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EXHIBIT 4.2
EXECUTION COPY
P.H. GLATFELTER COMPANY
$150,000,000
6 7/8% Notes Due 2007
PURCHASE AGREEMENT
July 17, 1997
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
BT SECURITIES CORPORATION
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
P.H. Glatfelter Company, a corporation organized and existing
under the laws of the Commonwealth of Pennsylvania (the "Company"), hereby
confirms its agreement with you (the "Initial Purchasers"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$150,000,000 aggregate principal amount of its 6 7/8% Notes Due 2007 (the
"Notes"). The Notes are to be issued under an indenture (the "Indenture") to be
dated as of July 22, 1997 between the Company and The Bank of New York, as
trustee (the "Trustee").
The Notes will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Act"), in reliance on one or more exemptions therefrom.
In connection with the sale of the Notes, the Company has
prepared a preliminary offering memorandum dated July 14, 1997 (together with
the documents incorporated by reference therein, the "Preliminary Memorandum")
and a final offering
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memorandum dated July 17, 1997 (together with the documents incorporated by
reference therein, the "Final Memorandum"; the Preliminary Memorandum and the
Final Memorandum each herein being referred to as a "Memorandum"), each setting
forth or incorporating by reference a description of the terms of the Notes and
the offering of the Notes, a description of the Company and a description of any
material developments relating to the Company occurring after the date of the
most recent historical financial statements included or incorporated by
reference therein.
The Initial Purchasers and their direct and indirect
transferees of the Notes will be entitled to the benefits of the Registration
Rights Agreement, substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement"), pursuant to which the Company has agreed,
among other things, to file a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission")
registering the Exchange Notes (as defined therein) or, in certain cases, the
Notes under the Act.
2. Representations and Warranties. The Company represents and
warrants to and agrees with the Initial Purchasers that:
(a) None of the Preliminary Memorandum as of the date thereof
or the Final Memorandum or any amendment thereof or supplement thereto as of the
date thereof and at all times subsequent thereto up to the Closing Date (as
defined in Section 3 below) contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this Section 2(a) do not apply to statements or omissions made in reliance
upon and in conformity with information relating to the Initial Purchasers
furnished to the Company expressly for use in the Preliminary Memorandum, the
Final Memorandum or any amendment thereof or supplement thereto.
(b) The documents incorporated or deemed to be incorporated by
reference in the Final Memorandum, at the time they were or hereafter are filed
(or, if any amendment with respect to any such document was filed, when such
amendment was filed) with the Commission, complied and will comply in all
material respects with the requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and regulations of the Commission
thereunder, and, when read together with the other information in the Final
Memorandum, as of the date thereof and at all times subsequent thereto up to the
Closing Date, did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(c) As of March 31, 1997, the Company had the capitalization
set forth in the Final Memorandum; all the outstanding shares of capital stock
of the Company and its subsidiaries set forth on Schedule 2 hereto (the
"Subsidiaries") have been, and as of the
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Closing Date will be, duly authorized and validly issued, fully paid and
nonassessable and not issued in violation of or subject to any preemptive or
similar rights; except as set forth in the Final Memorandum and except for not
more than the 1% of the outstanding shares of Class A Common Stock of GWS
▇▇▇▇▇▇, Inc., all the outstanding shares of capital stock of each of the
Subsidiaries will be owned by the Company, directly or through subsidiaries,
free and clear of all liens, encumbrances, equities and claims.
(d) Each of the Company and the Subsidiaries has been duly
organized, is validly existing and is in good standing as a corporation under
the laws of its jurisdiction of incorporation, with all requisite corporate
power and authority to own its properties and conduct its business as now
conducted and as described in the Final Memorandum; each of the Company and the
Subsidiaries is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified would not, individually or in the
aggregate, have a material adverse effect on the business, prospects,
properties, operations, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries, taken as a whole (any such
event, a "Material Adverse Effect"). No subsidiary of the Company (other than
the Subsidiaries) is a "Significant Subsidiary" as defined in Regulation S-X of
the Commission.
(e) The Company has the corporate power and authority to
execute, deliver and perform each of its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the Registration
Rights Agreement). The Notes, the Exchange Notes and the Private Exchange Notes
have each been duly authorized by all requisite corporate action of the Company
and, when executed by the Company and authenticated by the Trustee in accordance
with the provisions of the Indenture and, in the case of the Notes, when
delivered to and paid for by the Initial Purchasers in accordance with the terms
of this Agreement, will have been duly executed, issued and delivered and will
constitute legal, valid and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their respective terms, except that the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other laws now or
hereafter in effect relating to or affecting creditors' rights generally
(including applicable fraudulent transfer laws), and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity) and the discretion of the court before which any proceeding
therefor may be brought.
(f) The Company has the corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The form of
the Indenture meets the requirements for qualification under the Trust Indenture
Act of 1939, as amended (the "TIA"). The Indenture has been duly authorized by
all requisite corporate action of the Company and, when executed and delivered
by the Company (assuming the due authorization, execution and delivery by the
Trustee), will constitute a legal, valid and
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binding agreement of the Company, enforceable against the Company in accordance
with its terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other laws now or
hereafter in effect relating to or affecting creditors' rights generally
(including applicable fraudulent transfer laws) and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity) and the discretion of the court before which any proceeding
therefor may be brought.
(g) The Company has the corporate power and authority to
execute, deliver and perform its obligations under the Registration Rights
Agreement. The Registration Rights Agreement has been duly authorized by all
requisite corporate action of the Company and, when executed and delivered by
the Company, will constitute a legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
that (A) the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect relating to
or affecting creditors' rights generally (including applicable fraudulent
transfer laws) and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and the
discretion of the court before which any proceeding therefor may be brought and
(B) any rights to indemnity or contribution thereunder may be limited by federal
and state securities laws and public policy considerations.
(h) The Company has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Company.
