EXHIBIT 1.1
THE DERBY CYCLE CORPORATION
LYON INVESTMENTS B.V.
$100,000,000 10% Senior Notes due 2008
DM110,000,000 9 3/8% Senior Notes due 2008
PURCHASE AGREEMENT
May 7, 1998
CHASE SECURITIES INC.
000 Xxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
CHASE MANHATTAN BANK AG
Xxxxxxxxxxxxx 0
00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
CHASE MANHATTAN INTERNATIONAL LIMITED
000 Xxxxxx Xxxx, 0xx Xxxxx
Xxxxxx, XX0X 0XX
Xxxxxxx
Ladies and Gentlemen:
Pursuant to the Recapitalization Agreement dated as of March 11, 1998,
as amended (the "Recapitalization Agreement"), among The Derby Cycle
Corporation, a Delaware corporation ("DCC"), Derby International Corporation
S.A., a corporation organized under the laws of the Grand Duchy of Luxembourg
("DICSA"), Derby Finance S.a.r.l., a corporation organized under the laws of the
Grand Duchy of Luxembourg and a wholly owned subsidiary of DICSA ("DFS"), DC
Cycle, L.L.C., a Delaware limited liability company ("DC Cycle"), and Perseus
Cycle, L.L.C., a Delaware limited liability company ("Perseus Cycle"), DCC and
its direct and indirect wholly owned subsidiaries, including Lyon Investments
B.V., a company organized under the laws of The Netherlands and a wholly owned
subsidiary of DCC, which was formerly known as Lyon Cycle B.V. ("Lyon", and,
together with DCC, the "Issuers"), will undertake a restructuring (the
"Restructuring"), as a result of which DCC will own all the capital stock of
approximately 80 existing subsidiaries and the other components of the
Recapitalization (as defined in the Offering Memorandum referred to below) will
be consummated.
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In connection with the foregoing, the Issuers propose to issue and
sell $100,000,000 aggregate principal amount of 10 % Senior Notes due 2008 (the
"Dollar Securities") and DM110,000,000 aggregate principal amount of 9 3/8%
Senior Notes due 2008 (the "DM Securities", and, together with the Dollar
Securities, the "Securities"). The Dollar Securities will be issued pursuant to
an Indenture to be dated as of May 14, 1998 (the "Dollar Securities Indenture"),
among the Issuers and IBJ Xxxxxxxx Bank & Trust Company, as trustee (the "Dollar
Securities Trustee"), and the DM Securities will be issued pursuant to an
Indenture to be dated as of May 14, 1998 (the "DM Securities Indenture" and,
together with the Dollar Securities Indenture, the "Indentures"), among the
Issuers and IBJ Xxxxxxxx Bank & Trust Company, as trustee (the "DM Securities
Trustee", and together with the Dollar Securities Trustee, the "Trustees"). The
Issuers hereby confirm their agreement with Chase Securities Inc. ("CSI"), Chase
Manhattan Bank AG ("Chase AG") and Chase Manhattan International Limited
(collectively with CSI and Chase AG, the "Initial Purchasers") concerning the
purchase of the Securities from the Issuers by the several Initial Purchasers.
The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Issuers have
prepared a preliminary offering memorandum dated April 17, 1998 (the
"Preliminary Offering Memorandum"), and will prepare an offering memorandum
dated the date hereof (the "Offering Memorandum") setting forth information
concerning the Issuers and the Securities. Copies of the Preliminary Offering
Memorandum have been, and copies of the Offering Memorandum will be, delivered
by the Issuers to the Initial Purchasers pursuant to the terms of this
Agreement. Any references herein to the Preliminary Offering Memorandum and the
Offering Memorandum shall be deemed to include all amendments and supplements
thereto, unless otherwise noted. The Issuers hereby confirm that they have
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchasers in accordance with Section 2.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Exchange and Registration Rights Agreement"), pursuant to which
the Issuers will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering two issues of senior notes
of the Issuers (together, the "Exchange Securities"), one of which is identical
in all material respects to the Dollar Securities and one of which is identical
in all material respects to the DM Securities (except that the Exchange
Securities will not contain terms with respect to transfer restrictions), and
(ii) under certain circumstances, a shelf registration statement pursuant to
Rule 415 under the Securities Act (the "Shelf Registration Statement").
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum.
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1. Representations, Warranties and Agreements of the Issuers. Each
Issuer represents and warrants to, and agrees with, the several Initial
Purchasers on and as of the date hereof and the Closing Date (as defined in
Section 3) that:
(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, did not, and on the Closing Date the
Offering Memorandum will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Issuers make no representation or warranty as to information contained in
or omitted from the Preliminary Offering Memorandum or the Offering
Memorandum in reliance upon and in conformity with written information
relating to the Initial Purchasers furnished to the Issuers by or on behalf
of any Initial Purchaser specifically for use therein (the "Initial
Purchasers' Information").
(b) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains all the information that,
if requested by a prospective purchaser of the Securities, would be
required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and warranties of the
Initial Purchasers contained in Section 2 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchasers and the
offer, resale and delivery of the Securities by the Initial Purchasers in
the manner contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or, prior to the
effectiveness of any Registration Statement, to qualify the Indentures
under the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act").
(d) DCC has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and is
duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, Lyon
has been duly incorporated or organized and is validly existing in the form
of a private company with limited liability ("besloten vennootschap met
beperkte aansprakelijkheid") under the laws of The Netherlands, and each of
the subsidiaries of DCC listed on Schedule 1(d) hereto (the
"Subsidiaries"), which subsidiaries are all the subsidiaries of DCC
identified as "Obligors" in the Revolving Credit Agreement, has been duly
incorporated or organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, and DCC and
the Subsidiaries have all power and authority necessary to own or hold
their respective properties and to conduct the businesses in which they are
engaged, except where the failure so to qualify or have such power or
authority would not, singularly or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), results of
operations, business or prospects of DCC and the Subsidiaries, taken as a
whole (a "Material Adverse Effect").
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(e) As of the Closing Date, DCC will have an authorized capitalization
as set forth in its Amended and Restated Certificate of Incorporation and
as described in the Offering Memorandum, and Lyon will have an authorized
capitalization as set forth in its Deed of Incorporation. All the
outstanding shares of capital stock of DCC and Lyon are duly and validly
authorized and issued and are fully paid and non-assessable, and, as of the
Closing Date and after giving effect to the Transactions (as defined
below), all the outstanding shares of capital stock of DCC and Lyon will be
duly and validly authorized and issued and will be fully paid and non-
assessable. As of the Closing Date and after giving effect to the
Transactions, the capital stock of DCC will conform in all material
respects to the description thereof contained in the Offering Memorandum.
All of the outstanding shares of capital stock of each subsidiary of DCC
(including Lyon) have been duly and validly authorized and issued and are
fully paid and non-assessable, and, after giving effect to the
Restructuring, will be owned, directly or indirectly, by DCC, with the
exception of Raleigh Canada, Univega, Univega License, MS Sport Vertriebs
GmbH, MS Sport Vertriebs AG, Shenzen Raleigh Industrial Development Co.
Ltd, Derby Holdings South Africa and Derby Component Manufacturing (Pty.)
Ltd, with respect to which DCC will own controlling interests, and Piederb
Properties (Pty.) Ltd., with respect to which DCC will own a minority
interest. All such shares will be owned free and clear of any lien, charge,
encumbrance, security interest (other than as contemplated by the Revolving
Credit Agreement), restriction upon voting or transfer or any other claim
of any third party.
(f) Each of the Issuers and each of the Subsidiaries has full right,
power and authority to execute and deliver this Agreement, the Exchange and
Registration Rights Agreement, the Indentures, the Securities, the
Revolving Credit Agreement and the Recapitalization Agreement
(collectively, the "Transaction Documents") to which each is a party and to
perform its respective obligations hereunder and thereunder; and all action
required to be taken for the due and proper authorization, execution and
delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby (the "Transactions") has been duly and
validly taken.
(g) This Agreement has been duly authorized, executed and delivered by
each of the Issuers and constitutes a valid and legally binding agreement
of each of the Issuers.
(h) The Registration Rights Agreement has been duly authorized by each
of the Issuers and, when duly executed and delivered in accordance with its
terms by each of the parties thereto, will constitute a valid and legally
binding agreement of each of the Issuers enforceable against each of the
Issuers in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(i) Each of the Dollar Securities Indenture and the DM Securities
Indenture has been duly authorized by each of the Issuers and, when duly
executed and delivered in accordance with its terms by each of the parties
thereto, will constitute a valid and legally
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binding agreement of each of the Issuers, enforceable against each of the
Issuers in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law). On the Closing
Date, each of the Dollar Securities Indenture and the DM Securities
Indenture will conform in all material respects to the requirements of the
Trust Indenture Act and the rules and regulations of the Commission
applicable to an indenture that is qualified thereunder.
