each certificate signed by any officer of the Company or the Note Guarantors and
delivered to the Initial Purchasers or their counsel shall be deemed to be a
representation and warranty by the Company or the Note Guarantors, as the case
may be, to the Initial Purchasers as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Notes. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell $175,000,000 principal amount of Notes, and each of the Initial
Purchasers, severally and not jointly, agrees to purchase from the Company the
principal amount of Notes set forth opposite the name of such Initial Purchaser
in Schedule 1 hereto at a purchase price equal to 97.125% of the principal
amount thereof. One or more certificates in definitive form, as instructed by
the Initial Purchasers for the Notes that the several Initial Purchasers have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Initial Purchasers request upon notice
to the Company at least 48 hours prior to the Issue Date, shall be delivered by
or on behalf of the Company to the Initial Purchasers for the respective
accounts of the several Initial Purchasers, against payment by or on behalf of
the Initial Purchasers of the purchase price therefor by wire transfer in
same-day funds (the "Wired Funds") to the account of the Company. Such delivery
of and payment for the Notes shall be made at the offices of Covington & Burling
("Counsel for the Company"), 1330 Avenue of the Americas, New York, New York
10019 at 10:00 A.M., New York City time, on June 17, 2002, or at such other
place, time or date as the Initial Purchasers and the Company may agree upon,
such time and date of delivery against payment being herein referred to as the
"Closing Date". The Company will make such certificate or certificates for the
Notes available for checking by the Initial Purchasers at the New
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York, New York offices of Cleary, Gottlieb, Steen & Hamilton ("Counsel for the
Initial Purchasers") at least 24 hours prior to the Closing Date.
4. Offering of the Notes and the Initial Purchasers'
Representations and Warranties. Each of the Initial Purchasers, severally and
not jointly, represents and warrants to and agrees with the Company that:
(a) It is an "accredited investor" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act).
(b) It (and any person acting on its behalf) has not offered or
sold, and it (and any person acting on its behalf) will not offer or sell, any
Notes except (i) to those it reasonably believes to be qualified institutional
buyers (as defined in Rule 144A under the Securities Act) ("QIBs") in
transactions meeting the requirements of Rule 144A, or (ii) in accordance with
the restrictions set forth in Regulation S. In connection with each sale
pursuant to clause (i) above, each Initial Purchaser (and any person acting on
its behalf) has taken or will take reasonable steps to ensure that the purchaser
of such Notes is aware that such sale is being made in reliance upon Rule 144A.
(c) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Notes other than in accordance with Rule 144A or
Regulation S and therefore not by means of any form of general solicitation or
general advertising (within the meaning of Regulation D).
(d) At or prior to the confirmation of any sale of any Notes sold in
reliance on Regulation S, it (and any person acting on its behalf) will have
sent to each distributor, dealer or other person receiving a selling concession,
fee or other remuneration that purchases Notes from it during the restricted
period (as defined in Regulation S) a confirmation or notice substantially to
the following effect:
"The Notes covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered or 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 of the Notes
and June 17, 2002, except in either case in accordance with Regulation S or Rule
144A under the Securities Act. Terms used above have the meanings given to them
by Regulation S."
(e) (i) It has not offered or sold and, prior to the expiration of a
period of six months from the closing of the offering of the Notes, will not
offer or sell any Notes 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 Regulation 1995; (ii) it has only communicated or caused to
be communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
section 21 of the Financial Services and Markets Act 2000 (the "FMSA")) received
by it in connection with the issue or sale of any Notes in circumstances in
which section 21(1) of
10
the FSMA does not apply to the Company; and (iii) it has complied and will
comply with all applicable provisions of the FSMA with respect to anything done
by it in relation to the Notes in, from or otherwise involving the United
Kingdom.
5. Covenants of the Company. The Company covenants and agrees with
each of the Initial Purchasers that:
(a) The Company will furnish to the Initial Purchasers and to
Counsel for the Initial Purchasers as soon as reasonably possible, without
charge, during the period referred to in paragraph (c) below, as many copies of
the Final Memorandum and any amendments and supplements thereto as they
reasonably may request. The Company will pay the expenses of printing or other
production of all documents relating to the offering of the Notes and will
reimburse the Initial Purchasers for payment of the required PORTAL (as defined
below) filing fee.
(b) The Company will not amend or supplement the Final Memorandum
prior to the completion of the distribution of the Notes by the Initial
Purchasers without the prior written consent of First Union Securities, Inc. and
Credit Suisse First Boston Corporation.