(i) No consent, approval, authorization or order of, or
qualification with, any court or governmental agency or body is required for the
performance of this Agreement or the consummation by the Company of the
transactions contemplated hereby, except such as have been obtained and such as
may be required under state securities or "Blue Sky" laws in connection with the
purchase and resale of the Notes by the Initial Purchasers and except that the
exchange offer and certain resales contemplated by the Registration Rights
Agreement require effective registration statements under the Act. None of the
Company or the Subsidiaries is (i) in violation of its articles or certificate
of incorporation or bylaws (or similar organizational document), (ii) in breach
or violation of any statute, judgment, decree, order, rule or regulation
applicable to any of them except for any such breach or violation which would
not, individually or in the aggregate, have a Material Adverse Effect, or (iii)
in breach of or default under (nor has any event occurred which, with notice or
passage of time or both, would constitute a default under) or in violation of
any of the terms or provisions of any indenture, mortgage, deed of trust, loan
agreement, note or other instrument pursuant to which the Company or its
Subsidiaries has indebtedness for borrowed money outstanding or any material
lease, license, franchise agreement, permit, certificate, contract or other
material agreement or instrument to which any of them is a party (collectively,
"Contracts"),
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except for any such breach, default, violation or event which would not,
individually or in the aggregate, have a Material Adverse Effect.
(j) The execution, delivery and performance by the Company of
this Agreement, the Indenture and the Registration Rights Agreement and the
consummation by the Company of the transactions contemplated hereby and thereby
(including the issuance and sale of the Notes to the Initial Purchasers), and
the fulfillment of the terms hereof and thereof, will not constitute or result
in a breach of or a default under (or an event which with notice or passage of
time or both would constitute a default under) or violation of any of (i) the
terms or provisions of any Contract, except for any such breach, violation,
default or event which would not, individually or in the aggregate, have a
Material Adverse Effect, (ii) the articles or certificate of incorporation or
bylaws (or similar organizational document) of the Company or any of the
Subsidiaries, or (iii) any statute, judgment, decree, order, rule or regulation
applicable to the Company or any of the Subsidiaries or any of their respective
properties or assets, assuming compliance with all applicable state securities
or "Blue Sky" laws and assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 8 hereof, except for any such
breach or violation which would not, individually or in the aggregate, have a
Material Adverse Effect.
(k) The consolidated financial statements of the Company
(including the notes thereto) included or incorporated by reference in the Final
Memorandum present fairly in all material respects the consolidated financial
position, results of operations and cash flows of the Company and its
subsidiaries at the dates and for the period to which they relate and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, except as otherwise stated therein. Deloitte & Touche LLP
(the "Independent Accountants"), who have certified the consolidated financial
statements and supporting schedules thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996 which are incorporated
by reference in the Final Memorandum, are independent public accountants with
regard to the Company within the meaning of the Act and the rules and
regulations promulgated thereunder.
(l) Other than as described in the Final Memorandum or the
documents incorporated by reference therein, there is not pending or, to the
knowledge of the Company, threatened any action, suit, proceeding, inquiry or
investigation to which the Company or any of the Subsidiaries is a party, or to
which the property or assets of the Company or any of the Subsidiaries are
subject, before or brought by any court, arbitrator or governmental agency or
body which, if determined adversely to the Company or any of the Subsidiaries,
would, individually or in the aggregate, have a Material Adverse Effect or which
seeks to restrain, enjoin, prevent the consummation by the Company of or
otherwise challenge the issuance or sale of the Notes to be sold hereunder to
the Initial Purchasers, the consummation of the transactions contemplated hereby
or the application of the net proceeds therefrom as described in the Final
Memorandum under the heading "Use of Proceeds."
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(m) Each of the Company and the Subsidiaries has good title to
all properties owned by them, in each case, free and clear of all liens,
encumbrances, security interests, charges and claims of any kind whatsoever
except (i) as do not materially interfere with the use made or proposed to be
made of such properties, (ii) as set forth in the Offering Memorandum or (iii)
as could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(n) Each of the Company and the Subsidiaries possesses all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, presently required or necessary to own or lease, as the case may be,
and to operate its properties and to carry on its businesses in the manner
described in the Final Memorandum ("Permits"), except where the failure to
obtain such Permits would not, individually or in the aggregate, have a Material
Adverse Effect; each of the Company and the Subsidiaries has fulfilled and
performed in all material respects all of its obligations with respect to such
Permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such Permit; and none of the
Company or the Subsidiaries has received any notice of any proceeding relating
to revocation or modification of any such Permit, except as described in the
Final Memorandum and except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.
(o) Each of the Company and the Subsidiaries owns or
possesses, or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets or other
proprietary or confidential information, systems or procedures, whether patented
or unpatented), trademarks, service marks and trade names (collectively,
"intellectual property") presently employed by them in connection with the
business now operated by them, except where the failure to own or possess or
have the ability to acquire any such intellectual property would not,
individually or in the aggregate, have a Material Adverse Effect, and neither
the Company nor any of the Subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any of the
foregoing that, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(p) Except as disclosed in the Final Memorandum, each of the
Company and the Subsidiaries is in material compliance with all applicable
existing federal, state and local laws and regulations relating to the
protection of human health or the environment or imposing liability or standards
of conduct concerning any Hazardous Material (as hereinafter defined)
("Environmental Laws"), except, in each case, where such noncompliance,
individually or in the aggregate, would not have a Material Adverse Effect. The
term "Hazardous Material" means (i) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, (ii) any
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"hazardous waste" as defined by the Resource Conservation and Recovery Act, as
amended, (iii) any petroleum or petroleum product, (iv) any polychlorinated
biphenyl and (v) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material, waste or substance regulated under or within the meaning of
any other Environmental Law.
(q) Except as disclosed in the Final Memorandum, there is no
alleged liability (including alleged liability for investigatory costs, cleanup
costs, governmental response costs, natural resource damages, property damages,
personal injuries or penalties) of the Company or any of the Subsidiaries
arising out of, based on or resulting from (i) the presence or release into the
environment of any Hazardous Material at any location, whether or not owned by
the Company or any of the Subsidiaries or (ii) any violation or alleged
violation of any Environmental Law, which alleged liability, individually or in
the aggregate, would have a Material Adverse Effect.