(j) The Dollar Securities and the DM Securities have been duly
authorized by each of the Issuers and, when duly executed, authenticated,
issued and delivered as provided in the Dollar Securities Indenture or the
DM Securities Indenture, as applicable, and paid for as provided herein,
will be duly and validly issued and outstanding and will constitute valid
and legally binding obligations of each of the Issuers, as joint and
several obligors, entitled to the benefits of the applicable Indenture and
enforceable against each of the Issuers in accordance with their terms,
except to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law).
(k) On the Closing Date, the Revolving Credit Agreement will be duly
authorized, executed and delivered by DCC and the Subsidiaries and, when
duly executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement of
DCC and the Subsidiaries, enforceable against DCC and the Subsidiaries in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(l) The Recapitalization Agreement has been duly authorized, executed
and delivered by DCC, DICSA, DFS, DC Cycle and Perseus Cycle and
constitutes the valid and legally binding agreement of DCC, DICSA, DFS, DC
Cycle and Perseus Cycle, enforceable against DCC, DICSA, DFS, DC Cycle and
Perseus in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(m) Each Transaction Document conforms in all material respects to the
description thereof contained in the Offering Memorandum.
(n) (i) The execution, delivery and performance by each of the Issuers
and each of the Subsidiaries of each of the Transaction Documents to which
it is a party, (ii) the issuance, authentication, sale and delivery of the
Securities and compliance by each of the Issuers with the terms thereof and
(iii) the consummation of the Transactions will not
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conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of either of the Issuers or any of the Subsidiaries (other than as
contemplated by the Revolving Credit Agreement) pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which either of the Issuers or any the Subsidiaries is a
party or by which either of the Issuers or any of such subsidiaries is
bound or to which any of the property or assets of either of the Issuers or
any of the Subsidiaries is subject, which breach, violation, default or
creation or imposition of a lien, charge or encumbrance could reasonably be
expected to have a Material Adverse Effect, nor will such actions result in
any violation of the provisions of the charter or by-laws (or comparable
organizational or governing documents) of either of the Issuers or any of
the Subsidiaries or any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body having
jurisdiction over either of the Issuers or any of the Subsidiaries or any
of their respective properties or assets; and no consent, approval,
authorization or order of, or filing or registration with, any such court
or arbitrator or governmental agency or body under any such statute,
judgment, order, decree, rule or regulation is required for (i) the
execution, delivery and performance by each of the Issuers and the
Subsidiaries of each of the Transaction Documents to which it is a party,
(ii) the issuance, authentication, sale and delivery of the Securities and
compliance by each of the Issuers with the terms thereof and (iii) the
consummation of the Transactions, except for such consents, approvals,
authorizations, filings, registrations or qualifications (A) which shall
have been obtained or made prior to the Closing Date or which are to be
made following the Closing Date with the Luxembourg Stock Exchange (the
"Luxembourg Exchange") or (B) as may be required to be obtained or made
under the Securities Act as provided in the Exchange and Registration
Rights Agreement and applicable state securities laws.
(o) (i) Xxxxxx Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx") are independent
certified public accountants with respect to each of DICSA and its
subsidiaries, and DCC and its subsidiaries (including Lyon), in each case
within the meaning of Rule 101 of the Code of Professional Conduct of the
American Institute of Certified Public Accountants ("AICPA") and its
interpretations and rulings thereunder. The historical financial statements
(including the notes thereto) contained in the Offering Memorandum have
been prepared in accordance with U.S. generally accepted accounting
principles consistently applied throughout the periods covered thereby and
fairly present the financial position of the entities purported to be
covered thereby at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated; and
the financial information contained in the Offering Memorandum under the
headings "Summary--Summary Historical and Pro Forma Financial Data",
"Capitalization", "Selected Historical and Pro Forma Financial Data",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Management--Compensation of Executive Officers" is derived
from the accounting records of DICSA and its subsidiaries (including DCC
and Lyon) and fairly presents the information purported to be shown
thereby, except that the financial information contained in the Offering
Memorandum under such headings in respect of dates, unit sales, sale
prices, sales to major customers and exchange rates is not derived from
such
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accounting records. The pro forma financial information contained in the
Offering Memorandum has been prepared on a basis consistent with the
historical financial statements contained in the Offering Memorandum
(except for the pro forma adjustments specified therein), includes all
material adjustments to the historical financial information necessary to
reflect the transactions described in the Offering Memorandum, gives effect
to assumptions made on a reasonable basis and fairly presents the
historical and proposed transactions contemplated by the Offering
Memorandum and the Transaction Documents. The other historical financial
and statistical information and data included in the Offering Memorandum
are, in all material respects, fairly presented.
(p) There are no legal or governmental proceedings pending to which
DICSA or any of its subsidiaries (including DCC and Lyon) is a party or of
which any property or assets of DICSA or any of its subsidiaries (including
DCC and Lyon) is subject that, (A) singularly or in the aggregate, if
determined adversely to DICSA or any of its subsidiaries (including DCC and
Lyon), could reasonably be expected to have a Material Adverse Effect or
(B) question the validity or enforceability of any of the Transaction
Documents or any action taken or to be taken pursuant thereto; and to the
best knowledge of DICSA and the Issuers, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
(q) No action has been taken and no statute, rule, regulation or order
has been enacted, adopted or issued by any governmental agency or body that
prevents the issuance of the Securities or suspends the sale of the
Securities in any jurisdiction; no injunction, restraining order or order
of any nature by any U.S. federal or state court or any court of The
Netherlands or any court of Luxembourg, in each case of competent
jurisdiction, has been issued with respect to either of the Issuers that
would prevent or suspend the issuance or sale of the Securities or the use
of the Preliminary Offering Memorandum or the Offering Memorandum in any
jurisdiction; no action, suit or proceeding is pending against or, to the
best knowledge of the Issuers, threatened against or affecting the Issuers
before any court or arbitrator or any governmental agency, body or
official, domestic or foreign, that could reasonably be expected to
interfere with or adversely affect the issuance of the Securities or in any
manner draw into question the validity or enforceability of any of the
Transaction Documents or any action taken or to be taken pursuant thereto;
and each of the Issuers has complied with, and will comply with, any and
all requests by the Luxembourg Exchange for additional information to be
included in the Listing Application (as defined below) and has received no
request from the Luxembourg Exchange or any securities authority in any
jurisdiction for additional information to be included in the Preliminary
Memorandum or the Offering Memorandum.
(r) None of the Issuers or any of the subsidiaries of DCC is (i) in
violation of its charter or by-laws (or comparable organizational or
governing documents), (ii) in default in any material respect, and no event
has occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a party
or by which it is bound or
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to which any of its property or assets is subject (unless such default has
been waived) or (iii) in violation in any material respect of any law,
ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject, in each case which could reasonably be
expected, singularly or in the aggregate, to have a Material Adverse
Effect.
(s) DICSA, the Issuers and each of the Subsidiaries possess and, upon
consummation of the Transactions, each of the Issuers and the Subsidiaries
will possess, all licenses, certificates, authorizations and permits issued
by, and have made and, upon consummation of the Transactions, will have
made, all declarations and filings with, the appropriate federal, state or
foreign regulatory agencies or bodies that are necessary or desirable for
the ownership of their respective properties or the conduct of their
respective businesses as described in the Offering Memorandum, except where
the failure to possess or make the same would not, singularly or in the
aggregate, have a Material Adverse Effect, and none of DICSA, the Issuers
or any the Subsidiaries has received notification of any revocation or
modification of any such license, certificate, authorization or permit or
has any reason to believe that any such license, certificate, authorization
or permit will not be renewed in the ordinary course.
(t) DICSA and each of its subsidiaries (including DCC and Lyon but
excluding Exeter International Corporation S.A. ("Exeter"), which, as of
the date hereof, is not, and, upon consummation of the Transactions, will
not be, a subsidiary of DCC) has filed all federal, state, local and
foreign income and franchise tax returns required to be filed through the
date hereof and has paid all taxes due thereon, and no tax deficiency has
been determined adversely to DICSA or any of its subsidiaries (including
DCC and Lyon but excluding Exeter) that has had (nor does DICSA or any of
its subsidiaries (including DCC and Lyon but excluding Exeter) have any
knowledge of any tax deficiency that, if determined adversely to DICSA or
any of its subsidiaries (including DCC and Lyon but excluding Exeter),
could reasonably be expected to have) a Material Adverse Effect.
