Exhibit 1.1
AMTROL ACQUISITION, INC.
PLACEMENT AGREEMENT
November 7, 1996
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BT Securities Corporation
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
AMTROL Acquisition, Inc., a Rhode Island corporation ("Acquisition"),
proposes to issue and sell to you (the "Managers") and the other several
purchasers named in Schedule I hereto (collectively with the Managers, the
"Purchasers") $115,000,000 principal amount of its 10-5/8% Senior Subordinated
Notes Due 2006 (the "Securities") to be issued pursuant to the provisions of an
Indenture dated as of November 1, 1996 (the "Indenture"), between Acquisition,
as issuer, and The Bank of New York, as Trustee (the "Trustee").
The Securities will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
exemptions therefrom.
Immediately prior to or concurrent with the consummation of the sales
of the Securities, pursuant to a Merger Agreement dated as of August 28, 1996
(the "Merger Agreement") among AMTROL Holdings, Inc., a Delaware corporation
("Holdings"), Acquisition and AMTROL Inc., a Rhode Island corporation (the
"Company"), Acquisition will merge with and into the Company (the "Merger"), and
the Company will be the surviving corporation.
As a result of the Merger, all of Acquisition's obligations under this
Agreement, the Registration Agreement (as defined herein), the Credit Agreement
(as defined herein), the Indenture and the Securities will, by operation of law,
become obligations of the Company and, in connection with the Merger, the
Company will enter into a supplemental
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indenture relating to the Indenture (the "Supplemental Indenture").
It is understood that, in connection with the Merger, Acquisition, the
lenders named therein and Bankers Trust Company, as administrative agent, and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as documentation agent, will enter into a
credit agreement (the "Credit Agreement").
In connection with the sale of the Securities, Acquisition has
prepared a preliminary private placement memorandum dated October 21, 1996 (the
"Preliminary Memorandum") and will prepare a final private placement memorandum
(the "Final Memorandum" and, with the Preliminary Memorandum, each a
"Memorandum") setting forth or including a description of the terms of the
Securities, the terms of the offering, a description of the Company and any
material developments relating to the Company occurring after the date of the
most recent financial statements included therein.
1. REPRESENTATIONS AND WARRANTIES. Acquisition represents and
warrants to, and agrees with, each of the Purchasers that as of the date hereof:
(a) The Preliminary Memorandum does not contain and the Final
Memorandum will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
Section l(a) do not apply to statements or omissions in either Memorandum
based upon information relating to any Purchaser furnished to Acquisition
in writing by such Purchaser through you expressly for use therein.
(b) Each of Acquisition and the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in each
Memorandum and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing
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would not have a material adverse effect on Acquisition or on the Company
and its subsidiaries, taken as a whole.
(c) Each "significant subsidiary" (within the meaning of Rule 1-02 of
Regulation S-X) of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in each
Memorandum and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole. The Company's only significant subsidiaries are American
Granby, Inc. and Water Soft Inc.
(d) Each of this Agreement and the Registration Agreement, dated of
even date herewith, between Acquisition and the Purchasers (the
"Registration Agreement"), has been duly authorized, executed and delivered
by Acquisition.
(e) The Securities have been duly authorized by Acquisition and, when
executed, authenticated and delivered by Acquisition in accordance with the
terms of the Indenture and paid for by the Purchasers in accordance with
the terms of this Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of Acquisition (and,
after the Merger, the Company) enforceable in accordance with their terms,
except as (x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(y) rights of acceleration, if applicable, and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(f) The Indenture has been duly authorized by Acquisition and, when
executed and delivered by Acquisition and the Trustee, will be, a valid and
binding agreement of Acquisition (and, after the Merger, the Company),
enforceable in accordance with
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its terms except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration, if applicable, and the
availability of equitable remedies may be limited by equitable principles
of general applicability.
(g) The Merger Agreement has been duly authorized, executed and
delivered by each of Acquisition, Holdings and the Company. The Merger
Agreement is a valid and binding agreement of each of Acquisition, Holdings
and the Company, enforceable as to each in accordance with its terms except
as (x) the enforceability thereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (y) rights of
acceleration, if applicable, and the availability of equitable remedies may
be limited by equitable principles of general applicability.
