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EXHIBIT 4.14
EXECUTION COPY
PURCHASE AGREEMENT
Dated September 9, 2002
By and among
ERICO INTERNATIONAL CORPORATION
(Fully and Unconditionally Guaranteed by ERICO Products, Inc.)
and
CITIBANK, N.A.
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ERICO INTERNATIONAL CORPORATION
$30,000,000 11.0% Senior Notes due 2012
Purchase Agreement
Citibank, N.A.
399 Park Avenue
New York, New York 10043
Dear Ladies and Gentlemen:
Pursuant to the terms and conditions of this Purchase
Agreement (this "Agreement"), ERICO
International Corporation, an Ohio
corporation (the "Issuer"), proposes to
issue and sell to Citibank, N.A. (the
"Purchaser") $30,000,000 aggregate
principal amount of its 11.0% Senior
Subordinated Notes due 2012 (the
"Securities") to be fully and unconditionally
guaranteed on a senior subordinated basis
by ERICO Products, Inc., an Ohio
corporation (the "Subsidiary Guarantor"),
and such other Subsidiaries as may be
required from time to time pursuant to the
Indenture. The Securities are to be
issued pursuant to the provisions of an
indenture, dated as of the Closing Date
(the "Indenture"), by and among the Issuer,
the Subsidiary Guarantor and the
Purchaser. Capitalized terms used and not
defined herein shall have the meanings
assigned to such terms in the
Indenture.
1.
Representations and Warranties of the Issuer and
Subsidiary Guarantor. Each of the Issuer
and the Subsidiary Guarantor represents
and warrants as of the date hereof and as
of the Closing Date (except with
respect to the representations and
warranties made in paragraph (i) of this
Section 1 which shall be made as of the
Closing Date only) as follows:
(a) The Issuer
has been duly incorporated, is validly
existing as a corporation in good standing
under the laws of the State of Ohio,
has the corporate power and authority to
own its property and to conduct its
business and is duly qualified to transact
business and is in good standing in
each jurisdiction in which the conduct of
its business or its ownership or
leasing of property requires such
qualification, except to the extent that the
failure to be so qualified or be in good
standing would not have a material
adverse effect on the condition, financial
or otherwise, or in the earnings,
business or operations of the Issuer, the
Subsidiary Guarantor and their
respective Subsidiaries, taken as a whole
(a "Material Adverse Effect").
(b) The
Subsidiary Guarantor has been duly organized, is
validly existing and in good standing under
the laws of the State of Ohio, has
all requisite power and authority to own
its property and to conduct its
business and is duly qualified to transact
business and is in good standing in
each jurisdiction in which the conduct of
its business or its ownership or
leasing of property requires such
qualification, except to the extent that the
failure to be so qualified or be in good
standing would not have a Material
Adverse Effect. All of the issued shares of
capital stock of the Subsidiary
Guarantor have been duly and validly
authorized and issued, are fully paid and
nonassessable and are wholly owned directly
by the Issuer, free and clear of all
Liens (other than Liens in favor of the
lenders party to the Amended and
Restated Multicurrency Credit and Security
Agreement (as amended from time to
time, the "Credit Agreement"), dated as of
May 2, 2002, by and among the Issuer,
the Subsidiary Guarantor, ERICO Europa
B.V., National City Bank and the other
banks signatory thereto ("Senior
Liens")).
(c) This
Agreement has been duly authorized, executed and
delivered by each of the Issuer and the
Subsidiary Guarantor and is a valid and
binding obligation of each of the Issuer
and the Subsidiary Guarantor,
enforceable in accordance with its terms,
subject to applicable bankruptcy,
insolvency or similar laws affecting
creditors' rights generally and general
principles of equity.
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(d) The
Securities have been duly authorized by the
Issuer and the Subsidiary Guarantor and,
when delivered to and paid for by the
Purchaser in accordance with the terms of
this Agreement and the Indenture, will
be valid and binding obligations of each of
the Issuer and the Subsidiary
Guarantor, enforceable in accordance with
their terms, subject to applicable
bankruptcy, insolvency or similar laws
affecting creditors' rights generally and
general principles of equity, and will be
entitled to the benefits of the
Indenture.