(u) Neither of the Issuers is, and, upon consummation of the
Transactions neither of the Issuers will be, (i) an "investment company" or
a company "controlled by" an investment company within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act"),
and the rules and regulations of the Commission thereunder or (ii) a
"holding company" or a "subsidiary company" of a holding company or an
"affiliate" thereof within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
(v) DICSA and each of its subsidiaries (including DCC and Lyon but
excluding Exeter) maintains, and, upon consummation of the Transactions,
each of the Issuers and each of the subsidiaries of DCC will maintain, a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and
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(iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(w) DICSA and each of its subsidiaries (including DCC and Lyon but
excluding Exeter) have, and, upon consummation of the Transactions, each of
the Issuers and each of the subsidiaries of DCC will have, insurance
covering their respective properties, operations, personnel and businesses,
which insurance is in amounts and insures against such losses and risks as
are adequate to protect DICSA and each of its subsidiaries (including DCC
and Lyon but excluding Exeter) and their respective businesses and, upon
consummation of the Transactions, will be in amounts and insure against
such losses and risks as will be adequate to protect the Issuers, the
subsidiaries of DCC and their respective businesses. None of DICSA or any
of its subsidiaries (including DCC and Lyon but excluding Exeter) has
received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made in
order to continue such insurance.
(x) DICSA and each of its subsidiaries (including DCC and Lyon but
excluding Exeter) owns or possesses and, upon consummation of the
Transactions, each of the Issuers and each of the subsidiaries of DCC will
own or possess, adequate rights to use all patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service
mark registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the conduct
of their respective businesses in the manner such businesses are conducted
on the Closing Date; and the conduct of their respective businesses does
not and will not conflict in any material respect with, and DICSA and its
subsidiaries (including DCC and Lyon but excluding Exeter) have not
received any notice of any claim of conflict with, any such rights of
others.
(y) DICSA and each of its subsidiaries (including DCC and Lyon but
excluding Exeter) have, and, upon consummation of the Transactions, each of
the Issuers and the subsidiaries of DCC will have, good and marketable
title in fee simple to, and DICSA and each of its subsidiaries (including
DCC and Lyon but excluding Exeter) have, and, upon consummation of the
Transactions, each of the Issuers and the subsidiaries of DCC will have,
valid rights to lease or otherwise use, all items of real and personal
property that are material to the business of DICSA and its subsidiaries
(including DCC and Lyon but excluding Exeter), and, upon consummation of
the Transactions, the Issuers and the subsidiaries of DCC, in each case
free and clear of all liens, encumbrances (other than as contemplated by
the Revolving Credit Agreement), claims and defects and imperfections of
title except such as (i) do not materially interfere with the use made and
proposed to be made of such property or (ii) could not reasonably be
expected to have a Material Adverse Effect.
(z) No labor disturbance by or dispute with the employees of DICSA or
any of its subsidiaries (including DCC and Lyon but excluding Exeter)
exists or, to the best knowledge of DICSA and the Issuers, is contemplated
or threatened.
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(aa) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to
any employee benefit plan of DCC or any of its subsidiaries (including
Lyon) which could reasonably be expected to have, singularly or in the
aggregate, a Material Adverse Effect; each such employee benefit plan is in
compliance in all material respects with applicable law, including ERISA
and the Code; DCC and its subsidiaries (including Lyon) have not incurred,
and, upon consummation of the Transactions, DCC and its subsidiaries do not
expect to incur, liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any pension plan for which DCC or any
of its subsidiaries (including Lyon) would have any liability; and each
such pension plan that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which could reasonably be expected
to cause the loss of such qualification.
(bb) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission or other release of any kind of
toxic or other wastes or other hazardous substances by, due to or caused by
DICSA or any of its subsidiaries (including DCC or Lyon) (or, to the best
knowledge of DICSA and the Issuers, any other entity (including any
predecessor) for whose acts or omissions the Issuers or any of the
subsidiaries of DCC is or could reasonably be expected to be liable) upon
any of the property now or previously owned or leased by DICSA or any of
its subsidiaries (including DCC and Lyon), or upon any other property, in
violation of any statute or any ordinance, rule, regulation, order,
judgment, decree or permit or that would, under any statute or any
ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any
violation or liability that the Issuers believe could not reasonably be
expected to have, singularly or in the aggregate with all such violations
and liabilities, a Material Adverse Effect; and there has been no disposal,
discharge, emission or other release of any kind onto such property or into
the environment surrounding such property of any toxic or other wastes or
other hazardous substances with respect to which DICSA or the Issuers has
knowledge, except for any such disposal, discharge, emission or other
release of any kind which could not reasonably be expected to have,
singularly or in the aggregate with all such discharges and other releases,
a Material Adverse Effect.
(cc) None of DICSA or any of its subsidiaries (including DCC and Lyon
but excluding Exeter) or, to the best knowledge of DICSA and the Issuers,
any director, officer, agent, employee or other person associated with or
acting on behalf of DICSA or any of its subsidiaries (including DCC and
Lyon but excluding Exeter) has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds;
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(iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(dd) On and immediately after the Closing Date, each of the Issuers
(after giving effect to the issuance of the Securities and to the other
transactions related thereto as described in the Offering Memorandum) will
be Solvent. As used in this paragraph, the term "Solvent" means, with
respect to a particular date, that on such date (i) the present fair market
value (or present fair saleable value) of the assets of each of the Issuers
is not less than the total amount required to pay the probable liabilities
of such Issuer on its total existing debts and liabilities (including
contingent liabilities) as they become absolute and matured, (ii) each of
the Issuers is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business, (iii) assuming the sale of the
Securities as contemplated by this Agreement and the Offering Memorandum,
neither of the Issuers is incurring debts or liabilities beyond its ability
to pay as such debts and liabilities mature and (iv) neither of the Issuers
is engaged in any business or transaction, or about to engage in any
business or transaction, for which its property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Issuer is engaged. In computing the
amount of such contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all the
facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
(ee) Except as described in the Offering Memorandum, there are no
outstanding subscriptions, rights, warrants, calls or options to acquire,
or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of
capital stock of or other equity or other ownership interest in either of
the Issuers or any of the subsidiaries of DCC.
(ff) None of DICSA or any of its subsidiaries (including DCC and
Lyon) owns, and, upon consummation of the Transactions, none of the Issuers
or any of the subsidiaries of DCC will own, any "margin securities" as that
term is defined in Regulation U of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), and none of the proceeds of
the sale of the Securities will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry any margin security or for any other purpose which might
cause any of the Securities to be considered a "purpose credit" within the
meanings of Regul ation T, U or X of the Federal Reserve Board.
(gg) None of DICSA or any of its subsidiaries (including DCC and Lyon
but excluding Exeter) is a party to any contract, agreement or
understanding with any person that would give rise to a valid claim against
DICSA or any of its subsidiaries (including DCC and Lyon but excluding
Exeter) or the Initial Purchasers for a brokerage
12
commission, finder's fee or like payment in connection with the offering
and sale of the Securities.
(hh) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(ii) None of DICSA, any of its subsidiaries (including DCC and Lyon
but excluding Exeter), any of its or their respective affiliates or any
person acting on its or their behalf (other than the Initial Purchasers)
has engaged or will engage in any directed selling efforts (as such term is
defined in Regulation S under the Securities Act ("Regulation S")) with
respect to the Securities, and all such persons have complied and will
comply with the offering restrictions requirement of Regulation S to the
extent applicable.
(jj) None of DICSA, any of its subsidiaries (including DCC and Lyon
but excluding Exeter) or any of its or their respective affiliates has,
directly or through any agent, sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as such term is
defined in the Securities Act), which is or will be integrated with the
sale of the Securities in a manner that would require registration of the
Securities under the Securities Act.
(kk) None of DICSA, any of its subsidiaries (including DCC and Lyon
but excluding Exeter), any of its or their respective affiliates or any
person acting on its or their behalf has engaged, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D under the
Securities Act ("Regulation D").
(ll) There are no securities of the Issuers registered under the
Exchange Act or listed on a national securities exchange or quoted in a
U.S. automated inter-dealer quotation system.
(mm) None of DICSA, any of its subsidiaries (including DCC and Lyon
but excluding Exeter) has taken or will take, directly or indirectly, any
action prohibited by Regulation M under the Exchange Act in connection with
the offering of the Securities.
(nn) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Offering Memorandum or the Offering Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other than in
good faith.
(oo) None of DICSA or any of its subsidiaries (including DCC and Lyon
but excluding Exeter) does business with the government of Cuba or with any
person or affiliate located in Cuba within the meaning of Florida Statutes
Section 517.075.