(h) The Credit Agreement has been duly authorized by Acquisition and,
as of the Closing Date, will have been executed and delivered by
Acquisition. The Credit Agreement will be when so executed and delivered,
a valid and binding agreement of Acquisition (and, after the Merger, the
Company), enforceable in accordance with its terms except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (y) rights of acceleration,
if applicable, and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(i) Neither the execution and delivery by Acquisition of, and the
performance by Acquisition (and, after the Merger, the Company) of its
obligations under, this Agreement, the Registration Agreement, the Merger
Agreement, the Indenture, the Securities and the Supplemental Indenture nor
the consummation of the Merger will contravene (i) the articles of
incorporation or by-laws of Acquisition or the Company or (ii) any
agreement or other instrument binding upon Acquisition or the Company or
any of its subsidiaries or (iii) any provision of applicable law or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over Acquisition or the Company or its subsidiaries, except,
in the case of clause (ii) or (iii), contraventions which would not,
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individually or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole. No consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by Acquisition or the Company of
their respective obligations (both before and after the Merger) under this
Agreement, the Registration Agreement, the Merger Agreement, the Indenture,
the Securities or the Supplemental Indenture, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities or such the failure to
obtain would not, individually or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole. Each of
Acquisition and the Company has, subject to shareholder approval, full
power and authority to consummate the Merger.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
business, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole, from that set forth in the Preliminary
Memorandum.
(k) There are no legal or governmental proceedings pending or, to the
knowledge of Acquisition or the Company, threatened to which Acquisition or
the Company or any of its subsidiaries is a party or to which any of the
properties of Acquisition or the Company or any of its subsidiaries is
subject other than proceedings disclosed in each Memorandum and proceedings
that would not have a material adverse effect on Acquisition or the Company
and its subsidiaries, taken as a whole, or on the power or ability of
Acquisition or the Company to perform their respective obligations (both
before and after the Merger) under this Agreement, the Registration
Agreement, the Merger Agreement, the Indenture, the Securities or the
Supplemental Indenture or to consummate the Merger and the other
Transactions (as defined in the Final Memorandum) contemplated by the Final
Memorandum.
(l) Neither Acquisition, the Company nor any of their respective
affiliates (as defined in Rule 501(b) of Regulation D under the Securities
Act, an
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"Affiliate") has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be integrated
with the sale of the Securities in a manner that would require the
registration under the Securities Act of the Securities or (ii) engaged in
any form of general solicitation or general advertising in connection with
the offering of the Securities (as those terms are used in Regulation D
under the Securities Act), or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act.
(m) Acquisition (and, after the Merger, the Company) is not, and,
after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Final Memorandum,
will not be, an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment Company
Act of 1940, as amended.
(n) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Purchasers in the manner contemplated by
this Agreement to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended.
(o) Except as described in the Final Memorandum, the Company and its
subsidiaries (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses
(collectively "Environmental Permits") and (iii) are in compliance with all
terms and conditions of all Environmental Permits except where any
noncompliance with Environmental Laws, failure to receive Environmental
Permits or failure to comply with the terms and conditions of such
Environmental Permits would not, singly or in the aggregate, have a
material adverse
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effect on the Company and its subsidiaries, taken as a whole.
(p) Except as described in the Final Memorandum, there are no costs
or liabilities associated with or arising from the application of
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any Environmental Permits, any related
constraints on operating activities and any potential liabilities to third
parties, including governmental authorities) which would, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(q) Acquisition has delivered to the Purchasers true and correct
copies of the Merger Agreement in the form as originally executed, and
there have been no amendments or waivers thereto or in the exhibits or
schedules thereto other than those as to which the Purchasers shall have
been advised.
(r) Each of Acquisition and the Company has complied with all
provisions of Section 517.075, Florida Statutes (Chapter 92-198, Laws of
Florida) relating to doing business with the Government of Cuba or with any
person or affiliate located in Cuba.
(s) None of Acquisition, the Company, their respective Affiliates or
any person acting on its or their behalf (other than the Purchasers) has
engaged in any directed selling efforts (as that term is defined in
Regulation S under the Securities Act ("Regulation S")) with respect to the
Securities, and Acquisition, the Company and their respective Affiliates
and any person acting on its or their behalf (other than the Purchasers)
have complied with the offering restrictions requirement of Regulation S.
(t) Acquisition has no subsidiaries and has conducted no business
prior to the date hereof other than in connection with the transactions
contemplated by this Agreement and the Final Memorandum, including the
Merger.
2. OFFERING. You have advised Acquisition that the Purchasers will
make an offering of the Securities
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purchased by the Purchasers hereunder on the terms set forth in the Final
Memorandum, as soon as practicable after this Agreement is entered into as in
your judgment is advisable.