(e) The
Indenture, including all Obligations of the
Issuer under the Indenture and the
Securities issued thereunder, has been
guaranteed by the Subsidiary Guarantor and
each of the Indenture and the
Subsidiary Guarantee has been duly
authorized and when executed and delivered by
the Issuer and the Subsidiary Guarantor,
will be a valid and binding obligation
of the Issuer and the Subsidiary Guarantor,
enforceable in accordance with its
terms, subject to applicable bankruptcy,
insolvency or similar laws affecting
creditors' rights generally and general
principles of equity.
(f) The
execution and delivery by the Issuer and the
Subsidiary Guarantor of, and the
performance by the Issuer and the Subsidiary
Guarantor of its obligations under, this
Agreement, the Indenture, the
Subsidiary Guarantee and the Securities
will not contravene (i) any agreement or
other instrument binding upon the Issuer or
the Subsidiary Guarantor or any of
their respective Subsidiaries (including,
without limitation, the Credit
Agreement); (ii) any provision of
applicable law, (iii) any provision of the
certificate of incorporation or by-laws of
the Issuer and the Subsidiary
Guarantor, or (iv) any judgment, order or
decree of any governmental body,
agency or court having jurisdiction over
the Issuer, the Subsidiary Guarantor or
any Subsidiary, except as to clause (i),
(ii) or (iv) above, where such
contravention, individually or in the
aggregate, would not have, and could not
reasonably be expected to have, a Material
Adverse Effect. No consent, approval,
authorization or order of, or qualification
with, any governmental body or
agency is required for the performance by
the Issuer and the Subsidiary
Guarantor of their obligations under this
Agreement, the Indenture, or the
Securities, except (i)(x) such as may be
required by the securities or Blue Sky
laws of the various states in connection
with the offer and sale of the
Securities and (y) by Federal and state
securities laws with respect to the
Issuer's and the Subsidiary Guarantor's
obligations under Section 6 of this
Agreement, and (ii) in each case, where the
failure to obtain any such consent,
approval, authorization, order or
qualification would not have, and could not
reasonably be expected to have, a Material
Adverse Effect.
(g) Since
December 31, 2001, there has not occurred any
Material Adverse Effect or any development
reasonably likely to result in a
Material Adverse Effect.
(h) There are
no legal or governmental actions, suits or
proceedings pending or, to the best of the
Issuer's or the Subsidiary
Guarantor's knowledge, threatened against
or affecting the Issuer or the
Subsidiary Guarantor, which has as the
subject thereof any property owned or
leased by the Issuer or the Subsidiary
Guarantor, where in each such case there
is a reasonable possibility that such
action, suit or proceeding might be
determined adversely to the Issuer or the
Subsidiary Guarantor and any such
action, suit or proceeding, if so
determined adversely, would reasonably be
expected to result in a Material Adverse
Effect or adversely affect the
consummation of the transactions
contemplated by this Agreement or the
Indenture. No material labor dispute with
the employees of the Issuer or the
Subsidiary Guarantor, exists or, to the
Issuer's or the Subsidiary Guarantor's
knowledge, is threatened or imminent.
(i) Court
Square Capital Limited, a Delaware corporation
("Court Square"), owns 400 shares of Class
A voting common stock (the "Common
Stock"), no par value, of ERICO Holding
Company, an Ohio corporation and the
Issuer's direct parent corporation ("ERICO
Holdings").
(j) The
Issuer, the Subsidiary Guarantor and their
respective Subsidiaries (i) are in
compliance with all applicable foreign,
federal, state and local laws and
regulations relating to the
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protection of human health and safety, the
environment or hazardous or toxic
substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii)
have received all permits, licenses or
other approvals required of them under
Environmental Laws to conduct their
respective businesses and (iii) are in
compliance with all terms and conditions of
any such permit, license or
approval, except where such noncompliance
with Environmental Laws, failure to
receive required permits, licenses or other
approvals or failure to comply with
the terms and conditions of such permits,
licenses or approvals would not,
individually or in the aggregate, have a
Material Adverse Effect.