(r) Since the date of the most recent financial statements
included or incorporated by reference in the Final Memorandum, except as
described therein, none of the Company or the Subsidiaries has sustained any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree; and since the respective dates
as of which information is given in the Final Memorandum, there has not been any
material adverse change in the capital stock or consolidated short-term or
long-term debt of the Company (exclusive of the Bank Facility (as defined in the
Final Memorandum) and the issue of Notes contemplated by this Agreement) or any
event or development that, individually or in the aggregate, has had or would be
reasonably likely to have a Material Adverse Effect, otherwise than as set forth
or contemplated in the Final Memorandum.
(s) None of the Company or the Subsidiaries are, nor will any
of them upon consummation of the transactions contemplated hereby be, an
"investment company" or "promoter" or "principal underwriter" for an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
(t) The Notes, the Exchange Notes, the Indenture and the
Registration Rights Agreement will conform in all material respects to the
descriptions thereof in the Final Memorandum.
(u) No holder of securities of the Company or any Subsidiary
will be entitled to have such securities registered under the registration
statements required to be filed by the Company pursuant to the Registration
Rights Agreement other than as expressly permitted thereby.
(v) None of the Company, any of its "affiliates" (as defined
in Rule 501(b) of Regulation D under the Act ("Affiliates")) or any person
acting on behalf of any such
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person 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 Act) which is or could be integrated with the sale of the Notes in a
manner that would require the registration under the Act of the Notes or (ii)
engaged in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in connection with the offering of
the Notes or in any manner involving a public offering within the meaning of
Section 4(2) of the Act. None of the Company, any of its Affiliates or any
person acting on behalf of any such person (other than the Initial Purchasers,
as to whom the Company makes no representation) has engaged in any directed
selling efforts (as such term is defined in Regulation S under the Act) in the
United States with respect to the Notes and each of the Company, its Affiliates
and any person acting on behalf of any such person has complied with the
offering restrictions requirement of Regulation S under the Act.
(w) Assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 8 hereof, it is not necessary in
connection with the offer, sale and delivery of the Notes to the Initial
Purchasers in the manner contemplated by this Agreement and the Final Memorandum
to register any of the Notes under the Act or to qualify the Indenture under the
TIA.
(x) No securities of the Company are of the same class (within
the meaning of Rule 144A under the Act) as the Notes and listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted in
a U.S. automated inter-dealer quotation system.
(y) None of the Company or the Subsidiaries has taken, nor
will any of them take, directly or indirectly, any action designed to, or that
might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Notes.
(z) None of the execution, delivery and performance of this
Agreement, the execution, delivery, issuance and sale of the Notes, the
application of the proceeds from the issuance and sale of the Notes and the
consummation of the transactions contemplated by this Agreement and the Final
Memorandum will violate Regulation G, T, U or X promulgated by the Board of
Governor of the Federal Reserve System.
3. Purchase, Sale and Delivery of the Notes. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers, acting
severally and not jointly, agree to purchase the Notes in the respective amounts
set forth on Schedule 1 hereto from the Company, at 99.269% of their principal
amount. The Initial Purchasers agree to reduce by $675,000 the amount of the
discount otherwise payable to them hereunder. One or more certificates in
definitive form for the Notes that the Initial Purchasers have agreed to
purchase hereunder, and in such denomination or denominations and registered in
such name or names as the
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Initial Purchasers request upon notice to the Company at least 36 hours prior to
the Closing Date, shall be delivered by or on behalf of the Company to the
Initial Purchasers, against payment by or on behalf of the Initial Purchasers of
the purchase price therefor by wire transfer (same day funds) to such account or
accounts as the Company shall specify prior to the Closing Date, or by such
means as the parties hereto shall agree prior to the Closing Date. Such delivery
of and payment for the Notes shall be made at the offices of Stroock & Stroock &
▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., New York
time, on July 22, 1997, or at such other place, time or date as the Initial
Purchasers, on the one hand, and the Company, on the other hand, may agree upon,
such time and date of delivery against payment being herein referred to as the
"Closing Date." The Company will make such certificate or certificates for the
Notes available for checking and packaging by the Initial Purchasers at the
offices of Bear, ▇▇▇▇▇▇▇ & Co. Inc. in New York, New York, or at such other
place as Bear, ▇▇▇▇▇▇▇ & Co. Inc. may designate, at least 24 hours prior to the
Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers
propose to make an offering of the Notes at the price and upon the terms set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
5. Covenants of the Company. The Company covenants and agrees
with each of the Initial Purchasers that:
(a) The Company will not amend or supplement the Final
Memorandum or any amendment thereof or supplement thereto of which the Initial
Purchasers shall not previously have been advised and furnished a copy for a
reasonable period of time prior to the proposed amendment or supplement and as
to which the Initial Purchasers shall not have given their consent, which
consent shall not be unreasonably withheld. The Company will promptly, upon the
reasonable request of the Initial Purchasers or counsel for the Initial
Purchasers, make any amendments or supplements to the Preliminary Memorandum or
the Final Memorandum that may be necessary or advisable in connection with the
resale of the Notes by the Initial Purchasers.
(b) The Company will cooperate with the Initial Purchasers in
arranging for the qualification of the Notes for offering and sale under the
securities or "Blue Sky" laws of such jurisdictions as the Initial Purchasers
may designate and will continue such qualifications in effect for as long as may
be necessary to complete the resale of the Notes; provided, however, that in
connection therewith, the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation in excess of a nominal dollar amount
in any such jurisdiction where it is not then so subject.
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(c) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Notes or the Private Exchange
Notes, any event occurs or information becomes known as a result of which, in
the judgment of the Company or in the opinion of counsel for the Initial
Purchasers, the Final Memorandum as then amended or supplemented would include
any untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other reason it is
necessary at any time, in the judgment of the Company or in the opinion of
counsel for the Initial Purchasers, to amend or supplement the Final Memorandum
to comply with applicable law, the Company will promptly notify the Initial
Purchasers thereof and will promptly prepare, at the expense of the Company, an
amendment or supplement to the Final Memorandum that corrects such statement or
omission or effects such compliance.
