Exhibit 1.1
EXECUTION COPY
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GROVE HOLDINGS LLC
GROVE HOLDINGS CAPITAL, INC.
$88,000,000 of
11 5/8% Senior Discount Debentures due 2009
Purchase Agreement
April 22, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CHASE SECURITIES INC.
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GROVE HOLDINGS LLC
GROVE HOLDINGS CAPITAL, INC.
$88,000,000
11 5/8% Senior Discount Debentures due 2009
PURCHASE AGREEMENT
April 22, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CHASE SECURITIES INC.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Grove Holdings LLC., a Delaware limited liability company
("Holdings") and Grove Holdings Capital, Inc., a Delaware corporation ("Grove
Holdings Capital" and, together with Holdings, the "Issuers"), propose to issue
and sell to Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), and
Chase Securities Inc. ("Chase Securities" and, together with DLJ, the "Initial
Purchasers") an aggregate of $88,000,000 in principal amount of their 11 5/8%
Senior Discount Debentures due 2009 (the "Senior Discount Debentures"), subject
to the terms and conditions set forth herein. The Senior Discount Debentures are
to be issued pursuant to the provisions of an indenture (the "Indenture"), to be
dated as of the Closing Date (as defined below), among the Issuers and United
States Trust Company of New York, as trustee (the "Trustee"). The Senior
Discount Debentures and the New Senior Discount Debentures (as defined below)
issuable in exchange therefor are collectively referred to herein as the
"Debentures". Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Indenture.
The gross proceeds from the sale to the Initial Purchasers of the
Senior Discount Debentures along with an equity issuance by Holdings, together
with borrowings by Grove Worldwide LLC, a Delaware limited liability company
(the "Company") under the New Credit Facility and proceeds from the Company's
issuance of Senior Subordinated Notes due 2008 (the "Senior Subordinated
Notes"), will be used by the Company: (i) to fund the cash purchase price
payable in connection with the acquisition (the "Acquisition") by the Company,
through certain of its subsidiaries, of the mobile hydraulic crane, aerial work
platform and truck mounted crane
businesses of Hanson Funding (G) PLC and certain of its subsidiaries, pursuant
to an agreement (the "Acquisition Agreement") and (ii) to pay fees and expenses
in connection with the transactions.
1. Offering Memorandum. The Senior Discount Debentures will be
offered and sold to the Initial Purchasers pursuant to one or more exemptions
from the registration requirements under the Securities Act of 1933, as amended
(the "Securities Act"). The Issuers have prepared a preliminary offering
memorandum, dated April 9, 1998 (the "Preliminary Offering Memorandum"), and a
final offering memorandum, dated April 23, 1998 (the "Offering Memorandum"),
relating to the Senior Discount Debentures.
Upon original issuance thereof, and until such time as the same is
no longer required pursuant to the Indenture, the Senior Discount Debentures
(and all securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A OR REGULATION S THEREUNDER. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUERS THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF THE SECURITIES ACT (AN
"INSTITUTIONAL ACCREDITED INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE
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PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE ISSUERS SO REQUEST), (2) TO THE ISSUERS
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
2. Agreements to Sell and Purchase. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Issuers agree to issue
and sell to the Initial Purchasers, and the Initial Purchasers agree, severally
and not jointly, to purchase from the Issuers, the principal amounts of Senior
Discount Debentures set forth opposite the name of such Initial Purchaser on
Schedule A hereto at a purchase price equal to 54.813% of the principal amount
thereof (the "Purchase Price").
3. Terms of Offering. The Initial Purchasers have advised the
Issuers that the Initial Purchasers will make offers (the "Exempt Resales") of
the Senior Discount Debentures purchased hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely to (i) persons whom the
Initial Purchasers reasonably believe to be "qualified institutional buyers" as
defined in Rule 144A under the Securities Act ("QIBs") and (ii) to persons
permitted to purchase the Senior Discount Debentures in offshore transactions in
reliance upon Regulation S under the Securities Act (each, a "Regulation S
Purchaser") (such persons specified in clauses (i) and (ii) being referred to
herein as the "Eligible Purchasers"). The Initial Purchasers will offer the
Senior Discount Debentures to Eligible Purchasers in accordance with the terms
set forth in the Offering Memorandum initially at a price equal to 56.801% of
the principal amount thereof. Such price may be changed at any time without
notice.
Holders (including subsequent transferees) of the Senior Discount
Debentures will have the registration rights set forth in the registration
rights agreement (the "Registration Rights Agreement"), to be executed on and
dated the Closing Date, in substantially the form of Exhibit A hereto, for so
long as such Senior Discount Debentures constitute "Transfer Restricted
Securities" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Issuers will agree to file with the
Securities and Exchange Commission (the "Commission") under the circumstances
set forth therein, (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") relating to the Issuers' 11.625% new
Senior Discount Debentures due 2009 (the "New Senior Discount Debentures"),
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identical in all material respects to the Senior Discount Debentures (except
that the New Senior Discount Debentures shall have been registered pursuant to
such Exchange Offer Registration Statement), to be offered in exchange for the
Senior Discount Debentures (such offer to exchange being referred to as the
"Exchange Offer") and (ii) a shelf registration statement pursuant to Rule 415
under the Securities Act (the "Shelf Registration Statement" and, together with
the Exchange Offer Registration Statement, the "Registration Statements")
relating to the resale by certain holders of the Senior Discount Debentures, and
to use their best efforts to cause such Registration Statements to be declared
and remain effective and usable for the periods specified in the Registration
Rights Agreement and to consummate the Exchange Offer. This Agreement, the
Indenture, the Debentures and the Registration Rights Agreement are hereinafter
sometimes referred to collectively as the "Operative Documents."
4. Delivery and Payment.
(a) Delivery of, and payment of the Purchase Price for, the
Senior Discount Debentures shall be made at the offices of Paul, Weiss, Rifkind,
Wharton & Garrison, 1285 Avenue of the Americas, New York, New York 10019, or
such other location as may be mutually acceptable. Such delivery and payment
shall be made at 9:00 a.m. New York City time, on April 29, 1998 or at such
other time as shall be agreed upon in writing by the Initial Purchasers and the
Issuers. The time and date of such delivery and payment are herein called the
"Closing Date."
(b) One or more of the Senior Discount Debentures in
definitive global form, registered in the name of Cede & Co., as nominee of the
Depository Trust Company ("DTC"), having an aggregate principal amount
corresponding to the aggregate principal amount of the Senior Discount
Debentures (collectively, the "Global Debenture"), shall be delivered by the
Issuers to the Initial Purchasers (or as the Initial Purchasers direct) in each
case with any transfer taxes thereon duly paid by the Issuers against payment by
the Initial Purchasers of the Purchase Price thereof by wire transfer in federal
(same day) funds to an account or accounts designated by the Issuers or such
other manner of payment as may be designated by the Issuers and agreed to by the
Initial Purchasers. The Global Debenture shall be made available to the Initial
Purchasers for inspection not later than 9:30 a.m., New York City time, on the
business day immediately preceding the Closing Date.
5. Agreements of the Issuers. As of the date hereof, the Issuers
hereby agree with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly (and, if
requested by the Initial Purchasers, confirm such advice in writing) of (i) the
issuance by any state securities commission of any order suspending the
qualification or exemption from qualification of any Senior Discount Debentures
for offering or sale in any jurisdiction designated by the Initial Purchasers
pursuant to Section 5(e) hereof, or the initiation of any proceeding by any
state
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securities commission or any other federal or state regulatory authority for
such purpose and (ii) the happening of any event during the period referred to
in Section 5(c) below that makes any statement of a material fact made in the
Preliminary Offering Memorandum or the Offering Memorandum untrue or that
requires any additions to or changes in the Preliminary Offering Memorandum or
the Offering Memorandum in order to make the statements therein not misleading.