(pp) with respect to DCC and the Subsidiaries (other than
Subsidiaries that are dormant companies), any reprogramming required to
permit the proper functioning, in and
13
following the year 2000, of (i) DCC's or any Subsidiary's computer systems
and (ii) equipment containing embedded microchips (including systems and
equipment supplied by others or with which DCC's or any Subsidiary's
systems interface) and the testing of all such systems and equipment, as so
reprogrammed, will be completed by March 31, 1999. The cost to DCC and each
Subsidiary of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to DCC and each Subsidiary
(including, without limitation, reprogramming errors and the failure of
others' systems or equipment) will not result in a Material Adverse Effect.
Except for such of the reprogramming referred to in the preceding sentence
as may be necessary, the computer and management information systems of DCC
and each Subsidiary are and, with ordinary course upgrading and
maintenance, will continue to be, sufficient to permit DCC and each
Subsidiary to conduct its business without Material Adverse Effect.
(qq) Since the date as of which information is given in the Offering
Memorandum, (i) there has been no material adverse change or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs,
management or business prospects of DICSA and its subsidiaries (including
DCC and Lyon), whether or not arising in the ordinary course of business,
(ii) none of DICSA and its subsidiaries (including DCC and Lyon) has
incurred any material liability or obligation, direct or contingent, other
than in the ordinary course of business and (iii) except as contemplated by
the Recapitalization Agreement, (A) none of DICSA and its subsidiaries
(including DCC and Lyon) has entered into any material transaction other
than in the ordinary course of business and (B) there has not been any
change in the capital stock or long-term debt of DICSA and its subsidiaries
(including DCC and Lyon) or any dividend or distribution of any kind
declared, paid or made by DICSA or any of its subsidiaries (including DCC
and Lyon) on any class of their respective capital stock.
(rr) Application will be made to list the Securities on the
Luxembourg Exchange prior to the earlier to occur of the first interest
payment date in respect of the Securities and the consummation of the
Exchange Offer and, in connection therewith, the Issuers will prepare and
submit to the Luxembourg Exchange a listing application with respect to the
Securities (the "Listing Application"). The final Listing Application
approved by the Luxembourg Stock Exchange will comply in all material
respects with the requirements of the Luxembourg Exchange. There is no
requirement to deliver the Listing Application to prospective purchasers or
purchasers of Securities from the Initial Purchasers in connection with the
offer and sale by the Initial Purchasers of the Securities in the manner
contemplated by this Agreement and the Offering Memorandum.
(ss) Each of the Issuers has the power to submit, and pursuant to
this Agreement and the Indentures, has legally, validly, effectively and
irrevocably submitted, or in the case of the Indentures will legally,
validly, effectively and irrevocably submit, to the jurisdiction of any
U.S. Federal or state court in the Borough of Manhattan in The City of New
York, New York, and has the power to designate, appoint and empower and,
pursuant to this Agreement and the Indentures has, or in the case of the
Indentures will have, legally, validly, effectively and irrevocably
designated, appointed and empowered
14
an agent for service of process in any suit or proceeding based on or
arising under this Agreement, the Exchange and Registration Rights
Agreement and the Indentures in any U.S. Federal or state court in the
Borough of Manhattan in The City of New York, as provided in Section 17
hereof, and Section 11(h) of the Exchange and Registration Rights Agreement
and Section 11.10 of each of the Indentures.
(tt) There is no "substantial U.S. market interest" as defined in
Rule 902(n) of Regulation S in the Issuers' debt securities.
(uu) No stamp duty, stock exchange tax, value-added tax, withholding
or any other similar duty or tax is payable in the United States, The
Netherlands or any other jurisdiction in which either of the Issuers is
organized or engaged in business for tax purposes or, in each case, any
political subdivision thereof or any authority having power to tax, in
connection with the authorization, issuance, sale and delivery of the
Securities by the Issuers to the Initial Purchasers and resales thereof by
the Initial Purchasers in the manner contemplated by this Agreement and the
Offering Memorandum.
(vv) None of the Issuers or any of the subsidiaries of DCC, and none
of their respective properties or assets, has any immunity from the
jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution, executing or otherwise) under the laws of the United States or
The Netherlands.
(ww) To ensure the legality, validity, enforceability and
admissibility into evidence of each of this Agreement, the Exchange and
Registration Rights Agreement, the Indentures, the Securities and any other
document to be furnished hereunder or thereunder in The Netherlands, it is
not necessary that this Agreement, the Exchange and Registration Rights
Agreement, the Indentures, the Securities or such other document be filed
or recorded with any court or other authority in The Netherlands or that
any stamp of similar tax be paid in The Netherlands on or in respect of
this Agreement, the Exchange and Registration Rights Agreement, the
Indentures, the Securities or any such other document.
(xx) None of DICSA, any of its subsidiaries (including DCC and Lyon)
or any of its or their respective affiliates has offered, sold, transferred
or delivered, and will not offer, sell, transfer or deliver, the
Securities, anywhere in the world, directly or indirectly, other than to
banks, pension funds, insurance companies, securities funds, investment
institutions, central governments, large international and supra-national
institutions and other comparable entities, including, inter alia,
treasuries and finance companies of large enterprises which trade or invest
in securities in the conduct of a business or profession.
(yy) None of the DICSA or any of its subsidiaries (including DCC and
Lyon but excluding Exeter) or any of its or their respective affiliates
has, directly or through any agent, sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security under
circumstances that would breach article 3 of The Netherlands Securities
Market Supervision Act of 1995 ("Wet Toezicht Effectenverkeer 1995").
15
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Issuers agree to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Issuers, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on Schedule 1 hereto at a purchase price equal to 97% of the
aggregate principal amount thereof. The Issuers shall not be obligated to
deliver any of the Securities except upon payment for all of the Securities to
be purchased as provided herein. If any court or documentary taxes, or any
other excise or property taxes, charges or similar levies are payable in the
United States, The Netherlands or any other jurisdiction in which either of the
Issuers is organized or engaged in business for tax purposes or, in each case,
any political subdivision thereof or any authority having power to tax in
connection with the issuance, sale and delivery by the Issuers to the Initial
Purchasers and resales thereof by the Initial Purchasers in the manner
contemplated by this Agreement and the Offering Memorandum, the Issuers agree to
pay, or to reimburse the Initial Purchasers promptly for, any such tax, charge
or levy.
(b) The Initial Purchasers have advised the Issuers that they propose
to offer the Securities for resale upon the terms and subject to the conditions
set forth herein and in the Offering Memorandum. Each Initial Purchaser,
severally and not jointly, represents, warrants and agrees that (i) it is
purchasing the Securities pursuant to a private sale exempt from registration
under the Securities Act, (ii) it has not solicited offers for, or offered or
sold, and will not solicit offers for, or offer or sell, the Securities by means
of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act and (iii) it has solicited and
will solicit offers for the Securities only from, and has offered or sold and
will offer, sell or deliver the Securities, as part of its initial offering,
only (A) within the United States to persons whom it reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers"), as defined in
Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and in each case,
in transactions in accordance with Rule 144A and (B) outside the United States
to persons other than U.S. persons in reliance on Regulation S under the
Securities Act ("Regulation S").
(c) In connection with the offer and sale of Securities in reliance
on Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) the Securities have not been registered under the Securities
Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except pursuant to an exemption
from, or in transactions not subject to, the registration requirements of
the Securities Act;
(ii) such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of their distribution at
any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the
16
Closing Date, only in accordance with Regulation S or Rule 144A or any
other available exemption from registration under the Securities Act;
(iii) None of such Initial Purchaser or any of its affiliates or any
other person acting on its or their behalf has engaged or will engage in
any directed selling efforts with respect to the Securities, and all such
persons have complied and will comply with the offering restriction
requirements of Regulation S;
(iv) at or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, it will have sent to each distributor, dealer
or other person receiving a selling concession, fee or other remuneration
that purchases Securities from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of their distribution at any
time or (ii) otherwise until 40 days after the later of the
commencement of the offering of the Securities and the date of
original issuance of the Securities, except in accordance with
Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act. Terms used above have the
meanings given to them by Regulation S."
(v) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the
Securities, except with its affiliates or with the prior written
consent of the Issuers.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that (i) it has not offered or sold and, prior to the date
six months after the Closing Date, will not offer or sell, any Securities to
persons in the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or otherwise in
circumstances which have not resulted in 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, (ii) it has complied with and will comply with all
applicable provisions of the Financial Services Act 1986 and the Public Offers
of Securities Regulations 1995 with respect to anything done by it in relation
to the Securities in, from or otherwise involving the United Kingdom and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
(as amended), or to a person to whom such document may otherwise lawfully be
issued or passed on.