(k) There are
no costs or liabilities associated with
Environmental Laws, including, without
limitation, any capital or operating
expenditures required for cleanup, closure
of properties or compliance with
Environmental Laws or any permit, license
or approval, any related constraints
on operating activities and any potential
liabilities to third parties which
would, individually or in the aggregate,
have a Material Adverse Effect.
(l) The Issuer
will use the proceeds received from the
issuance of the Securities to repay senior
secured debt of the Issuer, provide
for working capital needs and for other
general corporate purposes of the Issuer
and the Subsidiary Guarantor.
(m) Neither
the Issuer nor the Subsidiary Guarantor is,
and after giving effect to the offering and
sale of the Securities and the
application of the proceeds thereof, will
be, required to register as an
"investment company" as such term is
defined in the Investment Company Act of
1940, as amended; and the Securities
satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
(n) None of
the Issuer, the Subsidiary Guarantor or any
affiliate (as defined in Rule 501(b) of
Regulation D under the Securities Act,
an "Affiliate") of the Issuer or the
Subsidiary Guarantor has directly, or
through any agent, (i) sold, offered for
sale, solicited offers to buy or
otherwise negotiated in respect of, any
security (as defined in the Securities
Act) which is or will be integrated with
the sale of the Securities in a manner
that would require the registration under
the Securities Act of the Securities
or (ii) engaged in any form of general
solicitation or general advertising in
connection with the offering of the
Securities (as those terms are used in
Regulation D under the Securities Act), or
in any manner involving a public
offering within the meaning of Section 4(2)
of the Securities Act.
(o) No default
or event of default exists under any
contract, indenture, mortgage, loan
agreement, note, lease, or other agreement
or instrument constituting Senior Debt.
(p) Each of
the Issuer and the Subsidiary Guarantor owns
or possesses sufficient trademarks, trade
names, patent rights, copyrights,
licenses, approvals, trade secrets and
other similar rights (collectively,
"Intellectual Property Rights") reasonably
necessary to conduct its business as
conducted as of the date hereof (except, in
each case, where the failure to so
own or possess would not, individually or
in the aggregate, result in a Material
Adverse Effect) and the expected expiration
of any of such Intellectual Property
Rights would not result in a Material
Adverse Effect. Neither the Issuer nor the
Subsidiary Guarantor has received any
notice of infringement or conflict with
asserted Intellectual Property Rights of
others, which infringement or conflict
is reasonably likely to be determined
adversely to the Issuer or the Subsidiary
Guarantor and, if the subject of an
unfavorable decision, would result in a
Material Adverse Effect.
(q) Each of
the Issuer and the Subsidiary Guarantor
possesses such valid and current
certificates, authorizations or permits issued
by the appropriate state, federal or
foreign regulatory agencies or bodies
necessary to conduct its business (except,
in each case, where the failure to so
possess would not, individually or in the
aggregate, result in a Material
Adverse Effect) and neither the Issuer
nor
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the Subsidiary Guarantor has received any
notice of proceedings relating to the
revocation or modification of, or
non-compliance with, any such certificate,
authorization or permit as to which there
is a reasonable likelihood of an
adverse determination to the Issuer or such
Subsidiary Guarantor and that, if so
adversely determined, could individually or
in the aggregate result in a
Material Adverse Effect.
(r) Each of
the Issuer, the Subsidiary Guarantor and
their respective Subsidiaries has good and
marketable title to all the
properties and assets necessary to conduct
its business, in each case free and
clear of any security interests, mortgages,
liens, encumbrances, equities,
claims and other defects, except (i) such
as do not materially and adversely
affect the value of such property and do
not materially interfere with the use
made or proposed to be made of such
property by the Issuer, such Subsidiary
Guarantor or such Subsidiary and (ii) with
respect to Senior Liens. The real
property, improvements, equipment and
personal property held under lease by each
of the Issuer and the Subsidiary Guarantor
are held under valid and enforceable
leases, with such exceptions as are not
material and do not materially interfere
with the use made or proposed to be made of
such real property, improvements,
equipment or personal property by the
Issuer and the Subsidiary Guarantor.
(s) The Issuer
and its consolidated Subsidiaries
(including the Subsidiary Guarantor) have
filed all necessary federal, state and
foreign income and franchise tax returns
and have paid all taxes required to be
paid by any of them and, if due and
payable, any related or similar assessment,
fine or penalty levied against any of them,
except where the failure to make
such filings or pay such taxes, assessments
fines or penalties would not,
individually or in the aggregate, result in
a Material Adverse Effect. The
Issuer has made adequate charges, accruals
and reserves in the audited
consolidated financial statements of the
Issuer and its Subsidiaries in respect
of all federal, state and foreign income
and franchise taxes for all periods as
to which the tax liability of the Issuer
and any of its consolidated
Subsidiaries (including the Subsidiary
Guarantor) has not been finally
determined, in each case, to the extent
required to be so recorded in accordance
with generally accepted accounting
principles.
(t) Each of
the Issuer and the Subsidiary Guarantor is
insured by recognized, financially sound
institutions with policies in such
amounts and with such deductibles and
covering such risks as are generally
deemed adequate and customary for their
businesses including, but not limited
to, policies covering real and personal
property owned or leased by the Issuer
and the Subsidiary Guarantor against theft,
damage, destruction and acts of
vandalism. Neither the Issuer nor the
Subsidiary Guarantor has any reason to
believe that it will not be able (i) to
renew its existing insurance coverage as
and when such policies expire or (ii) to
obtain comparable coverage from similar
institutions as may be necessary or
appropriate to conduct its business as now
conducted and at a cost that would not be
material to the Issuer or its
Subsidiaries, taken as a whole. Since
December 31, 2001, neither the Issuer nor
the Subsidiary Guarantor has been denied
any insurance coverage that it has
sought or for which it has applied.
(u) Assuming
that the representations and warranties of
the Purchaser in Section 7 are true,
correct and complete, it is not necessary
in connection with the offer, sale and
delivery of the Securities to the
Purchaser in the manner contemplated by
this Agreement to register the
Securities under the Securities Act or to
qualify the Indenture under the Trust
Indenture Act of 1939, as amended.
(v) No event
is outstanding which constitutes (or, with
the giving of notice, lapse of time, or the
fulfillment of any other applicable
condition (other than the mere occurrence
of such event), will constitute) a
Default or an Event of Default.
2.
Agreements to Sell and Purchase. The Issuer hereby
agrees to sell to the Purchaser, and the
Purchaser, upon the basis of the
representations and warranties herein
contained, but subject to the conditions
hereinafter stated, agrees to purchase from
the Issuer, the entire aggregate
principal amount of the Securities at a
purchase price equal to 97% of the
principal amount thereof (the
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"Purchase Price"). The excess of (i) the
$30,000,000 aggregate principal amount
of the Securities over (ii) the Purchase
Price shall represent a 3%
nonrefundable financing fee (which fee the
Purchaser has deemed to be a
Collateral Debt Asset Closing Fee as
defined in the indenture (the "CVC Capital
Indenture") governing the Class B-1 and
Class B-2 Notes issued by CVC Capital
Funding, LLC, an Affiliate of the
Purchaser).
3.
Payment and Delivery. Payment for the Securities
shall be made to the Issuer in United
States Federal or other funds immediately
available in New York City against delivery
of such Securities for the account
of the Purchaser at 9:00 am., New York City
time, on September 12, 2002. The
time and date of such payment are
hereinafter referred to as the "Closing Date."
The certificate evidencing the Securities shall be in the form
of a Definitive Note and
