Exhibit 4.4
ENVIRONMENTAL SYSTEMS PRODUCTS HOLDINGS INC.
and
ENVIROSYSTEMS CORP.
$100,000,000
Aggregate Principal Amount of
13% Senior Subordinated Notes due 2008
and 2,291.268 Shares of
Series A Common Stock
PLACEMENT AGREEMENT
October 15, 1998
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Environmental Systems Products Holdings Inc., a Delaware
corporation (the "Company"), proposes to issue and sell $100,000,000 aggregate
principal amount of the Company's 13% Senior Subordinated Notes due 2008 (the
"Notes") and EnviroSystems Corp., a Delaware corporation and the sole
shareholder of the Company (the "Parent"), proposes to issue and sell 2,291.268
shares (the "Series A Shares") of Series A common stock, par value $0.0001 per
share (the "Series A Common Stock"), of the Parent. The Notes are to be issued
under an indenture, dated as of October 16, 1998 (the "Indenture"), among the
Company, the Parent, the Guarantors (as defined) and United States Trust Company
of New York, as Trustee (the "Trustee"), which Notes will be unconditionally
guaranteed by the guarantors listed on Schedule A hereto (collectively, the
"Guarantors," and together with the Company and the Parent, the "Issuers"). For
purposes of this agreement, (i) the term "Securities" means the Notes, together
with
the guarantees (the "Guarantees") thereof by the Guarantors, and the Series A
Shares and (ii) references to "Subsidiaries" or "subsidiaries" of the Company
shall mean all subsidiaries of the Company, including Envirotest Systems Corp.,
a Delaware corporation ("Envirotest"), and the direct and indirect subsidiaries
of Envirotest, and Environmental Systems Products, Inc., a Delaware corporation
("ESP"), and the direct and indirect subsidiaries of ESP. The United States
Securities Act of 1933, as amended, is herein referred to as the "Securities
Act."
Pursuant to the terms of an Agreement and Plan of Merger, dated as of
August 12, 1998 (the "Merger Agreement"), among ESP, Stone Rivet, Inc., a
Delaware corporation ("Stone Rivet") and a wholly-owned subsidiary of ESP, and
Envirotest, Stone Rivet made a cash tender offer (the "Equity Offer") to acquire
all of the issued and outstanding shares of Envirotest's Class A Common Stock,
par value $.01 per share, under an Offer to Purchase, dated August 19, 1998 (the
"Equity Offer to Purchase"). Pursuant to the Merger Agreement, (i) upon
completion of the Equity Offer, Stone Rivet will be merged with and into
Envirotest, (ii) the separate corporate existence of Stone Rivet will cease and
(iii) Envirotest will continue as the surviving corporation (the above
transactions are herein referred to as the "Merger"). The net proceeds of the
sale of the Notes and the Series A Shares, together with the net proceeds from
the sale by the Parent of 15% Senior Discount Notes due 2009 and shares of
Series A Common Stock in connection therewith (the "Senior Discount
Transaction"), a portion of the initial borrowings under the New Credit Facility
(as defined below), available cash and the proceeds of the Equity Investment (as
defined below), will be used to finance the Merger and to complete the
Refinancing Plan (as defined below). Concurrently with the consummation of the
issuance and sale of the Notes and the Series A Shares hereunder, Alchemy
Partners (Guernsey) Limited, a U.K. partnership, shall cause to be made by
certain shareholders of Newmall Ltd., a company incorporated under the laws of
England and Wales, an indirect equity contribution of approximately $80 million
to ESP (the "Equity Contribution"). Immediately prior to the issuance and sale
of the Notes and the Series A Shares, the shareholders of Newmall shall exchange
their Newmall shares for shares of stock in the Company (the "Newmall Share
Exchange"). In addition, the shareholders of the Company shall exchange their
shares of the Company for shares of the Parent (the "Company Share Exchange"
and, collectively with the Newmall Share Exchange, the "Share Exchange"). In
addition, the Parent and the purchasers party thereto shall enter into a share
price adjustment agreement, dated October 16, 1998 (the "Share Price Adjustment
Agreement"), regarding the shares of Series A Common Stock to be issued in
connection with this Agreement and the Senior Discount Transaction (the "Share
Price Adjustment"). At or prior to the issuance and sale of the Notes and the
Series A Shares, the Parent, the Company and certain of its subsidiaries intend
to
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complete a refinancing plan (the "Refinancing Plan"). The principal elements of
the Refinancing Plan are: (i) the issuance and sale of the Notes and the Series
A Shares; (ii) the Senior Discount Transaction; (iii) the offers by the Company
to purchase, and the solicitation of consents (together, the "Debt Offers") from
the holders of, all of the outstanding 9 1/8% Senior Notes due 2001 (the "2001
Notes") and 9 5/8% Senior Subordinated Notes due 2003 (the "2003 Notes" and,
together with the 2001 Notes, the "Existing Notes") of Envirotest pursuant to
Offers to Purchase and Consent Solicitations, each dated September 1, 1998 (the
"Debt Offers to Purchase"); (iv) the entering by the Company into a new senior
secured credit facility consisting of up to approximately an aggregate of $385
million of term loan facilities and up to approximately an aggregate of $50
million of revolving credit facilities (the "New Credit Facility") with Credit
Suisse First Boston Corporation ("CSFB"), as administrative and collateral
agent, DLJ Capital Funding, Inc. ("DLJCF"), as syndication agent, and certain
lenders named therein; (v) the repayment in full of indebtedness under ESP's
existing credit facility (the "ESP Credit Facility") and the termination of such
facility; (vi) the repayment in full of approximately $___ million of other
outstanding indebtedness of Envirotest; (vii) the Equity Contribution; and
(viii) certain other refinancing transactions (together with the transaction
described in (vi) above, the "Other Refinancings"). After the Closing Date, upon
consummation of the Merger, pursuant to a Stock Purchase Agreement, dated
______, 1998 (the "Envirotest Agreement"), between ESP and the Company, all of
the outstanding capital stock of Envirotest will be sold to the Company by ESP
(the "Envirotest Sale") in exchange for a subordinated note of the Company in
the amount of $[80.0] million to be issued to ESP. Upon consummation of the
Envirotest Sale, Envirotest will become a wholly-owned direct subsidiary of the
Company. In addition, the Company expect that after the Closing Date (as
hereinafter defined), it and/or one of its subsidiaries will enter into a
written agreement, (the "Transervice Agreement"), with Wellman Overseas Ltd., an
affiliate of the Company ("Wellman"), to acquire the Transervice division of
Wellman (the "Transervice Acquisition") for aggregate consideration of
approximately $13.5 million.