(e) Each Initial Purchaser, severally and not jointly, represents and
agrees that the Securities will not be offered, sold, transferred or delivered
as part of their initial distribution or any time thereafter, anywhere in the
world, directly or indirectly, other than to banks, pension
17
funds, insurance companies, securities funds, investment institutions, central
governments, large international and supra-national institutions and other
comparable entities, including, inter alia, treasuries and finance companies of
large enterprises which trade or invest in securities in the conduct of a
business or profession.
(f) Each Initial Purchaser, severally and not jointly, represents and
agrees that (i) it is aware of the fact that no sales prospectus (Wertpapier-
Verkaufsprospekt) in Germany has been or will be published in respect of the
Securities, (ii) it will comply with the Securities Sales Prospectus Act of
Germany (Wertpapier-Verkaufsprospektgesetz) of December 13, 1990 and the
restrictions thereunder applying to the offer and distribution of the Securities
in Germany and (iii) in particular, it will only offer or sell any Securities in
Germany under any of the exemptions provided for in Section 2 of the Securities
Sales Prospectus Act.
(g) Each Initial Purchaser, severally and not jointly, agrees that,
prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Issuers pursuant hereto, such Initial Purchaser shall furnish
to that purchaser a copy of the Offering Memorandum (and any amendment or
supplement thereto that the Issuers shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale). In addition to the
foregoing, each Initial Purchaser acknowledges and agrees that the Issuers and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 5(d) and (e), counsel for the Issuers and for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers and their compliance with their agreements
contained in this Section 2, and each Initial Purchaser hereby consents to such
reliance.
(h) The Issuers acknowledge and agree that the Initial Purchasers may
sell Securities to any affiliate of an Initial Purchaser and that any such
affiliate may sell Securities purchased by it to an Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Xxxxxxxx & Xxxxx, 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as shall be
agreed upon by the Initial Purchasers and the Issuers, at 9:00 a.m., New York
City time, on May 14, 1998, or at such other time or date, not later than seven
full business days thereafter, as shall be agreed upon by the Initial Purchasers
and the Issuers (such date and time of payment and delivery being referred to
herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Issuers by wire or book-entry transfer of same-
day funds to such account or accounts as the Issuers shall specify prior to the
Closing Date or by such other means as the parties hereto shall agree prior to
the Closing Date against delivery to the Initial Purchasers of the certificates
evidencing the Securities. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligations of the Initial Purchasers hereunder. Upon delivery, the
Securities shall be in global form, registered in such names and in such
denominations as CSI, on behalf of the Initial Purchasers, shall have requested
in writing not less than two full business days prior to the Closing Date. The
Issuers agree to
18
make the global certificates evidencing the Securities available for inspection
by CSI, on behalf of the Initial Purchasers, in New York, New York at least 24
hours prior to the Closing Date.
4. Further Agreements of the Issuers. Each of the Issuers agrees with
each of the several Initial Purchasers:
(a) to advise the Initial Purchasers promptly and, if requested,
confirm such advice in writing, of the happening of any event which makes
any statement of a material fact made in the Offering Memorandum untrue or
which requires the making of any additions to or changes in the Offering
Memorandum (as amended or supplemented from time to time) in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; to advise the Initial Purchasers promptly of any
order preventing or suspending the use of the Preliminary Offering
Memorandum or the Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any jurisdiction
and of the initiation or threatening of any proceeding for any such
purpose; and to use its best efforts to prevent the issuance of any such
order preventing or suspending the use of the Preliminary Offering
Memorandum or the Offering Memorandum or suspending any such qualification
and, if any such suspension is issued, to obtain the lifting thereof at the
earliest possible time;
(b) to furnish promptly to each of the Initial Purchasers and counsel
for the Initial Purchasers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any
amendments or supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the Offering
Memorandum, to furnish a copy thereof to each of the Initial Purchasers and
counsel for the Initial Purchasers and not to effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by
notice to the Issuers after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Initial Purchasers or counsel for the Issuers, to amend or supplement
the Offering Memorandum in order that the Offering Memorandum will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Offering
Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
(e) for so long as the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
to furnish to holders of the Securities and beneficial owners and
prospective purchasers of the Securities designated
19
by such holders, upon request of such holders or such beneficial owners or
prospective purchasers, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act, unless the Issuers are then
subject to and in compliance with Section 13 or 15(d) of the Exchange Act
(the foregoing agreement being for the benefit of the holders from time to
time of the Securities and beneficial owners and prospective purchasers of
the Securities designated by such holders);
(f) for so long as the Securities are outstanding, to furnish to the
Initial Purchasers copies of any annual reports, quarterly reports and
current reports filed by either of the Issuers with the Commission on Forms
10-K, 10-Q and 8-K, or 20-F or 6-K, or such other similar forms as may be
designated by the Commission, and such other documents, reports and
information as shall be furnished by the Issuers to the Trustees or to the
holders of the Securities pursuant to the Indentures or the Exchange Act or
any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the Initial
Purchasers may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may designate and to continue such qualifications in
effect for so long as required for the resale of the Securities; and to
arrange for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial Purchasers
may reasonably request; provided that the Issuers and the subsidiaries of
DCC shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to file a general
consent to service of process in any jurisdiction (other than as required
by this Agreement);
(h) to arrange, with the cooperation of the Initial Purchasers, for
(i) the Dollar Securities to be (A) designated Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") Market securities in
accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. ("NASD") relating to trading in the
PORTAL Market, (B) eligible for clearance and settlement through The
Depository Trust Company ("DTC"), the Euroclear System ("Euroclear") and
Cedel S.A. ("Cedel") and (C) listed on the Luxembourg Exchange and (ii) for
the DM Securities to be (A) eligible for clearance and settlement through
Euroclear and Cedel and (B) listed on the Luxembourg Exchange;
(i) not to, and to cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) that could be integrated
with the sale of the Securities in a manner that would require registration
of the Securities under the Securities Act or that would require compliance
with Article 3 of The Netherlands Securities Market Supervision Act of 1995
("Wet Toezicht Effectenverkeer 1995");
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may
be, not to, and to cause its affiliates not to, and not to authorize or
knowingly permit any person acting on its or their
20
behalf to, solicit any offer to buy or offer to sell the Securities by
means of any form of general solicitation or general advertising within the
meaning of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act and not to offer, sell,
contract to sell or otherwise dispose of, directly or indirectly, any
securities under circumstances where such offer, sale, contract or
disposition would cause the exemption afforded by Section 4(2) of the
Securities Act to cease to be applicable to the offering and sale of the
Securities as contemplated by this Agreement and the Offering Memorandum;
(k) for a period of 180 days from the date of the Offering
Memorandum, not to, and to cause its affiliates not to, offer for sale,
sell, contract to sell or otherwise dispose of, directly or indirectly, or
file a registration statement for, or announce any offer, sale, contract
for sale of or other disposition of any debt securities issued or
guaranteed by the Issuers or any subsidiaries of DCC (other than the
Securities) without the prior written consent of the Initial Purchasers,
which consent shall not be unreasonably withheld;
(l) during the period from the Closing Date until two years after the
Closing Date, without the prior written consent of the Initial Purchasers,
not to, and not permit any of its affiliates (as defined in Rule 144 under
the Securities Act) to, resell any of the Securities that have been
reacquired by either of them, except for Securities purchased by either of
the Issuers or any of their affiliates and resold in a transaction
registered under the Securities Act;
(m) not to, for so long as the Securities are outstanding, be or
become, or be or become owned by, 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, and to not
be or become, or be or become owned by, a closed-end investment company
required to be registered, but not registered thereunder;
(n) in connection with the offering of the Securities, until CSI, on
behalf of the Initial Purchasers, shall have notified the Issuers of the
completion of the resale of the Securities, not to, and to cause its
affiliated purchasers (as defined in Regulation M under the Exchange Act)
not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Securities, or attempt to induce any person
to purchase any Securities and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the
Securities;
(o) in connection with the offering of the Securities, to make its
officers, employees, independent accountants and legal counsel reasonably
available upon request by the Initial Purchasers;
(p) to furnish to each of the Initial Purchasers on the date hereof a
copy of the independent accountants' report included in the Offering
Memorandum signed by the accountants rendering such report;
21
(q) to do and perform all things required to be done and
performed by it under this Agreement that are within its control prior to,
on or after the Closing Date, and to use its best efforts to satisfy all
conditions precedent on its part to the delivery of the Securities;
(r) to not take any action prior to the execution and delivery of
the Indentures that, if taken after such execution and delivery, would
have violated any of the covenants contained in the Indentures;
(s) to not take any action prior to the Closing Date that would
require the Offering Memorandum to be amended or supplemented pursuant to
Section 4(d);
(t) prior to the Closing Date, not to issue any press release or
other communication directly or indirectly or hold any press conference
with respect to DICSA, the Issuers, their condition, financial or
otherwise, or earnings, business affairs or business prospects (except for
routine oral marketing communications in the ordinary course of business
and consistent with the past practices of DICSA and the Issuers and of
which the Initial Purchasers are notified), without the prior written
consent of the Initial Purchasers, unless in the judgment of the Issuers
and their counsel, and after notification to the Initial Purchasers, such
press release or communication is required by law; and
(u) to apply the net proceeds from the sale of the Securities as
set forth in the Offering Memorandum under the heading "Use of Proceeds".
