Exhibit 1.1
EXECUTION COPY
$2,105,000,000
INTERNATIONAL PAPER COMPANY
Zero Coupon Convertible Debentures due June 20, 2021
PURCHASE AGREEMENT
June 13, 2001
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX, XXXXX & CO.
c/o Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000-0000
Ladies and Gentlemen:
1. International Paper Company, a corporation duly organized and existing
under the laws of the State of New York (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the initial
purchasers named in Schedule A hereto (the "Purchasers") $2,105,000,000
principal amount at maturity of its Zero Coupon Convertible Debentures due June
20, 2021 (the "Firm Securities") and also proposes to grant the Purchasers an
option, exercisable from time to time by Credit Suisse First Boston Corporation
("CSFBC"), to purchase an aggregate of up to an additional $315,750,000
principal amount at maturity of its Zero Coupon Convertible Debentures due June
20, 2021 (the "Optional Securities" and, with the Firm Securities, the "Offered
Securities"). The Offered Securities will be issued under an indenture, dated
as of April 12, 1999 (the "Indenture"), between the Company and The Bank of New
York, as Trustee (the "Trustee"), as supplemented by the Convertible Debentures
Supplemental Indenture, to be dated as of the Closing Date (as defined herein)
(the "Supplemental Indenture"), between the Company and the Trustee. The United
States Securities Act of 1933 is herein referred to as the "Securities Act."
The holders of the Offered Securities will be entitled to the benefits of a
registration rights agreement, to be dated as of the Closing Date (the
"Registration Rights Agreement"), among the Purchasers and the Company.
The Company hereby agrees with the Purchasers as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Purchasers that:
(a) An offering circular relating to the Offered Securities has been
prepared by the Company (the "Offering Circular"). Such Offering Circular,
together with the documents incorporated therein (the "Incorporated Documents")
and any other document approved by the Company for use in connection with the
contemplated resale of the Offered Securities are hereinafter collectively
referred to as the "Offering Document." On the date of this Agreement, the
Offering Document does not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements in or omissions
from the Offering Document based upon written information furnished to the
Company by any Purchaser through CSFBC specifically for use therein, it being
understood and agreed that the only such information is that described as such
in Section 7(b) hereof. Except as disclosed in the Offering Document, on the
date of this Agreement, the Company's Annual Report on Form 10-K most recently
filed with the Securities and Exchange Commission (the "Commission") and all
subsequent reports (collectively, the "Exchange Act Reports") that have been
filed by the Company with the Securities and Exchange Commission or sent to
stockholders pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act") do not include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such documents, when
they were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
(b) Neither the Company nor any of its subsidiaries is in violation of its
corporate charter or by-laws or in default under any agreement, indenture,
mortgage, lease, note or instrument, which violation or default would have a
material adverse effect on the assets, operations, condition (financial and
otherwise) or the prospects of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"); the execution, delivery and performance of
this Agreement, the Indenture, the Supplemental Indenture and the Registration
Rights Agreement and compliance by the Company with the provisions of the
Offered Securities, the Indenture, the Supplemental Indenture and the
Registration Rights Agreement, will not (1) conflict with, result in the
creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company or any of its subsidiaries pursuant to the terms of, or
constitute a default under, any agreement, indenture or instrument, or result
in a violation of the corporate charter or by-laws of the Company or any of its
subsidiaries or any order, rule, statute or regulation of any court or
governmental agency or body having jurisdiction over the Company, any of its
subsidiaries or their respective properties or (2) have a Material Adverse
Effect; and except as required by the Securities Act, the Trust Indenture Act,
the Exchange Act and applicable state securities or Blue Sky laws, no consent,
authorization or order of, or filing or registration with, any court or
governmental agency is required for the execution, delivery and performance by
the Company of this Agreement, the Registration Rights Agreement, the Indenture
or the Supplemental Indenture.