This Agreement, the Indenture, the Securities, the Subscription Agreement,
dated October 15, 1998 (the "Subscription Agreement"), among the Issuers and the
purchasers named therein substantially in the form of Exhibit B hereto, the
Registration Rights Agreement, dated October 16, 1998 (the "Registration Rights
Agreement"), among the Parent, the Company, DLJ Investment Partners, L.P., DLJ
ESC II, L.P., DLJ Investment Funding, Inc., Chase Equity Associates L.P. and
Credit Suisse First Boston (Europe) Limited, the Investors Agreement, dated
October 16, 1998 (the "Investors Agreement"), among the Parent, Alchemy Partners
(Guernsey) Limited, DLJ Merchant Banking Partners II, L.P., DLJ Merchant Banking
Partners
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II-A, L.P., DLJ Offshore Partners II, C.V., DLJ Diversified Partners, L.P., DLJ
Diversified Partners-A, L.P., DLJMB Funding II, Inc., DLJ Millennium Partners,
L.P., DLJ Millennium Partners-A, L.P., DLJ EAB Partners, L.P., UK Investment
Plan 1997 Partners, DLJ First ESC, L.P., DLJ ESC II, L.P., DLJ Investment
Partners, L.P., DLJ Investment Funding, Inc., Credit Suisse First Boston
(Europe) Limited, Chase Equity Associates L.P. and the other securityholders
named therein, the Merger Agreement, the Equity Offer to Purchase, the Debt
Offers to Purchase, the agreements evidencing the Equity Contribution, the
agreements evidencing the Senior Discount Transaction, the Share Price
Adjustment Agreement, the agreements evidencing the Share Exchange, the New
Credit Facility and the agreements creating security interests in the assets of
the Company for the benefit of the holders of indebtedness arising under the New
Credit Facility (together with the New Credit Facility, the "Bank Agreements"),
the Envirotest Agreement and the Transervice Agreement are sometimes referred to
in this Agreement, individually, as a "Transaction Document" and, collectively,
as the "Transaction Documents," and the Merger, the Equity Offer, the Debt
Offers, the Equity Contribution, the Senior Discount Transaction, the Share
Exchange, the Share Price Adjustment, the execution and delivery of the Bank
Agreements, the repayment and termination of the ESP Credit Facility, the Other
Refinancings, the Envirotest Sale, the Transervice Acquisition, the execution
and delivery of the Indenture, and the issuance and sale of the Notes and the
Series A Shares are sometimes referred to herein, individually, as a
"Transaction" and collectively, as the "Transactions."
Holders (including subsequent transferees) of the Securities will have the
rights (including the registration rights obligations) set forth in the
Registration Rights Agreement and the Investors Agreement. Pursuant to the
Registration Rights Agreement and the Investors Agreement, the Issuers will
agree to file with the Securities and Exchange Commission (the "Commission")
under the circumstances set forth therein, a registration statement under the
Securities Act (the "Registration Statement") registering the Securities. The
Investors Agreement also contains various restrictions on the transfer of Series
A Shares, various provisions requiring and in certain cases permitting Series A
stockholders to participate in sales of Series A Common Stock by the other
Series A Common stockholders that are party to that agreement and certain rights
to subscribe for newly issued Series A Common Stock of the Company.
Subject to the terms and conditions stated herein, the Issuers hereby
appoint Credit Suisse First Boston Corporation (the "Placement Agent") as the
exclusive agent of the Company for the purpose of soliciting offers to purchase
the Notes and the Series A Shares from the Company in transactions that are
intended to be exempt
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from the Securities Act.
2. Representations and Warranties of the Issuers. Each of the Issuers,
jointly and severally, represents and warrants to, and agrees with, the
Placement Agent that, as of the date hereof and as of the Closing Date:
(a) An offering memorandum (the "Offering Memorandum") relating to
the Securities to be sold to the purchasers thereof has been prepared by
the Company and the Parent. Such Offering Memorandum shall be referred to
herein as the "Offering Document." On the date of this Agreement and as of
the Closing Date, the Offering Document does not and will not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Each of the Parent and the Company was duly incorporated and is
in good standing under the laws of the jurisdiction of its incorporation,
with the power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Document; and each
of the Parent and the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect upon the business, condition (financial or
otherwise), properties or results of operations of the Parent, the Company
and its subsidiaries, taken as a whole (a "Material Adverse Effect").
(c) Each subsidiary of the Company was duly incorporated and is in
good standing under the laws of the jurisdiction of its incorporation,
with the power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Document; and each
subsidiary of the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified would not
have a Material Adverse Effect; except as disclosed in the Offering
Document, all of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and validly issued and
is fully paid and nonassessable; and the capital stock of each subsidiary
owned by the Company, directly or through
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subsidiaries, is owned free from liens, encumbrances and defects.
(d) All of the issued and outstanding shares of capital stock of
each of the Parent and the Company were duly authorized and validly
issued, are fully paid and non-assessable and were not issued in violation
of any preemptive or similar rights. Except as disclosed in the Offering
Document, there are no outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments convertible into
or exchangeable for, any capital stock of the Parent or the Company.
(e) The Indenture has been duly authorized by each Issuer; and when
the Notes, the Guarantees and the Series A Shares are delivered and paid
for pursuant to this Agreement and the Subscription Agreement on the
Closing Date (as defined below), the Indenture will have been duly
executed and delivered by each of the Issuers which is a party thereto,
and the Indenture will constitute valid and legally binding obligations of
each of the Issuers which is a party thereto, enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles and, as to rights of indemnification and contribution, to
principles of public policy and federal and state securities laws relating
thereto.
(f) The Notes and the Guarantees have been duly authorized by the
Company and the Guarantors, respectively, and, when issued and delivered
to and paid for by the purchasers thereof in accordance with the terms of
the Subscription Agreement, the Notes and the Guarantees will conform in
all material respects to the description thereof in the Offering Document.
(g) At the Closing Date, the Notes and the Guarantees will have been
duly executed by the Company and the Guarantors, respectively, and, when
the Notes are authenticated in the manner provided for in the Indenture
and delivered against payment of the purchase price therefor, the Notes
and the Guarantees will constitute valid and legally binding obligations
of the Company and the Guarantors, respectively, enforceable against the
Company and the Guarantors, respectively, in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles and, as to
rights of indemnification and
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contribution, to principles of public policy and federal and state
securities laws relating thereto.
(h) The Subscription Agreement has been duly authorized, executed
and delivered by each Issuer.
(i) The Series A Shares have been duly authorized and, when issued
and delivered to and paid for by the purchasers thereof in accordance with
the terms of the Subscription Agreement, will have been validly issued and
will be fully paid and non-assessable.
(j) The Securities, the Indenture, the Registration Rights Agreement
and the Investors Agreement will conform in all material respects to the
respective statements relating thereto contained in the Offering Document.
(k) There are no preemptive rights or similar rights that have not
been waived to subscribe for or purchase the Notes by the Company or the
Series A Shares by the Parent upon their issuance and sale pursuant to
this Agreement and the Subscription Agreement. No securityholder of any
Issuer has any right that has not been waived to require such Issuer to
register the sale of any securities owned by such securityholder under the
Securities Act in the offering and sale contemplated by this Agreement and
the Subscription Agreement.
(l) Except as disclosed in the Offering Document or other documents
or agreements to which CSFB, DLJCF or one or more of their respective
affiliates is a party, there are no contracts, agreements or
understandings between any Issuer and any person that would give rise to a
valid claim against any of the Issuers or any or their affiliates or the
Placement Agent for a brokerage commission, finder's fee or other like
payment in connection with the Transactions.
(m) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between any of the Issuers and any
person granting such person the right to require any of the Issuers to
file a registration statement under the Securities Act with respect to any
securities of any of the Issuers owned or to be owned by such person or to
require any of the Issuers to include such securities in any registration
statement filed by any of the Issuers under the Securities Act.
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(n) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the Transactions as contemplated by (i) this Agreement and
the Subscription Agreement in connection with the issuance and sale of the
Securities by the Issuers or (ii) any other Transaction Documents in
connection with the consummation of the transactions contemplated therein,
other than those consents, approvals, authorizations, orders or filings
that have been made or obtained and such as may be required by the
Securities Act (including Regulation D thereunder) and securities or blue
sky laws of any state of the United States or of any foreign jurisdiction
in connection with the offer and sale of the Securities and as may be
required under the Securities Act in connection with the Registration
Rights Agreement and the Investors Agreement.
(o) The issuance and sale of the Securities, and the execution,
delivery and performance of each of the Transaction Documents and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Parent, the Company or any subsidiary of the Parent
or the Company or any of their respective properties, or any agreement or
instrument to which the Parent, the Company or any such subsidiary is a
party or by which the Parent, the Company or any such subsidiary is bound
or to which any of the properties of the Parent or the Company or any such
subsidiary is subject, or the charter or by-laws of the Company, the
Parent or any such subsidiary, and each of the Issuers has full power and
authority to authorize, issue and sell the Securities as contemplated by
this Agreement.