(c) At any time prior to the completion of the distribution of the
Notes by the Initial Purchasers, if any event occurs as a result of which the
Final Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or if it should be necessary to amend or supplement the
Final Memorandum to comply with applicable law, the Company will promptly (i)
notify the Initial Purchasers of the same; (ii) subject to the requirements of
paragraph (b) of this Section 5, prepare and provide to the Initial Purchasers
pursuant to paragraph (a) of this Section 5, an amendment or supplement that
will correct such statement or omission or effect such compliance; and (iii)
supply any supplemented or amended Final Memorandum to the several Initial
Purchasers and Counsel for the Initial Purchasers without charge in such
quantities as may be reasonably requested.
(d) The Company will (i) qualify the Notes and the related Note
Guarantees for sale by the Initial Purchasers under the laws of such
jurisdictions as the Initial Purchasers may designate and (ii) will maintain
such qualifications for so long as required for the sale of the Notes by the
Initial Purchasers; provided, that the Company will not be required to qualify
to do business in any jurisdiction in which it is not then so qualified, to file
any general consent to service of process or to take any other action which
would subject it to general service of process or to taxation in any such
jurisdiction where it is not then so subject. The Company will promptly advise
the Initial Purchasers of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(e) At any time prior to the completion of the distribution of the
Notes by the Initial Purchasers, the Company, whenever it or any of its
subsidiaries publishes or makes available to the public (by filing with any
regulatory authority or securities exchange or by publishing a press release or
otherwise) any information that would reasonably be expected to be material in
the
11
context of the issuance of the Notes under this Agreement, shall promptly notify
the Initial Purchasers as to the nature of such information or event. The
Company will likewise notify the Initial Purchasers of (i) any decrease in the
rating of the Notes or any other debt securities of the Company by any
nationally recognized statistical rating organization (as defined in Rule
436(g)(2) under the Securities Act) or (ii) any notice or public announcement
given of any intended or potential decrease in any such rating or that any such
securities rating agency has under surveillance or review, with possible
negative implications, its rating of the Notes, as soon as the Company becomes
aware of any such decrease, notice or public announcement. The Company will also
deliver to the Initial Purchasers, as soon as available and without request,
copies of its yearly and quarterly filings under the Exchange Act.
(f) The Company will not, and will not permit any of its Affiliates
to, resell any of the Notes that have been acquired by any of them, other than
pursuant to an effective registration statement under the Securities Act or in
accordance with Rule 144 under the Securities Act.
(g) Except as contemplated in the Registration Rights Agreement,
none of the Company or any of its Affiliates, nor any person acting on its or
their behalf (other than the Initial Purchasers or any of their respective
Affiliates, as to whom the Company makes no covenant) will, directly or
indirectly, make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of the Notes
under the Securities Act.
(h) None of the Company or any of its Affiliates, nor any person
acting on its or their behalf (other than the Initial Purchasers or any of their
respective Affiliates, as to whom the Company makes no covenant) will engage in
any form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Notes.
(i) So long as any of the Notes are "restricted securities" within
the meaning of Rule 144(a)(3) under the Securities Act, at any time that the
Company is not then subject to Section 13 or 15(d) of the Exchange Act, the
Company will provide at its expense to each holder of the Notes and to each
prospective purchaser (as designated by such holder) of the Notes, upon the
request of such holder or prospective purchaser, any information required to be
provided by Rule 144A(d)(4) under the Securities Act. (This covenant is intended
to be for the benefit of the holders, and the prospective purchasers designated
by such holders from time to time, of the Notes.)
(j) The Company will use its best efforts to cause the Notes to be
designated Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") market securities in accordance with the rules and regulations
adopted by the National Association of Notes Dealers, Inc. relating to trading
in PORTAL and to be eligible for clearance and settlement through DTC.
(k) The Company will apply the net proceeds from the sale of the
Notes as set forth under "Use of Proceeds" in the Final Memorandum.
(l) Until completion of the distribution, neither the Company nor
any of its Affiliates will take, directly or indirectly, any action designed to
cause or result in, or which has constituted
12
or which might reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Notes.
(m) For so long as any Notes are outstanding, each of the Company
and its subsidiaries will conduct its operations in a manner that will not
subject the Company or any such subsidiary to registration as an investment
company under the Investment Company Act.