The Issuers shall use their best efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption of any Senior Discount
Debentures under any state securities or Blue Sky laws and, if at any time any
state securities commission or other federal or state regulatory authority shall
issue an order suspending the qualification or exemption of any Senior Discount
Debentures under any state securities or Blue Sky laws, the Issuers shall use
their best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Issuers as many copies of the
Preliminary Offering Memorandum and Offering Memorandum, and any amendments or
supplements thereto, as the Initial Purchasers may reasonably request for the
time period specified in Section 5(c). Subject to the Initial Purchasers'
compliance with its representations and warranties and agreements set forth in
Section 7 hereof, the Issuers consent to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) During such period as in the opinion of counsel for the
Initial Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers, not to make any
amendment or supplement to the Offering Memorandum of which the Initial
Purchasers shall not previously have been advised or to which the Initial
Purchasers shall reasonably object after being so advised and to prepare
promptly upon the Initial Purchasers' reasonable request, any amendment or
supplement to the Offering Memorandum which may be necessary or advisable in
connection with Exempt Resales or market-making activities.
(d) If, during the period referred to in Section 5(c) above,
any event shall occur or condition shall exist as a result of which, in the
opinion of counsel to the Initial Purchasers, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances existing when such Offering Memorandum is
delivered to an Eligible Purchaser, not misleading, or if, in the opinion of
counsel to the Initial Purchasers, it is necessary to amend or supplement the
Offering Memorandum to comply with any applicable law, to prepare promptly upon
the Initial Purchasers' reasonable request an appropriate amendment or
supplement to such Offering Memorandum so that the statements therein, as so
amended or supplemented, will not, in the light of the circumstances existing
when it is so delivered, be misleading, or so that such Offering Memorandum will
comply with applicable law, and to furnish to the Initial Purchasers
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and such other persons as the Initial Purchasers may designate such number of
copies thereof as the Initial Purchasers may reasonably request.
(e) Prior to the sale of all Senior Discount Debentures
pursuant to Exempt Resales as contemplated hereby, to cooperate with the Initial
Purchasers and counsel to the Initial Purchasers in connection with the
registration or qualification of the Senior Discount Debentures for offer and
sale to the Initial Purchasers and pursuant to Exempt Resales under the
securities or Blue Sky laws of such jurisdictions as the Initial Purchasers may
reasonably request and to continue such registration or qualification in effect
so long as required for Exempt Resales and to file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification; provided, however, that the Issuers shall not be
required in connection therewith to register or qualify as a foreign corporation
in any jurisdiction in which it is not now so qualified or to take any action
that would subject it to general consent to service of process or taxation other
than as to matters and transactions relating to the Preliminary Offering
Memorandum, the Offering Memorandum or Exempt Resales, in any jurisdiction in
which it is not now so subject.
(f) So long as any Debentures are outstanding, Holdings will
furnish to the holders of the Debentures (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if Holdings was required to file such Forms,
including a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" that describes the financial condition and results of
operations of the Company and its consolidated subsidiaries and, with respect to
the annual information only, a report thereon by Holdings' certified independent
accountants and (ii) all current reports that would be required to be filed with
the Commission on Form 8-K if Holdings was required to file such reports, in
each case within the time periods specified in the Commission's rules and
regulations. In addition, following the consummation of the exchange offer
contemplated by the Registration Rights Agreement, whether or not required by
the rules and regulations of the Commission, Holdings will file a copy of all
such information and reports with the Commission for public availability within
the time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, (i) at
all times the Commission does not accept the filings provided for in the
preceding sentence, or (ii) such filings provided for in the preceding sentence
do not contain the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act, then, in each case, Holdings has agreed
that, for so long as any Debentures remain outstanding, it will furnish to the
holders of the Debentures and to securities analysts and prospective investors,
upon their request, the information ("Rule 144A Information") required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(g) So long as the Debentures are outstanding, to furnish to
the Initial Purchasers promptly after furnishing to its public security holders
or filing with any national
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securities exchange copies of all reports or other communications furnished by
the Issuers to their public security holders or filed with the Commission or any
national securities exchange on which any class of securities of the Issuers is
listed and such other publicly available information concerning the Issuers
and/or their subsidiaries as the Initial Purchasers may reasonably request.
(h) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all reasonable expenses incident to the performance of the obligations of
the Issuers under this Agreement, including: (i) the fees, disbursements and
expenses of counsel to the Issuers and accountants of the Issuers in connection
with the sale and delivery of the Senior Discount Debentures to the Initial
Purchasers and pursuant to Exempt Resales, and all other fees or expenses in
connection with the preparation, printing, filing and distribution of the
Preliminary Offering Memorandum, the Offering Memorandum and all amendments and
supplements to any of the foregoing (including financial statements) including
the mailing and delivering of copies thereof to the Initial Purchasers and
persons designated by it in the quantities specified herein, (ii) all costs and
expenses related to the sale and delivery of the Senior Discount Debentures to
the Initial Purchasers and pursuant to Exempt Resales, including any transfer or
other taxes payable thereon, (iii) all costs of printing or producing this
Agreement, the other Operative Documents and any other agreements or documents
in connection with the offering, purchase, sale or delivery of the Senior
Discount Debentures, (iv) all expenses in connection with the registration or
qualification of the Senior Discount Debentures for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any preliminary and supplemental Blue Sky memoranda in connection
therewith (including the filing fees and the reasonable fees and disbursements
of counsel for the Initial Purchasers in connection with such registration or
qualification and memoranda relating thereto), (v) the cost of printing
certificates representing the Senior Discount Debentures, (vi) all expenses and
listing fees in connection with the application for quotation of the Senior
Discount Debentures in the National Association of Securities Dealers, Inc.
("NASD") Private Offerings, Resales and Trading through Automated Linkages
market ("PORTAL"), (vii) the fees and expenses of the Trustee and the Trustee's
counsel in connection with the Indenture, the Debentures, (viii) the costs and
charges of any transfer agent, registrar and/or depository (including DTC), (ix)
any fees charged by rating agencies for the rating of the Debentures, (x) all
costs and expenses of the Exchange Offer and any Registration Statement, as set
forth in the Registration Rights Agreement, and (xi) and all other costs and
expenses incident to the performance of the obligations of the Issuers hereunder
for which provision is not otherwise made in this Section (but specifically
excluding any fees, disbursements and expenses of counsel to the Initial
Purchasers except as specifically provided for herein).
(i) To use its best efforts to effect the inclusion of the
Senior Discount Debentures in PORTAL and to maintain the listing of the Senior
Discount Debentures on PORTAL for so long as the Senior Discount Debentures are
outstanding.
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(j) To obtain the approval of DTC for "book-entry" transfer of
the Debentures, and to comply with all of its agreements set forth in the
representation letters of the Issuers to DTC relating to the approval of the
Debentures by DTC for "book-entry" transfer.
(k) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise transfer or dispose of any debt securities of the Issuers or
any warrants, rights or options to purchase or otherwise acquire debt securities
of the Issuers substantially similar to the Debentures (other than (i) the
Debentures and (ii) commercial paper issued in the ordinary course of business,
without the prior written consent of the Initial Purchasers.