3. PURCHASE AND DELIVERY. Acquisition hereby agrees to sell to the
several Purchasers, and each Purchaser, upon the basis of the representations
and warranties herein contained, but subject to the conditions hereinafter
stated, agrees, severally and not jointly, to purchase from Acquisition, the
respective principal amount of Securities set forth in Schedule I hereto
opposite their names at a purchase price of 96.5% of the principal amount
thereof plus accrued interest, if any, from November 13, 1996, to the date of
payment and delivery.
Payment for the Securities shall be made in Federal or other funds
immediately available in New York City against delivery of the Securities for
the respective accounts of the several Purchasers at 10:00 a.m., local time, on
November 13, 1996, or at such other time on the same or such other date, not
later than November 15, 1996, as shall be designated in writing by you. The
time and date of such payment are herein referred to as the "Closing Date".
Certificates for the Securities shall be in definitive form and
registered in such names and in such denominations as you shall request in
writing not less than one full business day prior to the Closing Date. The
certificates evidencing the Securities shall be delivered to you on the Closing
Date, for the respective accounts of the several Purchasers, with any transfer
taxes payable in connection with the transfer of the Securities to the
Purchasers duly paid, against payment of the purchase price therefor.
4. CONDITIONS TO THE PURCHASERS' OBLIGATIONS. The several
obligations of the Purchasers under this Agreement to purchase the Securities
will be subject to the following conditions:
(a) Subsequent to the date of this Agreement and prior to the Closing
Date,
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not
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indicate the direction of the possible change, in the rating accorded
any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the business, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Preliminary
Memorandum that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Securities on
the terms and in the manner contemplated in the Final Memorandum.
(b) You shall have received on the Closing Date a certificate, dated
the Closing Date and signed by an executive officer of Acquisition, to the
effect set forth in clause (a)(i) and (ii) above and to the effect that the
representations and warranties of Acquisition contained in this Agreement
are true and correct as of the Closing Date and that Acquisition has
complied with all of the agreements and satisfied all the conditions on its
part to be performed or satisfied on or before the Closing Date.
(c) You shall have received on the Closing Date an opinion of
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Company, dated the Closing Date,
that the Merger Agreement and the Merger have been duly and validly
approved by the stockholders of the Company in accordance with the laws of
the state of Rhode Island and the Company's articles of incorporation.
(d) You shall have received on the Closing Date an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, independent counsel to Acquisition, dated the Closing
Date, to the effect set forth in Exhibit A; PROVIDED, HOWEVER, that any of
the opinions set forth in Exhibit A with respect to the Company may be
given by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇.
(e) You shall have received on the Closing Date an opinion of
Cravath, Swaine & ▇▇▇▇▇, counsel to the
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Purchasers, dated the Closing Date, to the effect set forth in Exhibit B.
(f) You shall have received on each of the date hereof and the
Closing Date a letter, dated the date hereof and the Closing Date, as the
case may be, in form and substance satisfactory to you, from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information, including the pro forma financial
information, contained in the Final Memorandum as identified by you;
provided that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than the date hereof.
(g) Prior to or concurrently with the issue and sale of the
Securities by Acquisition, the Merger shall be consummated on terms that
conform in all material respects to the Merger Agreement and the Purchasers
shall have received true and correct copies of all documents pertaining
thereto and evidence reasonably satisfactory to the Purchasers of the
consummation thereof.
(h) Prior to or concurrently with the issue and sale of the
Securities by Acquisition, Acquisition shall have entered into the Credit
Agreement and the initial borrowings thereunder shall have occurred. The
Purchasers shall have received conformed counterparts thereof and all other
documents and agreements entered into and received thereunder in connection
with the closing of the Credit Agreement. There shall exist at and as of
the Closing Date (after giving effect to the transactions contemplated by
this Agreement and the Merger Agreement) no condition that would constitute
a default (or an event that with notice or lapse of time or both would
constitute a default) under the Credit Agreement.
5. COVENANTS OF ACQUISITION. In further consideration of the
agreements of the Purchasers contained in this Agreement, Acquisition covenants
with each Purchaser as follows:
(a) To furnish to you, without charge, during the period mentioned in
paragraph (c) below, as many copies
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of the Final Memorandum, any documents incorporated by reference therein
and any supplements and amendments thereto as you may reasonably request.