(p) Each of this Agreement and the Subscription Agreement has been
duly authorized, executed and delivered by each of the Issuers. Each of
the other Transaction Documents has been, or as of the Closing Date will
have been, duly authorized, executed and delivered by each of the Parent,
the Company and their subsidiaries (to the extent each is a party thereto)
and each conforms or will conform in all material respects to the
descriptions thereof contained in the Offering Document and each will
constitute valid and legally binding obligations of the Parent, the
Company and their subsidiaries (to the extent each is a party thereto),
enforceable in accordance with its respective terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
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moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles and, as to
rights of indemnification and contribution, to principles of public policy
and federal and state securities laws relating thereto.
(q) Except as disclosed in the Offering Document, the Parent, the
Company and their subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each case
free from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Offering Document, the
Parent, the Company and their subsidiaries hold any leased real or
personal property under valid and enforceable leases with no exceptions
that would materially interfere with the use made or to be made thereof by
them.
(r) The Parent, the Company and their subsidiaries possess all
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them
and have not received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit that, if
determined adversely to the Parent, the Company or any of its
subsidiaries, would individually or in the aggregate, have a Material
Adverse Effect.
(s) Neither the Parent, the Company nor any of their subsidiaries is
in violation of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Parent, the Company or any of their subsidiaries is a party or by which or
any of them may be bound, or to which any of the property or assets of the
Parent, the Company or any of their subsidiaries is subject, except for
such defaults that would not, individually or in the aggregate, have a
Material Adverse Effect.
(t) Except as disclosed in the Offering Document, no labor strike,
slowdown, stoppage or dispute (except for routine disciplinary and
grievance matters) with the employees of the Parent, the Company or any of
their subsidiaries exists or, to the knowledge of the Parent or the
Company, is imminent, that could reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
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(u) The Parent, the Company and their subsidiaries own, possess,
have the legal rights to use or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property rights") used in the business now
operated by them, or presently employed by them and have not received any
notice of infringement of or conflict with asserted rights of others with
respect to any intellectual property rights that, if determined adversely
to the Parent, the Company or any of their subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(v) Except as disclosed in the Offering Document, none of the
Parent, the Company or any of their subsidiaries (i) is in violation of
any statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"), (ii)
to its knowledge owns or operates any real property contaminated with any
substance that is subject to any environmental laws, (iii) is liable for
any off-site disposal or contamination pursuant to any environmental laws,
or (iv) is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Parent, the Company and
their subsidiaries are not aware of any pending investigation which might
lead to such a claim.
(w) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Parent, the
Company, any of their subsidiaries or any of their respective properties
that, if determined adversely to the Parent, the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect or would materially and adversely affect the ability of the
Parent, the Company and their subsidiaries to perform their respective
obligations under the Transaction Documents, or which are otherwise
material in the context of the sale of the Securities and the consummation
of the other Transactions; and, to the Parent's, the Company's and their
subsidiaries' knowledge, no such actions, suits or proceedings are
threatened or contemplated.
(x) The historical financial statements of each of ESP and
Envirotest and their respective consolidated subsidiaries included in the
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Offering Document present fairly the financial position of each of ESP and
Envirotest and their respective consolidated subsidiaries as of the dates
shown and their results of operations and cash flows for the periods
shown, and such financial statements have been prepared in conformity with
the generally accepted accounting principles in the United States applied
on a consistent basis. The assumptions used in preparing the pro forma
financial statements included in the Offering Document provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the related
pro forma adjustments give appropriate effect to those assumptions, and
the pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement amounts.
The pro forma financial statements of the Company and the Parent, together
with related schedules and notes, set forth in the Offering Document
comply in all material respects with the requirements applicable to pro
forma financial statements to be included in a registration statement on
Form S-1 under the Securities Act.
(y) Except as disclosed in the Offering Document, since the date of
the latest financial statements included in the Offering Document, there
has been no material adverse change in the business, condition (financial
or other), properties or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Change"), nor any
development or event involving a prospective Material Adverse Change and,
except as disclosed in or contemplated by the Offering Document, there has
been no dividend or distribution of any kind declared, paid or made by the
Parent or the Company on any class of its capital stock.
(z) The proceeds to the Issuers from the issuance and sale of the
Securities will not be used to purchase or carry any security except any
securities evidencing indebtedness being purchased in connection with the
Refinancing Plan. None of the Issuers is an open-end investment company,
unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the United States Investment
Company Act of 1940 (the "Investment Company Act"); and each of the
Issuers is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Offering Document and the consummation of the other Transactions, will not
be, an "investment company" as defined in the Investment Company Act.
(aa) Each of the Parent, the Company and their subsidiaries is, and
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immediately after the Closing Date will be, Solvent. As used herein, the
term "Solvent" means, with respect to each of the Parent, the Company and
its subsidiaries on a particular date, that on such date (A) the fair
market value of the assets of the Company or such subsidiary is greater
than the total amount of liabilities (including contingent liabilities) of
the Parent, the Company or such subsidiary, (B) the present fair salable
value of the assets of the Parent, the Company or such subsidiary is
greater than the amount that will be required to pay the probable
liabilities of the Parent, the Company or such subsidiary on its debts as
they become absolute and matured, (C) the Parent, the Company or such
subsidiary is able to realize upon its assets and pay its debts and other
liabilities, including contingent obligations, as they mature, and (D) the
Parent, the Company or such subsidiary does not have unreasonably small
capital.
(bb) No securities of the Parent, the Company or any of its
subsidiaries of the same class (within the meaning of Rule 144A(d)(3)
under the Securities Act) as the Securities are listed on any national
securities exchange registered under Section 6 of Exchange Act or quoted
in a U.S. automated inter-dealer quotation system.
(cc) The issuance and sale of the Securities in the manner
contemplated by this Agreement and the Subscription Agreement will be
exempt from the registration requirements of the Securities Act by reason
of Section 4(2) thereof and Regulation S thereunder; and it is not
necessary to qualify an indenture in respect of the Notes under the United
States Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act").
(dd) None of the Parent, the Company, or any of their affiliates,
nor any person acting on its or their behalf (i) has, within the six-month
period prior to the date hereof, offered or sold in the United States or
to any U.S. person (as such terms are defined in Regulation S under the
Securities Act) the Securities or any security of the same class or series
as the Securities or (ii) has offered or will offer or sell the Securities
(A) in the United States by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the Securities
Act or (B) with respect to any such securities sold in reliance on Rule
903 of Regulation S under the Securities Act, by means of any directed
selling efforts within the meaning of Rule 902(b) of Regulation S. The
Parent, the Company and any person acting on their behalf have complied
and will comply with the offering restrictions requirement of Regulation
S. Neither the Parent nor the Company has entered
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and they will not enter into any contractual arrangement with respect to
the issuance and sale of the Securities except for this Agreement, the
Registration Rights Agreement, the Investors Agreement and the
Subscription Agreement.
(ee) Neither the Parent nor the Company has, directly or indirectly,
solicited any offer to buy or offered to sell, and they will not, directly
or indirectly, solicit any offer to buy or offer to sell, in the United
States or to any United States citizen or resident, any security that is
or would be integrated with the sale of the Securities in a manner that
would require the Securities to be registered under the 1933 Act.
(ff) The issuance and sale of the Securities hereunder will not
involve any transaction that is subject to the prohibitions of Section
406(a)(1) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or in connection with which a tax could be imposed
pursuant to Section 4975(c)(1)(A)-(D) of the Internal Revenue Code of
1986, as amended (the "Code"). The representation of the Issuers in the
first sentence of this Article 2(ff) is made in reliance upon, and subject
to the accuracy of, the representations of the Purchasers in Article 4.2
of the Subscription Agreement, and with respect to any transferee, the
accuracy of the representation made by such transferee pursuant to Article
4.3(b) of the Subscription Agreement.