(l) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Securities
Act) that would be integrated with the sale of the Senior Discount Debentures to
the Initial Purchasers or pursuant to Exempt Resales in a manner that would
require the registration of any such sale of the Senior Discount Debentures
under the Securities Act.
(m) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Debentures.
(n) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(o) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Closing Date and to satisfy or obtain the waiver of all conditions
precedent to the delivery of the Senior Discount Debentures.
(p) Not to use any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act) in
connection with the offer and sale of the Senior Discount Debentures pursuant
hereto, including, but not limited to, articles, notices or other communications
published in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
6. Representations, Warranties and Agreements of the Issuers. As of
the date hereof, the Issuers, represent and warrant to, and agree with, the
Initial Purchasers as set forth below.
(a) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or
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necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties contained in this paragraph (a) shall not apply to statements in or
omissions from the Preliminary Offering Memorandum or the Offering Memorandum
(or any supplement or amendment thereto) based upon information relating to the
Initial Purchasers furnished to the Issuers in writing by the Initial Purchasers
expressly for use therein. The Issuers acknowledge for all purposes under this
Agreement that the statements set forth in the last paragraph on the cover page,
the legend on the bottom of the inside cover page and in the first sentence of
the third paragraph, the first sentence of the fourth paragraph, the fourth
sentence of the sixth paragraph and the seventh and eighth paragraphs under the
caption "Plan of Distribution" in the Offering Memorandum constitute the only
written information furnished to the Issuers by the Initial Purchasers expressly
for use in the Offering Documents (or any amendment or supplement thereto). No
stop order preventing the use of the Preliminary Offering Memorandum or the
Offering Memorandum, or any amendment or supplement thereto, or any order
asserting that any of the transactions contemplated by this Agreement are
subject to the registration requirements of the Securities Act, has been issued.
(b) Each of the Issuers and their subsidiaries is a
corporation or limited liability company, duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization (if such concept exists under such laws), as the case may be, and
has the corporate power (in the case of a corporation) or power (in the case of
a limited liability company) and authority to carry on its business as described
in the Preliminary Offering Memorandum and the Offering Memorandum and to own,
lease and operate its properties as described in the Offering Memorandum, and
each is, duly qualified and in good standing as a foreign corporation or limited
liability company, as the case may be, authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect. As used herein, "Material
Adverse Effect" shall mean, with respect to any Person, any effect that (i)
would be reasonably expected, individually or in the aggregate, to result in a
material adverse effect on the assets, properties, business, results of
operations, condition (financial or otherwise) or prospects of such Person and
its subsidiaries, taken as a whole or (ii) would materially and adversely affect
(A) the issuance of the Senior Discount Debentures or the consummation of this
Agreement, (B) the performance by such Person and each of its subsidiaries of
its respective agreements and obligations under this Agreement or the
consummation of the transactions contemplated thereby.
(c) All limited liability company interests of Holdings are
owned Grove Investors LLC free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature (each a "Lien"). All shares of
capital stock of Grove Holdings Capital are owned by Holdings, free and clear of
any Liens (other than Liens in favor of the Lenders under the New Credit
Facility). All outstanding limited liability company interests of Holdings have
been duly authorized and validly issued and are not subject to any preemptive or
similar rights.
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All outstanding shares of capital stock of Grove Holdings Capital have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights.
(d) All of the outstanding shares of capital stock of each of
Holdings' subsidiaries that are corporations have been duly authorized and
validly issued and are fully paid and non-assessable and are owned by Holdings,
directly or indirectly through one or more subsidiaries, free and clear of any
Liens (other than those in favor of the Lenders under the New Credit Facility).
All of the outstanding limited liability company interests of each of Holdings'
subsidiaries that are limited liability companies have been duly authorized and
validly issued and are owned by Holdings, directly or indirectly through one or
more subsidiaries, free and clear of any Liens (other than Liens in favor of the
Lenders under the New Credit Facility).
(e) This Agreement has been duly authorized, executed and
delivered by the Issuers and is a valid and binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms, except as the
enforcement hereof may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing and except as rights to
indemnity and contribution thereunder may be limited by Federal or state
securities laws or principles of public policy.
(f) The Indenture has been duly authorized by the Issuers and,
on the Closing Date, will have been validly executed and delivered by the
Issuers. When the Indenture has been duly executed and delivered by the Trustee
and the Issuers, the Indenture will be a valid and binding agreement of the
Issuers, enforceable against the Issuers in accordance with its terms, except as
the enforcement thereof may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing and except as rights to
indemnity and contribution thereunder may be limited by Federal or state
securities laws or principles of public policy. On the Closing Date, the
Indenture will comply in all material respects with the requirements of the
Trust Indenture Act of 1939, as amended (the "TIA" or" Trust Indenture Act"),
and the rules and regulations of the Commission applicable to an indenture which
is qualified thereunder.
(g) The Senior Discount Debentures have been duly authorized
by the Issuers for issuance and sale to the Initial Purchasers pursuant to this
Agreement and, on the Closing Date, will have been validly executed and
delivered by the Issuers. When the Senior Discount Debentures have been issued,
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, the Senior Discount Debentures will be entitled to the
benefits
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of the Indenture and will be the valid and binding obligations of the Issuers,
enforceable in accordance with their terms except as the enforcement thereof may
be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing and except as rights to indemnity and contribution thereunder may be
limited by Federal or state securities laws or principles of public policy. On
the Closing Date, the Senior Discount Debentures will conform as to legal
matters in all material respects to the description thereof contained in the
Offering Memorandum.
(h) On the Closing Date, the New Senior Discount Debentures
will have been duly authorized by the Issuers. When the New Senior Discount
Debentures are issued, executed and authenticated in accordance with the terms
of the Exchange Offer and the Indenture, the New Senior Discount Debentures will
be entitled to the benefits of the Indenture and will be the valid and binding
obligations of the Issuers, enforceable against the Issuers in accordance with
their terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing and except as rights
to indemnity and contribution thereunder may be limited by Federal or state
securities laws or principles of public policy.
(i) The Registration Rights Agreement has been duly authorized
by the Issuers and, on the Closing Date, will have been duly executed and
delivered by the Issuers. When the Registration Rights Agreement has been duly
executed and delivered, the Registration Rights Agreement will be a valid and
binding agreement of the Issuers, enforceable against the Issuers in accordance
with its terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing and except as rights
to indemnity and contribution thereunder may be limited by Federal or state
securities laws or principles of public policy. On the Closing Date, the
Registration Rights Agreement will conform as to legal matters in all material
respects to the description thereof contained in the Offering Memorandum.
(j) Neither the Issuers nor any of their subsidiaries are in
violation of its respective charter or by-laws or operating agreement, as the
case may be, or in default in the performance of any obligation, agreement or
condition contained in any material bond, debenture, note or any other evidence
of material indebtedness or in any other material agreement, indenture or
instrument to which the Issuers or any of their subsidiaries are a party or by
which the Issuers or any of their subsidiaries or their respective properties
are bound, except for such defaults that would not have a Material Adverse
Effect.