(n) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf (other than the Initial Purchasers or their
agents, as to which the Company makes no covenant) will engage in any directed
selling efforts with respect to the Notes, and each of them will comply with the
offering restrictions requirement of Regulation S. Terms used in this paragraph
have the meanings given them by Regulation S.
(o) Each Note will bear a legend substantially to the following
effect until such legend shall no longer be necessary or advisable because the
Notes are no longer subject to the restrictions on transfer described therein:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER, OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF, THE SECURITIES ACT, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION AND IN ACCORDANCE WITH THE TRANSFER RESTRICTIONS
CONTAINED IN THE INDENTURE UNDER WHICH THIS NOTE WAS ISSUED.
6. Expenses. The Company will pay all costs and expenses incident
to the performance of the obligations of the Company under this Agreement,
whether or not the transactions contemplated herein are consummated or this
Agreement is terminated pursuant to Section 10 hereof, including all costs and
expenses incident to (i) the printing or other production of documents with
respect to the transactions, including any costs of printing the Preliminary
Memorandum and Final Memorandum and any amendment or supplement thereto, this
Agreement and any blue sky memoranda; (ii) all arrangements relating to the
delivery to the Initial Purchasers of copies of the foregoing documents; (iii)
the fees and disbursements of the counsel, the accountants, the Trustee and any
other experts or advisors retained by the Company; (iv) preparation, issuance
and delivery to the Initial Purchasers of any certificates evidencing the Notes;
(v) the qualification of the Notes under state securities and blue sky laws, and
the maintenance of such qualifications, including filing fees and fees and
disbursements of counsel for the Initial Purchasers relating thereto; (vi) the
fees and expenses, if any, incurred in connection with the admission of the
Notes for trading in the PORTAL market; and (vii) the fees of any agency that
rates the Notes. If the sale of the Notes provided for herein is not consummated
because any condition to the obligations of the Initial Purchasers set forth in
Section 7 hereof is not satisfied, because this Agreement is terminated pursuant
to Section 10 hereof or because of any failure, refusal or inability on the part
of the Company to perform all obligations and satisfy all conditions on its part
to be performed or satisfied hereunder other than by reason of a default by any
of the Initial Purchasers, the Company will reimburse the Initial Purchasers
upon demand for all reasonable out-of-pocket expenses (including counsel fees
and
13
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Notes. The Company shall not in any event be
liable to any of the Initial Purchasers for the loss of anticipated profits from
the transactions covered by this Agreement.
7. Conditions to the Initial Purchasers' Obligations. The
obligations of the several Initial Purchasers to purchase and pay for the Notes
shall be subject to the accuracy of the representations and warranties of the
Company in Section 2 hereof, in each case as of the Execution Date and as of the
Closing Date, as if made on and as of the Closing Date, to the accuracy of the
statements of the Company's officers made pursuant to the provisions hereof, to
the performance by the Company of its covenants and agreements hereunder and to
the following additional conditions:
(a) The Initial Purchasers shall have received opinions, dated the
Closing Date, of Thomas D. Singer, Senior Vice President and General Counsel of
the Company and Covington & Burling, outside counsel for the Company, in form
and substance satisfactory to the Initial Purchasers, to the effect set forth in
Exhibit A hereto.
(b) The Initial Purchasers shall have received an opinion, dated the
Closing Date, of Counsel for the Initial Purchasers, with respect to the
issuance and sale of the Notes and such other related matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to such
counsel such documents as it may reasonably request for the purpose of enabling
it to pass upon such matters. In rendering such opinion, such counsel may rely
as to certain matters of law upon the opinion of Covington & Burling referred to
in paragraph (a) above.
(c) The Initial Purchasers shall have received a "comfort letter"
from Ernst & Young LLP, the independent public accountant for the Company, dated
as of the date hereof, addressed to the Initial Purchasers and in form and
substance satisfactory to the Initial Purchasers and Counsel for the Initial
Purchasers. In addition, the Initial Purchasers shall have received a
"bring-down comfort letter" from Ernst & Young LLP, dated as of the Closing
Date, addressed to the Initial Purchasers and in form and substance satisfactory
to the Initial Purchasers and Counsel for the Initial Purchasers. References to
the Final Memorandum in this paragraph (c) with respect to either letter
referred to above shall include any amendment or supplement thereto at the date
of such letter.
(d) The Bank Credit Facility, with terms substantially the same as
those described in the Preliminary Memorandum and the Final Memorandum, shall
have been executed and delivered by the parties thereto, and the closing
conditions to the initial borrowings thereunder shall have been satisfied. The
Initial Purchasers have received copies of the executed Bank Credit Facility.