(b) Before amending or supplementing the Final Memorandum, to furnish
to you a copy of each such proposed amendment or supplement and not to use
any such proposed amendment or supplement to which you reasonably object.
(c) If, during the period after the date hereof and prior to the date
on which all the Securities shall have been sold by the Purchasers, any
event shall occur or condition exist as a result of which it is necessary
in your judgment to amend or supplement the Final Memorandum in order to
make the statements therein, in light of the circumstances when such
Memorandum is delivered to a purchaser, not misleading, or if, in the
opinion of counsel to the Purchasers it is necessary to amend or supplement
such Memorandum to comply with applicable law, forthwith to prepare and
furnish, at its own expense, to the Purchasers, either amendments or
supplements to such Memorandum so that the statements in such Memorandum as
so amended or supplemented will not, in light of the circumstances when
such Memorandum is delivered to a purchaser, be misleading or so that such
Memorandum, as so amended or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request; PROVIDED, HOWEVER, that neither Acquisition nor the
Company shall not be required to (i) qualify generally or as a foreign
corporation to do business in any jurisdiction where it is not then so
qualified or (ii) take any action that would subject it to general service
of process or to taxation in any jurisdiction where it is not then so
subject.
(e) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including (i) the fees, disbursements and expenses of
Acquisition's and the Company's counsel and accountants and all other fees
or expenses in connection with the preparation of each Memorandum and
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all amendments and supplements thereto, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to
the Purchasers, in the quantities hereinabove specified, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Purchasers, including any transfer or other taxes payable thereon,
(iii) the cost of printing or producing any Blue Sky or Legal Investment
memorandum in connection with the offer and sale of the Securities under
state securities laws and all expenses in connection with the qualification
of the Securities for offer and sale under state securities laws as
provided in Section 5(d) hereof, including filing fees and the reasonable
fees and disbursements of counsel to the Purchasers in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) any fees charged by rating agencies for the rating of such
Securities, (v) all fees and expenses, in any, incurred in connection with
the admission of such Securities for trading in PORTAL, (vi) 50% of the
chartered airplane used in connection with the road show, (vii) all
document production charges and expenses of counsel to the Purchasers (but
not including their fees for professional services) in connection with the
preparation of this Agreement and (viii) all other costs and expenses
incident to the performance of the obligations of Acquisition or the
Company hereunder for which provision is not otherwise made in this
Section.
(f) Neither Acquisition, the Company nor any of their respective
Affiliates will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Securities Act)
which could be integrated with the sale of the Securities in a manner which
would require the registration under the Securities Act of the Securities.
(g) Neither Acquisition, the Company nor any of their respective
Affiliates will solicit any offer to buy or offer to sell the Securities by
means of any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.
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(h) While any of the Securities remain outstanding, to make
available, upon request, to any seller of such Securities the information
specified in Rule 144A(d)(4) under the Securities Act, unless the Company
is then subject to Section 13 or 15(d) of the Exchange Act.
(i) To include in each Memorandum information substantially in the
form set forth in Exhibit C.
(j) To use its best efforts to permit the Securities to be designated
PORTAL securities in accordance with the rules and regulations adopted by
the National Association of Securities Dealers, Inc. relating to trading in
the PORTAL Market.
(k) None of Acquisition, the Company, their respective Affiliates or
any person acting on its or their behalf (other than the Purchasers) will
engage in any directed selling efforts (as that term is defined in
Regulation S of the Securities Act) with respect to the Securities, and
Acquisition, the Company, their respective Affiliates and each person
acting on its or their behalf (other than the Purchasers) will comply with
the offering restrictions of Regulation S.
(l) To use the net proceeds from the sale of the Securities as
described in the Final Memorandum.
6. OFFERING OF THE SECURITIES; RESTRICTIONS ON TRANSFER. (a) Each
Purchaser, severally and not jointly, represents and warrants that such
Purchaser is a qualified institutional buyer as defined in Rule 144A under the
Securities Act (a "QIB"). Each Purchaser, severally and not jointly, agrees
with Acquisition that (i) it will not solicit offers for, or offer or sell, the
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act and (ii) it will solicit offers for such Securities only from, and will
offer such Securities only to, persons that it reasonably believes to be (A) in
the case of offers inside the United States (1) QIBs or (2) other institutional
accredited investors (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act ("institutional accredited investors") that, prior to their
purchase of the Securities, deliver to such Purchaser a letter containing the
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representations and agreements set forth in Appendix A to the Final Memorandum
and (B) in the case of offers outside the United States, to persons other than
U.S. persons ("foreign purchasers", which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)) that, in each
case, in purchasing the Securities are deemed to have represented and agreed as
provided in Exhibit C.
