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Purchase Agreement

 

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Title:

Purchase Agreement

Entities:

Banc of America Securities LLC; Bear, Stearns & Co. Inc.; Credit Suisse First Boston LLC; Nutone Inc; U.S. Bank, NA; UBS Securities LLC; Cahill Gordon & Reindel LLP; Ropes & Gray

Date:

2004

Size:

Preview shows 18KB of 119KB total

Price:

$58

ID:

#1614623

 

 

► Purchase & Sale ► Purchase Agreements
► Financial
► Services ► Legal

 

 

Start of Preview


                                THL BUILDCO, INC.


A DELAWARE CORPORATION THAT WILL BE
MERGED ULTIMATELY WITH AND INTO

NORTEK, INC.

$625,000,000 8 1/2% SENIOR SUBORDINATED NOTES DUE 2014

PURCHASE AGREEMENT

August 12, 2004
New York, New York

UBS Securities LLC
Credit Suisse First Boston LLC
Banc of America Securities LLC
Bear, Stearns & Co. Inc.
Sovereign Securities Corporation, LLC
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171

Ladies and Gentlemen:

THL Buildco, Inc., a Delaware corporation (the "INITIAL ISSUER"),
agrees with you as follows:

1. Issuance of Notes. The Initial Issuer proposes, subject to and
upon the terms and conditions set forth below, to issue and sell to UBS
Securities LLC (the "REPRESENTATIVE") and the several parties named on Schedule
I hereto (together with the Representative, the "INITIAL PURCHASERS")
$625,000,000 aggregate principal amount of 8 1/2% Senior Subordinated Notes due
2014 (the "ORIGINAL NOTES").

As part of the Transactions (as defined below), which are more fully
described under the heading "The Transactions" in the Offering Memorandum (as
defined below), the Original Notes are being offered and sold by the Initial
Issuer in connection with the purchase (the "STOCK PURCHASE") by the Initial
Issuer of all of the capital stock of Nortek Holdings, Inc., a Delaware
corporation ("PARENT"), pursuant to that certain Stock Purchase Agreement, dated
as of July 15, 2004, by and among Kelso Investment Associates VI, L.P., the
other sellers named therein, THL Buildco Holdings, Inc. and the Initial Issuer
(as amended, the "STOCK PURCHASE AGREEMENT"). On the date hereof, Parent is the
sole stockholder of Nortek, Inc., a Delaware corporation (the "COMPANY"). On the
Closing Date (as defined below), immediately following the issuance and sale of
the Original Notes to the Initial Purchasers and the Stock Purchase, the Initial
Issuer will be merged (the "FIRST MERGER") with and


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into Parent, with Parent continuing as the surviving corporation of the First
Merger, and, immediately following the First Merger, Parent will be merged (the
"SECOND MERGER") with and into the Company, with the Company continuing as the
surviving corporation (the "SURVIVING CORPORATION") of the Second Merger (the
First Merger and the Second Merger being collectively referred to herein as the
"MERGERS" and, together with the Stock Purchase, as the "ACQUISITION"; and the
agreements and other documents governing the Mergers, together with the Stock
Purchase Agreement, being collectively referred to herein, as the "ACQUISITION
DOCUMENTS"). In addition, on the Closing Date and in connection with the
Acquisition, (i) an investor group led by affiliates of Thomas H. Lee Partners,
L.P. will make cash equity investments in entities that will beneficially own,
after the Acquisition, all of the capital stock of the Surviving Corporation
(the "EQUITY FINANCING"), (ii) the Initial Issuer will enter into a new
$800,000,000 senior secured credit facility (together with all other documents
related to such facility, the "CREDIT DOCUMENTS") with UBS AG, Stamford Branch,
as administrative agent, and the lenders party thereto and (iii) notes
representing certain existing indebtedness of Parent and the Company will have
been accepted for purchase in tender offers of Parent and the Company, as
applicable, relating to such notes (the "REFINANCING"), all as more fully
described in the Offering Memorandum.

On the Closing Date, immediately after giving effect to the
Acquisition, the Surviving Corporation shall execute and deliver a joinder
agreement (the "JOINDER AGREEMENT") substantially in the form of Exhibit C
hereto, and each of the subsidiaries of the Company listed on Schedule II hereto
(collectively, the "GUARANTORS") shall become parties hereto by executing and
delivering the Joinder Agreement. In addition, on the Closing Date, immediately
after giving effect to the Acquisition, (i) the Surviving Corporation will
execute the Original Notes and each of the Guarantors will execute a notation of
guarantee set forth thereon and (ii) the Initial Issuer, the Surviving
Corporation and the Guarantors will execute and deliver the Indenture (as
defined below) and the Registration Rights Agreement (as defined below). Upon
execution and delivery of the Original Notes and the Indenture by the
Guarantors, the Surviving Corporation's obligations under the Original Notes and
the Indenture will be, jointly and severally, unconditionally guaranteed (the
"ORIGINAL GUARANTEES"), on an unsecured senior subordinated basis, by each of
the Guarantors.