(e) The Initial Purchasers shall have received a certificate, dated
the Closing Date, of the Chief Executive Officer and the Chief Financial Officer
of the Company to the effect that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the Closing
Date; the Final Memorandum, as amended or supplemented as of the Closing
Date, does not include any untrue statement
14
of a material fact or omit to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; and the Company has performed all
covenants and agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Date; and
(ii) neither the Company nor any of its subsidiaries has
sustained any loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding that is material to the Company and its
subsidiaries, and there has not been any Material Adverse Effect, except
in each case as described in or contemplated by the Final Memorandum
(exclusive of any amendment or supplement thereto).
(f) The Notes shall have received initial ratings of not less than
BB+ by Standard & Poor's and Ba2 by Moody's, and, subsequent to the Execution
Date, there shall not have been any decrease in the rating of the Notes by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g)(2) under the Securities Act) or any notice or public announcement
given of any intended or potential decrease in any such rating or that any such
securities rating agency has under surveillance or review, with possible
negative implications, its rating of the Notes.
(g) On or before the Closing Date, the Initial Purchasers and
Counsel for the Initial Purchasers shall have received such further
certificates, documents or other information as they may have reasonably
requested from the Company.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Initial Purchasers and
Counsel for the Initial Purchasers. The Company shall furnish to the Initial
Purchasers such conformed copies of such opinions, certificates, letters and
documents in such quantities as the Initial Purchasers and Counsel for the
Initial Purchasers shall reasonably request.
8. Indemnification and Contribution. The Company and the Note
Guarantors, jointly and severally, agree to indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) any Initial
Purchaser against any losses, claims, damages or liabilities, joint or several,
to which such Initial Purchaser or such controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Preliminary Memorandum or the Final Memorandum or any amendment
or supplement thereto; or (ii) the omission or alleged omission to state in the
Preliminary Memorandum or the Final Memorandum or any amendment or supplement
thereto, a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse, as incurred, each Initial
Purchaser and each such controlling person for any legal or other expenses
reasonably incurred by such Initial Purchaser or such controlling person in
connection with investigating, defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or
15
action; provided, that the Company and the Note Guarantors will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Memorandum, the Final
Memorandum or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company and the Note
Guarantors by such Initial Purchaser specifically for use therein as set forth
in Section 12 hereof. The Company and the Note Guarantors will not, without the
prior written consent of each Initial Purchaser, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Initial Purchaser or any person who controls any such Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) unless such
settlement, compromise or consent includes an unconditional release of all of
the Initial Purchasers and such controlling persons from all liability arising
out of such claim, action, suit or proceeding.
(b) Each Initial Purchaser, severally and not jointly, will
indemnify and hold harmless the Company and the Note Guarantors, their
respective directors, officers, and each person, if any, who controls any of the
Company and the Note Guarantors within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities to which the Company, the Note Guarantors, any such
directors or officers of the Company and the Note Guarantors or any such
controlling person of the Company and the Note Guarantors may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Preliminary Memorandum or the Final Memorandum or any amendment
or supplement thereto, or (ii) the omission or the alleged omission to state
therein a material fact required to be stated in the Preliminary Memorandum or
the Final Memorandum or any amendment or supplement thereto, necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company or the Note Guarantors by or on behalf of
such Initial Purchaser specifically for use therein as set forth in Section 12
hereof, subject to the limitation set forth immediately preceding this clause,
will reimburse as incurred, any legal or other expenses reasonably incurred by
the Company or the Note Guarantors or any such directors or officers or such
controlling person in connection with investigating, defending against or
appearing as a third party witness in connection with, any such loss, claim,
damage, liability or action in respect thereof.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 8, notify such indemnifying party of the commencement
thereof; but the failure so to notify such indemnifying party will not relieve
such indemnifying party from any liability which it may have to such indemnified
party otherwise than under this Section 8. In case any such action is brought
against any indemnified party, and such indemnified party notifies the relevant
indemnifying party of the commencement thereof, such indemnifying party will be
entitled to participate therein and, to the extent that it may wish, to assume
the defense thereof, jointly with any other indemnifying party similarly
notified, with counsel satisfactory to such indemnified party; provided, that if
the defendants in
16
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded, based on advice of
outside counsel, that there may be one or more legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from an indemnifying party to an indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, such indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) such
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence or (ii) such indemnifying party does not
promptly retain counsel satisfactory to such indemnified party or (iii) such
indemnifying party has authorized the employment of counsel for such indemnified
party at the expense of the indemnifying party. After such notice from an
indemnifying party to an indemnified party, such indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by
such indemnified party without the consent of such indemnifying party.