(c) Except as described in or contemplated by the Offering Document, since
the dates as of which information is given in the Offering Document, no
Material Adverse Effect has occurred.
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(d) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes legally binding obligations of the Company.
(e) Each of the accountants whose reports are incorporated by reference in
the Offering Document are independent public accountants as required by the
Securities Act and the applicable rules and regulations thereunder.
(f) On the Closing Date (i) each of the Indenture, the Supplemental
Indenture and the Registration Rights Agreement will have been validly
authorized, executed and delivered by the Company and will constitute the
legally binding obligation of the Company enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization,
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles, (ii) the Offered Securities will have
been validly authorized and, upon payment therefor as provided in this
Agreement, will be validly issued and outstanding, and will constitute legally
binding obligations of the Company entitled to the benefits of the Indenture
and the Supplemental Indenture, and (iii) the Offered Securities, the Indenture
and the Supplemental Indenture will conform to the descriptions thereof
contained in the Offering Document.
(g) The Company and each of its Significant Subsidiaries (as such term is
defined in Rule 1-02(w) of Regulation S-X under the Securities Act) have been
duly incorporated, are validly existing and in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to do
business and in good standing as foreign corporations in each jurisdiction in
which their respective ownership of property or the conduct of their respective
business requires such qualification and where the failure to be so qualified
would have a Material Adverse Effect, and have corporate power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged.
(h) Except as disclosed in the Offering Document, there are no contracts,
agreements or understandings between the Company and any person that would give
rise to a valid claim against the Company or any Purchaser for a brokerage
commission, finder's fee or other like payment in connection with sales to the
Purchasers by the Company of the Offered Securities.
(i) No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required for the consummation of
the transactions contemplated by this Agreement or the Registration Rights
Agreement in connection with the issuance and sale of the Offered Securities by
the Company except for the order of the Commission declaring the Registration
Statement (as defined in the Registration Rights Agreement) effective.
(j) The execution, delivery and performance of this Agreement, the
Registration Rights Agreement, the Indenture, the Supplemental Indenture and
the issuance and sale of the Offered Securities and compliance with the terms
and provisions thereof will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court, domestic
or foreign, having jurisdiction over the Company or any Significant Subsidiary
of the Company or any of their properties, or any agreement or instrument to
which the Company or any such Significant
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Subsidiary is a party or by which the Company or any such Significant
Subsidiary is bound or to which any of the properties of the Company or any
such Significant Subsidiary is subject, or the charter or by-laws of the
Company or any such subsidiary, and the Company has full power and authority to
authorize, issue and sell the Offered Securities as contemplated by this
Agreement.
(k) Except as disclosed in the Offering Document, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, except where the failure to have
such good and marketable title could not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect; and except as
disclosed in the Offering Document, the Company and its subsidiaries hold any
leased real or personal property under valid and enforceable leases except
where the failure to hold such valid and enforceable leases could not
reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect.
(l) The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not received
any notice of proceedings relating to the revocation or modification of any
such certificate, authority or permit that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate have
a Material Adverse Effect.
(m) No labor dispute with the employees of the Company or any subsidiary
exists or, to the knowledge of the Company, is imminent that might have a
Material Adverse Effect.
(n) Except as disclosed in the Offering Document or in any Exchange Act
Report, neither the Company nor any of its subsidiaries is in violation of any
statute, any rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "environmental laws"), owns or operates any real
property contaminated with any substance that is subject to any environmental
laws, is liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any environmental
laws, which violation, contamination, liability or claim would individually or
in the aggregate have a Material Adverse Effect; and the Company has not
received notice of any pending investigation which might lead to such a claim.
(o) Except as described in the Offering Document or any Exchange Act
Report, there is no material litigation or governmental proceeding pending or,
to the knowledge of the Company, threatened against the Company or any of its
subsidiaries which might result in any Material Adverse Effect.