5. Conditions of Initial Purchasers' Obligations. The respective
obligations of the several Initial Purchasers hereunder are subject to the
accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Issuers contained herein, to the accuracy
of the statements of each of the Issuers and their respective officers made in
any certificates delivered pursuant hereto, to the performance by each of the
Issuers of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchasers
may agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Issuers on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact that, in the opinion of counsel for the Initial
Purchasers, is material or omits to state any fact which, in the opinion of
such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of each of the Transaction Documents
and the Offering
22
Memorandum, and all other legal matters relating to the Transaction
Documents and the Transactions shall be satisfactory in all material
respects to the Initial Purchasers, and the Issuers shall have furnished to
the Initial Purchasers and their counsel all documents and information that
they or their counsel may reasonably request to enable them to pass upon
such matters.
(d) Xxxxxxxx & Xxxxx shall have f furnished to the Initial Purchasers
their written opinion, as U.S. counsel to the Issuers, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, Trenite Van Doorne shall
have furnished to the Initial Purchasers their written opinion, as Dutch
counsel to the Issuers, addressed to the Initial Purchasers and dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, and the Issuers shall have furnished to such counsel such
documents and information as they reasonably request for the purpose of
enabling them to pass upon such matters.
(e) The Initial Purchasers shall have received from Cravath, Swaine &
Xxxxx, counsel for the Initial Purchasers, such opinion or opinions, dated
the Closing Date, with respect to such matters as the Initial Purchasers
may reasonably require, and the Issuers shall have furnished to such
counsel such documents and information as they request for the purpose of
enabling them to pass upon such matters.
(f) The Issuers shall have furnished to the Initial Purchasers a
letter (the "Initial Letter") of Xxxxxx Xxxxxxxx, addressed to the Initial
Purchasers and dated the date hereof, in form and substance satisfactory to
the Initial Purchasers.
(g) The Issuers shall have furnished to the Initial Purchasers a
letter (the "Bring-Down Letter") of Xxxxxx Xxxxxxxx, addressed to the
Initial Purchasers and dated the Closing Date (i) confirming that they are
independent public accountants with respect to each of DICSA and its
subsidiaries, and DCC and its subsidiaries (including Lyon), in each case
within the meaning of Rule 101 of the Code of Professional Conduct of the
AICPA and its interpretations and rulings thereunder, (ii) stating, as of
the date of the Bring-Down Letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Offering Memorandum, as of a date
not more than three business days prior to the date of the Bring-Down
Letter), that the conclusions and findings of such accountants with
respect to the financial information and other matters covered by the
Initial Letter are accurate and (iii) confirming in all material respects
the conclusions and findings set forth in the Initial Letter.
(h) The Issuers shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, of the chief executive officer of
their group and the financial controller of their group stating that (A)
such officers have carefully examined the Offering Memorandum, (B) in their
opinion, the Offering Memorandum, as of its date, did not include any
untrue statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and since the date
23
of the Offering Memorandum, no event has occurred that should have been set
forth in a supplement or amendment to the Offering Memorandum so that the
Offering Memorandum (as so amended or supplemented) would not include any
untrue statement of a material fact and would not omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (C) as of the Closing Date, the representations and
warranties of such Issuer in this Agreement are true and correct in all
material respects, such Issuer has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
on or prior to the Closing Date and subsequent to the date of the most
recent financial statements contained in the Offering Memorandum, there has
been no material adverse change in the financial position or results of
operation of such Issuer or any of its subsidiaries, or any change, or any
development including a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business or prospects of
such Issuer and its subsidiaries, taken as a whole and (D) the
Recapitalization has been consummated on the terms described in the
Offering Memorandum.
(i) The Initial Purchasers shall have received a counterpart of
the Exchange and Registration Rights Agreement which shall have been
executed and delivered by a duly authorized officer of each Issuer.
(j) Each Indenture shall have been duly executed and delivered by the
Issuers and the applicable Trustee, and the Securities shall have been duly
executed and delivered by the Issuers and duly authenticated by the
applicable Trustee.
(k) The Dollar Securities shall have been approved by the NASD for
trading in the PORTAL Market and shall be eligible for clearance and
settlement through the facilities of DTC, Euroclear and Cedel. The DM
Securities shall be eligible for clearance and settlement through the
facilities of Euroclear and Cedel.
(l) If any event shall have occurred that requires the Issuers under
Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchasers shall have been given a reasonable opportunity to
comment thereon, and copies thereof shall have been delivered to the
Initial Purchasers reasonably in advance of the Closing Date.
(m) There shall not have occurred any invalidation of Rule 144A
or Regulation S under the Securities Act by any court or any withdrawal or
proposed withdrawal of any rule or regulation under the Securities Act or
the Exchange Act by the Commission or any amendment or proposed amendment
thereof by the Commission that in the judgment of the Initial Purchasers
would materially impair the ability of the Initial Purchasers to purchase,
hold or effect resales of the Securities as contemplated hereby.
(n) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital
24
stock or long-term debt or any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
results of operations, business or prospects of DICSA and its subsidiaries
(including DCC and Lyon) or DCC and its subsidiaries (including Lyon), each
taken as a whole, the effect of which, in any such case described above,
is, in the judgment of the Initial Purchasers, so material and adverse as
to make it impracticable or inadvisable to proceed with the sale or
delivery of the Securities on the terms and in the manner contemplated by
this Agreement and the Offering Memorandum (exclusive of any amendment or
supplement thereto ) .
(o) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body that would, as of the Closing Date, prevent the issuance or
sale of the Securities; and no injunction, restraining order or order of
any other nature by any U.S. federal or state court or any court of The
Netherlands or any court of Luxembourg, in each case of competent
jurisdiction, shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Securities.
(p) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Securities or any of the Issuers' other debt securities or preferred stock
by any "nationally recognized statistical rating organization", as such
term is defined by the Commission for purposes of Rule 436(g)(2) of the
rules and regulations of the Commission under the Securities Act and (ii)
no such organization shall have publicly announced that it has under
surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of the Securities or any
of the Issuers' other debt securities or preferred stock.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the Luxembourg Exchange, the New York Stock Exchange, the
American Stock Exchange or the over-the-counter market shall have been
suspended or limited, or minimum prices shall have been established on any
such exchange or market by any such exchange, the Commission or by any
other regulatory body or governmental authority having jurisdiction, or
trading in any securities of the Issuers on any exchange or in the
over-the-counter market shall have been suspended or (ii) any general
moratorium on commercial banking activities shall have been declared by
Luxembourg, The Netherlands or U.S. federal or New York state authorities
or (iii) an outbreak or escalation of hostilities in the United States or
in any member state of the European Union or a declaration by the United
States or any member state of the European Union of a national emergency or
war or (iv) a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on
financial markets shall be such) the effect of which, in the case of this
clause (iv), is, in the judgment of the Initial Purchasers, so material and
adverse as to make it impracticable or inadvisable to proceed with the sale
or the delivery of the Securities on the terms and in the manner
contemplated by this Agreement and in the Offering Memorandum (exclusive of
any amendment or supplement thereto).
25
(r) Substantially simultaneously with the sale of the Securities
hereunder, the Recapitalization shall have been consummated on the terms
described in the Offering Memorandum and the Revolving Credit Agreement
shall have been executed and delivered and the initial borrowings
thereunder shall have been made. All conditions precedent to the
consummation of the Transactions, other than the payment of the
consideration contained in this Agreement, shall have been satisfied or
waived, with the prior written consent of the Initial Purchasers, prior to
or on the Closing Date. There shall have been no amendment, supplement or
waiver of any part of the Recapitalization Agreement (including the
exhibits and schedules thereto) not disclosed in writing to the Initial
Purchasers prior to the date hereof, or any such amendment, supplement or
waiver after the date hereof not consented to in writing by the Initial
Purchasers.
(u) The Initial Purchasers shall have received such further opinions,
certificates, letters and documents as the Initial Purchasers may
reasonably request.
The Issuers shall have furnished, or shall furnish, the Initial
Purchasers with conformed copies of such opinions, certificates, letters and
documents mentioned above as the Initial Purchasers reasonably request. All
opinions, certificates, letters and documents mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.