(d) In circumstances in which the indemnity agreement provided for
in the preceding paragraphs of this Section 8 is unavailable or insufficient,
for any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) ("Losses"), the
Company and the Note Guarantors, on the one hand, and the Initial Purchasers, on
the other, in order to provide for just and equitable contribution, agree to
contribute to the amount paid or payable by such indemnified party as a result
of such Losses to which the Company and the Note Guarantors, on the one hand,
and the Initial Purchasers, on the other, may be subject, in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Note Guarantors, on the one hand, and the Initial Purchasers, on the other, from
the offering of the Notes or (ii) if the allocation provided by the foregoing
clause (i) is unavailable for any reason, not only such relative benefits but
also the relative fault of the Company and the Note Guarantors, on the one hand,
and the Initial Purchasers, on the other, in connection with the statements or
omissions or alleged statements or omissions that resulted in such Losses. The
relative benefits received by the Company and the Note Guarantors on the one
hand and the Initial Purchasers on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (before deducting expenses)
received by the Company and the Note Guarantors bear to the total underwriting
discounts and commissions received by the Initial Purchasers from the Company in
connection with the purchase of the Notes hereunder. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Note Guarantors or the Initial Purchasers, the parties' intent,
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations appropriate
in the circumstances. The Company, the Note Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation that does
not take into account the equitable considerations referred to above.
17
Notwithstanding any other provision of this paragraph (d), no Initial Purchaser
shall be obligated to make contributions hereunder that in the aggregate exceed
the total underwriting discounts and commissions received by such Initial
Purchaser from the Company in connection with the purchase of the Notes
hereunder, and 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 Initial Purchasers' obligations to contribute hereunder
are several in proportion to their respective obligations to purchase Notes as
set forth in Schedule 1 hereto and not joint. For purposes of this paragraph
(d), each person, if any, who controls an Initial Purchaser within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Initial Purchaser, and each director or
officer of the Company or any Note Guarantor and each person, if any, who
controls the Company or any Note Guarantor within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, shall have the same rights
to contribution as the Company and the Note Guarantors.
(e) The obligations of the Company and the Note Guarantors under
this Section 8 shall be in addition to any liability which the Company and the
Note Guarantors may otherwise have and the obligations of the Initial Purchasers
under this Section 8 shall be in addition to any liability which the respective
Initial Purchasers may otherwise have.
9. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company and the
Note Guarantors, their respective officers, and the several Initial Purchasers
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement shall remain in full force and effect, regardless of
(i) any investigation made by or on behalf of the Company, the Note Guarantors,
any of their respective officers, directors or subsidiaries or any controlling
person referred to in Section 8 hereof or any Initial Purchaser and (ii)
delivery of and payment for the Notes. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
10. Termination. (a) This Agreement may be terminated with respect
to the Notes in the sole discretion of the Initial Purchasers by notice to the
Company given prior to the Closing Date in the event that the Company shall have
failed, refused or been unable to perform in any material respect all
obligations and satisfy in any material respect all conditions on its part to be
performed or satisfied hereunder at or prior thereto or if, at or prior to the
Closing Date (i) trading in the Company's common stock shall have been suspended
by the Commission or trading in securities generally on the New York Stock
Exchange shall have been suspended or minimum or maximum prices shall have been
established on any such exchange; (ii) a banking moratorium shall have been
declared by New York, Pennsylvania or United States authorities or there has
been a material disruption in securities clearance services in the United
States; or (iii) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an outbreak or
escalation of any other insurrection or armed conflict involving the United
States or (C) any other calamity or crisis or material adverse change in general
economic, political or financial conditions which has an effect on the U.S.
financial markets that, in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offer, sale and delivery of the
Notes as contemplated by the Final
18
Memorandum, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 10 shall
be without liability of any party to any other party except as provided in
Sections 6 and 8 hereof.