11
(k) Except as described in the Offering Memorandum, the
execution, delivery and performance of this Agreement and the other Operative
Documents by the Issuers, compliance by the Issuers with all provisions hereof
and thereof and the consummation of the transactions contemplated hereby and
thereby will not require any consent, approval, authorization or other order of
any court, regulatory body, administrative agency or other governmental body
(except as such may be required under (1) the Securities Act and state
securities or Blue Sky laws and regulations, (2) the Trust Indenture Act, (3)
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and similar provisions of foreign laws and (4) applicable Environmental
Laws (as defined below) and will not conflict with or constitute a breach of any
of the terms or provisions of, or a default under, (x) the charter or by-laws or
operating agreement, as the case may be of the Issuers or any of their
respective subsidiaries or (y) any agreement, indenture or other instrument to
which the Issuers or any of their respective subsidiaries are a party or by
which the Issuers, or any of their respective subsidiaries or their respective
properties are bound except for, in the case of clause (y), for such conflicts,
breaches or defaults as would not have a Material Adverse Effect, or violate or
conflict with any laws, administrative regulations or rulings or court decrees
applicable to the Issuers or any of their respective subsidiaries or their
respective properties except for such violations and conflicts as would not have
a Material Adverse Effect.
(l) Except as described in this Offering Memorandum, there are
no legal or governmental proceedings pending or to the knowledge of Issuers,
threatened to which the Issuers or any of their respective subsidiaries are or
would be a party or to which any of their respective properties are or would be
subject, which would, if determined adversely to the Issuers result, singly or
in the aggregate, in a Material Adverse Effect.
(m) Except as described in the Offering Memorandum, neither
the Issuers nor any of their subsidiaries have violated any foreign, federal,
state or local law or regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws") or any federal or state law relating to
discrimination in the hiring, promotion or pay of employees or any applicable
federal or state wages and hours laws, or any provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the rules and
regulations promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect.
(n) Except as described in the Offering Memorandum, neither
Issuer is required under any Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any Authorization, any
related constraints on operating activities and any potential liabilities to
third parties) to incur any costs or liabilities which would, singly or in the
aggregate, have a Material Adverse Effect.
12
(o) Except as described in the Offering Memorandum, each of
the Issuers and its subsidiaries has such permits, licenses, consents,
exemptions, franchises, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business in the manner described in the
Offering Memorandum, except where the failure to have any such Authorization or
to make any such filing or notice would not, singly or in the aggregate, have a
Material Adverse Effect. Except as described in the Offering Memorandum, each
such Authorization is valid and in full force and effect and each of the Issuers
and their respective subsidiaries is in compliance with all the terms and
conditions thereof and with the rules and regulations of the authorities and
governing bodies having jurisdiction with respect thereto; and no event has
occurred (including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
and such Authorizations contain no restrictions that are burdensome to the
Issuers or any of their subsidiaries; except where such failure to be valid and
in full force and effect or to be in compliance, the occurrence of any such
event or the presence of any such restriction would not, singly or in the
aggregate, have a Material Adverse Effect.
(p) Except as described in the Offering Memorandum, Holdings
and each of its subsidiaries has good and marketable title, free and clear of
all liens, claims, encumbrances and restrictions except for Liens in favor of
the Lenders under the New Credit Facility, assessments, quasi-easements,
licenses, covenants rights of way, utility agreements or other similar
restrictions that affect the use of such properties or assets and liens for
taxes not yet due and payable (collectively "Permitted Liens"), to all property
and assets being described in the Offering Memorandum as being owned by it,
except as would not have a Material Adverse Effect. All leases for real property
to which any of Holdings or any of its subsidiaries is a party are valid and
binding and no default has occurred or is continuing thereunder which would have
a Material Adverse Effect, and Holdings and its subsidiaries enjoy peaceful and
undisturbed possession under all such leases to which any of Holdings and its
subsidiaries is a party as lessee with such exceptions as do not materially
interfere with the use currently made by Holdings or such subsidiary, as the
case may be.
(q) Holdings and its subsidiaries maintain reasonably adequate
insurance.
(r) The accountants, Ernst & Young LLP and Price Waterhouse
LLP, that have certified the financial statements included in the Preliminary
Offering Memorandum and the Offering Memorandum are independent public
accountants with respect to the Issuers, as required by the Securities Act and
the Exchange Act. The historical financial statements,
13
together with related schedules and notes, set forth in the Preliminary Offering
Memorandum and the Offering Memorandum comply as to form in all material
respects with the requirements applicable to registration statements on Form S-1
under the Securities Act.
(s) The historical financial statements of the Issuers and
their subsidiaries, together with related schedules and notes forming part of
the Offering Memorandum (and any amendment or supplement thereto), present
fairly the combined financial position, results of operations and changes in
financial position of the Issuers and their subsidiaries on the basis stated in
the Offering Memorandum at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein and, with respect to interim financial statements, except for the
absence of footnote presentation and normal year-end adjustments; and the other
financial and statistical information and data of the Issuers and their
subsidiaries set forth in the Offering Memorandum (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Issuers.
(t) The pro forma financial statements included in the
Preliminary Offering Memorandum and the Offering Memorandum have been prepared
on a basis consistent with the historical financial statements of the Issuers
and their subsidiaries and give effect to assumptions used in the preparation
thereof on a reasonable basis and in good faith, and such pro forma financial
statements comply as to form in all material respects with the requirements
applicable to pro forma financial statements included in registration statements
on Form S-1 under the Securities Act. The other pro forma financial and
statistical information and data included in the Offering Memorandum are, in all
material respects, accurately and consistently derived from the pro forma
financial statements.
(u) In the Issuers' opinion, the assumptions used in the
preparation of the pro forma financial statements included in the Offering
Memorandum are reasonable and the adjustments used therein are appropriate to
give effect to and present fairly the transactions or circumstances referred to
therein.
(aa) The Issuers are not and, after immediately giving effect
to the offering and sale of the Senior Discount Debentures and the application
of the net proceeds thereof as described in the Offering Memorandum will not be,
an "investment company," as such term is defined in the Investment Company Act
of 1940, as amended.
(ab) Except as described in the Offering Memorandum, there are
no holders of securities of the Issuers who, by reason of the execution by the
Issuers of the Registration Rights Agreement or the consummation of the
transactions contemplated thereby,
14
have the right to request or demand that the Issuers register under the
Securities Act securities held by them other than pursuant to the Registration
Rights Agreement.
(ac) Neither the Issuers nor any of their subsidiaries nor any
agent thereof acting on the behalf of them have taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Senior Discount Debentures to violate Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System.
(ad) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in or contemplated by
the Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there has not occurred any
material adverse change in the condition, financial or otherwise, or the
earnings, business, management, prospects (viewed as of the date hereof) or
operations of the Issuers and their subsidiaries, taken as a whole, (ii) there
has not been any material adverse change in the capital stock or in the
long-term debt of the Issuers or any of their subsidiaries and (iii) neither the
Issuers nor any of their subsidiaries have incurred any material liability or
obligation, direct or contingent.
(ae) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens related to
or entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, any of Holdings' subsidiaries
other than Permitted Liens and liens in favor of the lenders under the New
Credit Facility.
(af) There is (i) no significant unfair labor practice
complaint pending against Holdings, any of its subsidiaries or, to the knowledge
of Holdings, threatened against any of them, before the National Labor Relations
Board or any state or local labor relations board, and no significant grievance
or significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against Holdings or any of its subsidiaries
or, to the best knowledge of Holdings, threatened against any of them, and (ii)
no significant strike, labor dispute, slowdown or stoppage pending against
Holdings, any of its subsidiaries, or, to the knowledge of Holdings, threatened
against it or any of its subsidiaries except for such actions specified in
clause (i) or (ii) above, which, singly or in the aggregate, would not have a
Material Adverse Effect.
(ag) Holdings maintains a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles 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
15
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(ah) All material tax returns required to be filed by Holdings
and its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges
due pursuant to such returns or pursuant to any assessment received by Holdings
or any of its subsidiaries have been paid, other than those being contested in
good faith and for which adequate reserves have been provided.