(p) The Company is not, and after giving effect to the offering and sale
of the Offered Securities and the application of the proceeds thereof as
described in the Offering Circular, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
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(q) There are no contracts or other documents which were required to be
filed as exhibits to any Company document incorporated by reference in the
Offering Document by the Securities Act or the rules and regulations
thereunder, which have not been filed as exhibits to such document or
incorporated therein by reference as permitted by such rules and regulations.
(r) No securities of the same class (within the meaning of Rule 144A(d)(3)
under the Securities Act) as the Offered Securities are listed on any national
securities exchange registered under Section 6 of the Exchange Act or quoted in
a U.S. automated inter-dealer quotation system.
(s) Assuming the accuracy of the representations and warranties contained
in Section 4 of the Agreement, the offer and sale of the Offered Securities in
the manner contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act by reason of Section 4(2) thereof and it is
not necessary in connection with the offer and sale of the Offered Securities
to the Purchasers to qualify an indenture in respect of the Offered Securities
under the United States Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(t) The Company has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities except
for this Agreement and the Registration Rights Agreement.
(u) All outstanding shares of capital stock of the Company have been duly
authorized; all outstanding shares of capital stock of the Company are, and,
when the Underlying Shares (as defined below) have been delivered and paid for
upon conversion of the Offered Securities in accordance with the Supplemental
Indenture, such Underlying Shares will have been validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in the
Offering Document; and the stockholders of the Company have no preemptive or
similar rights with respect to the Offered Securities or the Underlying Shares.
The Company does not have outstanding, and at the Closing Date (as defined
below) the Company will not have outstanding, any options to purchase, or any
rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, (i) any
Offered Securities or the Underlying Shares, or (ii) any shares of capital
stock held by it in any subsidiary, or any such warrants, convertible
securities or obligations (except shares issued or issuable pursuant to
employee or director benefit plans after the date as of which information with
respect thereto is given in the Offering Document), except in each case as
described in the Offering Document.
(v) Except for the Registration Rights Agreement, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act to include shares of the Company's stock in the securities
registered pursuant to a registration statement filed by the Company under the
Securities Act, except as previously disclosed to CSFBC in writing.
(w) When the Offered Securities are delivered and paid for pursuant to
this Agreement on the Closing Date, such Offered Securities will be convertible
into shares ("Underlying Shares") of the Company's common stock, par value
$1.00 per share, in accordance with the Supplemental Indenture; the Underlying
Shares issuable upon conversion of such Offered Securities have been
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duly authorized and reserved for issuance upon such conversion and, when issued
upon such conversion, will be validly issued, fully paid and nonassessable.
(x) The Company and its affiliates have not taken and will not take,
directly or indirectly, any action designed to cause, or result in, or which
has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Company's stock to facilitate
the sale or resale of the Offered Securities.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Purchasers, and each of the Purchasers agrees, severally and not jointly, to
purchase from the Company, at a purchase price of 46.853% of the principal
amount thereof, the respective principal amounts of Firm Securities set forth
opposite the names of the Purchasers in Schedule A hereto.
The Company will deliver against payment of the purchase price the Offered
Securities in the form of one or more permanent global securities in definitive
form (the "Global Securities") deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC. Interests in any permanent Global Securities will be held only
in book-entry form through DTC, except in the limited circumstances described
in the Offering Document.
Payment for the Offered Securities shall be made by the Purchasers in
federal (same day) funds by official check or checks or wire transfer to an
account previously designated by the Company for such purpose at a bank
reasonably acceptable to CSFBC at 10:30 A.M. (New York City time), on June 20,
2001, such time being herein referred to as the "First Closing Date", against
delivery to the Trustee as custodian for DTC of the Global Securities
representing all of the Offered Securities. The Global Securities will be made
available for checking at the offices of Milbank, Tweed, Xxxxxx & XxXxxx LLP or
its designated custodian not later than 2:00 p.m., New York City time, on the
business day prior to the Closing Date.