No condition exists or event or transaction has occurred in
connection with any Benefit Plan maintained or contributed to by the
Company and its subsidiaries, or any Affiliate of any such entity, which
is likely to result in any of them incurring any liability, fine or
penalty which singly or in the aggregate would have a material adverse
effect on the Company and its subsidiaries, taken as a whole, resulting
from the failure of the Company or its subsidiaries or any Affiliate of
any such entity to comply with ERISA insofar as such Act applies to them.
(gg) The Company is an "operating company" as such term is defined
in Department of Labor Regulation 2510.3-101(c), as may be amended.
3. Purchase, Sale and Delivery of Notes and the Series A Shares. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Placement Agent agrees
to solicit offers to purchase the Notes from the Company and the Series A Shares
from
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the Parent upon the terms and conditions set forth in the Subscription
Agreement. The Placement Agent shall have the right, in its sole discretion, to
reject any offer received by it to purchase Notes and Series A Shares, as a
whole or in part, and any such rejection by the Placement Agent shall not be
deemed a breach of its agreements contained herein. The Placement Agent shall
communicate to the Parent and the Company, orally or in writing, each offer to
purchase Notes and Series A Shares and may reject any proposed purchase of Notes
and Series A Shares as a whole or in part. Neither the Parent nor the Company
shall have any obligation to any prospective purchaser in respect of any
Securities proposed to be sold to such prospective purchaser until such
prospective purchaser has entered into the Subscription Agreement pursuant to
which purchasers will subscribe for the Notes and the Series A Shares. The
Parent and the Company agrees to pay or cause to be paid to the Placement Agent
placement fees with respect to its services as set forth in this Agreement in an
amount equal to the product of 2% and the principal amount of Notes sold. The
placement fees will be paid by the Parent and the Company to the Placement Agent
at the Closing Date by wire transfer of immediately available funds.
The Parent and Company will deliver against payment of the purchase price
the Notes, in the form of one or more permanent global securities in definitive
form (the "Global Securities") deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC. Interests in any permanent Global Securities will be held only
in book-entry form through DTC, except in the limited circumstances described in
the Indenture. The Parent will deliver the Series A Shares, in the form of
certificated securities in definitive form. Payment for the Notes and the Series
A Shares shall be made by the purchasers thereof in Federal (same day) funds by
official check or checks drawn to the order of the Parent or the Company or wire
transfer to an account at a bank acceptable to the Placement Agent, at the
office of Skadden, Arps, Slate, Meagher & Flom LLP at 9:00 A.M. (New York time),
on October 16, 1998, or at such other time not later than seven full business
days thereafter as the Placement Agent, the purchasers of such Notes and Series
A Shares, the Parent and the Company determine, such time being herein referred
to as the "Closing Date." Payment for the Notes shall be made against delivery
to the Trustee for the Notes as custodian for DTC of the Global Securities
representing all of the Notes. The Global Securities and the certificates
representing the Series A Shares to be purchased by each purchaser thereof shall
be made available for examination and packaging by the Placement Agent in The
City of New York not later than 10:00 A.M. on the last business day prior to the
Closing Date.
4. Agreement of Placement Agent Regarding No Advertising. The
14
Placement Agent agrees that it and each of its affiliates will not offer or sell
the Notes or the Series A Shares in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act, including, but not limited to (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising.
5. Certain Agreements of the Issuers. Each of the Issuers, jointly and
severally, agrees with the Placement Agent that:
(a) The Parent and the Company will advise the Placement Agent
promptly of any proposal to amend or supplement the Offering Document and
will not effect such amendment or supplementation without the Placement
Agent's consent. If, at any time prior to the completion of the placement
of the Notes and the Series A Shares by the Placement Agent, any event
occurs as a result of which the Offering Document as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any such time to amend or supplement
the Offering Document to comply with any applicable law, the Parent and
the Company promptly will notify the Placement Agent of such event and
promptly will prepare, at its own expense, an amendment or supplement
which will correct such statement or omission or effect such compliance.
Neither the Placement Agent's consent to, nor the Placement Agent's
delivery to offerees or investors of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 6.
(b) The Company will deliver to each purchaser of the Notes and
Parent will deliver to each purchaser of the Series A Shares, in
connection with the sale of the Notes and the Series A Shares, a copy of
the Offering Document, as amended and supplemented at the date of such
delivery.
(c) The Parent and the Company will furnish to the Placement Agent
copies of the Offering Document and all amendments and supplements
thereto, in each case as soon as available and in such quantities as the
Placement Agent reasonably requests, and the Parent and the Company will
furnish to the Placement Agent on the date hereof three copies of the
Offering Document signed by a duly authorized officer of each of the
Parent and the
15
Company, one of which will include the independent accountants' reports
therein manually signed by such independent accountants. At any time when
the either of the Parent or the Company is not subject to Section 13 or
15(d) of the Exchange Act, such entity will promptly furnish or cause to
be furnished to the Placement Agent and, upon request of holders and
prospective purchasers of the Securities, to such holders and purchasers,
copies of the information required to be delivered to holders and
prospective purchasers of the Securities pursuant to Rule 144A(d)(4) under
the Securities Act in order to permit compliance with Rule 144A in
connection with resales by such holders of the Securities. The Parent and
the Company will pay the expenses of printing and distributing to the
Placement Agent and the holders and the prospective purchasers of the
Securities all such documents.
(d) The Parent and the Company will arrange for the qualification of
the Securities for sale and will use their reasonable best efforts to
arrange for the determination of their eligibility for investment under
the laws of such jurisdictions as the Placement Agent designates and will
continue such qualifications in effect so long as required for the resale
of the Securities by the purchasers thereof provided that the Parent and
the Company will not be required to qualify as a foreign corporation or to
file a general consent to service of process in any such jurisdiction.
(e) During the period of five years hereafter, the Parent and the
Company will furnish to the Placement Agent and, upon request, to each
purchaser of the Securities, as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such year, if
any; and the Parent and the Company will furnish to the Placement Agent
and, upon request, to each purchaser of the Securities as soon as
available, (i) a copy of each description of reports, notices or
communications sent to securityholders or, if applicable, filed with
foreign regulators or securities exchanges, and (ii) from time to time,
such other information concerning the Parent or the Company as the
Placement Agent may reasonably request.
(f) During the period of two years after the Closing Date, the
Parent and the Company will, upon request, furnish to the Placement Agent
and any holder of Securities a copy of the restrictions on transfer
applicable to the Securities.
(g) [Intentionally omitted.]
16
(h) During the period of two years after the Closing Date, none of
the Issuers will be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act.
(i) The Issuers will pay all expenses incidental to the performance
of their obligations under this Agreement, the Subscription Agreement and
the Indenture, including (i) the fees and expenses of the Trustee and its
professional advisers in connection with the Indenture and the Securities;
(ii) all expenses in connection with the execution, issue, authentication,
packaging and initial delivery of the Securities, the preparation and
printing of this Agreement, the Indenture, the Notes, the Series A Shares,
the Offering Document and amendments and supplements thereto, and any
other document relating to the issuance, offer, sale and delivery of the
Securities; (iii) the cost of listing the Offered Securities and
qualifying the Offered Securities for trading in The Portal(SM) Market
("PORTAL"), the cost of obtaining CUSIP numbers and any expenses
incidental thereto; (iv) any expenses (including fees and disbursements of
counsel) incurred in connection with qualification of the Securities for
sale under the laws of such jurisdiction as the Placement Agent designates
and the printing of memoranda relating thereto; (v) any fees charged by
investment rating agencies for the rating of the Securities; (vi) all
costs and expenses of any Registration Statement, as set forth in the
Registration Rights Agreement and the Investors Agreement and (vii)
expenses incurred in distributing the Offering Document (including any
amendments and supplements thereto) to the Placement Agent and the
purchasers of the Notes and the Series A Shares. The Issuers will also pay
or reimburse the Placement Agent (to the extent incurred by them and, upon
the Company's request, only upon presentation to the Company of
documentation reasonably evidencing the same) for all travel expenses of
the Placement Agent and the Parent's and the Company's officers and
employees and any other expenses of the Placement Agent, the Parent and
the Company in connection with attending or hosting meetings with
prospective purchasers of the Notes and the Series A Shares.