The Initial Purchasers may in their sole discretion waive compliance
with any conditions to their obligations hereunder, whether in respect of the
Closing Date or otherwise.
6. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers, in their absolute discretion, by
notice given to and received by the Issuers prior to delivery of and payment for
the Securities if, prior to that time, any of the events described in Section
5(m), (n), (o), (p) or (q) shall have occurred and be continuing.
7. Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6, (b) the Issuers
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason permitted under this Agreement or (c) the Initial Purchasers shall
decline to purchase the Securities for any reason permitted under this
Agreement, the Issuers shall reimburse the Initial Purchasers for such out-of-
pocket expenses (including reasonable fees and disbursements of counsel) as
shall have been reasonably incurred by the Initial Purchasers in connection with
this Agreement and the proposed purchase and resale of the Securities.
8. Indemnification. (a) The Issuers shall indemnify and hold harmless
each Initial Purchaser, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls any
Initial Purchaser within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 8(a), Section 9 and
Section 17(c) as an Initial Purchaser), from and against any and all losses,
claims, damages or liabilities and reasonable expenses, joint or several, or any
action in respect thereof (including, without limitation, any loss, claim,
damage, liability or action relating to purchases
26
and sales of the Securities), to which that Initial Purchaser may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other statutory law or regulation, at common law or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Memorandum, the Offering Memorandum or in
any amendment or supplement thereto or in any information provided by the
Issuers pursuant to Section 4(e) or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and shall reimburse each Initial Purchaser
promptly upon demand for any legal or other expenses reasonably incurred by that
Initial Purchaser in connection with investigating or defending or preparing to
defend against or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Issuers shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with any Initial Purchasers' Information; and provided, further, that with
respect to any such untrue statement in or omission from the Preliminary
Offering Memorandum, the indemnity agreement contained in this Section 8(a)
shall not inure to the benefit of any such Initial Purchaser to the extent that
the sale to the person asserting any such loss, claim, damage, liability or
action was an initial resale by such Initial Purchaser and any such loss, claim,
damage, liability or action of or with respect to such Initial Purchaser results
from the fact that both (i) to the extent required by applicable law, a copy of
the Offering Memorandum was not sent or given to such person at or prior to the
written confirmation of the sale of such Securities to such person and (ii) the
untrue statement in or omission from the Preliminary Offering Memorandum was
corrected in the Offering Memorandum unless, in either case, such failure to
deliver the Offering Memorandum was a result of non-compliance by the Issuers
with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Issuers, their affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Issuers within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 8(b) and
Section 9 as the Issuers), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Issuers may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other statutory law or regulation, at
common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with the Initial Purchasers' Information, and shall
reimburse the Issuers for any legal or other expenses reasonably incurred by the
Issuers in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred.
27
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 8(a) or 8(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have under this Section 8 except to the extent
that it has been materially prejudiced by such failure; and provided, further,
that the failure to notify the indemnifying party shall not relieve it from any
liability that it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that an indemnified party shall have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such
counsel for the indemnified party will be at the expense of such indemnified
party unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based upon advice of counsel to the indemnified party)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (3) a conflict or potential conflict exists (based upon advice of counsel
to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 8(a) and 8(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), 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.
28
The obligations of the Issuers and the Initial Purchasers in this
Section 8 and in Section 9 are in addition to any other liability that the
Issuers or the Initial Purchasers, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
9. Contribution. If the indemnification provided for in Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or 8(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Issuers on the one hand and the Initial Purchasers on
the other 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 Issuers on the one hand and the Initial
Purchasers on the other with respect to the statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Issuers on the one hand and the Initial Purchasers on the other
with respect to such offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Securities purchased under this
Agreement (before deducting expenses) received by or on behalf of the Issuers,
on the one hand, and the total discounts and commissions received by the Initial
Purchasers with respect to the Securities purchased under this Agreement, on the
other, bear to the total gross proceeds from the sale of the Securities under
this Agreement, in each case as set forth in the table on the cover page of the
Offering Memorandum. 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 the
Issuers or information supplied by the Issuers on the one hand or to any Initial
Purchasers' Information on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Issuers and the Initial Purchasers agree
that it would not be just and equitable if contributions pursuant to this
Section 9 were to be determined by pro rata allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method
of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 9 shall be deemed to include, for purposes of
this Section 9, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or preparing to
defend any such action or claim. Notwithstanding the provisions of this Section
9, no Initial Purchaser shall be required to contribute any amount in excess of
the amount by which the total discounts and commissions received by such Initial
Purchaser with respect to the Securities purchased by it under this Agreement
exceeds the amount of any damages which such Initial Purchaser has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
as provided in this Section 9 are several in proportion to their respective
purchase obligations and not joint.
29
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Issuers
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except as provided in
Sections 8 and 9 with respect to affiliates, officers, directors, employees,
representatives, agents and controlling persons of the Initial Purchasers and
the Issuers and in Section 4(e) with respect to holders and beneficial owners
and prospective purchasers of the Securities. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 10, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
11. Expenses. (a) The Issuers agree with the Initial Purchasers to
pay (i) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that connection; (ii) the
costs incident to the preparation, printing and distribution of the Preliminary
Offering Memorandum, the Offering Memorandum, the Listing Application and any
amendments or supplements thereto; (iii) the costs of reproducing and
distributing each of the Transaction Documents; (iv) the costs incident to the
preparation, printing and delivery of the certificates evidencing the
Securities, including stamp duties, stock exchange taxes, value added taxes,
withholding taxes, or any similar duties or taxes, if any, payable upon
authorization, issuance, sale or delivery of the Securities; (v) the fees and
expenses of the Issuers' counsel and independent accountants; (vi) the fees and
expenses of qualifying the Securities under the securities laws of the several
jurisdictions as provided in Section 4(g) and of preparing, printing and
distributing Blue Sky Memoranda (including related fees and expenses of counsel
for the Initial Purchasers); (vii) any fees charged by rating agencies for
rating the Securities; (viii) the fees and expenses of the Trustees, any paying
agents and any listing agent (including any affiliate of any Initial Purchaser
acting in such capacity) (including related fees and expenses of any counsel to
such parties); (ix) all expenses and application fees incurred in connection
with the application for and the qualification for inclusion of the Dollar
Securities for quotation on the PORTAL Market, the approval of the Dollar
Securities for book-entry transfer through DTC, Euroclear and Cedel, the
approval of the DM Securities for book-entry transfer through Euroclear and
Cedel and the listing of the Securities on the Luxembourg Exchange or any other
securities exchange; (x) the expenses incurred by the Issuers and the Initial
Purchasers in connection with attending or hosting "road show" meetings with
prospective purchasers of the Securities from the Initial Purchasers; (xi) any
fees or other costs incident to securing any required review by any other
regulatory authority in The Netherlands; (xii) any fees or other costs incurred
by the Initial Purchasers as a result of the failure to release the DM
Securities for delivery and settlement through Euroclear and Cedel on, and as
of, the Closing Date and (xiii) all other costs and expenses incident to the
performance of the obligations of the Issuers under this Agreement which are not
otherwise specifically provided for in this Section 11; provided, however, that
except as provided in this Section 11 and Section 7, the Initial Purchasers
shall pay their own costs and expenses.
(b) In addition, the Issuers agree to indemnify and hold harmless the
Initial Purchasers against any stamp duties, stock exchange taxes, value added
taxes, withholding taxes or similar duties or taxes, including any interest and
penalties, on the authorization, issuance, sale and delivery of the Securities
and on the execution and delivery of this Agreement.
30
(c) All amounts payable by the Issuers hereunder shall be paid free
and clear of, and without any deduction or withholding for or on account of, any
current or future taxes, levies, imports, duties, charges or other deductions or
withholdings levied in any jurisdiction from or through which payment is made or
where the payor is located unless such deduction or withholding is required by
applicable law, in which event the Issuers shall pay additional amounts so that
the persons entitled to such payments receive the amount that such persons would
otherwise have received but for such deduction or withholding.
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Issuers and the Initial
Purchasers contained in this Agreement or made by or on behalf of the Issuers or
the Initial Purchasers pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination or
cancelation of this Agreement or any investigation made by or on behalf of any
of them or any of their respective affiliates, officers, directors, employees,
representatives, agents or controlling persons.