In addition, upon written notice from CSFBC given to the Company from time
to time not more than 13 days subsequent to the date of this Agreement, the
Purchasers may purchase all or less than all of the Optional Securities at the
purchase price per principal amount of Offered Securities (including any
accreted value thereon to the related Optional Closing Date (as defined below))
to be paid for the Firm Securities. The Company agrees to sell to the
Purchasers the principal amount of Optional Securities specified in such notice
and the Purchasers agree, severally and not jointly, to purchase such Optional
Securities. Such Optional Securities shall be purchased from the Company for
the account of each Purchaser in the same proportion as the principal amount of
Firm Securities set forth opposite such Purchaser's name in Schedule A hereto
bears to the total number of Firm Securities (subject to adjustment by CSFBC to
eliminate fractions). No Optional Securities shall be sold or delivered unless
the Firm Securities previously have been, or simultaneously are, sold and
delivered. The right to purchase the Optional Securities or any portion thereof
may be exercised from time to time and to the extent not previously exercised
may be surrendered and terminated at any time upon notice by CSFBC to the
Company.
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Each time for the delivery of a payment for the Optional Securities, being
herein referred to as the "Optional Closing Date," which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
on behalf of the several Purchasers but shall not be later than seven full
business days, nor prior to two full business days except in the case of the
First Closing Date, after written notice of election to purchase Optional
Securities is given. The certificates for the Securities evidencing the
Optional Securities being purchased on each Optional Closing Date will be in
such denominations and registered in such names as CSFBC requests and will be
made available for checking and packaging at the offices of Milbank, Tweed,
Xxxxxx & XxXxxx LLP at a reasonable time in advance of such Optional Closing
Date.
Payment for the Optional Securities being purchased on each Optional
Closing Date shall be made by the Purchasers in Federal (same day) funds by
wire transfer to an account at a bank acceptable to CSFBC drawn to the order of
the Company at 10:00 A.M. (New York time) on such Optional Closing Date against
delivery to the Trustee as custodian for DTC of a permanent global security in
definitive form without coupons representing all of the Optional Securities
being purchased on such Optional Closing Date.
4. Representations by Purchasers; Resale by Purchasers. (a) Each Purchaser
severally represents and warrants to the Company that it is an "accredited
investor" within the meaning of Regulation D under the Securities Act.
(b) Each Purchaser severally acknowledges that the Offered 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 the registration requirements of the
Securities Act. Each Purchaser severally represents and agrees that it has
offered and sold the Offered Securities, and will offer and sell the Offered
Securities only in accordance with Rule 144A under the Securities Act ("Rule
144A").
(c) Each Purchaser severally agrees that it and each of its affiliates
will not offer or sell the Offered Securities in the United States by means of
any form of general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act, or by means of a public offering within
the meaning of Section 4(2) of the Securities Act, including, but not limited
to (i) any advertisement, article, notice or other communication published in
any newspaper, magazine or similar media or broadcast over television or radio,
or (ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. Each Purchaser severally agrees, with
respect to resales made in reliance on Rule 144A of any of the Offered
Securities, to deliver either with the confirmation of such resale or otherwise
prior to settlement of such resale a notice to the effect that the resale of
such Offered Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A.
5. Certain Agreements of the Company. The Company agrees with the several
Purchasers that:
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(a) The Company will advise CSFBC promptly of any proposal to amend or
supplement the Offering Document and will not effect such amendment or
supplementation without CSFBC's consent, which consent shall not be
unreasonably withheld. If, at any time prior to the completion of the resale of
the Offered Securities by the Purchasers, any event occurs as a result of which
the Offering Document as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, the Company promptly will notify CSFBC of
such event and promptly will prepare, at its own expense, an amendment or
supplement which will correct such statement or omission. Neither CSFBC's
consent to, nor the Purchasers' delivery to offerees or investors of, any such
amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 6.