11. Defaulting Initial Purchasers. If, on the Closing Date, any
Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchasers shall be obligated to purchase
the Notes that such defaulting Initial Purchaser or Initial Purchasers agreed
but failed to purchase on the Closing Date (the "Remaining Notes") in the
respective proportions that the principal amount of the Notes set opposite the
name of each non-defaulting Initial Purchaser in Schedule 1 hereto bears to the
total number of the Notes set opposite the names of all the non-defaulting
Initial Purchasers in Schedule 1 hereto; provided, however, that the
non-defaulting Initial Purchasers shall not be obligated to purchase any of the
Notes on the Closing Date if the total amount of Notes which the defaulting
Initial Purchaser or Initial Purchasers agreed but failed to purchase on such
date exceeds 10% of the total amount of Notes to be purchased on the Closing
Date, and no non-defaulting Initial Purchaser shall be obligated to purchase
more than 110% of the amount of Notes that it agreed to purchase on the Closing
Date pursuant to this Agreement. If the foregoing maximums are exceeded, the
non- defaulting Initial Purchasers, or those other purchasers satisfactory to
the Initial Purchasers who so agree, shall have the right, but not the
obligation, to purchase, in such proportion as may be agreed upon among them,
all the Remaining Notes. If the non-defaulting Initial Purchasers or other
Initial Purchasers satisfactory to the Initial Purchasers do not elect to
purchase the Remaining Notes, this Agreement shall terminate without liability
on the part of any non- defaulting Initial Purchaser or the Company, except that
the Company will continue to be liable for the payment of expenses to the extent
set forth herein.
Nothing contained in this Agreement shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company for damages caused by its
default. If other purchasers are obligated or agree to purchase the Notes of a
defaulting or withdrawing Initial Purchaser, the Company may postpone the
Closing Date for up to five full business days in order to effect any changes in
the Transaction Documents or in any other document or arrangement that, in the
opinion of counsel for the Company or Counsel for the Initial Purchasers, may be
necessary.
12. Information Supplied by Initial Purchasers. The statements set
forth under the headings "Plan of Distribution" and "Notice to Canadian
Investors - Certain Relationships and Transactions" in the Preliminary
Memorandum and the Final Memorandum and each of the sentences in the second full
paragraph under the heading "Risk Factors - An active trading market may not
develop for the Notes, and you may not be able to resell the Notes." in the
Preliminary Memorandum and the Final Memorandum, to the extent such statements
relate to the Initial Purchasers, constitute the only information furnished by
any Initial Purchaser to the Company for the purposes of Sections 2(a) and 8
hereof.
13. Notices. All communications hereunder shall be in writing and,
if sent to any of the Initial Purchasers, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to First Union
Securities, Inc., One First Union Center, 301 South College Street, NC 0604,
Charlotte, North Carolina 28288-0604, Attention: High Yield Origination, with a
copy to Cleary, Gottlieb, Steen & Hamilton, One Liberty Plaza, New York, New
York 10006,
19
Attention: Allan Sperling, Esq. and if sent to the Company, shall be delivered
or sent by mail, telex or facsimile transmission and confirmed in writing to the
Company at JLG Industries, Inc., 1 JLG Drive, McConnellsburg, Pennsylvania
17233-9533, Attention: General Counsel, with a copy to Covington & Burling, 1201
Pennsylvania Avenue, NW, Washington, DC 20004-2401, Attention: W. Andrew Jack,
Esq.
14. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Initial Purchasers, the Company and the Note
Guarantors and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement, or any provisions herein contained, this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the several Initial Purchasers, the
Company and the Note Guarantors and their respective successors and legal
representatives, and for the benefit of no other person, except that (i) the
indemnities of the Company and the Note Guarantors contained in Section 8 of
this Agreement shall also be for the benefit of any person or persons who
control any Initial Purchaser within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act and (ii) the indemnities of the Initial
Purchasers contained in Section 8 of this Agreement shall also be for the
benefit of the directors of the Company, the Note Guarantors, the respective
officers and any person or persons who control the Company or the Note
Guarantors within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act. No purchaser of Notes from any Initial Purchaser shall be
deemed a successor to such Initial Purchaser because of such purchase.
15. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York.
16. Consent to Jurisdiction and Service of Process.
(a) All judicial proceedings arising out of or relating to this
Agreement may be brought in any state or federal court of competent jurisdiction
in the State of New York, which jurisdiction is non-exclusive.
(b) Each party agrees that any service of process or other legal
summons in connection with any Proceeding may be served on it by mailing a copy
thereof by registered mail, or a form of mail substantially equivalent thereto,
postage prepaid, addressed to the served party at its address as provided for in
Section 12 hereof. Nothing in this Section shall affect the right of the parties
to serve process in any other manner permitted by law.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company, the Note
Guarantors and each of the several Initial Purchasers.