(j) In connection with the offering, until the Placement Agent shall
have notified the Parent and the Company of the completion of the
placement of the Notes and the Series A Shares, none of the Parent, the
Company or any of their affiliates has or will, either alone or with one
or more other persons, bid for or purchase, for any account in which it or
any of its affiliates has a beneficial interest, any Securities or attempt
to induce any person to purchase
17
any Securities, and they shall not make bids or purchases for the purpose
of creating actual, or apparent, active trading in, or of raising the
price of, the Securities.
(k) For a period of 180 days after the date of the sale of the Notes
and the Series A Shares to the purchasers thereof, none of the Issuers
will offer, sell, contract to sell, announce their intention to sell,
pledge or otherwise dispose of, directly or indirectly, any United States
dollar-denominated debt securities issued or guaranteed by any of the
Issuers and having a maturity of more than one year from the date of issue
without the prior written consent of the Placement Agent. None of the
Issuers will at any time offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, pledge, contract or disposition
would cause the exemption afforded by Section 4(2) of the Securities Act
or the safe harbor of Regulation S thereunder to cease to be applicable to
the offer and sale of the Securities.
(l) The Parent and the Company agree that they will use the net
proceeds to them from the sale of the Securities in the manner described
in the Offering Document under the caption "Use of Proceeds". The Company
further agrees that on the Closing Date it will, in accordance with
respective terms of the Indenture, dated as of March 15, 1994, as
supplemented, between Envirotest, the guarantors named therein and First
Trust National Association, as trustee (the "2001 Trustee"), pursuant to
which the 2001 Notes were issued (the "2001 Indenture") and the Indenture,
dated as of April 1, 1993, as supplemented, between Envirotest, the
guarantors named therein and First Trust National Association, as trustee
(the "2003 Trustee"), pursuant to which the 2003 Notes were issued (the
"2003 Indenture"), (i) defease any and all of the 2001 Notes and the 2003
Notes remaining outstanding on such Closing Date after consummation of the
Debt Offers, in accordance with Section 8.1 of the 2001 Indenture and
Section 8.01 of the 2003 Indenture, respectively, or (ii) give such
notices to the 2001 Trustee and the 2003 Trustee, as applicable, and take
such other actions as may be required to exercise, at the earliest
practicable date, its optional redemption right under Section 3.1 of the
2001 Indenture and Section 3.01 of the 2003 Indenture, with respect to any
2001 Notes or 2003 Notes remaining outstanding after consummation of the
Debt Offers.
(m) In connection with the original distribution of the Notes and
the Series A Shares, the Issuers agree that, prior to any offer or sale of
the
18
Notes by the Company or the Series A Shares by the Parent, the Placement
Agent and counsel for the Placement Agent shall have the right to make
reasonable inquiries into the business of the Parent, the Company and
their subsidiaries. The Issuers will provide each prospective purchaser
the opportunity to ask questions of, and receive answers from, the
officers, employees and representatives of the Issuers concerning the
terms and conditions of the offering and to obtain any other additional
information about the Parent, the Company and their subsidiaries and the
Securities, to the extent the officers and employees of the Issuers
possess the same or can acquire it without unreasonable effort or expense.
(n) The Issuers will furnish or cause to be furnished to the
Placement Agent such information as the Placement Agent reasonably
believes appropriate to its appointment as Placement Agent, including
without limitation such information as the Placement Agent reasonably
believes is necessary in connection with its assistance in the preparation
of, or for inclusion in the Offering Document (all such information so
furnished being hereinafter referred to as the "Information"). It is also
understood that the Parent and the Company may make available to
prospective purchasers of the Notes and the Series A Shares additional
material, data or other information (whether oral or written) relating to
the Parent or the Company (the "Company Data"). The Issuers recognize and
confirm that: (i) in performing the services contemplated by this
Agreement, the Placement Agent will use and rely primarily on the
Information and on other information available from generally recognized
public sources without having independently verified the same; (ii) the
Placement Agent does not assume responsibility for the accuracy or
completeness of the Offering Document, the Information, the Company Data
and such other information; and (iii) the Placement Agent will not make an
appraisal of any of the assets owned or managed by the Issuers as part of
the services to be performed by it hereunder except in connection with its
valuation of the Series A Common Stock.
(o) Offers and sales of the Notes and the Series A Shares will be
made only by the Issuers to persons whom the Issuers reasonably believe to
be institutional "accredited investors" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act ("Institutional
Accredited Investors") and in a manner not involving a public offering
with the meaning of Section 4 of the Securities Act.
(p) No general solicitation or general advertising (within the
19
meaning of Rule 502(c) under the Securities Act) will be used in
connection with the offering of the Notes and the Series A Shares. If
required, the Issuers will file in a timely manner with the Commission any
notices with respect to the Securities required by Regulation D and will
furnish to the Placement Agent promptly thereafter a signed copy of each
such notice.
(q) The transfer restrictions and the other provisions set forth in
(i) the Indenture and the Registration Rights Agreement with respect to
the Notes and (ii) the Investors Agreement, the Share Price Adjustment
Agreement and the certificates representing the Series A Shares with
respect to such Shares, including the legends required thereby or
appearing thereon, shall apply to the Securities except as otherwise
agreed by the Issuers and the Placement Agent. Following the sale of the
Notes by the Company and the Series A Shares by the Parent to purchasers
thereof pursuant to the terms of the Subscription Agreement, the Placement
Agent (solely in its capacity as Placement Agent) shall not be liable or
responsible to any of the Issuers for any losses, damages or liabilities
suffered or incurred by any of the Issuers, including any losses, damages
or liabilities under the Securities Act, arising from or relating to any
sale, resale or transfer of any Security except for any such loss, damage
or liability incurred by the Company as a result of gross negligence or
willful misconduct on the part of the Placement Agent or any of its
affiliates.
(r) Each of the Issuers agrees that it will not and will cause its
affiliates not to make any offer or sale of securities of any of the
Issuers of any class if, as a result of the doctrine of "integration"
referred to in Rule 502 under the Securities Act, such offer or sale would
render invalid (for the purpose of the sale of the Notes and the Series A
Shares by the Company and the Parent to the purchasers thereof) the
exemption from the registration requirements of the Securities Act
provided by Section 4(2) thereof or otherwise.