(b) The Company will furnish to the Purchasers copies of any preliminary
offering circular, the Offering Document and all amendments and supplements to
such documents, in each case as soon as available and in such quantities as
CSFBC reasonably requests. At any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act and any Offered Securities are
outstanding, upon request of holders and prospective purchasers of the Offered
Securities the Company will furnish or cause to be furnished, to such holders
and purchasers, copies of the information required to be delivered to holders
and prospective purchasers of the Offered Securities pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto) in
order to permit compliance with Rule 144A in connection with resales by such
holders of the Offered Securities. The Company will pay the expenses of
printing and distributing to the Purchasers all such documents.
(c) The Company will endeavor in good faith in cooperation with the
Purchasers to arrange for the qualification of the Offered Securities for sale
and the determination of their eligibility for investment under the laws of
such jurisdictions in the United States and Canada as CSFBC designates and will
continue such qualifications in effect so long as required for the resale of
the Offered Securities by the Purchasers, provided that the Company will not be
required to qualify as a foreign corporation or to file a general consent to
service of process or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
(d) During the period of five years hereafter, the Company will furnish to
CSFBC and, upon request, to the other Purchaser, as soon as practicable after
the end of each fiscal year, a copy of its annual report to stockholders for
such year; and the Company will furnish to CSFBC and, upon request, to the
other Purchaser from time to time, such information concerning the Company as
CSFBC may reasonably request.
(e) During the period of two years after the Closing Date or, if earlier,
until such time as the Offered Securities are no longer restricted securities
(as defined in Rule 144 under the Securities Act), the Company will, upon
request, furnish to CSFBC, the other Purchaser and any holder of Offered
Securities a copy of the restrictions on transfer applicable to the Offered
Securities.
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(f) During the period of two years after the Closing Date or, if earlier,
until such time as the Offered Securities are no longer restricted securities
(as defined in Rule 144 under the Securities Act), the Company will not, and
will use its reasonable efforts to cause its affiliates (as defined in Rule 144
under the Securities Act) not to, resell any of the Offered Securities that
have been reacquired by any of them.
(g) During the period of two years after the Closing Date, the Company
will not be or become, an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under
Section 8 of the Investment Company Act.
(h) The Company will pay all expenses incidental to the performance of its
obligations under this Agreement, the Indenture, the Supplemental Indenture and
the Registration Rights Agreement, including (i) the fees and expenses of the
Trustee and its professional advisers; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the Offered
Securities and, as applicable, the Registration Statement (as defined in the
Registration Rights Agreement), the preparation and printing of this Agreement,
the Registration Rights Agreement, the Offered Securities, the Indenture, the
Supplemental Indenture, the Offering Document and amendments and supplements
thereto, and any other document relating to the issuance, offer, sale and
delivery of the Offered Securities and as applicable, the Registration
Statement; (iii) the cost of any advertising approved by the Company in
connection with the issue of the Offered Securities; (iv) any expenses
(including fees and disbursements of counsel) incurred in connection with
qualification of the Offered Securities or the Registration Statement for sale
under the laws of such jurisdictions in the United States and Canada as CSFBC
designates and the printing of memoranda relating thereto; (v) for any fees
charged by investment rating agencies for the rating of the Offered Securities
or the Registration Statement; and (vi) for expenses incurred in distributing
preliminary offering circulars and the Offering Document (including any
amendments and supplements thereto) to the Purchasers. The Company will also
pay or reimburse the Purchasers (to the extent incurred by them) for all travel
expenses of the Company's officers and employees and any other expenses of the
Company in connection with attending or hosting meetings with prospective
purchasers of the Offered Securities from the Purchasers.
(i) In connection with the offering, until CSFBC shall have notified the
Company and the other Purchaser of the completion of the resale of the Offered
Securities, neither the Company nor any of its affiliates has or will, either
alone or with one or more other persons, bid for or purchase for any account in
which it or any of its affiliates has a beneficial interest any Offered
Securities or attempt to induce any person to purchase any Offered Securities;
and neither it nor any of its affiliates will make bids or purchases for the
purpose of creating actual, or apparent, active trading in, or of raising the
price of, the Offered Securities.