Very truly yours,
JLG INDUSTRIES, INC.
By: /s/ James H. Woodward, Jr.
------------------------------------
Name: James H. Woodward, Jr.
Title: Executive Vice President and
Chief Financial Officer
ACCESS FINANCIAL SOLUTIONS, INC.
By: /s/ James H. Woodward, Jr.
------------------------------------
Name: James H. Woodward, Jr.
Title: President
FULTON INTERNATIONAL, INC.
By: /s/ James H. Woodward, Jr.
------------------------------------
Name: James H. Woodward, Jr.
Title: President
JLG EQUIPMENT SERVICES, INC.
By: /s/ James H. Woodward, Jr.
------------------------------------
Name: James H. Woodward, Jr.
Title: Secretary and Treasurer
JLG MANUFACTURING, LLC
By: /s/ James H. Woodward, Jr.
------------------------------------
Name: James H. Woodward, Jr.
Title: Executive Vice President and
Chief Financial Officer
21
GRADALL INDUSTRIES, INC.
By: /s/ James H. Woodward, Jr.
------------------------------------
Name: James H. Woodward, Jr.
Title: Vice President
THE GRADALL COMPANY
By: /s/ James H. Woodward, Jr.
------------------------------------
Name: James H. Woodward, Jr.
Title: Vice President
THE GRADALL ORVILLE COMPANY
By: /s/ James H. Woodward, Jr.
------------------------------------
Name: James H. Woodward, Jr.
Title: Vice President
22
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
FIRST UNION SECURITIES, INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
J.P. MORGAN SECURITIES INC.
BANC ONE CAPITAL MARKETS, INC.
BMO NESBITT BURNS CORP.
BNY CAPITAL MARKETS, INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
By FIRST UNION SECURITIES, INC. and
CREDIT SUISSE FIRST BOSTON CORPORATION
Each for itself and on behalf of the other Initial Purchasers
FIRST UNION SECURITIES, INC.
By: /s/ Lewis S. Morris III
------------------------------------
Name: Lewis S. Morris III
Title: Vice President
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Colleen A. Burke
------------------------------------
Name: Colleen A. Burke
Title: Managing Director
23
Exhibit A
FORM OF COVINGTON & BURLING/ THOMAS D. SINGER OPINION
[To be allocated between Covington & Burling and Thomas D. Singer, General
Counsel of the Company, as reasonably acceptable to Counsel for the
Initial Purchasers]
1. The Company and each Note Guarantor has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of
the jurisdiction in which it is chartered or
organized.
2. The Company and each Note Guarantor is duly
qualified to do business as a foreign
corporation and is in good standing under the
laws of each jurisdiction which requires such
qualification wherein it owns or leases material
properties or conducts material business, except
in such jurisdictions in which the failure to be
in such good standing or to so qualify, in the
aggregate, would not have a Material Adverse
Effect.
3. The Company and each Note Guarantor has full
corporate power to own or lease its properties
and conduct its businesses as described in the
Final Memorandum, to enter into the Transaction
Documents and to carry out their obligations
thereunder.
4. To our knowledge, (a) there is no action, suit
or proceeding before any court or administrative
body pending or threatened against or affecting
the Company (i) asserting the invalidity of the
Transaction Documents or the Notes; (ii) seeking
to prevent the consummation of the transactions
contemplated by the Transaction Documents; or
(iii) that would be likely to impair materially
the ability of the Company to perform its
obligations under the Transaction Documents; and
(b) there is no action, suit or proceeding
before any court or administrative body pending
or threatened against or affecting the Company
that would be required to be described in a
prospectus filed pursuant to the Securities Act
of 1933, as amended (the "Securities Act") that
is not described in the Final Memorandum.
5. The issued shares of capital stock of each of
the Note Guarantors have been duly authorized
and validly issued, are fully paid and
nonassessable and are owned of record and
beneficially by the Company, either directly or
through wholly owned subsidiaries.
6. The Purchase Agreement has been duly authorized,
executed and delivered by the Company and each
Note
Ex. A
Guarantor.
7. The Indenture and the Registration Rights
Agreement have been duly authorized, executed
and delivered by the Company and the Note
Guarantors and (in the case of the Indenture,
assuming the due authorization, execution and
delivery thereof by the Trustee) constitute
legal, valid and binding obligations of the
Company and the Note Guarantors, enforceable
against them in accordance with their terms.