(b) Each Purchaser, severally and not jointly, represents, warrants,
and agrees with respect to offers and sales outside the United States that:
(i) it understands that no action has been or will be taken in any
jurisdiction by Acquisition or the Company that would permit a public
offering of the Securities, or possession or distribution of either
Memorandum or any other offering or publicity material relating to the
Securities, in any country or jurisdiction where action for that purpose is
required;
(ii) it will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Securities or
has in its possession or distributes either Memorandum or any such other
material, in all cases at its own expense;
(iii) the Securities have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except in accordance
with Regulation S under the Securities Act or pursuant to another exemption
from the registration requirements of the Securities Act;
(iv) it has offered the Securities and will offer and sell the
Securities (A) as part of its distribution at any time and (B) otherwise
until 40 days after the later of the commencement of the offering of the
Securities and the Closing Date, in each case only in accordance with
Rule 903 of Regulation S or (C) pursuant to another exemption from the
registration requirements of the Securities Act. Accordingly, neither such
Purchaser, its Affiliates nor any persons acting on its or their behalf has
engaged or will engage in any directed selling efforts (within the meaning
of Regulation S) with respect to the
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Securities, and such Purchaser, its Affiliates and any such persons has
complied and will comply with the offering restrictions requirements of
Regulation S in connection with the offering of the Securities;
(v) it represents and, during the period of six months from the date
hereof, agrees that (1) it has not offered or sold and will not offer or
sell any Securities to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995 (the
"Regulations"); (2) it has complied and will comply with all applicable
provisions of the Financial Services ▇▇▇ ▇▇▇▇ and the Regulations with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom; and (3) it has only issued or
passed on and will only issue or pass on to any person in the United
Kingdom any document received by it in connection with the issue of the
Securities if that person is of a kind described in Article 11(3) of the
Financial Services ▇▇▇ ▇▇▇▇ (Investment Advertisement) (Exemptions)
Order 1996 or is a person to whom such document may otherwise lawfully be
issued or passed on;
(vi) it understands that the Securities have not been and will not be
registered under the Securities and Exchange Law of Japan, and represents
that it has not offered or sold, and agrees that it will not offer or sell,
any Securities, directly or indirectly, in Japan or to or from any resident
of Japan except (A) pursuant to an exemption from the registration
requirements of the Securities and Exchange Law of Japan and (B) in
compliance with any other applicable requirements of Japanese law; and
(vii) it agrees that, at or prior to confirmation of sales of the
Securities, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
16
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:
"The securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and the closing of the offering, except in either case in
accordance with Regulation S (or Rule 144A if available) under the
Securities Act. Terms used above have the meaning given to them by
Regulation S."
Terms used in this Section 6 have the meanings given to them by Regulation S.
7. INDEMNITY AND CONTRIBUTION. (a) Acquisition (and, after the
Merger, the Company) agrees to indemnify and hold harmless each Purchaser, and
each person, if any, who controls any Purchaser within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, or is under
common control with, or is controlled by, such Purchaser, from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in either Memorandum (as
amended or supplemented if Acquisition shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Purchaser furnished to Acquisition in writing by such Purchaser through you
expressly for use therein; PROVIDED that the foregoing indemnity with respect to
any Preliminary Memorandum shall not inure to the benefit of any Purchaser from
whom the person asserting any such losses, claims, damages or liabilities
purchased Securities, or any person controlling such Purchaser, if it is
established that a copy of the Final Memorandum (as then amended or supplemented
if
17
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of the Purchasers to such person, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of the Securities to such person, and if the Final Memorandum (as so
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability, unless such failure was the result of noncompliance
by Acquisition with Section 5(a) hereof.
(b) Each Purchaser agrees, severally and not jointly, to indemnify
and hold harmless Acquisition (and, after the Merger, the Company), its
directors, its officers and each person, if any, who controls Acquisition (and,
after the Merger, the Company) within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from Acquisition (and, after the Merger, the Company) to the
Purchasers, but only with reference to information relating to such Purchaser
furnished to Acquisition in writing by such Purchaser through you expressly for
use in either Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate because of actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same
18
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for (i) all Purchasers and all persons, if
any, who control any Purchaser within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and (ii) Acquisition (or, after
the Merger, the Company), its directors, its officers and each person, if any,
who controls Acquisition (or, after the Merger, the Company) within the meaning
of either such Section, and that all such fees and expenses shall be reimbursed
as they are incurred. In the case of any such separate firm for the Purchasers
and such control persons of the Purchasers, such firm shall be designated in
writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated. In the case of any such separate
firm for Acquisition (or, after the Merger, the Company), and such directors,
officers and control persons of Acquisition (or, after the Merger, the Company),
such firm shall be designated in writing by Acquisition (or, after the Merger,
the Company). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 7 is unavailable to an indemnified party or insufficient
in respect of any
19
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by Acquisition and the Company on the one hand and the Purchasers on
the other hand in connection with the offering of the Securities shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of such Securities (before deducting expenses) received by Acquisition and the
Company and the total discounts and commissions received or realized by the
Purchasers in respect thereof, in each case as set forth in the Final
Memorandum, bear to the aggregate offering price of such Securities. The
relative fault of Acquisition and the Company on the one hand and of the
Purchasers on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by Acquisition and the Company or by the Purchasers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Purchasers' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective amount of Securities they have purchased hereunder, not joint.
(e) Acquisition (and, after the Merger, the Company) and the
Purchasers agree that it would not be just or equitable if contribution pursuant
to this Section 7 were determined by PRO RATA allocation (even if the Purchasers
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (d) of
20
this Section 7. The amount paid or payable by an indemnified party as a result
of the losses, claims, damages and liabilities referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Purchaser shall be required
to contribute any amount in excess of the amount by which the total price at
which the Securities resold by it in the initial placement of such Securities
were offered to investors exceeds the amount of any damages that such Purchaser
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of
Acquisition contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Purchaser or any person controlling
such Purchaser or by or on behalf of Acquisition or the Company, their
respective officers or directors or any person controlling Acquisition or the
Company and (iii) acceptance of and payment for any of the Securities. The
remedies provided for in this Section 7 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified party
at law or in equity.
8. TERMINATION. This Agreement shall be subject to termination by
notice given by you to Acquisition, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange or the National Association
of Securities Dealers, Inc. (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of
21
hostilities or any change in financial markets or any calamity or crisis that,
in your judgment, is material and adverse and (b) in the case of any of the
events specified in clauses (a)(i) through (iv), such event, singly or together
with any other such event, makes it, in your judgment, impracticable to market
the Securities on the terms and in the manner contemplated in the Final
Memorandum.
9. EFFECTIVENESS; DEFAULTING PURCHASERS. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Purchasers shall fail
or refuse to purchase Securities that it has or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Purchaser or Purchasers agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount of the Securities
to be purchased on such date, the other Purchasers shall be obligated severally
in the proportions that the principal amount of Securities set forth opposite
their respective names in Schedule I bears to the aggregate principal amount of
Securities set forth opposite the names of all such non-defaulting Purchasers,
or in such other proportions as you may specify, to purchase the Securities
which such defaulting Purchaser or Purchasers agreed but failed or refused to
purchase on such date; PROVIDED that in no event shall the principal amount of
Securities that any Purchaser has agreed to purchase pursuant to this Agreement
be increased pursuant to this Section 9 by an amount in excess of one-ninth of
such principal amount of Securities without the written consent of such
Purchaser. If, on the Closing Date, any one or more of the Purchasers shall
fail or refuse to purchase Securities that it has or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Purchaser or Purchasers agreed but failed or
refused to purchase is more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date, and arrangements satisfactory to you
and Acquisition for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Purchaser or of Acquisition. In any such case either you
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
22
the Final Memorandum or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting Purchaser
from liability in respect of any default of such Purchaser under this Agreement.
If this Agreement shall be terminated by the Purchasers, or any of
them, because of any failure or refusal on the part of Acquisition to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason Acquisition shall be unable to perform its obligations under this
Agreement, Acquisition will reimburse the Purchasers or such Purchasers as have
so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Purchasers in connection with this Agreement or the
offering contemplated hereunder.
10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
Acquisition 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.
11. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
23
Please confirm your agreement to the foregoing by signing in the space
provided below for that purpose and returning to us a copy hereof, whereupon
this Agreement shall constitute a binding agreement between us.
Very truly yours,
AMTROL ACQUISITION, INC.,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BT Securities Corporation
Acting severally on behalf of
themselves and the several
Purchasers named herein
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