(j) For a period of 60 days after the date hereof, the Company will not
offer, sell, pledge or otherwise dispose of, directly or indirectly any shares
of common stock of the Company or other securities convertible into or
exchangeable or exercisable for shares of common stock of the Company or
warrants or other rights to purchase shares of common stock of the Company, or
publicly disclose the intention to make any such offer, sale, pledge or
disposition, in each case without the prior written consent of CSFBC, except
issuances of Offered Securities or common
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stock pursuant to the conversion or exchange of convertible or exchangeable
securities or the exercise of warrants or options, in each case outstanding on
the date hereof, grants of employee stock options, restricted stock awards or
other equity-based compensation pursuant to the terms of a plan in effect on
the date hereof, and issuances of Offered Securities pursuant to the exercise
of such options, restricted stock awards or other equity-based compensation.
The Company will not at any time offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, pledge, contract or disposition would
cause the exemption afforded by Section 4(2) of the Securities Act to cease to
be applicable to the offer and sale of the Offered Securities.
6. Conditions of the Obligations of the Purchasers. The obligations of the
several Purchasers to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of
the Company herein, to the accuracy of the statements of officers of the
Company made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Purchasers shall have received a letter, dated the date of this
Agreement, of Xxxxxx Xxxxxxxx LLP in agreed form confirming that they are
independent public accountants certified with respect to International Paper
Company under rule 101 of the American Institute of Certified Public
Accountants (the "AICPA") Code of Professional Conduct, and its interpretations
and rulings and to the effect that:
(i) in their opinion the consolidated financial statements examined
by them and incorporated by reference in the Offering Document and in the
Exchange Act Reports comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by the AICPA for a
review of interim financial information as described in Statement of
Auditing Standards No. 71, Interim Financial Information, on the unaudited
consolidated financial statements incorporated by reference in the
Offering Document and in the Exchange Act Reports;
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available unaudited interim consolidated financial
statements of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe
that:
(A) the unaudited consolidated financial statements incorporated
by reference in the Offering Document or in the Exchange Act Reports
do not comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the related
published Rules and Regulations or any material modifications should
be made to such unaudited consolidated financial statements for them
to be in conformity with generally accepted accounting principles;
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(B) the unaudited pro forma condensed consolidated financial
statements incorporated by reference into the Offering Circular do
not comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X and that the
pro forma adjustments have not been properly applied to historical
amounts in the compilation of those statements;
(C) at the date of the latest available balance sheet read by
such accountants, or at a subsequent date specified therein, there
was any change in the capital stock or any increase in long-term debt
of the Company and its consolidated subsidiaries, as compared with
amounts shown on the latest unaudited consolidated balance sheet
incorporated by reference in the Offering Document;
(D) for the period from the closing date of the latest unaudited
consolidated statement of earnings incorporated by reference in the
Offering Document to the closing date of the latest available
unaudited consolidated statement of earnings read by such accountants
there were any decreases, as compared with the corresponding period
of the previous year, in consolidated net sales or in total or per
share amounts of earnings before extraordinary items or net earnings;
except in all cases set forth in clauses 6(a)(iii)(C) and 6(a)(iii)(D) above
for changes, increases or decreases which the Offering Document discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Offering Document and the Exchange Act Reports (in each
case to the extent that such dollar amounts, percentages and other
financial information are derived from the general accounting records of
the Company and its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures specified
in such letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (A) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries, taken as one
enterprise, which, in the judgment of a majority in interest of the Purchasers
including CSFBC, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the offering or the sale of and
payment for the Offered Securities; (B) any downgrading in the rating of any
debt securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities
Act), or any public announcement that any such organization has under
surveillance or
11
review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (C) any material
suspension or material limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market; (D) any banking moratorium declared
by U.S. Federal or New York authorities; or (E) any outbreak or escalation of
major hostilities in which the United States is involved, any declaration of
war by Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Purchasers
including CSFBC, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the offering or sale of and payment for the Offered Securities.