6. Conditions of the Obligations of the Placement Agent. The obligations
of the Placement Agent hereunder will be subject to the accuracy of the
representations and warranties on the part of the Issuers herein, to the
accuracy of the statements of officers of the Issuers made pursuant to the
provisions hereof, to the performance by the Issuers of their respective
obligations hereunder and to the following additional conditions precedent and
conditions subsequent:
(a) The Placement Agent shall have received a letter, dated the
20
Closing Date and satisfactory to the Placement Agent and the purchasers of
Securities, of PriceWaterhouseCoopers LLP addressed to the Placement
Agent, the Parent, the Company and the purchasers of the Securities
pursuant to this Agreement confirming that they are independent public
accountants within the meaning of the Securities Act and the applicable
published rules and regulations thereunder ("Rules and Regulations") and
to the effect that:
(i) in their opinion the financial statements and schedules
examined by them and included in the Offering Document comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act and the related published Rules
and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements included in the Offering Document;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Parent and the Company, and of all subsidiaries of
the Company for which such interim financial statements are
provided, inquiries of officials of the Parent, the Company, and of
such subsidiaries, who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited financial statements included in the
Offering Document do not comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the related published Rules and Regulations
or any material modifications should be made to such unaudited
financial statements for them to be in conformity with
generally accepted accounting principles;
(B) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date
not more than three business days prior to the Closing Date,
there was any change in the capital stock or any material
increase in
21
long-term debt of the Parent or the Company and its
consolidated subsidiaries or, at the date of the latest
available balance sheet read by such accountants, there was
any decrease in consolidated net current assets, as compared
with amounts shown on the latest balance sheet included in the
Offering Document, or
(C) for the period from the closing date of the latest
income statement included in the Offering Document to the
closing date of the latest available income statement read by
such accountants there were any decreases, as compared with
the corresponding period of the previous year and with the
period of corresponding length ended the date of the latest
income statement included in the Offering Document, in
consolidated net sales, net operating income or in the total
or per share amounts of consolidated income before
extraordinary items or net income; except in all cases set
forth in clauses (B) and (C) above for changes, increases or
decreases which the Offering Document disclose have occurred
or may occur or which are described in such letter;
(iv) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review on
pro forma financial information as described in Statement on
Standards for Attestation Engagement No. 1, Reporting on Pro Forma
Financial Statements, on the pro forma financial statements included
in the Offering Document;
(v) on the basis of the review referred to in clause (iv)
above, nothing came to their attention that caused them to believe
that the pro forma financial statements included in the Offering
Document do not comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
related published Rules and Regulations or that the pro forma
adjustments have not been properly applied to the historical amounts
in the compilation of those statements; and
(vi) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Offering Document (in each case to the
22
extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Parent or the Company and its subsidiaries subject to the internal
controls of the Company's accounting system or are derived directly
from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise specified in
such letter.
(vii) the presentation of Management's Discussion and Analysis
of Financial Condition and Results of Operations in the Offering
Document includes, in all material respects, the required elements
of the rules and regulations adopted by the Commission; the
historical financial amounts included therein have been accurately
derived, in all material respects, from the Company's financial
statements; and the underlying information, determination, estimates
and assumptions of the Company provide a reasonable basis for the
disclosures contained therein.
(b) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) a change in U.S. or international
financial, political or economic conditions or currency exchange rates or
exchange controls as would, in the reasonable judgment of the Placement
Agent, be likely to prejudice materially the success of the proposed issue
and sale of the Notes and the Series A Shares, whether in the primary
market or in respect of dealings in the secondary market, or (ii) (A) any
change, or any development or event involving a prospective change, in the
condition (financial or other), business prospects, properties or results
of operations of the Parent and its subsidiaries taken as a whole, which,
in the reasonable judgment of the Placement Agent, is material and adverse
to the Parent and its subsidiaries taken as a whole and makes it
impractical or inadvisable to proceed with completion of the issuance or
the sale of and payment for the Securities; (B) any downgrading in the
rating of any debt securities of the Parent, the Company or any of their
subsidiaries by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Parent,
the Company or any of their subsidiaries (other than an announcement with
23
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (C) any suspension or limitation of
trading in securities generally on the New York Stock Exchange or the
Nasdaq National Market, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the
Parent, the Company or any of their subsidiaries on any exchange or in the
over-the-counter market; (D) any banking moratorium declared by U.S.
Federal or New York authorities; or (E) any outbreak or escalation of
major hostilities in which the United States is involved, any declaration
of war by Congress or any other substantial national or international
calamity or emergency if, in the reasonable judgment of the Placement
Agent, the effect of any such outbreak, escalation, declaration, calamity
or emergency makes it impractical or inadvisable to proceed with
completion of the issuance or sale of and payment for the Notes and the
Series A Shares.
(c) The Placement Agent shall have received an opinion or opinions,
dated such Closing Date, of counsel for the Issuers, substantially to the
effect that:
(i) Each of the Parent, the Company and each subsidiary of the
Company was duly incorporated and is in good standing under the laws
of its jurisdiction of incorporation, with corporate power and
authority to own its properties and conduct its businesses as
described in the Offering Document.
(ii) Each of the Transaction Documents (except for the
Envirotest Agreement and the Transervice Agreement) has been duly
authorized, executed and delivered by each of the Parent, the
Company and their subsidiaries (to the extent each is a party
thereto); each of the Transaction Documents conforms to the
description thereof contained in the Offering Document (to the
extent described therein); and each of the Transaction Documents
(other than this Agreement and the Subscription Agreement)
constitutes valid and legally binding obligations of each of the
Parent, the Company and their subsidiaries (to the extent each is a
party thereto) enforceable in accordance with its respective terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles and, as to rights of indemnification and contribution, to
principles of public policy and federal and state
24
securities laws relating thereto.
(iii) The Notes, the Guarantees and the Series A Shares
conform in all material respects to the description thereof in the
Offering Document.
(iv) The Notes and the Guarantees have been duly authorized
and executed by the Company and the Guarantors, respectively, and,
when the Notes are authenticated in the manner provided for in the
Indenture and delivered against payment of the purchase price
therefor, the Notes and the Guarantees will constitute valid and
binding obligations of the Company and the Guarantors, respectively,
enforceable against the Company and the Guarantors, respectively, in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles and, as to rights of indemnification
and contribution, to principles of public policy and federal and
state securities laws relating thereto.
(v) The Series A Shares have been duly authorized and, when
issued and delivered to and paid for by the purchasers thereof in
accordance with the terms of the Subscription Agreement, will have
been validly issued and fully paid and nonassessable.
(vi) [Intentionally omitted.]
(vii) To our knowledge, there are no preemptive rights or
similar rights that have not been waived to subscribe for or
purchase the Securities upon their issuance and sale by the Issuers
pursuant to this Agreement and the Subscription Agreement. To our
knowledge, no securityholder of any Issuer has any right that has
not been waived to require such Issuer to register the sale of any
securities owned by such securityholder under the Securities Act in
the offering and sale contemplated by this Agreement and the
Subscription Agreement.
(viii) The execution, delivery of, and performance by each of
the Parent, the Company and their subsidiaries (to the extent each
is a party thereto) of its obligations under each of the Transaction
Documents (including the issuance and sale of the Securities) and
25
compliance with the terms and provisions thereof will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Parent, the Company or any
subsidiary of the Company or any of their respective properties, or
the charter or by-laws of the Parent, the Company or any such
subsidiary, any agreement or instrument set forth on Schedule B
attached hereto or the Transaction Documents, and each of the
Issuers has full power and authority to authorize, issue and sell
the Securities as contemplated by this Agreement and the
Subscription Agreement.
(ix) Each of the Issuers is not and, after giving effect to
the offering and sale of the Securities and the application of the
proceeds thereof as described in the Offering Document and the
consummation of the other Transactions, will not, be an "investment
company" as defined in the Investment Company Act.
(x) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by the Parent, the Company or any subsidiary of the
Parent or the Company for the consummation of the Transactions or
otherwise in connection with the issuance and sale of the
Securities, other than those consents, approvals, authorizations,
orders or filings that have been made or obtained and such as may be
required by the Securities Act (including Regulation D thereunder)
and securities or blue sky laws of any state of the United States or
of any foreign jurisdiction in connection with the offer and sale of
the Securities and as may be required under the Securities Act in
connection with the Registration Rights Agreement and the Investors
Agreement.
(xi) It is not necessary in connection with the offer, sale
and delivery of the Securities by the Parent and the Company to the
purchasers thereof pursuant to this Agreement and the Subscription
Agreement to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act.
(xii) Except as set forth in the Offering Document, all
outstanding shares of the capital stock of the Parent, the Company
and
26
each of their subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable and conform in all material
respects to the description thereof contained in the Offering
Document; the Parent is the record owner of all of the issued and
outstanding capital stock of the Company. The Company, directly or
through subsidiaries, is the record owner of all of the issued and
outstanding capital stock of each subsidiary of the Company, and the
securityholders of the Parent, the Company and their subsidiaries
have no preemptive rights with respect to the Securities.