References herein to the "ISSUERS" refer (i) prior to the
Acquisition, solely to the Initial Issuer and (ii) following the Acquisition, to
the Surviving Corporation and the Guarantors.

The Securities (as defined below) will be offered and sold to the
Initial Purchasers pursuant to an exemption from the registration requirements
under the Securities Act of 1933, as amended (the "ACT"). The Initial Issuer has
prepared a preliminary offering memorandum, dated as of August 5, 2004 (as
amended or supplemented at the date hereof, including all exhibits thereto and
all documents incorporated by reference therein which have been prepared by
Parent and filed with the Securities and Exchange Commission (the "COMMISSION")
at the date hereof, the "PRELIMINARY OFFERING MEMORANDUM"), and a final offering
memorandum dated as of and available for distribution on the date hereof (as
amended or supplemented at the date hereof, including any and all exhibits
thereto and all documents incorporated by reference therein which have been
prepared by Parent and filed with the Commission at the date hereof, the
"OFFERING MEMORANDUM"), each relating to the Company, Parent, the Initial
Issuer, the Surviving Corporation and the Guarantors, the offering of the
Securities and the Securities.


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Subject to the foregoing paragraph, any references herein to the
terms "AMEND," "AMENDMENT" or "SUPPLEMENT" with respect to the Offering
Memorandum shall be deemed to refer to and include any document filed under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), subsequent to
the date hereof that is incorporated by reference therein; and all references in
this Agreement to financial statements and schedules and other information which
are "CONTAINED," "INCLUDED," "STATED" or "DESCRIBED" in the Offering Memorandum
(or other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which are included
in any document filed under the Exchange Act and incorporated by reference in
the Offering Memorandum.

The Initial Purchasers have advised the Initial Issuer and the
Company that the Initial Purchasers intend, as soon as they deem practicable
after this Purchase Agreement (this "AGREEMENT") has been executed and
delivered, to resell (the "EXEMPT RESALES") the Securities in private sales
exempt from registration under the Act on the terms set forth in the Offering
Memorandum, as amended or supplemented, solely to (i) persons whom the Initial
Purchasers reasonably believe to be "qualified institutional buyers" ("QIBS"),
as defined in Rule 144A under the Act ("RULE 144A"), in accordance with Rule
144A and (ii) other eligible purchasers pursuant to offers and sales that occur
outside the United States within the meaning of Regulation S under the Act
("REGULATION S") in accordance with Regulation S (the persons specified in
clauses (i) and (ii), the "ELIGIBLE PURCHASERS").

Holders (including subsequent transferees) of the Securities will
have the registration rights under the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), among the Issuers and the Initial Purchasers,
to be dated the Closing Date, substantially in the form attached hereto as
Exhibit A. Under the Registration Rights Agreement, the Issuers will agree to
(i) file with the Securities and Exchange Commission (the "COMMISSION") (a) a
registration statement under the Act (the "EXCHANGE OFFER REGISTRATION
STATEMENT") relating to a new issue of debt securities (collectively with the
Private Exchange Notes (as defined in the Registration Rights Agreement), the
"EXCHANGE NOTES" and, together with the Original Notes, the "NOTES"), guaranteed
by the guarantors under the Indenture (the "EXCHANGE GUARANTEES" and, together
with the Original Guarantees, the "GUARANTEES"), to be offered in exchange for
the Original Notes and the Original Guarantees (the "EXCHANGE OFFER") and issued
under the Indenture or an indenture substantially identical to the Indenture
and/or (b) under certain circumstances set forth in the Registration Rights
Agreement, a shelf registration statement pursuant to Rule 415 under the Act
(the "SHELF REGISTRATION STATEMENT") relating to the resale by certain holders
of the Original Notes and the Original Guarantees, (ii) to use its reasonable
best efforts to cause the Exchange Offer Registration Statement and, if
applicable, the Shelf Registration Statement to be declared effective and (iii)
to use their reasonable best efforts to consummate the Exchange Offer, all
within the time periods specified in the Registration Rights Agreement.

References herein to the "SECURITIES" refer (i) prior to the
Acquisition, solely to the Notes, and (ii) upon the consummation of the
Acquisition and after giving effect thereto, to the Notes and the Guarantees.
The Securities will be issued pursuant to an indenture (the "INDENTURE"), to be
dated the Closing Date (as defined herein), among the Issuers and U.S. Bank
National Association, as trustee (the "TRUSTEE").