(c) You shall have received opinions, dated the Closing Date, of each of
Xxxxx Xxxx & Xxxxxxxx, counsel to the Company, and Xxxxxxx Xxxxxxxx, Vice
President and Secretary of the Company, in each case in form and substance
reasonably satisfactory to CSFBC. In giving such opinion, (i) each of Xxxxx
Xxxx & Xxxxxxxx and Xxxxxxx Xxxxxxxx may limit such opinion to the laws of the
State of New York and the Federal laws of the United States and (ii) Xxxxx Xxxx
& Xxxxxxxx may rely, as to matters of fact, upon the representations and
warranties of the Company contained herein and upon certificates of officers of
the Company and of public officials. Such opinion may also be subject to such
assumptions and qualifications as are satisfactory to counsel for the
Purchasers.
(d) The Purchaser shall have received from Milbank, Tweed, Xxxxxx &
XxXxxx, counsel for the Purchasers, such opinion or opinions, dated the Closing
Date, with respect to the validity of the Offered Securities, the Offering
Document, the exemption from registration for the offer and sale of the Offered
Securities by the Company to the several Purchasers and the resales by the
several Purchasers as contemplated hereby and other related matters as CSFBC
may require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(e) The Company shall have furnished to the Purchasers on the Closing
Date, a certificate, dated as of such Closing Date, of an authorized executive
officer of the Company stating that:
(i) The representations, warranties and agreements of the Company
herein are true and correct in all material respects as of such Closing
Date; the Company has complied in all material respects with its
agreements contained herein; and there shall have been no material adverse
change in the condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole, or in the earnings or business affairs of
the Company and its subsidiaries, taken as a whole, whether or not arising
in the ordinary course of business, from that set forth in the Offering
Circular; and
(ii) Such officer has carefully examined the Offering Circular and,
in such officer's opinion, (A) as of the date of the Offering Circular,
the Offering Circular did not include an untrue statement of a material
fact or omit to state a material fact required to
12
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 (B) since the date of the Offering Circular, no event has occurred
which should have been set forth in a supplement to or amendment of the
Offering Circular which has not been set forth in such a supplement or
amendment.
(f) The Purchasers shall have received a letter, dated the Closing Date,
of Xxxxxx Xxxxxxxx LLP which meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection will be
a date not more than five days prior to the Closing Date for the purposes of
this subsection.
The Company will furnish the Purchasers with such conformed copies of such
opinions, certificates, letters and documents as the Purchasers reasonably
request. CSFBC may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchasers hereunder.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Purchaser, its partners, directors and officers and each
person, if any, who controls such Purchaser within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which such Purchaser may become subject, under the Securities
Act or the Exchange Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Offering Document, or any amendment or supplement thereto, or any
related preliminary offering circular, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, including any losses, claims, damages or
liabilities arising out of or based upon the Company's failure to perform its
obligations under Section 5(a) of this Agreement, and will reimburse each
Purchaser for any legal or other expenses reasonably incurred by such Purchaser
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability 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 written information furnished
to the Company by any Purchaser through CSFBC specifically for use therein, it
being understood and agreed that the only such information consists of the
information described as such in subsection (b) below and, provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary offering circular the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Purchaser that sold Offered Securities to the person asserting
any such losses, claims, damages or liabilities, to the extent that such sale
was an initial resale by such Purchaser and any such loss, claim, damage or
liability of such Purchaser results from the fact that there were not given to
such person, at or prior to the written confirmation of the sale such Offered
Securities to such person, a copy of the Offering Document (exclusive of any
material included therein but not attached thereto) if the Company had
previously furnished copies thereof to such Purchaser and
13
the untrue statement or omission or alleged untrue statement or omission was
corrected in the Offering Circular.