(ai) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information specified in,
and meeting the requirements of, Rule 144A(d)(4) under the Securities Act.
(aj) When the Senior Discount Debentures are issued and
delivered pursuant to this Agreement, the Senior Discount Debentures will not be
of the same class (within the meaning of Rule 144A under the Securities Act) as
any security of the Issuers that is listed on a national securities exchange
registered under Section 6 of the Exchange Act or that is quoted in a United
States automated inter-dealer quotation system.
(ak) No form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) was used by the
Issuers or any of their respective representatives (other than the Initial
Purchasers, as to whom the Issuers make no representation) in connection with
the offer and sale of the Senior Discount Debentures contemplated hereby,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising. No securities of the same
class as the Senior Discount Debentures have been issued and sold by the Issuers
within the six-month period immediately prior to the date hereof.
(al) Prior to the effectiveness of any Registration Statement,
the Indenture will not be required to be qualified under the TIA.
(am) None of the Issuers nor any of their respective
affiliates or any person acting on its or their behalf (other than the Initial
Purchasers, as to whom the Issuers make no representation) has engaged or will
engage in any directed selling efforts within the meaning of Regulation S under
the Securities Act ("Regulation S") with respect to the Senior Discount
Debentures.
(an) The Issuers have not, and will not, offer or sell the
Senior Discount Debentures in reliance on Regulation S except in offshore
transactions.
16
(ao) The Issuers have not, and will not, offer or sell the
Senior Discount Debentures as part of a plan or scheme to evade the registration
provisions of the Securities Act.
(ap) The Issuers and their respective affiliates and all
persons acting on their behalf (other than the Initial Purchasers, as to whom
the Issuers make no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with the
offering of the Senior Discount Debentures outside the United States and, in
connection therewith, the Offering Memorandum will contain the disclosure
required by Rule 902(h).
(aq) Assuming (i) the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof and
(ii) compliance by the Initial Purchasers with the offering and transfer
procedures and restrictions described elsewhere in this Agreement and the
Offering Memorandum, no registration under the Securities Act of the Senior
Discount Debentures is required for the sale of the Senior Discount Debentures
to the Initial Purchasers as contemplated hereby or for the Exempt Resales.
(ar) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act (i) has informed the Issuers that it is imposing or considering
imposing any condition (financial or otherwise) on the Issuers' retaining any
rating assigned as of the date hereof to the Issuers or any securities of the
Issuers or (ii) has indicated to the Issuers that it is considering (a) the
downgrading, suspension or withdrawal of, or any review for a possible change
that does not indicate the direction of the possible change in, any rating so
assigned or (b) any change in the outlook for any rating of the Issuers.
(as) Each certificate signed by any officer of the Issuers and
delivered to the Initial Purchasers or counsel for the Initial Purchasers shall
be deemed to be a representation and warranty by the Issuers to the Initial
Purchasers as to the matters covered thereby.
The Issuers acknowledge that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 9 hereof, counsel to the Issuers and counsel to the Initial Purchasers,
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
7. Initial Purchasers' Representations and Warranties. Each of the
Initial Purchasers, severally and not jointly, represents and warrants to the
Issuers, and agrees that:
(a) Such Initial Purchaser is either a QIB or an institutional
"accredited investor" (as defined in rule 501(a)(1), (2), (3) or (7) of
Regulation D under the
17
Securities Act) (an "Accredited Institution"), in either case, with such
knowledge and experience in financial and business matters as is necessary in
order to evaluate the merits and risks of an investment in the Senior Discount
Debentures.
(b) Such Initial Purchaser (A) is not acquiring the Senior
Discount Debentures with a view to any distribution thereof or with any present
intention of offering or selling any of the Senior Discount Debentures in a
transaction that would violate the Securities Act or the securities laws of any
state of the United States or any other applicable jurisdiction and (B) will be
reoffering and reselling the Senior Discount Debentures only to (x) QIBs in
reliance on the exemption from the registration requirements of the Securities
Act provided by Rule 144A and (y) in offshore transactions in reliance upon
Regulation S under the Securities Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) has been or will be used by such Initial Purchaser or any of
its representatives in connection with the offer and sale of the Senior Discount
Debentures pursuant hereto, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser understands that, the Senior
Discount Debentures are being offered in a transaction not involving any public
offering in the United States within the meaning of the Securities Act, that the
Senior Discount Debentures have not been registered under the Securities Act and
that (A) the Senior Discount Debentures may be offered, resold, pledged or
otherwise transferred only (i) to a person who the seller reasonably believes is
a QIB in a transaction meeting the requirements of Rule 144A, in a transaction
meeting the requirements of Rule 144 under the Securities Act, outside the
United States to a foreign person in a transaction meeting the requirements of
Rule 904 under the Securities Act, to an institutional "accredited investor" as
defined in Rules 501(a)(1), (2), (3) or (7) of the Securities Act (an
"institutional accredited investor") that, prior to such transfer, furnishes the
Trustee a signed letter containing certain representations and agreements (the
form of which can be obtained from the Trustee) and, if such transfer is in
respect of an aggregate principal amount of Senior Discount Debentures less than
$250,000, an opinion of counsel that such transfer is in compliance with the
Securities Act or in accordance with another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel if the
Issuers so request), (ii) to the Issuers or (iii) pursuant to an effective
registration statement, and, in each case, in accordance with any applicable
securities laws of any State of the United States or any other applicable
jurisdiction and (B) the Initial Purchasers shall, and each subsequent holder
shall be required to, notify any subsequent purchaser from it of the resale
restrictions set forth in (A) above.
18
(e) None of such Initial Purchasers nor any of its affiliates
or any person acting on its or their behalf has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Senior Discount Debentures.
(f) The Senior Discount Debentures offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S have been and will
be offered and sold only in offshore transactions.
(g) The sale of the Senior Discount Debentures offered and
sold by such Initial Purchaser pursuant hereto in reliance on Regulation S is
not part of a plan or scheme to evade the registration provisions of the
Securities Act.
(h) Such Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Senior Discount Debentures in the United
States or to, or for the benefit or account of, a U.S. Person (other than a
distributor), in each case, as defined in Rule 902 under the Securities Act (i)
as part of its distribution at any time and (ii) otherwise until 40 days after
the later of the commencement of the offering of the Senior Discount Debentures
pursuant hereto and the Closing Date, other than in accordance with Regulation S
of the Securities Act or another exemption from the registration requirements of
the Securities Act. Such Initial Purchaser agrees that, during such 40-day
restricted period, it will not cause any advertisement with respect to the
Senior Discount Debentures (including any "tombstone" advertisement) to be
published in any newspaper or periodical or posted in any public place and will
not issue any circular relating to the Senior Discount Debentures, except such
advertisements as permitted by and include the statements required by Regulation
S.
(i) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Senior Discount Debentures by it to any distributor,
dealer or person receiving a selling concession, fee or other remuneration
during the 40-day restricted period referred to in Rule 903(c)(3) under the
Securities Act, it will send to such distributor, dealer or person receiving a
selling concession, fee or other remuneration a confirmation or notice to
substantially the following effect:
"The Senior Discount Debentures covered hereby have not been
registered under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and may not be offered and sold within
the United States or to, or for the account or benefit of,
U.S. persons (i) as part of your distribution at any time or
(ii) otherwise until 40 days after the later of the
commencement of the Offering and the Closing Date, except in
either case in accordance with Regulation S under the
Securities Act (or Rule 144A or to Accredited Institutions in
transactions that are exempt from the registration
requirements of the Securities Act), and in connection with
any subsequent sale by you of the Senior Discount Debentures
covered hereby in reliance
19
on Regulation S during the period referred to above to any
distributor, dealer or person receiving a selling concession,
fee or other remuneration, you must deliver a notice to
substantially the foregoing effect. Terms used above have the
meanings assigned to them in Regulation S."