8. The Notes are in the form contemplated by the
Indenture, have been duly authorized by all
necessary corporate action for issuance and sale
pursuant to the Purchase Agreement and, assuming
authentication by the Trustee, constitute legal,
valid and binding obligations of the Company
entitled to the benefits of the Indenture and
enforceable against the Company in accordance
with their terms and the terms of the Indenture.
9. The statements in the Final Memorandum under the
captions "Description of Notes," "Exchange
Offer; Registration Rights" and "Certain United
States Federal Tax Considerations", insofar as
such statements constitute summaries of legal
matters or documents, fairly summarize the
matters referred to therein.
10. In reliance on the representations, warranties
and covenants of the Company and the Initial
Purchasers in the Purchase Agreement and
assuming the compliance by all parties with the
offering procedures set forth in the Purchase
Agreement, the offer and sale of the Notes by
the Company to the Initial Purchasers is exempt
from the registration requirements of the
Securities Act and it is not necessary to
qualify the Indenture under the Trust Indenture
Act.
11. The issuance, offering and sale of the Notes to
the Initial Purchasers by the Company pursuant
to the Purchase Agreement and the compliance by
the Company and the Note Guarantors with the
Transaction Documents do not require the
consent, approval, authorization, order,
registration or qualification of, or filing
with, any governmental authority or court, or
body or arbitrator having jurisdiction over the
Company or any Note Guarantor, excluding state
securities laws.
12. The issuance, offering and sale of the Notes to
the Initial
Ex. A - 2
Purchasers by the Company pursuant to the
Purchase Agreement and the compliance by the
Company and the Note Guarantors with the
Transaction Documents do not conflict with,
result in a breach or violation of, or
constitute a default under, (a) any agreement to
which the Company or any Note Guarantor is bound
that has been filed as an exhibit to the
Company's annual report on Form 10-K for the
year ended July 31, 2001, excluding the
predecessors to the Bank Credit Facility and the
Amended and Restated Financing Agreement, or any
filings made by the Company under the Exchange
Act since that date; (b) the Purchase and Sale
Agreement dated as of April 26, 2002 between
Access Financial Solutions, Inc. and Wells Fargo
Equipment Finance, Inc.; (c) the Bank Credit
Facility and the Amended and Restated Financing
Agreement; (d) the charter or by-laws of the
Company or any Note Guarantor; or (e) any
statute, rule or regulation or any judgment,
order or decree of any governmental authority or
court or any arbitrator applicable to the
Company or any of the Note Guarantors.
13. The Company is not an "investment company", and
is not a company "controlled" by an "investment
company", within the meaning of the Investment
Company Act, without taking account of any
exemption arising out of the number of holders
of the securities of the Company.
In addition Covington & Burling shall include in its opinion or a separate
letter the following language:
In our capacity as counsel to the Company, we have examined a
copy of the Final Memorandum. We have also reviewed and participated in
discussions concerning the preparation of the Final Memorandum with
certain officers and employees of the Company, with its auditors and
with representatives of and counsel to the Initial Purchasers. The
limitations inherent in the independent verification of factual matters
and in the role of outside counsel are such, however, that we cannot and
do not assume any responsibility for the accuracy, completeness or
fairness of any of the statements made in the Final Memorandum, except
as set forth in paragraphs 4(b) and 9 of our opinion addressed to you,
dated the date hereof.
Subject to the limitations set forth in the immediately
preceding paragraph, we advise you that, on the basis of the information
we gained in the course of performing the services referred to above, no
facts came to our attention which gave us reason to believe that the
Final Memorandum (other than the financial statements and schedules and
other financial data included or incorporated by reference therein or
omitted therefrom, as to which we have not been requested to express a
view), as of its date or the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a
Ex. A - 3
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Ex. A - 4
SCHEDULE 1
INITIAL PURCHASERS
Aggregate Principal
Amount of Notes to be
Initial Purchasers Purchased from the Company
- ------------------ --------------------------
First Union Securities, Inc. $70,000,000
Credit Suisse First Boston Corporation $70,000,000
J.P. Morgan Securities Inc. $17,500,000
Banc One Capital Markets, Inc. $4,375,000
BMO Nesbitt Burns Corp. $4,375,000
BNY Capital Markets, Inc. $4,375,000
Credit Lyonnais Securities (USA) Inc. $4,375,000
Total $175,000,000
S1