(b) Each Purchaser will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Securities Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Offering Document, or any
amendment or supplement thereto, or any related preliminary offering circular,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by
such Purchaser through CSFBC specifically for use therein, and will reimburse
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred, it being understood and agreed that the
only such information furnished by any Purchaser consists of the following
information in the Offering Document: under the caption "Plan of Distribution":
the information in the table and the third, ninth and tenth paragraphs;
provided, however, that the Purchasers shall not be liable for any losses,
claims, damages or liabilities arising out of or based upon the Company's
failure to perform its obligations under Section 5(a) of this Agreement.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above, except to the extent that the failure to so
notify has materially prejudiced the rights of the indemnifying party under
this Agreement. In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party which consent shall not be
unreasonably withheld, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such action
14
and does not include a statement as to or an admission of fault, culpability or
failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Purchasers other from the offering of the Offered
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 Company on the one hand and the Purchasers on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total discounts and commissions received by the
Purchasers from the Company under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Purchasers and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to contribute
any amount in excess of the amount by which the total price at which the
Offered Securities purchased by it were resold exceeds the amount of any
damages which such Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their respective
purchase obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Purchasers under this Section shall be in addition to any
liability which the respective Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in their
obligations to purchase Offered Securities hereunder and the aggregate
principal amount of Offered Securities that such defaulting Purchaser or
Purchasers agreed but failed to purchase does not exceed 10%
15
of the total principal amount of the Offered Securities, CSFBC may make
arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Purchasers, but if no such
arrangements are made by the Closing Date, the non-defaulting Purchasers shall
be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Purchasers
agreed but failed to purchase. If any Purchaser or Purchasers so default and
the aggregate principal amount of the Offered Securities with respect to which
such default or defaults occur exceeds 10% of the total principal amount of the
Offered Securities and arrangements satisfactory to CSFBC and the Company for
the purchase of such Offered Securities by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Purchaser or the Company, except as provided in
Section 9. As used in this Agreement, the term "Purchaser" includes any persons
substituted for a Purchaser under this Section 8. Nothing herein will relieve a
defaulting Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
the Company or its officers and of the Purchasers set forth in or made pursuant
to this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Purchaser, the Company or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and
payment for the Offered Securities. If this Agreement is terminated pursuant to
Section 8 or if for any reason the purchase of the Offered Securities by the
Purchasers is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the
respective obligations of the Company and the Purchasers pursuant to Section 7
shall remain in effect. If the purchase of the Offered Securities by the
Purchasers is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 8 or the occurrence of any
event specified in clause (C), (D) or (E) of Section 6(b), the Company will
reimburse the Purchasers for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Purchasers will be mailed, delivered or telegraphed and confirmed to the
Purchasers, c/o Credit Suisse First Boston Corporation, Eleven Madison Avenue,
New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or, if sent
to the Company, will be mailed, delivered or telegraphed and confirmed to it at
International Paper Company, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
Attention: Secretary; provided, however, that any notice to a Purchaser
pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to
such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 7, and no other person will have any right or
obligation hereunder, except that holders of Offered Securities shall be
entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Company as if such
holders were parties thereto.
16
12. Representation of Purchasers. CSFBC will act for the Purchasers in
connection with this purchase, and any action under this Agreement taken by
CSFBC will be binding upon all the Purchasers.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
17
If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
several Purchasers in accordance with its terms.
Very truly yours,
INTERNATIONAL PAPER COMPANY
By:
------------------------------------
Name:
Title:
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX, SACHS & CO.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
Acting on behalf of themselves
and as the Representative
of the Purchasers
By
-----------------------------------
Name:
Title:
18
SCHEDULE A
Principal Amount of Firm
Initial Purchaser Securities
----------------- ------------------------
CREDIT SUISSE FIRST BOSTON CORPORATION $1,789,250,000
XXXXXXX, XXXXX & CO. 315,750,000
--------------
Total $1,000,000,000