(d) The Company authorizes the Initial Purchaser to deliver to
prospective purchasers copies of any Preliminary Memorandum and the Final
Memorandum and any amendments thereof or supplements thereto in connection with
any offer or sale of the Notes by the Initial Purchasers in accordance herewith.
In connection with such delivery of copies of any Preliminary Memorandum and the
Final Memorandum and any amendments thereof or supplements thereto, the Company
agrees to furnish, without charge, to the Initial Purchasers and to counsel for
the Initial Purchasers as many copies of the Preliminary Memorandum and the
Final Memorandum or any amendment thereof or supplement thereto as the Initial
Purchasers may reasonably request.
(e) The Company will promptly advise the Initial Purchasers
and, if requested by the Initial Purchasers, confirm such advice in writing, of
the issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of the Notes for offering or sale
in any jurisdiction, or the initiation of any proceeding for such purpose by any
state securities commission or other regulatory authority. The Company will use
every reasonable effort to prevent the issuance of any stop order or order
suspending the qualification or exemption of the Notes under any state
securities or "Blue Sky" laws and, if at any time any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption of the Notes under any state securities or "Blue Sky"
laws, the Company will use every reasonable effort to obtain the withdrawal or
lifting of such order at the earliest possible time.
(f) The Company will apply the net proceeds from the sale of
the Notes as set forth under "Use of Proceeds" in the Final Memorandum.
(g) For so long as any of the Notes remain outstanding, the
Company will furnish to the Initial Purchasers who are then making a market in
the Notes copies of all reports and other substantive communications (financial
or otherwise) furnished by the Company to the Trustee, or the holders of the
Notes and, as soon as available, copies of any reports or financial statements
furnished to or filed by the Company with the Commission or
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any national securities exchange on which any class of securities of the Company
may be listed.
(h) Prior to the Closing Date, the Company will furnish to the
Initial Purchasers, as soon as they have been prepared, a copy of any unaudited
interim financial statements of the Company for any quarterly period subsequent
to the period covered by the most recent financial statements appearing in the
Final Memorandum.
(i) None of the Company, any of its Affiliates or any person
acting on behalf of any such person will sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any "security" (as defined in the
Act) which could be integrated with the sale of the Notes in a manner which
would require the registration under the Act of the Notes.
(j) The Company will not, and will not permit any of its
Affiliates or any person acting on behalf of the Company or its Affiliates to,
engage in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in connection with the offering of
the Notes or in any manner involving a public offering within the meaning of
Section 4(2) of the Act.
(k) None of the Company, any of its Affiliates or any person
acting on behalf of any such person will engage in any directed selling efforts
(as such term is defined in Regulation S under the Act) in the United States
with respect to the Notes and each of the Company, its Affiliates and any person
acting on behalf of any such person will comply with the offering restrictions
requirement of Regulation S under the Act.
(l) For so long as any of the Notes remain outstanding, the
Company will (i) make available, upon request, to any holder of Notes and any
prospective purchaser thereof designated by such a holder, upon the request of
such holder or prospective purchaser, the information required to be provided to
such holder or prospective purchaser by Rule 144A(d)(4) under the Act and (ii)
update such information from time to time in order to prevent such information
from becoming false and misleading and will take such other actions as are
necessary to ensure that the safe harbor exemption from the registration
requirements of the Act under Rule 144A is and will be available for resales of
the Notes conducted in accordance with Rule 144A.
(m) The Company will use its reasonable efforts to (i) permit
the Notes to be designated PORTAL securities in accordance with the rules and
regulations adopted by the NASD relating to trading in the Private Offerings,
Resales and Trading through Automated Linkages market (the "PORTAL Market") of
the National Association of Securities Dealers, Inc. and (ii) permit the Notes
to be eligible for clearance and settlement through the facilities of The
Depository Trust Company ("DTC").
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6. Expenses. The Company agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Sections 7 or 11 hereof, including all costs and expenses
incident to (i) the printing, word processing or other production of documents
with respect to the transactions contemplated hereby, including any costs of
printing the Preliminary Memorandum and the Final Memorandum and any amendment
thereof or supplement thereto, and any "Blue Sky" memoranda, (ii) all
arrangements relating to the delivery to the Initial Purchasers of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (iv)
preparation (including printing), issuance and delivery to the Initial
Purchasers of the Notes, (v) the qualification of the Notes under state
securities and "Blue Sky" laws, including filing fees and reasonable fees and
disbursements of counsel for the Initial Purchasers relating thereto, (vi)
expenses of the Company in connection with any meetings with prospective
investors in the Notes, (vii) fees and expenses of the Trustee including the
fees and disbursements of its counsel, (viii) all expenses and listing fees
incurred in connection with the application for quotation of the Notes on the
PORTAL Market, (ix) the cost and charges of DTC and its nominee in connection
with the Notes and (x) any fees charged by investment rating agencies for the
rating of the Notes. If the sale of the Notes provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated pursuant to Section 11 hereof or because of any failure, refusal or
inability on the part of the Company to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder (other than solely
by reason of a default by the Initial Purchasers of their obligations hereunder
after all conditions hereunder have been satisfied in accordance herewith), the
Company agrees to promptly reimburse the Initial Purchasers upon demand for all
reasonable out-of-pocket expenses (including reasonable fees, disbursements and
charges of Stroock & Stroock & ▇▇▇▇▇ LLP, counsel for the Initial Purchasers)
that shall have been incurred by the Initial Purchasers in connection with the
proposed purchase and sale of the Notes.
7. Conditions of the Initial Purchasers' Obligations. The
obligations of the Initial Purchasers to purchase and pay for the Notes shall,
in their sole discretion, be subject to the accuracy of the representations and
warranties of the Company contained herein as of the date hereof and as of the
Closing Date, 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 satisfaction or waiver of the following
additional conditions precedent on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have
received the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, counsel for the Company, in
form and substance satisfactory to counsel for the Initial Purchasers, to the
effect that:
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(i) Each of the Company and the Subsidiaries has been duly
incorporated, is validly and presently subsisting under the laws of its
respective jurisdiction of incorporation and has all requisite corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Final Memorandum. The Company is duly qualified to
do business as a foreign corporation in good standing in the jurisdictions set
forth on Schedule 3 hereto.