(j) Such Initial Purchaser agrees that the Senior Discount
Debentures offered and sold in reliance on Regulation S will be represented upon
issuance by a global security that may not be exchanged for definitive
securities until the expiration of the 40-day restricted period referred to in
Rule 903(c)(3) of the Securities Act and only upon certification of beneficial
ownership of such Senior Discount Debentures by non-U.S. persons or U.S. persons
who purchased such Senior Discount Debentures in transactions that were exempt
from the registration requirements of the Securities Act.
The Initial Purchasers acknowledge that the Issuers, for purposes of
the opinions to be delivered to each Initial Purchaser pursuant to Section 9
hereof, counsel to the Issuers and counsel to the Initial Purchasers, will rely
upon the accuracy and truth of the foregoing representations and the Initial
Purchasers hereby consent to such reliance.
8. Indemnification.
(a) Each of the Issuers agrees, jointly and severally, to
indemnify and hold harmless each Initial Purchaser, its directors, its officers
and each person, if any, who controls such Initial Purchaser within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any reasonable legal or other reasonable
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), the Preliminary Offering Memorandum or any
Rule 144A Information provided by the Issuers to any holder or prospective
purchaser of Senior Discount Debentures pursuant to Section 5(h) or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are (i)
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to an Initial Purchaser furnished in
writing to the Issuers by any Initial Purchaser; provided, however, that the
foregoing indemnity agreement with respect to any Preliminary Offering
Memorandum shall not inure to the benefit of any Initial Purchaser who failed to
deliver a Final Offering Memorandum (as then amended or supplemented, provided
by the Issuers to several Initial Purchasers in the requisite quantity and on a
timely basis to permit proper delivery on or prior to the Closing Date) to the
person asserting any losses, claims, damages and liabilities caused by any
untrue statement or omission, or any alleged untrue statement of a material fact
contained in any or omission, made
20
in the Preliminary Offering Memorandum, or (ii) caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Final Offering Memorandum.
(b) The Initial Purchasers agree, severally and not jointly,
to indemnify and hold harmless the Issuers, and their respective directors and
officers and each person, if any, who controls (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) the Issuers, to the
same extent as the foregoing indemnity from the Issuers to each Initial
Purchaser but only with reference to information relating to an Initial
Purchaser furnished in writing to the Issuers by any Initial Purchaser expressly
for use in the Preliminary Offering Memorandum or the Offering Memorandum.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers shall not
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Initial Purchasers). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by Donaldson, Lufkin & Jenrette Securities
Corporation, in the case of the parties indemnified pursuant to Section 8(a),
and by the Issuers, in the case of parties indemnified pursuant to Section
21
8(b). The indemnifying party shall indemnify and hold harmless the indemnified
party from and against any and all losses, claims, damages, liabilities and
judgments by reason of any settlement of any action (i) effected with the
indemnifying party's written consent (which consent shall not be unreasonably
withheld) or (ii) effected without its written consent if the settlement is
entered into more than thirty business days after the indemnifying party shall
have received a request from the indemnified party for reimbursement for the
reasonable fees and expenses of counsel (in any case where such fees and
expenses are at the expense of the indemnifying party) and, prior to the date of
such settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to herein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Senior Discount Debentures 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, on the
one hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Issuers, on the one hand
and the Initial Purchasers, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Senior Discount
Debentures (after discounts and commissions, but before deducting expenses)
received by the Issuers, and the total discounts and commissions received by the
Initial Purchasers bear to the total price to investors of the Senior Discount
Debentures, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault of the Issuers, on the one hand, and the
Initial Purchasers, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Issuers, on the one hand, or the Initial Purchasers,
on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
22
The Issuers and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, the Initial Purchasers shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchasers exceeds the amount of any damages which the Initial
Purchasers have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph (d),
each member of the Management Committee or each director of the Issuers, each
officer of the Issuers, and each person, if any, who controls the Issuers 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 Issuers.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. Conditions of Initial Purchasers' Obligations. The obligations of
the Initial Purchasers to purchase the Senior Discount Debentures under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Issuers
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Issuers or any securities of the Issuers (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act, (ii) there
shall not have occurred any change, nor shall notice have been given of any
potential or
23
intended change, in the outlook for any rating of the Issuers by any such rating
organization and (iii) no such rating organization shall have given notice that
it has assigned (or is considering assigning) a lower rating to the Debentures
than that on which the Debentures were marketed.
(c) Since the respective dates as of which information is
given in the Offering Memorandum, other than as set forth in or contemplated by
the Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there shall not have occurred any
material adverse change in the condition, financial or otherwise, or the
earnings, business, management, prospectus (viewed as of the Closing Date) or
operations of the Issuers and their subsidiaries, taken as a whole, (ii) there
shall not have been any material adverse change or in the capital stock or in
the long-term debt of the Issuers and their subsidiaries, taken as a whole, and
(iii) neither the Issuers nor any of their subsidiaries shall have incurred any
liability or obligation, direct or contingent, the effect of which, in any such
case described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Senior Discount Debentures on the terms and in the manner contemplated in the
Offering Memorandum.
(d) The Initial Purchasers shall have received on the Closing
Date a certificate dated the Closing Date, signed by the Presidents and the
Chief Financial Officers of the Issuers, confirming the matters set forth in
Sections 9(a), 9(b) and 9(c) and stating that each of the Issuers has complied
with all agreements and satisfied all of the conditions herein contained and
required to be complied with or satisfied on or prior to the Closing Date.
(e) The Initial Purchasers shall have received on the Closing
Date an opinion (satisfactory to you and counsel for the Initial Purchasers),
dated the Closing Date, of Paul, Weiss, Rifkind, Wharton & Garrison, special
counsel for the Issuers, to the effect that:
(i) each of the Issuers, has been duly incorporated or
organized, as applicable, is validly existing as a limited
liability company or corporation, as applicable, in good
standing under the laws of its jurisdiction of organization
and has the limited liability company or corporate power and
authority, as applicable, to carry on the business as
described in the Offering Memorandum and to own lease and
operate its properties.