(xiii) Except as set forth in the Offering Document or any
Transaction Document, there are no contracts, agreements or
understandings known to such counsel between the Parent, the Company
or any of their subsidiaries and any person granting such person the
right to require the Parent, the Company or any of their
subsidiaries to file a registration statement under the Securities
Act with respect to any securities of the Parent, the Company or any
of their subsidiaries owned or to be owned by such person or to
require the Parent, the Company or any of their subsidiaries to
include such securities in any registration statement filed by the
Parent, the Company or any of their subsidiaries under the
Securities Act.
(xiv) The statements under the captions "Business--Legal
Proceedings," "Description of Other Indebtedness," "Description of
the Notes," "Description of Capital Stock" and "Certain United
States Federal Income Tax Considerations" in the Offering Document,
insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly
present in all material respects the information called for with
respect to such legal matters, documents and proceedings as if such
Offering Document were a prospectus included in a registration
statement on Form S-1.
(xv) None of the Parent, the Company or any of their
subsidiaries is in violation of its respective charter or by-laws
and none of the Parent, the Company or any of their subsidiaries is
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 as set forth on Schedule B
attached hereto.
(xvi) Based solely on discussions with the Parent, the
27
Company or any of their subsidiaries but without independent
investigation or verification thereof, such counsel does not know of
any legal or governmental proceedings pending or threatened to which
the Parent, the Company or any of their subsidiaries is or could be
a party or to which any of their respective property is or could be
subject, which might result, singly or in the aggregate, in a
Material Adverse Effect.
(xvii) Based upon our participation in the preparation of the
Offering Document, but without independent check and verification,
nothing has come to our attention which causes us to believe that as
of its date or as of the Closing Date the Offering Document as
amended or supplemented (other than the financial statements and
other financial data included therein or omitted therefrom, as to
which we express no belief) contained or contains an untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) The Placement Agent shall have received from Skadden, Arps,
Slate, Meagher & Flom LLP, counsel for the Placement Agent, such opinion
or opinions, dated such Closing Date, with respect to such matters as the
Placement Agent may reasonably require, and the Issuers shall have
furnished to such counsel such documents as they request for the purpose
of enabling them to pass upon such matters.
(e) The Placement Agent shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of each of the Issuers in which such
officers after reasonable investigation shall state that the
representations and warranties of such company in this Agreement are true
and correct as of such date, that such company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and that, subsequent
to the date of the most recent financial statements in the Offering
Document, there has been no Material Adverse Change, nor any development
or event involving a prospective Material Adverse Change, and there has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock, except as disclosed in or
contemplated by the Offering Document or as described in such certificate.
28
(f) The Company and the Parent shall have caused the ENR Transfer to
be effected and consummated pursuant to the documentation described in the
definition of Transaction Documents and the Company shall have pledged and
delivered the capital stock of Envirotest to the Collateral Agent (as
defined in the Bank Agreements) pursuant to the Collateral Documents (as
defined in the Bank Agreements) and all conditions and requirements under
the Collateral Documents with respect to the pledging of capital stock
shall have been fulfilled to the satisfaction of the Collateral Agent, in
each case, on or prior to November 20, 1998. For purposes of this
paragraph, "ENR Transfer" means the purchase, following the Merger, by the
Company of all of the outstanding capital stock of Envirotest from ESP for
a purchase price (which may be paid in the form of a note) in an amount,
and pursuant to documentation, satisfactory to the Administrative Agent
(including, without limitation, provisions of any such note relating to
subordination, payments of principal and interest and the exercise of
remedies) under the Credit Agreement.
(g) The Issuers and the Trustee shall have entered into the
Indenture and you shall have received executed counterparts thereof.
(h) The Issuers shall have entered into the Registration Rights
Agreement and the Investors Agreement and you shall have received executed
counterparts thereof.
(i) On or prior to the Closing Date, (i)(a) the Company and the
other parties thereto shall have entered into the Bank Agreements and all
conditions precedent to the effectiveness thereof shall have been
satisfied or waived to the satisfaction of the Placement Agent and (b)
each of the Transactions (other than the Transervice Acquisition and the
Envirotest Sale) shall have been consummated in accordance with the terms
set forth in each Transaction Document and all conditions precedent to the
effectiveness thereof shall have been satisfied or waived to the
satisfaction of the Placement Agent; (ii) such transactions described in
the foregoing clause (i) shall continue to be in full force and effect in
accordance with the terms thereof; and (iii) the Company shall have
provided to the Placement Agent and counsel to the Placement Agent copies
of all Transaction Documents delivered to the parties relating to the
Transactions (including but not limited to legal opinions relating
thereto). To the extent the conditions in any of the agreements and
documents referred to in clause (i) above permit any person or persons to
29
waive compliance with such condition, or require that a document, opinion
or other instrument or any event or condition be acceptable or
satisfactory to any person or persons, for purposes of this Agreement,
such condition shall be complied with only if waived by the Placement
Agent and such document, opinion or other instrument and such events or
conditions shall be acceptable or satisfactory only if acceptable or
satisfactory to the Placement Agent. No amendment to or waiver of such
condition made pursuant to the Bank Agreements or any of the Transaction
Documents shall be effective to amend or waive such condition for the
purposes of this Agreement without the consent of the Placement Agent.
(j) The Placement Agent shall have been furnished with a copy of the
opinions delivered on behalf of the Company in connection with the
Transactions, which opinions shall expressly state that the Placement
Agent is justified in relying upon the opinions therein.
(k) The Placement Agent shall have received an opinion addressed to
them from Murray, Devine & Co. in form and substance reasonably
satisfactory to the purchasers of the Notes and the Series A Shares that
the Transactions and the application of the net proceeds therefrom will
not render the Parent, the Company or any of their subsidiaries insolvent,
leave the Parent, the Company or any of their subsidiaries with inadequate
or unreasonably small capital with which to conduct business or result in
the Parent, the Company or any of their subsidiaries incurring
indebtedness beyond its ability to repay as such indebtedness matures.
(l) The Placement Agent shall have received a certificate, dated the
Closing Date, of the President or any Vice President of the Company in
which such officer after reasonable investigation shall state that (i)
each of the Company and its subsidiaries has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals
("permits") of, and has made all filings with and notice 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 failure to have any such permit or to make any such filing or
notice would not, singly or in the aggregate, have a Material Adverse
Effect, (ii) each such permit is valid and in full force and effect and
each of the Company and its subsidiaries is in compliance with all the
terms and conditions thereof and with the rules and regulations of the
authorities and
30
governing bodies having jurisdiction with respect thereto, (iii) no event
has occurred (including the receipt of any notice from any authority or
governing body) which allows or, after notice or elapse of time or both,
would allow for revocation, suspension or termination of any such permit
or has resulted or, after notice or lapse of time or both, would result,
in any other impairment of the rights of the holder of any such permit,
and (iv) such permits contain no restrictions that are burdensome to the
Company or any of its 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.
(m) Upon consummation of the Envirotest Sale, the Company shall
provide notice to the Placement Agent of such sale and shall provide the
Placement Agent with an executed copy of the Envirotest Agreement.
(n) The Placement Agent shall have received a certificate, dated the
Closing Date, of the President or any Vice President of the Company in
which such officer shall state that (i) each of the Transactions (other
than the Transervice Acquisition and the Envirotest Sale) shall have been
consummated in accordance with the terms set forth in each Transaction
Document, (ii) each of the Transactions shall be in full force and effect
in accordance with the terms thereof and (iii) each Transaction Document
shall have been executed and delivered.
(o) The Securities shall have been designated PORTAL securities in
accordance with the rules and regulations adopted by the NASD relating to
trading in the PORTAL market.
(p) The Placement Agent shall have received evidence satisfactory to
it that all conditions set forth herein shall have been met and such
further certificates and documents as the Placement Agent shall reasonably
request.