(ii) Except as set forth in or contemplated by the Final Memorandum, to
the knowledge of such counsel, no holder of securities of the Company is
entitled to have such securities registered under a registration statement filed
by the Company pursuant to the Registration Rights Agreement.
(iii) To the knowledge of such counsel, no legal or governmental
proceedings are pending to which the Company or any of the Subsidiaries is a
party or to which the property or assets of the Company or any of the
Subsidiaries are subject which would be required under the Act to be described
in a registration statement or in a prospectus and are not described in the
Final Memorandum or in a document incorporated by reference therein, or which
seek to restrain, enjoin, prevent the consummation by the Company of or
otherwise challenge the issuance or sale of the Notes to be sold hereunder to
the Initial Purchasers, the consummation of the transactions contemplated hereby
or the application of the net proceeds therefrom as described in the Final
Memorandum under the caption "Use of Proceeds."
(iv) The Company has the corporate power and authority to execute,
deliver and perform its obligations under the Indenture, the Notes, the Exchange
Notes and the Private Exchange Notes; the form of the Indenture meets the
requirements for qualification under the TIA; the Indenture has been duly
authorized by all requisite corporate action of the Company and, when duly
executed and delivered by the Company (assuming the due authorization, execution
and delivery thereof by the Trustee), will constitute the legal, valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except that the enforcement thereof may be subject to (A)
bankruptcy, insolvency, reorganization, moratorium or other laws now or
hereafter in effect relating to or affecting creditors' rights generally
(including applicable fraudulent transfer laws) and (B) general principles of
equity, including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether enforceability is considered
in a proceeding at law or in equity) and the discretion of the court before
which any proceeding therefor may be brought.
(v) The Notes have each been duly authorized by all requisite corporate
action of the Company and when duly executed and delivered by the Company and
paid for by the Initial Purchasers in accordance with the terms of this
Agreement (assuming the due authorization, execution and delivery of the
Indenture by the
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Trustee and due authentication and delivery of the Notes by the Trustee in
accordance with the Indenture), will constitute the legal, valid and binding
obligations of the Company, entitled to the benefits of the Indenture, and
enforceable against the Company in accordance with their terms, except that the
enforcement thereof may be subject to (A) bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect relating to
or affecting creditors' rights generally (including applicable fraudulent
transfer laws) and (B) general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether enforceability is considered in a proceeding at law or in
equity) and the discretion of the court before which any proceeding therefor may
be brought.
(vi) The Exchange Notes and the Private Exchange Notes have been duly
authorized by all requisite corporate action of the Company and, when the
Exchange Notes and the Private Exchange Notes have been duly executed and
delivered by the Company in accordance with the terms of the Registration Rights
Agreement and the Indenture (assuming the due authorization, execution and
delivery of the Indenture by the trustee and due authentication and delivery of
the Exchange Notes and the Private Exchange Notes by the Trustee in accordance
with the Indenture and assuming no changes in the law from the date thereof),
will constitute the legal, valid and binding obligations of the Company,
entitled to the benefits of the Indenture, and enforceable against the Company
in accordance with their terms, except that the enforcement thereof may be
subject to (A) bankruptcy, insolvency, reorganization, moratorium or other laws
now or hereafter in effect relating to or affecting creditors' rights generally
(including applicable fraudulent transfer laws) and (B) general principles of
equity, including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether enforceability is considered
in a proceeding at law or in equity) and the discretion of the court before
which any proceeding therefor may be brought.
(vii) The Company has the corporate power and authority to execute,
deliver and perform its obligations under the Registration Rights Agreement; the
Registration Rights Agreement has been duly authorized by all requisite
corporate action of the Company and, when duly executed and delivered by the
Company (assuming due authorization, execution and delivery thereof by the
Initial Purchasers), will constitute the legal, valid and binding agreement of
the Company enforceable against the Company in accordance with its terms, except
that (A) the enforcement thereof may be subject to (x) bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect relating to
or affecting creditors' rights generally (including applicable fraudulent
transfer laws) and (y) general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether enforceability is considered in a proceeding at law or in
equity) and the discretion of the court before which any proceeding therefor may
be brought
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15
and (B) any rights to indemnity or contribution thereunder may be limited by
federal and state securities laws or regulation and public policy
considerations.
(viii) The Company has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The Indenture, the Notes, the Exchange Notes and the Registration
Rights Agreement conform as to legal matters in all material respects to the
descriptions thereof contained in the Final Memorandum.
(x) The execution and delivery of this Agreement, the Indenture and the
Registration Rights Agreement and the consummation of the transactions
contemplated hereby and thereby (including the issuance and sale of the Notes to
the Initial Purchasers) will not constitute or result in a breach of or a
default under (or an event which with notice or passage of time or both would
constitute a default under) or violation of any of (A) the terms or provisions
of any indenture, mortgage, deed of trust, loan agreement, note or other
agreement or instrument filed or incorporated by reference as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 or the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 or
any material agreement or instrument entered into by the Company subsequent to
March 31, 1997 known to such counsel, (B) the articles of incorporation or
bylaws of the Company, or (C) assuming compliance with all applicable state
securities or "Blue Sky" laws and assuming the accuracy of the representations
and warranties of the Initial Purchasers in Section 8 hereof, any United States
federal or Pennsylvania statute, rule or regulation of, or judgment, decree or
order applicable to the Company issued by, any governmental authority or
regulatory body having jurisdiction over the Company of which such counsel is
aware, which, in such counsel's experience, is normally applicable both to
general business corporations which are not engaged in regulated business
activities and to transactions of the type contemplated by the Final Memorandum
(but without having made any special investigation as to other laws and provided
that such opinion need not cover any laws or regulations to which the Company or
its affiliates may be subject as a result of the Initial Purchasers' legal or
regulatory status or the involvement of the Initial Purchasers in such
transaction), except for any such conflict, breach or violation which would not,
individually or in the aggregate, have a Material Adverse Effect.
(xi) To the knowledge of such counsel, no consent, approval,
authorization or order of, or qualification with, any United States Federal or
Pennsylvania governmental authority is required to be obtained by the Company
for the issuance and sale by the Company of the Notes to the Initial Purchasers
or the other
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transactions contemplated hereby, except such as may be required under "Blue
Sky" laws, as to which such counsel need express no opinion, and those which
have previously been obtained, except where the failure to obtain such consents
or waivers would not result in a Material Adverse Effect and except that the
exchange offer and certain resales contemplated by the Registration Rights
Agreement require effective registration statements under the Act and the
qualification of the Indenture under the TIA.
(xii) No registration under the Act of the Notes is required in
connection with the sale of the Notes to the Initial Purchasers as contemplated
by this Agreement and the Final Memorandum or in connection with the initial
resale of the Notes by the Initial Purchasers in accordance with Section 8 of
this Agreement, and prior to the commencement of the Exchange Offer (as defined
in the Registration Rights Agreement) or the effectiveness of the Shelf
Registration Statement (as defined in the Registration Rights Agreement), the
Indenture is not required to be qualified under the TIA, in each case assuming
(A) that the purchasers who buy such Notes in the initial resale thereof are
"qualified institutional buyers" as defined in Rule 144A promulgated under the
Act ("QIBs"), institutional "accredited investors" as defined in Rule 501(a)(1),
(2), (3) or (7) promulgated under the Act ("Accredited Investors") or foreign
persons under Regulation S, (B) the accuracy of the Initial Purchasers'
representations in Section 8 and those of the Company contained in this
Agreement regarding the absence of a general solicitation in connection with the
sale of such Notes to the Initial Purchasers and the initial resale thereof, (C)
the due performance by the Initial Purchasers of the agreements set forth in
Section 8 hereof and (D) the accuracy of the representations made by each
Accredited Investor who purchases Notes in the initial resale as set forth in
the Final Memorandum.
(xiii) None of the execution, delivery and performance of this
Agreement, the execution, delivery, issuance and sale of the Notes, the
application of the proceeds from the issuance and sale of the Notes and the
consummation of the transactions each as contemplated by this Agreement and the
Final Memorandum will violate Regulation G, T, U or X promulgated by the Board
of Governors of the Federal Reserve System.
(xiv) No securities of the Company are of the same class (within the
meaning of Rule 144A under the Act) as the Notes and listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted in
a U.S. automated inter-dealer quotation system.
(xv) The documents incorporated by reference in the Final Memorandum
(the "Exchange Act Documents") when they were filed with the Commission complied
as to form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder; it being understood that such counsel
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need express no opinion with respect to the financial statements and schedules
and related notes thereto and the other financial, statistical and accounting
data included or incorporated by reference in the Final Memorandum or the
Exchange Act Documents.
(xvii) None of the Company or the Subsidiaries are, nor will any of
them upon consummation of the transactions contemplated hereby be, an
"investment company" or "promoter" or "principal underwriter" for an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
The opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ described in this Section shall
be rendered to the Initial Purchasers at the request of the Company and shall so
state therein.
At the time the foregoing opinion is delivered, such counsel
shall additionally state that (x) such counsel has acted as counsel to the
Company on a regular basis and in connection with the preparation of the Final
Memorandum and (y) such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the independent
public accountants for the Company, representatives of the Initial Purchasers
and counsel for the Initial Purchasers, at which conferences the contents of the
Final Memorandum and related matters were discussed and, on the basis of such
participation (relying as to materiality to a large extent upon the opinions of
officers and other representatives of the Company), although such counsel has
not independently verified and is not passing upon and assumes no responsibility
for the accuracy, completeness or fairness of the statements contained in the
Final Memorandum (except to the extent set forth in clauses (iii) and (ix)
above), no facts have come to its attention which leads it to believe that the
Final Memorandum, as amended or supplemented, including the Exchange Act
Documents, on the date thereof or at the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and schedules and related notes thereto and the other financial,
statistical and accounting data included or incorporated by reference in the
Final Memorandum).
References to the Final Memorandum in this subsection (a)
shall include any amendment thereof or supplement thereto prepared in accordance
with the provisions of this Agreement at the Closing Date.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the federal
laws of the United States, the laws of the Commonwealth of Pennsylvania and the
General Corporation Law of the State of Delaware. With respect to the
enforceability of the Notes, the Exchange Notes, the Private Exchange Notes, the
Indenture and the Registration Rights Agreement such counsel may rely
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on the opinion of New York counsel, which shall be reasonably acceptable to
counsel to the Initial Purchasers, provided that such New York counsel shall
state that ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll and the Initial Purchasers are
entitled to rely on the opinions of such counsel (copies of which opinions shall
be delivered to the Initial Purchasers on the Closing Date). Such counsel may
also state that, insofar as such opinion involves factual matters, such counsel
have relied, to the extent they deem proper, upon the representations and
warranties of the Company in this Agreement and upon certificates of officers of
the Company and certificates of public officials; provided, however, that such
certificates have been provided to the Initial Purchasers.
(b) On the Closing Date, the Initial Purchasers shall have
received the opinion, in form and substance satisfactory to the Initial
Purchasers, dated as of the Closing Date and addressed to the Initial
Purchasers, of Stroock & Stroock & ▇▇▇▇▇ LLP, counsel for the Initial
Purchasers, with respect to certain legal matters relating to this Agreement and
such other related matters as the Initial Purchasers may reasonably require. In
rendering such opinion, Stroock & Stroock & ▇▇▇▇▇ LLP (i) may rely, as to all
matters governed by the laws of jurisdictions other than the federal law of the
United States, the laws of the State of New York and the General Corporation Law
of the State of Delaware, upon the opinions of counsel satisfactory to the
Initial Purchasers and (ii) shall have received from the Company and may rely
upon such certificates and other documents and information as it may reasonably
request to pass upon such matters.
(c) At the time this Agreement is executed and at the Closing
Date, the Initial Purchasers shall have received from the Independent
Accountants a customary comfort letter and a bring-down comfort letter, as
applicable, dated, respectively, the date hereof and the Closing Date, addressed
to the Initial Purchasers and in form and substance satisfactory to the Initial
Purchasers and their counsel with respect to the financial statements and
certain financial and other information of the Company contained or incorporated
by reference in the Memorandum.
(d) The representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date; the statements of the Company's officers made pursuant to any certificate
delivered in accordance with the provisions hereof shall be true and correct on
and as of the date made and on and as of the Closing Date; the Company shall
have performed all covenants and agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing Date;
and, except as described in the Final Memorandum, subsequent to the date of the
most recent financial statements in such Final Memorandum, there shall have been
no event or development that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect.
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(e) The sale of the Notes hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(f) The Initial Purchasers shall have received a certificate
of the Company, dated the Closing Date, signed by its Chairman of the Board,
President or any Senior Vice President and the Chief Financial Officer,
Controller or Treasurer, to the effect that:
(i) the representations and warranties of the Company contained in this
Agreement are true and correct as of the date hereof and as of the Closing Date,
and the Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date;
(ii) at the Closing Date, since the date hereof or, except as described
in the Final Memorandum, since the date of the most recent financial statements
in the Final Memorandum, no event or events have occurred, no information has
become known nor does any condition exist that, individually or in the
aggregate, would have a Material Adverse Effect;
(iii) the sale of the Notes hereunder has not been enjoined
(temporarily or permanently); and
(iv) nothing has come to the attention of such officers that would lead
such officers to believe that the Final Memorandum contains or incorporates by
reference any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) On the Closing Date, the Initial Purchasers shall have
received the Indenture executed by the Company and the Trustee and the Indenture
shall be in full force and effect and no default shall exist thereunder.
(h) On the Closing Date, the Initial Purchasers shall have
received the Registration Rights Agreement executed by the Company and such
agreement shall be in full force and effect and no default shall exist
thereunder.
On or before the Closing Date, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such further documents,
opinions, certificates, letters and schedules or instruments relating to the
business, corporate, legal and financial affairs of the Company and the
Subsidiaries as they shall have heretofore reasonably requested from the
Company.
All such documents, opinions, certificates, letters, schedules
or instruments delivered pursuant to this Agreement shall be reasonably
satisfactory in all material respects
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in form and substance to the Initial Purchasers and counsel for the Initial
Purchasers. The Company shall furnish to the Initial Purchasers such conformed
copies of such documents, opinions, certificates, letters, schedules and
instruments in such quantities as the Initial Purchasers shall reasonably
request.
If any of the conditions specified in this Section 7 shall not
have been fulfilled when and as provided by this Agreement, or if any of the
opinions, certificates, written statements or letters furnished to the Initial
Purchasers or their counsel pursuant to this Section 7 shall not be in all
material respects reasonably satisfactory in form and substance to the Initial
Purchasers and their counsel, all obligations of the Initial Purchasers
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Initial Purchasers. Notice of such cancellation shall be given to the Company in
writing, or by telephone or telecopy confirmed in writing.
8. Offering of Notes; Restrictions on Transfer. Each of the
Initial Purchasers represents and warrants (as to itself only) that it is an
Accredited Investor. Each of the Initial Purchasers agrees with the Company (as
to itself only) that (i) it has not and will not engage in any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) in connection with the offering of the Notes or in any manner
involving a public offering within the meaning of Section 4(2) of the Act; and
(ii) it has and will solicit offers for the Notes only from, and will offer the
Notes only to (A) in the case of offers inside the United States, (x) persons
whom the Initial Purchasers reasonably believe to be QIBs 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 the Initial
Purchasers that each such account is a QIB, 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 under Rule 144A or (y) a limited number of other institutional
investors reasonably believed by the Initial Purchasers to be Accredited
Investors that, prior to their purchase of the Notes, deliver to the Initial
Purchasers a letter containing the representations and agreements set forth in
Annex A to the Final Memorandum and (B) in the case of offers outside the United
States, to persons other than U.S. persons ("foreign purchasers," which term
shall include dealers or other professional fiduciaries in the United States
acting on a discretionary basis for foreign beneficial owners (other than an
estate or trust)); provided, however, that in the case of this clause (B), in
purchasing such Notes such persons are deemed to have represented and agreed as
provided under the caption "Notice to Investors" contained in the Final
Memorandum.
9. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser and each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against any and all losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but not limited
to reasonable attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any
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litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained or incorporated by
reference in any Memorandum, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company will not
be liable in any such case to the extent but only to the extent that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with the information
relating to the Initial Purchasers furnished to the Company in writing expressly
for use therein; and provided further, that this indemnity agreement with
respect to the Preliminary Memorandum shall not inure to the benefit of any
Initial Purchaser from whom the person asserting such losses, liabilities,
claims, damages or expenses purchased Notes, or any person controlling such
Initial Purchaser, if a copy of the Final Memorandum (as then amended or
supplemented if the Company shall have furnished any such amendments thereof or
supplements thereto, but excluding documents incorporated or deemed to be
incorporated by reference therein) was not sent or given by or on behalf of the
Initial Purchasers to such person at or prior to the written confirmation of the
sale of such Notes to such person and if the Final Memorandum (as so amended or
supplemented, but excluding documents incorporated or deemed to be incorporated
by reference therein) would have corrected the defect giving rise to such loss,
liability, claim, damage or expense, it being understood that this proviso shall
have no application if such defect shall have been corrected in a document which
is incorporated or deemed to be incorporated by reference in the Final
Memorandum. This indemnity agreement will be in addition to any liability which
the Company may otherwise have including under this Agreement.
(b) Each Initial Purchaser, severally and not jointly, agrees
to indemnify and hold harmless the Company, each of the directors of the Company
and each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of material fact contained in any Memorandum or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
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extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with the information relating to the Initial Purchasers
furnished in writing to the Company expressly for use therein. This indemnity
will be in addition to any liability which any Initial Purchaser may otherwise
have including under this Agreement.
(c) Promptly after receipt by an indemnified party under
paragraph (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under paragraph (a) or (b) above
except to the extent 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 which it may have to an indemnified party
otherwise than under this Section 9. In case any such action is brought against
any indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the defense of such
action, (ii) the indemnifying parties shall not have employed counsel reasonably
satisfactory to the indemnified party to take charge of the defense of such
action within a reasonable time after receipt of notice of commencement of the
action, or (iii) such indemnified party or parties shall have been advised by
counsel that there may be defenses available to it or them which are different
from or additional to those available to one or all of the indemnifying parties
(in which case the indemnified party or parties shall have the right to select
separate counsel to assume such legal defenses and to otherwise participate in
the defense of such action on behalf of the indemnified party or parties) in
which event the reasonable fees and expenses of one separate firm of attorneys
for all such indemnified parties (together with one firm of local counsel in
each appropriate jurisdiction) shall be borne by the indemnifying parties.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent; provided, however, that such consent was not
unreasonably withheld. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution is being
sought under this Section 9 (whether or not the indemnified parties are actual
or potential parties
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thereto), unless such settlement, compromise or consent (i) includes an
unconditional written release in form and substance satisfactory to the
indemnified parties of each indemnified party from all liability arising out of
such litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) In order to provide for contribution in circumstances in
which the indemnification provided for in the preceding paragraphs of this
Section 9 is for any reason held to be unavailable from any indemnifying party
or is insufficient to hold harmless a party indemnified thereunder, the Company
and the Initial Purchasers shall contribute to the aggregate losses, claims,
damages, liabilities and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, claims, damages, liabilities and expenses suffered by the Company any
contribution received by the Company from persons, other than the Initial
Purchasers, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, officers and directors of the Company) as incurred to which
the Company and one or more of the Initial Purchasers may be subject, in such
proportions as is appropriate to reflect the relative benefits received by the
Company and the Initial Purchasers from the offering of the Notes or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in the preceding paragraphs of this Section 9, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Initial Purchasers in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Initial Purchasers shall
be deemed to be in the same proportion as (x) the total proceeds from the
offering (net of discounts and commissions but before deducting expenses)
received by the Company and (y) the discounts and commissions received by the
Initial Purchasers, respectively. The relative fault of the Company and of the
Initial Purchasers 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 Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this paragraph (d)
were 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
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), (i) in no case shall any
Initial Purchaser be required to contribute any amount that in the aggregate
exceeds the price at which the Notes were sold by such Initial Purchaser under
this Agreement, less the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of
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such untrue or alleged untrue statement or omission or alleged omission, and
(ii) 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 contribution
obligations of the Initial Purchasers hereunder are several in proportion to
their respective purchase commitments and not joint. For purposes of this
paragraph (d), each person, if any, who controls an Initial Purchaser within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as such Initial Purchaser, and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, and each officer and director of the Company
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this paragraph (d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this paragraph (d)
or otherwise, except to the extent that such omission results in material
prejudice; provided, however, that the omission to so notify shall not relieve a
party from any liability which it may have to another party otherwise than under
this Section 9. No party shall be liable for contribution with respect to any
action or claim settled without its consent; provided, however, that such
consent was not unreasonably withheld.
10. Survival Clause. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, its officers and the Initial Purchasers set forth in this Agreement or
made by or on behalf of them pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company, any of its officers or directors, the Initial Purchasers or any
other person referred to in Section 9 hereof and (ii) delivery of and payment
for the Notes. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6, 9 and 15 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the
sole discretion of the Initial Purchasers by notice given to the Company prior
to delivery of and payment for the Notes if there has occurred any of the
following: (i) any domestic or international event or act or occurrence has
materially disrupted, or in the opinion of the Initial Purchasers will in the
immediate future materially disrupt, the market for the Company's securities or
securities in general; or (ii) if trading on the New York or American Stock
Exchanges shall have been suspended, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York or American Stock Exchanges by the New York or
American Stock Exchanges or by order of the Commission or any other governmental
authority having jurisdiction; or (iii) if a banking moratorium has been
declared by a state or federal authority
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or if any new restriction materially adversely affecting the offering of the
Notes shall have become effective; or (iv) if, subsequent to the date of this
Agreement, there has been any downgrading in the rating of the Company's debt
securities by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given of any
intended or potential downgrading in the rating of the Company or of a possible
change in any such rating that does not indicate the direction of the possible
change; or (v) (A) if the United States becomes engaged in hostilities or there
is an escalation of hostilities involving the United States or there is a
declaration of a national emergency or war by the United States or (B) if there
shall have been such change in political, financial or economic conditions if
the effect of any such event in (A) or (B) as in the judgment of the Initial
Purchasers makes it impracticable or inadvisable to proceed with the offering,
sale and delivery of the Notes on the terms contemplated by the Final
Memorandum.
(b) Termination of this Agreement pursuant to this Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by the Initial Purchasers. The
statements set forth in the last paragraph on the front cover page, the fourth
paragraph on page 2, the fourth sentence under the caption "Offering Memorandum
Summary--The Offering--Absence of Market for the Notes" and in the third
paragraph and the fourth sentence of the fourth paragraph under the caption
"Plan of Distribution" in the Final Memorandum (to the extent such statements
relate to the Initial Purchasers) constitute the only information furnished by
the Initial Purchasers to the Company for the purposes of Sections 2(a) and 9
hereof.
13. Notices. All communications hereunder shall be in writing
and if sent to the Initial Purchasers, shall be mailed or delivered to Bear,
▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇; if sent to the Company, shall be mailed or delivered
to the Company at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Treasurer.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; and one
business day after being timely delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchasers, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 9 of this Agreement shall
also be for the benefit of any
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person or persons who control the Initial Purchasers within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnities
of the Initial Purchasers contained in Section 9 of this Agreement shall also be
for the benefit of the directors and officers of the Company and any person or
persons who control the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act. No purchaser of Notes from the Initial
Purchasers will be deemed a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein shall be governed by
and construed in accordance with the laws of the state of New York applicable to
contracts made and to be performed wholly therein, without giving effect to any
provisions thereof relating to conflicts of law.
16. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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