13. Notices, etc.. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail
or telecopy transmission to (i) Chase Securities Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, Attention: Xxxxx X. Xxxxx (telecopier no.: (212)
270-0994); (ii) Chase Manhattan Bank AG, Xxxxxxxxxxxxx 0, 00000 Xxxxxxxxx
xx Xxxx, Xxxxxxx; Attention: Xxxxxxxx Xxxxx (telecopier no.: 49-69-7158-
2553) and (iii) Chase Manhattan International Limited, 000 Xxxxxx Xxxx, 0xx
Xxxxx, Xxxxxx, XX0X 0XX; Attention: Xxxxx Xxxxxxxx (telecopier no.: (44)
171-777-3141); or
(b) if to the Issuers, shall be delivered or sent by mail or telecopy
transmission to The Derby Cycle Corporation, in care of Raleigh Industries
Ltd., Triumph Road, Nottingham NG7 2DD, England, Attention: Xx. Xxxx X.
Finden-Xxxxxx (telecopier no.: 011-44-115-942-2178);
provided that any notice to an Initial Purchaser pursuant to Section 8(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Issuers shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by CSI.
14. Definition of Terms. For purposes of this Agreement, (a) the
term "business day" means a day other than a Saturday, Sunday or other day on
which banking institutions in the State of New York, Luxembourg, London or
Frankfurt are authorized or required by law to close, (b) the term "subsidiary"
has the meaning set forth in Rule 405 under the Securities Act and (c) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act.
31
15. Initial Purchasers' Information. The parties hereto acknowledge
and agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the following information in the Preliminary
Offering Memorandum and the Offering Memorandum: (i) the last paragraph on the
front cover page concerning the terms of the offering by the Initial Purchasers;
(ii) the first paragraph on the inside front cover page concerning over-
allotment and trading activities by the Initial Purchasers; and (iii) the
statements concerning the Initial Purchasers contained in the third, eleventh
(except the first sentence), fourteenth and fifteenth paragraphs under the
caption "Plan of Distribution".
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. Consent to Jurisdiction; Appointment of Agent for Service of
Process; Judgment Currency. (a) Each of the Issuers agrees that any suit, action
or proceeding against such Issuer arising out of or relating to this Agreement
may be instituted in any state or U.S. Federal court in the Borough of
Manhattan, The City of New York, New York, and any appellate court from any
thereof, and it irrevocably submits to the non-exclusive jurisdiction of such
courts in any suit, action or proceeding. Each of the Issuers irrevocably
waives, to the fullest extent permitted by law, any objection to any suit,
action or proceeding that may be brought in connection with this Agreement,
including such actions, suits or proceedings relating to securities laws of the
United States of America or any state thereof, in such courts whether on the
grounds of venue, residence or domicile or on the ground that any such suit,
action or proceeding has been brought in an inconvenient forum. Each of the
Issuers agrees that final judgment in any such suit, action or proceeding
brought in such court shall be conclusive and binding upon such Issuer and may
be enforced in any court to the jurisdiction of which such Issuer is subject by
a suit upon such judgment; provided that service of process is effected upon
such Issuer in the manner provided by this Section 17.
(b) Each of the Issuers irrevocably appoints CT Corporation System,
with offices on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as
its authorized agent (the "Authorized Agent"), upon whom process may be served
in any suit, action or proceeding arising out of or relating to this Agreement
or the transactions contemplated herein which may be instituted in any state or
U.S. Federal court in the Borough of Manhattan, The City of New York, New York,
and expressly accepts the non-exclusive jurisdiction of any such court in
respect of any such suit, action or proceeding. Each of the Issuers hereby
represents and warrants that the Authorized Agent has accepted such appointment
and has agreed to act as said agent for service of process, and each of the
Issuers agrees to take any and all action, including the filing of any and all
documents that may be necessary to continue such respective appointment in full
force and effect so long as such Issuer has any outstanding obligations under
this Agreement, the Indentures or the Securities. Service of process upon the
Authorized Agent shall be deemed, in every respect, effective service of process
upon each of the Issuers. Notwithstanding the foregoing, any action involving
the Issuers arising out of or relating to this Agreement may be instituted in
any court of competent jurisdiction in any other jurisdiction.
32
(c) Any action, suit or proceeding brought by the Issuers against any
Initial Purchaser entitled to indemnification or contribution under Section 8 or
9 arising out of or based upon this Agreement and the transactions contemplated
herein shall be brought solely in a U.S. Federal or state court in the Borough
of Manhattan, The City of New York, New York, and the Issuers shall not initiate
nor seek to initiate, in the State of Delaware, The Netherlands or in any other
jurisdiction other than in such New York courts, any action, suit or proceeding
against any Initial Purchaser entitled to indemnification or contribution under
Section 8 or 9 arising out of or based upon this Agreement and the transactions
contemplated hereby. The foregoing shall apply, without limitation, to any
action seeking to obtain any injunction or declaratory judgment against the
enforcement of, or a declaratory judgment concerning, any claim by any Initial
Purchaser in respect of this Agreement and any transaction contemplated hereby,
and any action challenging the enforceability of or seeking to invalidate in any
respect the submission by the Issuers hereunder to the jurisdiction of such New
York courts or the designation, pursuant to this Section 17, of the laws of the
State of New York as the law applicable to this Agreement.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder into any currency other than U.S.
dollars or Deutsche marks, the parties hereto agree, to the fullest extent that
they may effectively do so, that the rate of exchange used shall be the rate at
which in accordance with normal banking procedures the Initial Purchasers could
purchase U.S. dollars or Deutsche marks, as applicable, with the other currency
in New York City on the business day preceding that on which final judgment is
given. The obligation of the Issuers in respect of any sum due to an Initial
Purchaser shall, notwithstanding any judgment in a currency other than U.S.
dollars or Deutsche marks, not be discharged until the first business day
following receipt by such Initial Purchaser of any sum adjudged to be so due in
such other currency, on which (and only to the extent that) such Initial
Purchaser may in accordance with normal banking procedures purchase U.S. dollars
or Deutsche marks, as applicable, with such other currency; if the U.S. dollars
or Deutsche marks so purchased are less than the sum originally due to an
Initial Purchaser hereunder, each of the Issuers agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Initial
Purchaser against such loss. If the U.S. dollars or Deutsche marks so purchased
are greater than the sum originally due to an Initial Purchaser hereunder, such
Initial Purchaser agrees to pay to the Issuers an amount equal to the excess of
the U.S. dollars or Deutsche marks, as the case may be, so purchased over the
sum originally due to such Initial Purchaser hereunder.
(e) The provisions of this Section 17 shall survive any termination
or cancelation of this Agreement.
18. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
19. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
33
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Issuers and the several
Initial Purchasers in accordance with its terms.
Very truly yours,
THE DERBY CYCLE CORPORATION,
by Xxxx X. Finden-Xxxxxx
----------------------------------
Name: Xxxx X. Finden-Xxxxxx
Title: CEO and President
LYON CYCLE B.V.,
by Xxxx X. Finden-Crofts
----------------------------------
Name:Xxxx X. Finden-Xxxxxx
Title:
Accepted:
On behalf of Chase Securities Inc.,
Chase Manhattan Bank AG and
Chase Manhattan International Limited
CHASE SECURITIES INC.,
by [SIGNATURE ILLEGIBLE]^^
------------------------------
Authorized Signatory
Address for notices pursuant to Section 8(c):
0 Xxxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
SCHEDULE 1
Principal
Amount
Initial Purchasers of Securities
Chase Securities Inc. $ 100,000,000
DM 36,666,666
Chase Manhattan Bank AG DM 36,666,667
Chase Manhattan International Limited DM 36,666,667
___________
Total $ 100,000,000
DM 110,000,000
SCHEDULE 1(d)
SUBSIDIARIES
NAME JURISDICTION OF INCORPORATION
Derby Holding Limited England and Wales
Raleigh Industries Limited England and Wales
Raleigh International Limited England and Wales
Sturmey-Xxxxxx Limited England and Wales
Raleigh Industries of Canada Limited Canada Limited
Raleigh BV Netherlands
Raleigh Europe BV Netherlands
Koninklijke Gazelle BV Netherlands
Derby Nederland BV Netherlands
Derby Holding BV Netherlands
Sturmey-Xxxxxx Limited BV Netherlands
Lyon Investments BV Netherlands
Derby Holding (Deutschland) GmbH Germany
Raleigh Fahrrader GmbH Germany
NW Sportgerate GmbH Germany
Derby Cycle Werke GmbH Germany
E Weiner Bike Parts GmbH Germany
Univega Worldwide GmbH Germany
Univega Beteiligung GmbH Germany
MS Sport Vertiebs GmbH Germany
Derby Fahrrader GmbH Germany
Derby WS Germany
Vermogenswerwaltungs GmbH Germany
Xxxxxx-Xxxxxxx GmbH Germany
Curragh Finance Company Ireland
3
NAME JURISDICTION OF INCORPORATION
Raleigh Ireland Limited Ireland
InterDerby Group Finance N.V. Netherlands Antilles
Derby Finance N.V. Netherlands
The British Cycle Corporation Limited England and Wales