(ii) each of the Issuers is duly qualified and in good
standing as foreign limited liability company or corporation,
as applicable, authorized to do business in each jurisdiction
listed on Schedule I hereto;
(iii) the Issuers have duly authorized the Senior
Discount Debentures and, when executed, issued and
authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the
24
Senior Discount Debentures will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the
Issuers, enforceable against the Issuers in accordance with
their terms except as (x) the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance or
transfer, moratorium or similar laws affecting creditors'
rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability whether asserted in law or
in equity;
(iv) the Indenture has been duly authorized, executed
and delivered by the Issuers and is a valid and binding
agreement of the Issuers, enforceable against the Issuers in
accordance with its terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance or transfer, moratorium or similar laws affecting
creditors' rights generally and (y) rights of acceleration and
the availability of equitable remedies may be limited by
equitable principles of general applicability whether asserted
in law or in equity;
(v) this Agreement has been duly authorized, executed
and delivered by the Issuers;
(vi) the Registration Rights Agreement has been duly
authorized, executed and delivered by the Issuers and is a
valid and binding agreement of the Issuers enforceable against
the Issuers in accordance with its terms, except as (x) the
enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally, (y) rights
of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability
whether asserted in action at law or in equity and (z)
indemnification or contribution provisions may be held to be
unenforceable;
(vii) the Issuers have duly authorized the New Senior
Discount Debentures and, when the New Senior Discount
Debentures are issued and authenticated in accordance with the
terms of the Registered Exchange Offer and the Indenture, the
new Senior Discount Debentures will be the legally valid and
binding obligations of the Issuers, enforceable against the
Issuers in accordance with their terms except as (x) the
enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally and (y)
rights of acceleration and the availability of equitable
25
remedies may be limited by equitable principles of general
applicability whether asserted in law or in equity;
(viii) the statements under the captions "Description of
Debentures", `Transactions", "Business--Environmental Matters
--Legal Proceedings", "Certain Relationships and Related
Transactions" and "Description of Certain Indebtedness" in the
Offering Memorandum, insofar as such statements refer to
matters arising under or governed by Applicable Law (as
hereinafter defined) and constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly
present in all material respects such legal matters, documents
and proceedings;
(ix) such counsel is of the opinion ascribed to it in
the Offering Memorandum under the caption "United States
Federal Tax Considerations for Non-United States Holders";
(x) based on current provisions of the Internal Revenue
Code of 1986, as amended, applicable regulations promulgated
by the Department of Treasury, and the current administrative
and judicial interpretations thereof, Holdings has been
properly treated either as a partnership or (y) not as an
entity separate from its sole member for all periods of its
existence and should not have been treated as an "association"
taxable as a corporation; no assurance can be given that
changes in applicable law, regulations or administrative
rulings, procedures or announcements, or that judicial
decisions would not adversely affect the classification of
such entities for federal income tax purposes.
(xi) to such counsel's knowledge, the Issuers (i) are
not in violation of their respective charter or by-laws and
(ii) are not in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or
instrument to which the Issuers are a party or by which the
Issuers or any of their respective properties are bound, which
indenture, loan agreement, mortgage, lease or other agreement
or instrument is material to the Issuers, taken as a whole,
and would be required to be filed as an exhibit to a
registration statement of Holdings on Form S-1 covering this
offering of the Senior Discount Debentures;
(xii) except as described in the Offering Memorandum,
the execution, delivery and performance of this Agreement and
the other Operative Documents by the Issuers, compliance by
the Issuers with all
26
provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i)
require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or
agency of the United States or the State of New York or under
the Limited Liability Company Act of the State of Delaware
(the "DLLC Act") or the Delaware General Corporation Law
("GCL", together with the DLLC Act, the "Delaware Laws")
(except such as may be required under the securities or Blue
Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws or operating agreements,
as applicable, of the Issuers to such counsel's knowledge, any
indenture, loan agreement, mortgage, lease or other agreement
or instrument is material to Holdings or its subsidiaries,
taken as a whole, and would be required to be filed as an
exhibit to a registration statement of Holdings on Form S-1
covering this offering of the Senior Discount Debentures, or
(iii) violate or conflict with any Applicable Law (as
hereinafter defined) or any judgement, order or decree known
to such counsel of any court or any governmental body or
agency of the United States or the State of New York that has
jurisdiction over the Issuers or their respective properties,
except, in each case, where such failure to obtain consent,
such conflict, breach, default or violation will not result in
a Material Adverse Effect. The term "Applicable Law" means the
Delaware Laws, the laws of the State of New York and the laws,
rules and regulations of the United States, in each case,
which in such counsel's experience are normally applicable to
a transaction of the type contemplated by this Agreement.
(xiii) except as described in the Offering Memorandum,
such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Issuers are or
would be a party or to which any of their respective
properties are or would be subject, which, if adversely
determined, would result, singly or in the aggregate, in a
Material Adverse Effect.
(xiv) the Issuers after giving effect to the offering
and sale of the Senior Discount Debentures and the application
of the net proceeds thereof as described in the Offering
Memorandum, will not be required to register under the
Investment Company Act of 1940, as amended, as an "investment
company" as such term is defined in such Act;
(xv) the Indenture appears on its face to be
appropriately responsive in all material respects to the
requirements of the TIA, and the
27
rules and regulations of the Commission applicable to an
indenture which is qualified thereunder. It is not necessary
in connection with the offer, sale and delivery of the Senior
Discount Debentures to the Initial Purchasers in the manner
contemplated by this Agreement or in connection with the
Exempt Resales to qualify the Indenture under the TIA.
(xvi) no registration under the Securities Act of the
Senior Discount Debentures is required for the sale of the
Senior Discount Debentures to the Initial Purchasers as
contemplated by this Agreement or for the Exempt Resales
assuming that (i) each Initial Purchaser is a QIB or a
Regulation S Purchaser, (ii) the accuracy of, and compliance
with, the Initial Purchasers' representations and agreements
contained in Section 7 of this Agreement, (iii) the accuracy
of the representations of the Issuers set forth in Sections
5(h) and 6(ac), (ad), (ae) and (ak) of this Agreement.
In addition, such counsel shall state that no facts have come
to such counsel's attention that cause such counsel to believe that, as of the
date of the Offering Memorandum or as of the Closing Date, the Offering
Memorandum, as amended or supplemented, if applicable (except for the financial
statements and other financial data included therein or omitted therefrom, as to
which such counsel need not express any belief) contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The opinion of Paul, Weiss, Rifkind, Wharton & Garrison
described in Section 9(e) above shall be rendered to you at the request of the
Issuers and shall so state therein. With respect to the matters covered by the
statement in the first sentence of this paragraph, Paul, Weiss, Rifkind, Wharton
& Garrison may state that their belief is based upon their participation in the
preparation of the Offering Memorandum and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification except as specified and such counsel may rely as to
materiality to the extent they deem appropriate upon facts provided to such
counsel by officers and other representatives of the Issuers.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of Keith Simmons, Esq., General Counsel of the Issuers, to the effect
that:
(i) except as described in the Offering Memorandum, such
counsel does not know of any legal or governmental proceedings
pending or threatened to which the Issuers are or could be a
party or to which any
28
of their respective properties are or could be subject, which
would result, singly or in the aggregate, in a Material
Adverse Effect;
(ii) except as described in the Offering Memorandum, to
such counsel's knowledge, the Issuers have not violated any
Environmental Law or any provisions of ERISA, or the rules or
regulations thereunder, except for such violations which,
singly or in the aggregate, would not have a Material Adverse
Effect;
(iii) except as described in the Offering Memorandum, to
such counsel's knowledge, each of the Issuers has such
permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, an "Authorization")
of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including,
without limitation, under any applicable Environmental Laws,
as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except
where the filing or notice would not, singly or in the
aggregate, have a Material Adverse Effect; except as described
in the Offering Memorandum, to such counsel's knowledge, each
such Authorization is valid and in full force and effect and
each of the Issuers is in compliance with all the terms and
conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including the
receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations
contain no restrictions that are burdensome to the Issuers;
except where such failure to be valid and in full force and
effect or to be in compliance on the occurrence of any such
event would not, singly or in the aggregate, have a Material
Adverse Effect; and
(iv) except as described in the Offering Memorandum, to
such counsel's knowledge, there are no contracts, agreements
or understandings between the Issuers and any person granting
such person the right to require the Issuers to include any
securities with the Senior Discount Debentures registered
pursuant to any Registration Statement. The opinions to be
rendered by such counsel shall also be subject to customary
exceptions and assumptions.