This Agreement, the Notes, the Guarantees, the Indenture, the
Registration Rights Agreement and the Joinder Agreement are hereinafter
sometimes referred to collectively as the "NOTE


- 4 -

DOCUMENTS." The Note Documents, the Acquisition Documents and the Credit
Documents are hereinafter sometimes referred to collectively as the "TRANSACTION
DOCUMENTS." The issuance and sale of the Securities, the Acquisition, the Equity
Financing, the effectiveness of the Credit Documents and the initial borrowings
thereunder and the Refinancing are collectively referred to as the
"TRANSACTIONS."

2. Agreements to Sell and Purchase. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained in this Agreement, the Initial
Issuer agrees to issue and sell to the Initial Purchasers, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Initial Issuer, the aggregate principal amount of Original Notes set forth
opposite its name on Schedule I attached hereto. The purchase price for the
Original Notes shall be 97.25% of their principal amount.

3. Delivery and Payment. Payment of the purchase price for the
Original Notes and the Original Guarantees shall be made at 9:00 a.m., New York
time, on August 27, 2004 (such date, the "CLOSING DATE") at the offices of Ropes
& Gray LLP, 45 Rockefeller Plaza, New York, New York 10111, against delivery
thereof on the Closing Date. The Closing Date and the location of delivery of
and the form of payment for the Original Notes and the Original Guarantees may
be varied by mutual agreement between the Initial Purchasers and the Initial
Issuer.

The Original Notes and the Original Guarantees shall be delivered by
the Issuers to the Initial Purchasers (or as the Initial Purchasers direct)
through the facilities of The Depository Trust Company against payment by the
Initial Purchasers of the purchase price therefor by means of wire transfer of
immediately available funds to such account or accounts specified by the Initial
Issuer in accordance with Section 8(h) on or prior to the Closing Date, or by
such means as the parties hereto shall agree prior to the Closing Date. The
Original Notes and the Original Guarantees shall be evidenced by one or more
certificates in global form registered in such names as the Initial Purchasers
may request upon at least one business day's notice prior to the Closing Date
and having an aggregate principal amount corresponding to the aggregate
principal amount of the Original Notes and the Original Guarantees.

4. Agreements of the Issuers. The Initial Issuer, prior to the
Acquisition, and the Surviving Corporation and the Guarantors, jointly and
severally, following the consummation of the Acquisition, covenant and agree
with the Initial Purchasers as follows:

(a) To furnish the Initial Purchasers and those persons identified
by the Initial Purchasers, without charge, with as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as the Initial Purchasers may
reasonably request. The Issuers consent to the use of the Preliminary
Offering Memorandum and the Offering Memorandum, and any amendments and
supplements thereto, by the Initial Purchasers in connection with Exempt
Resales.

(b) Not to make any changes or additions to the information
contained in the Offering Memorandum from the corresponding information
contained in the Preliminary Offering Memorandum other than (i) changes
and additions to reflect pricing information with respect to the
Securities and (ii) such other changes and additions as to which the
Representative


- 5 -

shall have consented (such consent not to be unreasonably withheld or
delayed). Not to amend or supplement the Offering Memorandum prior to the
Closing Date unless (i) the Initial Purchasers shall previously have been
advised of such proposed amendment or supplement at least two business
days prior to the proposed use and (ii) shall not have objected to, or
shall have consented to (such consent not to be unreasonably withheld or
delayed), such amendment or supplement.

(c) If, prior to the time that the Initial Purchasers have completed
their distribution of the Securities, any event shall occur and, as a
result thereof, in the judgment of the Issuers or in the judgment of
counsel to the Initial Purchasers, the Offering Memorandum, as then
amended or supplemented, would include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements in the Offering Memorandum, as then amended or supplemented, in
the light of the circumstances under which they are made, not misleading,
or if it is necessary to amend or supplement the Offering Memorandum to
comply with all applicable laws, the Issuers shall promptly notify the
Initial Purchasers of such event and (subject to Section 4(b)) prepare an
appropriate amendment or supplement to the Offering Memorandum so that (i)
the statements in the Offering Memorandum, as amended or supplemented,
will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances at the time that the Offering Memorandum is
delivered to prospective Eligible Purchasers, not misleading and (ii) the
Offering Memorandum will comply with applicable law.

(d) To qualify or register the Securities under the securities laws
of such jurisdictions as the Initial Purchasers may request and to
continue such qualification in effect so long as required for the Exempt
Resales. Notwithstanding the foregoing, no Issuer shall be required to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified or to execute a general consent to service of process in any
such jurisdiction or subject itself to taxation in excess of a nominal

 

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