(q) The Company will furnish the Placement Agent with such conformed
copies of such opinions, certificates, letters and documents as the
Placement Agent reasonably requests. The Placement Agent may in its sole
discretion waive compliance with any conditions to the obligations of the
Placement Agent hereunder.
(r) As of the Closing Date, the Parent and the Company shall have
31
received CUSIP numbers for the Notes and the Series A Shares and will
provide the Placement Agent with such CUSIP numbers.
(s) On the Closing Date, the Placement Agent shall have received the
final Offering Document, in a form satisfactory to the Placement Agent,
the purchasers of Securities and their respective counsel.
7. Indemnification and Contribution. (a) Each of the Issuers, jointly and
severally, will indemnify and hold harmless the Placement Agent against any
losses, claims, damages or liabilities, joint or several, to which the Placement
Agent may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Offering
Document, or any amendment or supplement thereto, or in the Information or
Company Data furnished or made available by the Parent or the Company directly,
through the Placement Agent or otherwise, to any prospective purchaser of the
Notes and the Series A Shares or its representatives, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and will reimburse the
Placement Agent for any legal or other expenses reasonably incurred by the
Placement Agent in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred upon
presentation of documentation reasonably evidencing the same or (ii) the
engagement of the Placement Agent pursuant to, and the performance by the
Placement Agent of the services contemplated by, this Agreement;
(b) [Intentionally omitted.]
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) above, notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under subsection (a) above.
In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent
32
of the indemnified party (which consent shall not be unreasonably
withheld), be counsel to the indemnifying party), and after notice from
the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) above, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) above
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Issuers on the one hand and the Placement Agent on the
other from the issuance and sale of the Notes and the Series A Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the
relative fault of the Issuers on the one hand and the Placement Agent on
the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by the Issuers on
the one hand and the Placement Agent on the other shall be deemed to be in
the same proportion as the total net proceeds from the issuance and sale
of the Notes and the Series A Shares (before deducting expenses) received
by the Parent and the Company bear to the total placement fees received by
the Placement Agent from the Parent and the Company. The relative fault
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied
by any of the Issuers or the Placement Agent and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection
33
(d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), the Placement Agent
shall not be required to contribute any amount in excess of the actual
fees paid to the Placement Agent.
(e) The obligations of the Issuers under this Section shall be in
addition to any liability which the Issuers may otherwise have and shall
extend, upon the same terms and conditions, to the Placement Agent, its
representatives, officers and directors and each person, if any, who
controls the Placement Agent within the meaning of the Securities Act or
the Exchange Act; and the obligations of the Placement Agent under this
Section shall be in addition to any liability which the Placement Agent
may otherwise have and shall extend, upon the same terms and conditions to
each Company, its representatives, officers and directors and person, if
any, who controls the Issuers within the meaning of the Securities Act or
the Exchange Act.
8. Services; Default. In connection with the services to be rendered
hereunder, the Placement Agent shall act as an independent contractor, and any
duties of the Placement Agent arising out of its engagement pursuant to this
Agreement shall be owed solely to the Parent and the Company. In soliciting
orders from others to purchase Notes and Series A Shares, the Placement Agent is
acting solely as an agent for the Parent and the Company, and not as a
principal. The Placement Agent will not have any liability to the Parent and the
Company in the event any purchaser whose offer to purchase Notes and Series A
Shares has been accepted by the Parent or the Company does not perform its
obligations to the Parents or the Company. If the Parent or the Company shall
default on their obligation to deliver Notes and Series A Shares to a purchaser
thereof whose offer they have accepted, the Parents or the Company shall
indemnify the Placement Agent against any loss, claim, or damage arising from or
as a result of such default by the Parent or the Company.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
each of the Issuers or its officers and of the Placement Agent set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation, or statement as to the results thereof, made by or on
behalf of the Placement Agent, the Issuers or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Notes and the Series A Shares. If for
any reason the purchase of the Notes and the Series A Shares
34
by the purchasers thereof is not consummated, the Issuer shall remain
responsible for the expenses (including fees and disbursements of counsel) to be
paid or reimbursed by them pursuant to Section 5(i) and the obligations of each
of the Issuers and the Placement Agent pursuant to Section 7 shall remain in
effect; provided, however, that the Companies shall have no obligations under
either Section 5(i) or Section 7 if this Agreement is terminated pursuant to
Section 8 or as a result of the occurrence of any event specified in clause (C),
(D) or (E) of Section 6(b)(ii) or if the purchase of the Securities is not
consummated due to a material breach of, or default under, this Agreement by the
Placement Agent; if any Notes and Series A Shares have been purchased hereunder
and under the Subscription Agreement, the Issuers shall remain responsible for
the expenses to be paid or reimbursed by them pursuant to Section 5 and the
obligations of the Issuers pursuant to Section 7 shall remain in effect, and the
representations and warranties in Section 2 and all other obligations under
Section 5 shall also remain in effect.
10. Notices. All communications hereunder will be in writing and, if sent
to the Placement Agent will be mailed, delivered or telegraphed and confirmed to
the Placement Agent at Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking Department B
Transactions Advisory Group, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at EnviroSystems Corp., c/o
Environmental Systems Products, Inc., 7 Kripes Road, East Granby, Connecticut
06026, Attention: David J. Langevin.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the representatives,
officers and directors controlling persons referred to in Section 7, and no
other person will have any right or obligation hereunder, except that holders of
Securities shall be entitled to enforce the agreements for their benefit
contained in the second and third sentences of Section 5(c) hereof against the
Parent and the Company as if such holders were parties thereto.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
35
EACH OF THE ISSUERS HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
THE FEDERAL AND STATE COURTS IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
36
If the foregoing is in accordance with the Placement Agent's understanding
of our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement among the Companies and the
Placement Agent in accordance with its terms.
Very truly yours,
ENVIROSYSTEMS CORP.
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
ENVIRONMENTAL SYSTEMS
PRODUCTS HOLDINGS INC.
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
ENVIRONMENTAL SYSTEMS
PRODUCTS, INC.
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
ENVIROTEST SYSTEMS CORP. (Delaware)
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
37
ENVIROTEST HOLDINGS, INC.
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
ENVIROTEST TECHNOLOGIES,
INC.
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
ENVIROTEST PARTNERS
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
REMOTE SENSING
TECHNOLOGIES, INC.
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
ENVIROTEST WISCONSIN, INC.
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
38
ES FUNDING CORPORATION
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
ENVIROTEST ACQUISITIONS CO.
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
ENVIROTEST SYSTEMS CORP.
(Washington)
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
ENVIROTEST ILLINOIS, INC.
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
WELLMAN NORTH AMERICA, INC.
By: /s/ David J. Langevin
---------------------------------
Name: David Langevin
Title: EVP CFO
39
WELLMAN OVERSEAS LIMITED
By: /s/ T. Smith [Illegible]
---------------------------------
Name: T. Smith [Illegible]
Title: Director Company Secretary
NEWMALL LIMITED
By: /s/ T. Smith [Illegible]
---------------------------------
Name: T. Smith [Illegible]
Title: Director Company Secretary
The foregoing Placement Agreement is hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ Richard Gallant
---------------------------------
Name: Richard Gallant
Title: Director
40
SCHEDULE A
List of Guarantors
Environmental Systems Products. Inc.
Envirotest Systems Corp. (Delaware)
Envirotest Holdings, Inc.
Envirotest Technologies, Inc.
Envirotest Partners (Pennsylvania)
Remote Sensing Technologies, Inc.
Envirotest Wisconsin, Inc.
ES Funding Corporation
Envirotest Acquisitions Co.
Envirotest Systems Corp. (Washington)
Envirotest Illinois, Inc.
Wellman North America, Inc.
Wellman Overseas Ltd.
Newmall Ltd.
41
SCHEDULE B
[LIST OF "NO-CONFLICT" CONTRACTS]
[Envirotest State Contracts]
[Ohio Notes]
42