29
(g) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of Latham & Watkins, counsel for the
Initial Purchasers, in form and substance reasonably satisfactory to the Initial
Purchasers.
(h) The Initial Purchasers shall have received, at the time
this Agreement is executed and at the Closing Date, letters dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers from Ernst & Young LLP and Price
Waterhouse, independent public accountants for the Issuers and, in each case
containing the information and statements of the type ordinarily included in
accountants' "comfort letters" to the Initial Purchasers with respect to the
financial statements and certain financial information contained in the Offering
Memorandum.
(i) The Senior Discount Debentures shall have been approved
for trading on, and duly listed in, PORTAL.
(j) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Issuers and the Trustee.
(k) The Issuers shall have executed the Registration Rights
Agreement and the Initial Purchasers shall have received an original copy
thereof, duly executed by the Issuers.
(l) The Issuers shall have executed this Agreement and the
Initial Purchasers shall have received an original copy thereof, duly executed
by the Issuers.
(m) The Company shall have entered into the New Credit
Facility (the form and substance of which shall be reasonably acceptable to the
Initial Purchasers) and the Initial Purchasers shall have received counterpart,
conformed as executed, thereof and of all other documents and agreements entered
into in connection therewith.
(n) Each condition to the closing contemplated by the New
Credit Facility (other than the issuance and sale of the Senior Subordinated
Notes and Subsidiary Guarantees pursuant thereto) shall have been satisfied or
waived. There shall exist at and as of the Closing Date (after giving effect to
the transactions contemplated by this Agreement and the Acquisition Agreement)
no conditions that would constitute a default (or an event that with notice or
the lapse of time, or both, would constitute a default) under the New Credit
Facility. On the Closing Date, the closing under the New Credit Facility shall
have been consummated on terms that conform in all material respects to the
description thereof in the Offering Memorandum.
(o) Each condition to the closing of the Acquisition
contemplated by the Acquisition Agreement (other than the issuance and sale of
the Senior Subordinated Notes
30
pursuant thereto and the closing under the New Credit Facility) shall have been
satisfied or waived. There shall exist at and as of the Closing Date (after
giving effect to the transactions contemplated by this Agreement and the New
Credit Facility) no conditions that would constitute a default (or an event that
with notice or the lapse of time, or both, would constitute a default) under the
Acquisition Agreement. On the Closing Date, the Acquisition shall have been
consummated on terms that conform in all material respects to the description
thereof in the Offering Memorandum and the Initial Purchasers shall have
received evidence satisfactory to the Initial Purchasers of the consummation
thereof.
(p) Latham & Watkins shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably require
for the purpose of enabling them to review or pass upon the matters referred to
in this Section 9 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations, warranties
or conditions herein contained.
(q) Prior to the Closing Date, the Issuers shall have
furnished to the Initial Purchasers such further information, certificates and
documents as the Initial Purchasers may reasonably request.
(r) The Issuers shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Issuers at or prior to the
Closing Date.
10. Effectiveness of Agreement and Termination. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time prior to the Closing
Date by the Initial Purchasers by written notice to the Issuers if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in the Initial
Purchasers' judgment, is material and adverse and, in the Initial Purchasers'
judgment, makes it impracticable to market the Senior Discount Debentures on the
terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Issuers on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Issuers and their
subsidiaries, taken as a whole,
31
(v) the declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date either of the Initial Purchasers shall fail
or refuse to purchase the Senior Discount Debentures which it or they have
agreed to purchase hereunder on such date and the aggregate principal amount of
the Senior Discount Debentures which such defaulting Initial Purchaser or
Initial Purchasers, as the case may be, agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount of the Senior
Discount Debentures to be purchased on such date by all Initial Purchasers, each
non-defaulting Initial Purchaser shall be obligated severally, in the proportion
which the principal amount of the Senior Discount Debentures set forth opposite
its name in Schedule B bears to the aggregate principal amount of the Senior
Discount Debentures which all the non-defaulting Initial Purchasers, as the case
may be, have agreed to purchase, or in such other proportion as you may specify,
to purchase the Senior Discount Debentures which such defaulting Initial
Purchaser or Initial Purchasers, as the case may be, agreed but failed or
refused to purchase on such date; provided that in no event shall the aggregate
principal amount of the Senior Discount Debentures which any Initial Purchaser
has agreed to purchase pursuant to Section 2 hereof be increased pursuant to
this Section 11 by an amount in excess of one-ninth of such principal amount of
the Senior Discount Debentures without the written consent of such Initial
Purchaser. If on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase the Senior Discount Debentures and the
aggregate principal amount of the Senior Discount Debentures with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of the Senior Discount Debentures to be purchased by all Initial
Purchasers and arrangements satisfactory to the Initial Purchasers and the
Issuers for purchase of such Senior Discount Debentures are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Initial Purchaser and the Issuers. In any such case
which does not result in termination of this Agreement, either you 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
Offering Memorandum or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Initial
Purchaser from liability in respect of any default of any such Initial Purchaser
under this Agreement.
11. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Issuers, to 1565 Buchanan
Trail East, P.O. Box 21, Shady Grove, PA 17256, Attention: Keith Simmons, with a
copy to Grove Investors LLC, c\o Paul, Weiss, Rifkind, Wharton & Garrison, 1285
Avenue of the Americas, New York, NY 10019, Attention: Mathew Nimetz and Bruce
Gruder, and (ii) if to the Initial Purchasers, Donaldson, Lufkin & Jenrette
Securities Corporation, 277 Park Avenue, New York, New York
32
10172, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Issuers and the Initial
Purchasers set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Senior Discount Debentures, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the Initial
Purchasers, the officers or directors of the Initial Purchasers, any person
controlling the Initial Purchasers, the Issuers, the officers or directors of
the Issuers, or any person controlling the Issuers, (ii) acceptance of the
Senior Discount Debentures and payment for them hereunder and (iii) termination
of this Agreement.
If this Agreement shall be terminated by the Initial Purchasers
because of any failure or refusal on the part of the Issuers to comply with the
terms or to fulfill any of the conditions of this Agreement, the Issuers,
jointly and severally, agree to reimburse the Initial Purchasers for all
out-of-pocket expenses (including the reasonable fees and disbursements of
counsel) reasonably incurred by them. Notwithstanding any termination of this
Agreement, the Issuers shall be liable for all expenses which they have agreed
to pay pursuant to Section 5(i) hereof. The Issuers also agree, jointly and
severally, to reimburse each Initial Purchaser and its officers, directors and
each person, if any, who controls such Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act for any and
all fees and expenses (including without limitation the reasonable fees and
expenses of counsel) incurred by them in connection with enforcing their rights
under this Agreement (including without limitation its rights under this Section
12).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Issuers, the Initial
Purchasers, the Initial Purchasers' directors and officers, any controlling
persons referred to herein, the directors of the Issuers and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Senior Discount Debentures from the Initial Purchasers merely because
of such purchase.
This Agreement shall be governed and construed in accordance with
the internal laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
* * * *
33
Please confirm that the foregoing correctly sets forth the agreement
among the Issuers and the Initial Purchasers as of the date first above written.
Very truly yours,
GROVE HOLDINGS, LLC
By: /s/ Salvatore J. Bonanno
-------------------------------
Name:
Title:
GROVE HOLDINGS CAPITAL, INC.
By: /s/ Salvatore J. Bonnano
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Name:
Title:
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written
by Donaldson, Lufkin & Jenrette
Securities Corporation on behalf
of the Initial Purchasers.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Edward Biggins
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Name:
Title: