EXHIBIT 1.1
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
$275,000,000 5.50% Junior Subordinated Convertible Debentures Due 2033
PURCHASE AGREEMENT
May 20, 2003
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The ▇▇▇▇▇▇▇▇ Companies, Inc. (the "COMPANY"), a Delaware corporation,
proposes to issue and sell $275,000,000 aggregate principal amount of its 5.50%
Junior Subordinated Convertible Debentures Due 2033 (the "FIRM SECURITIES;") to
▇▇▇▇▇▇ Brothers Inc. (the "INITIAL PURCHASER"). The Company also proposes to
issue and sell to the Initial Purchaser not more than $25,000,000 aggregate
principal amount of its 5.50% Junior Subordinated Convertible Debentures Due
2033 (the "ADDITIONAL SECURITIES") if requested by the Initial Purchaser as
provided in Section 3 hereof. The Firm Securities and the Additional Securities
are herein collectively called the "SECURITIES". The Securities will be issued
pursuant to an Indenture (the "INDENTURE") between the Company and JPMorgan
Chase Bank, as Trustee (the "TRUSTEE"). The Securities will be convertible at
the option of the holders thereof into shares of common stock, par value $1 per
share, of the Company (the "COMMON STOCK") as described in the Offering
Memorandum (as defined herein).
The Company hereby confirms its agreement with the Initial Purchaser to
issue and sell all of the Securities to the Initial Purchaser, on the terms and
conditions set forth herein. The Securities will be offered and sold to the
Initial Purchaser, without registration under the Securities Act of 1933, as
amended (the "SECURITIES Act"), in reliance upon an exemption from the
registration requirements of the Securities Act.
In connection with the sale of the Securities, the Company will deliver
to the Initial Purchaser as soon as practicable after the date of this
Agreement, copies of a final confidential offering memorandum, dated May 20,
2003 (together with all amendments and supplements thereto, and together with
all documents
incorporated by reference therein, the "OFFERING MEMORANDUM"), relating to the
Securities. All references in this Agreement to the Offering Memorandum include
the documents incorporated by reference therein. The Company hereby confirms
that it has authorized the use of the Offering Memorandum in connection with the
offer and sale of the Securities.
The Company understands that the Initial Purchaser proposes to make
offerings ("EXEMPT RESALES") of the Securities only on the terms and in the
manner set forth in the Offering Memorandum and Section 3 hereof, as soon as the
Initial Purchaser deems advisable after this Agreement has been executed and
delivered only to persons in the United States whom the Initial Purchaser
reasonably believes to be "qualified institutional buyers" ("QIBs") as defined
in Rule 144A under the Securities Act, as such rule may be amended from time to
time ("RULE 144A"), or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchaser 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.
The holders of the Securities will be entitled to the benefit of a
Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to
which the Company will file a registration statement (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission (the "COMMISSION")
registering the Securities under the Securities Act.
1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, the Initial Purchaser that
as of the date hereof and at the Closing Date (as defined herein):
(a) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Offering Memorandum and
is duly qualified to do business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the financial condition, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole (a "MATERIAL ADVERSE EFFECT");
(b) Each significant subsidiary of the Company (as
defined in Rule 1-02 of Regulation S-X under the Securities Act (each,
a
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"SIGNIFICANT SUBSIDIARY" and collectively, "SIGNIFICANT SUBSIDIARIES")
has been duly organized or validly formed, is validly existing and in
good standing under the laws of the jurisdiction of its formation or
incorporation, has the power (corporate or other) and authority to own
its property and to conduct its business as described in the Offering
Memorandum and is duly qualified to do business and is in good standing
in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect;
(c) The Company and its Significant Subsidiaries each has
all consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities, and all
courts or other tribunals (collectively, the "LICENSES") necessary to
own, hold, or lease, as the case may be, and to operate its properties
and to carry on its business as presently conducted, except where the
failure to possess such Licenses could not reasonably be expected to
have a Material Adverse Effect, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to
revocation or modification of any such Licenses, except to the extent
that any such revocation or modification would not have a Material
Adverse Effect;
(d) The Company has an authorized capitalization as set
forth in the Offering Memorandum; and all of the issued shares of
capital stock of each Significant Subsidiary (in the case of each
Significant Subsidiary which is a corporation) have been duly
authorized and validly issued and are fully paid and non-assessable
and, except as disclosed in the Offering Memorandum, are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(e) Each of the Company and its Significant Subsidiaries
(i) is in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its
business as presently conducted and (iii) is in compliance with all
terms and conditions of any such permit, license or approval, except,
with respect to (i), (ii) and (iii), as may be disclosed in the
Offering Memorandum and except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other
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approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not be reasonably likely to,
singly or in the aggregate, have a Material Adverse Effect;
(f) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by the
Company or any of its Significant Subsidiaries (or, to the knowledge of
the Company, any of their predecessors in interest) at, upon or from
any of the property now or previously owned or leased by the Company or
its Significant Subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which
would require remedial action under any applicable law, ordinance,
rule, regulation, order, judgment, decree or permit, except as may be
disclosed in the Offering Memorandum and except for any violation or
remedial action which would not be reasonably likely to have,
singularly or in the aggregate, a Material Adverse Effect; there has
been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to
or caused by the Company or any of its Significant Subsidiaries or with
respect to which the Company or any of its Significant Subsidiaries
have knowledge, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not be reasonably
likely to have, singularly or in the aggregate, a Material Adverse
Effect; and the terms "hazardous wastes", "toxic wastes", "hazardous
substances" and "medical wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations
with respect to environmental protection;
(g) The Company has filed all material tax returns which
are required to be filed by it and has paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Company,
except where the same may be contested in good faith by appropriate
proceedings, and where the Company has maintained in accordance with
generally accepted accounting principles appropriate reserves for the
accrual of any of the same. The charges, accruals and reserves on the
books of the Company in respect of taxes or other governmental charges
are, in the opinion of the Company, adequate;
(h) The Company is not, and immediately following the
consummation of the offering of the Securities and the application of
the
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proceeds therefrom will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended;
(i) The Indenture has been duly authorized by the Company
and, assuming due authorization, execution and authentication by the
Trustee, the Indenture, when duly executed and delivered by the
Company, will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally or by general principles of
equity (regardless of whether considered in a proceeding in equity or
at law);
(j) The Securities have been duly authorized by the
Company and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Initial Purchaser, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company, enforceable
in accordance with their terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally or by general principles of equity (regardless of whether
considered in a proceeding in equity or at law);
(k) On each Closing Date (as defined herein), the
Securities and the Indenture will conform as to legal matters to the
descriptions thereof contained in the Offering Memorandum;
(1) The authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the
Offering Memorandum and all of the outstanding shares of Common Stock
have been duly authorized and validly issued, are fully paid and
non-assessable and are not subject to any preemptive or similar
statutory rights;
(m) The Common Stock issuable upon conversion of the
Securities has been duly authorized by the Company and validly reserved
for issuance by the Company upon such conversion by all necessary
corporate action, and such Common Stock, when duly issued upon
conversion, will be validly issued, fully paid and non-assessable; no
holder thereof will be subject to personal liability solely by reason
of being such a holder; the issuance of such Common Stock upon such
conversion will not
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be subject to preemptive rights; and the preferred stock purchase
rights under the Rights Agreement dated as of February 6, 1996 (the
"RIGHTS AGREEMENT") to which holders of shares of such Common Stock
will be entitled, have been duly authorized and, when issued together
with such shares of Common Stock will be validly issued and the Common
Stock will conform in all material respects to the description thereof
contained in the Offering Memorandum;
(n) The Rights Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and
binding agreement of the Company enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally or by
general principles of equity (regardless of whether considered in a
proceeding in equity or at law);
(o) This Agreement has been duly authorized, executed and
delivered by the Company;
(p) The Registration Rights Agreement has been duly
authorized by the Company and, when duly executed and delivered by the
Company, and assuming due authorization, execution and delivery by or
on behalf of the Initial Purchaser, will be a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally or by general principles of equity
(regardless of whether considered in a proceeding in equity or at law)
and except as rights to indemnification and contribution thereunder may
be limited by applicable law;
(q) The execution and delivery by the Company of this
Agreement, the Indenture and the Registration Rights Agreement, the
issuance and delivery of the Securities, the consummation by the
Company of the transactions contemplated herein and therein and the
compliance by the Company with the terms of this Agreement, the
Indenture, the Securities and the Registration Rights Agreement have
been duly authorized by all necessary action (corporate or other) on
the part of the Company, and do not and will not (i) result in any
violation of the charter or by-laws of the Company or (ii) conflict
with, or result in a breach of any of the terms or provisions of, or
constitute a default or result in the
6
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company or any of its affiliates is a party or by which the Company or
any of its affiliates is bound (except for such conflicts, breaches or
defaults that could not reasonably be expected to have a Material
Adverse Effect), nor does or will such action result in any violation
of any statute applicable to the Company or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and assuming
the accuracy of the representations, warranties and agreements of the
Initial Purchaser in Section 2 hereof and Section 7 hereof, no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issuance and sale of the Securities by the Company to the Initial
Purchaser as contemplated by this Agreement, except as may be required
by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Securities and by the federal and state
securities laws with respect to the obligations of the Company under
the Registration Rights Agreement;
(r) The Company is not (i) in violation of its charter or
by-laws, as applicable, (ii) in default, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, obligation,
agreement, covenant or condition contained in any material contract,
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it is bound
or which any of its properties or assets may be subject or (iii) in
violation of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject, except
with respect to (ii) or (iii), for any such violations or defaults that
would not be reasonably likely, singly or in the aggregate, to have a
Material Adverse Effect;
(s) The Company has filed all documents with the
Securities and Exchange Commission (the "COMMISSION") that it is
required to file under the Securities Act and the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), as applicable, and the
rules and regulations of the Commission thereunder, and such documents
conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and each document so filed or
to be filed and incorporated by reference in the Offering Memorandum or
any further amendment or supplement thereto, complied or will comply
when so filed in all material respects to
7
the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and, when read together with the other information in the Offering
Memorandum, or any amendment or supplement thereto furnished by the
Company, do not or will not as of the applicable Closing Date, 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 not misleading;
(t) The Offering Memorandum as of its date will not, and
the Offering Memorandum (as amended or supplemented, if the Company
shall have furnished any amendments or supplements thereto) will not as
of the applicable Closing Date, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that this
representation and warranty shall not be made to the Initial Purchaser
with regard to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by it;
(u) Neither the Company nor any of its Significant
Subsidiaries has sustained, since the date of the latest audited
financial statements included or incorporated by reference in the
Offering Memorandum, any 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, which would be reasonably likely to result in any
Material Adverse Effect, or any development involving a material
adverse change in or affecting the financial condition, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Offering Memorandum, and, since the respective dates as of which
information is given in the Offering Memorandum or since the date of
the Offering Memorandum, there has not been (i) any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries, (ii) any material adverse change in or affecting the
financial condition, results of operations, business or prospects of
the Company and its subsidiaries, taken as a whole or (iii) any
transaction entered into by the Company or any of its Significant
Subsidiaries, other than in the ordinary course of business, that is
material to the Company and its subsidiaries, taken as a whole,
otherwise than as disclosed, in each case, in the Offering Memorandum;
(v) The Company and its Significant Subsidiaries have
good and marketable title in fee simple to, or valid rights of way,
easements,
8
leaseholds, licenses and consents to use, all real property and good
and marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects, except such
as are described in the Offering Memorandum or would not reasonably be
expected to, singly or in the aggregate, have a Material Adverse
Effect; and all real property and buildings held under lease by the
Company and its Significant Subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as would not
reasonably be expected to, singly or in the aggregate, have a Material
Adverse Effect and do not interfere in any material respect with the
use made and proposed to be made of such property and buildings by the
Company or such Significant Subsidiary, as the case may be;
(w) The Company and its Significant Subsidiaries carry,
or are covered by, insurance in such amounts and covering such risks as
is reasonable in accordance with customary practices for companies
engaged in similar businesses in similar industries for the conduct of
their respective businesses and the value of their properties;
(x) The consolidated financial statements filed with or
as part of any document filed with the Commission present fairly in all
material respects the financial position, results of operations and
changes in financial position of the Company and its subsidiaries at
the dates and for the periods indicated, all in conformity with
generally accepted accounting principles (subject, in the case of
interim statements, to normal year-end audit adjustments); and the
Company has no material contingent obligation which is not disclosed in
such financial statements or in the Offering Memorandum;
(y) Ernst & Young LLP, who have reported upon the audited
financial statements and schedules included or incorporated by
reference in the Offering Memorandum, are independent auditors within
the meaning of the rules and regulations promulgated under the
Securities Act;
(z) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company with respect to any securities of the Company owned
or to be owned by such person (other than the Securities) to include
such securities with the securities to be registered pursuant to the
registration statement to be filed pursuant to the Registration Rights
Agreement;
(aa) The Company (i) makes and keeps books and records
which accurately reflect transactions and dispositions of the Company's
assets
9
and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's general or specific authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to
its assets is permitted only in accordance with management's general or
specific authorization and (D) the recorded accountability for its
assets is compared with existing assets at reasonable intervals;
(bb) (i) The Company has established and maintains
disclosure controls and procedures (as such term is defined in Rule 13
a-14 under the Exchange Act); (ii) such disclosure controls and
procedures are designed to ensure that information required to be
disclosed by the Company in the reports it files or submits under the
Exchange Act is accumulated and communicated to the Company's
management, including its principal executive officer and its principal
financial officer, as appropriate, to allow timely decisions regarding
required disclosure; and (iii) such disclosure controls and procedures
are effective in all material respects to perform the functions for
which they were established;
(cc) Since the date of the filing of the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, the
Company's auditors and the audit committee of the board of directors of
the Company (or persons fulfilling the equivalent function) have not
been advised of (i) any significant deficiencies in the design or
operation of internal controls which could adversely affect the
Company's ability to record, process, summarize and report financial
data nor any material weaknesses in internal controls; and (ii) any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal
controls;
(dd) Since the date of the filing of the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2003,
there have been no significant changes in internal controls or in other
factors that could significantly affect internal controls, including
any corrective actions with regard to significant deficiencies and
material weaknesses;
(ee) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined by ERISA) for which the Company would have any material
liability; the
10
Company has not incurred and does not expect to incur material
liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, and "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "CODE"); and
each "pension plan" for which the Company would have any liability that
is intended to be qualified under Section 401 (a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification;
(ff) Other than as set forth or incorporated by reference
in the Offering Memorandum, there is no action, suit or proceeding
before or by any government, governmental instrumentality or court,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Significant
Subsidiary or to which any of their respective properties are subject
that could reasonably be expected to result in any Material Adverse
Effect, or that could reasonably be expected to adversely affect the
consummation of the transactions contemplated in this Agreement;
(gg) Assuming the accuracy of the representations,
warranties and agreements of the Initial Purchaser in Section 2 hereof,
compliance by the Initial Purchaser with the offering and transfer
procedures and restrictions described in the Offering Memorandum and
the accuracy of the representations and warranties deemed to be made in
the Offering Memorandum by purchasers to whom the Initial Purchaser
initially resells the Securities, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial
Purchaser or in connection with the initial resale of the Securities by
the Initial Purchaser, in each case, in the manner contemplated by this
Agreement and the Offering Memorandum, to register the Securities under
the Securities Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended;
(hh) The Offering Memorandum has been prepared by the
Company for use in connection with the Exempt Resales. No decree or
order preventing the use of the Offering Memorandum, or any order
asserting that the transactions contemplated by this Agreement are
subject to the registration requirements of the Securities Act has been
issued and no proceeding for that purpose has commenced or is pending
or, to the knowledge of the Company, is contemplated;
(ii) The Company, its affiliates and any person acting on
its or their behalf (other than the Initial Purchaser in connection
with the
11
transactions contemplated hereby, about which the Company makes no
representation) have not, directly or indirectly:
(i) offered or sold the Securities in the United
States by any form of general solicitation or general
advertising (within the meaning of Regulation D under the
Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; or
(ii) sold, solicited any offers to buy or offered
to sell or otherwise negotiated in respect of any security in
a manner that would require registration of the Securities
under the Securities Act in accordance with the theory of
"integration" referred to in Regulation D under the Securities
Act; and
(jj) The Securities satisfy the requirements of Rule
144A(d)(3) under the Securities Act.
The Company (i) acknowledges that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant
hereto, counsel to the Company and counsel to the Initial Purchaser will rely
upon the accuracy and truth of the foregoing representations and (ii) hereby
consents to such reliance.
2. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASER. The
Initial Purchaser hereby represents and warrants to, and agrees with the Company
that the Initial Purchaser (i) is an institutional "accredited investor" (as
defined in Regulation D) with such knowledge and experience in financial and
business matters as are necessary to evaluate the merits and risks of an
investment in the Securities; (ii) is not acquiring the Securities with a view
to any distribution thereof that would violate the Securities Act or the
securities or blue sky laws of any state or country, (iii) has received all
information it considers necessary to evaluate the merits and risks of an
investment in the Securities, (iv) has not and will not solicit offers for, or
offer to sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the Securities Act,
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act; and (v) has and will solicit offers for the Securities
only from, and will offer, sell or deliver the Securities, as part of their
initial offering, only to persons in the United States it reasonably believes to
be QIBs to whom notice has been given that such sale or delivery is being made
in reliance on Rule 144A or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchaser that each such
account
12
is a QIB to whom notice has been given that such sale or delivery is being made
in reliance on Rule 144A.
The Initial Purchaser (i) acknowledges that the Company and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant
hereto, counsel to the Company and counsel to the Initial Purchaser will rely
upon the accuracy and truth of the foregoing representations and (ii) hereby
consents to such reliance.
3. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to
sell and the Initial Purchaser, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase from the Company the Firm Securities at 97% of their
principal amount (the "PURCHASE PRICE") plus accrued interest, if any, from May
28, 2003 to the date of payment and delivery.
In addition, the Company hereby grants to the Initial Purchaser an
option to purchase up to $25,000,000 aggregate principal amount of the
Additional Securities at the Purchase Price plus accrued interest, if any, from
May 28, 2003 to the date of payment and delivery. Such option is exercisable as
provided in Section 4 hereof.
4. PAYMENT AND DELIVERY. Payment for the Firm Securities shall be
made by wire or other immediately available funds to the order of the Company to
a bank account designated by the Company at 10:00 A.M., New York time, on May
28, 2003, or at such other time on the same or such other date, as shall be
agreed by the parties and designated in writing by the Initial Purchaser. The
time and date of such payment are herein referred to as the "FIRST CLOSING
DATE."
Payment for the Firm Securities shall be made against delivery to the
Initial Purchaser of one or more global securities representing the Firm
Securities (collectively, the "GLOBAL FIRM SECURITIES") registered in the name
of Cede & Co. (the "GLOBAL HOLDER") with any transfer taxes payable in
connection with the transfer of the Firm Securities to the Initial Purchaser
duly paid. Such Global Firm Securities shall be made available to the Initial
Purchaser for checking at least twenty four hours prior to the First Closing
Date, at the offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, New York, New York.
The option granted in Section 3 will expire 30 days after the date of
this Agreement, and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Initial Purchaser. Such notice
shall set forth the aggregate principal amount of Additional Securities as to
which the option is being exercised and when such Additional Securities are to
be delivered; provided, however, that this date and time shall not be earlier
than the First
13
Closing Date nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. Payment for the
Additional Securities shall be made by wire or other immediately available funds
to the order of the Company to the account designated by the Company at 10:00
A.M., New York time, on the date specified in such notice, or at such other time
on the same or such other date, as shall be agreed by the parties and designated
in writing by the Initial Purchaser. The time and date of such payment are
herein referred to as the "ADDITIONAL CLOSING DATE" and the First Closing Date
and any Additional Closing Date are sometimes each referred to herein as a
"CLOSING DATE".
Payment for the Additional Securities shall be made against
delivery to the Initial Purchaser of one or more global securities representing
the Additional Securities (collectively, the "GLOBAL ADDITIONAL SECURITIES")
registered in the name of the Global Holder with any transfer taxes payable in
connection with the transfer of the Additional Securities to the Initial
Purchaser duly paid. Such Global Additional Securities shall be made available
to the Initial Purchaser for checking at least twenty four hours prior to the
Additional Closing Date, at the offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, New York, New
York.
5. CONDITIONS TO THE INITIAL PURCHASER'S OBLIGATIONS. The
obligations of the Initial Purchaser are subject to the following conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the applicable Closing Date:
(i) there shall not have occurred any
downgrading, nor shall any notice have been received of (A)
any intended or potential downgrading or (B) any review or
possible change that does not indicate the direction of a
possible change, in the rating accorded any of the securities
of the Company by any "nationally recognized statistical
rating organization," as such term is defined for purposes of
Rule 436(g)(2) under the Act, and
(ii) there shall not have occurred any material
adverse change, or any development which could reasonably be
expected to result in a prospective material adverse change,
in the financial condition, or in the earnings, business or
operations of the Company, from that set forth in the Final
Offering Memorandum.
(b) The Initial Purchaser shall have received on the
applicable Closing Date a certificate, dated such Closing Date and
signed by an executive officer of the Company, to the effect set forth
in clauses (a)(i)
14
and (ii) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and
correct as of such Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part
to be performed or satisfied hereunder on or before such Closing Date.
The person signing and delivering such certificate
may rely upon the best of such person's knowledge after due inquiry as
to proceedings threatened.
(c) The Initial Purchaser shall have received on the
applicable Closing Date an opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Senior
Vice President and General Counsel of ▇▇▇▇▇▇▇▇, dated such Closing
Date, with such exceptions and qualifications as shall be agreed by the
Initial Purchaser, to the effect set forth in Exhibit A.
The opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. described in
Exhibit A shall be rendered to the Initial Purchaser at the request of
the Company and shall so state therein.
(d) The Initial Purchaser shall have received on the
applicable Closing Date an opinion from White & Case LLP, special
counsel for the Company, dated such Closing Date, with such exceptions
and qualifications as shall be agreed by the Initial Purchaser, to the
effect set forth in Exhibit B.
(e) The Initial Purchaser shall have received on the
applicable Closing Date an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel
for the Initial Purchaser, dated such Closing Date, covering the
matters referred to in paragraph 10 of Exhibit A, and such other
matters as shall be agreed by the Initial Purchaser.
With respect to paragraph 10 of Exhibit A, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ may
state that their opinion and belief are based upon their participation in the
preparation of the Offering Memorandum (excluding any documents incorporated by
reference therein) and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified. ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ may also state that
they have relied solely on the opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., as to matters
relating to the regulation of the Company by the Federal Energy Regulatory
Commission.
(f) The Initial Purchaser shall have received on the
applicable Closing Date a letter, in form and substance satisfactory to
the Initial
15
Purchaser, from Ernst & Young LLP, independent public accountants,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained or
incorporated by reference in the Offering Memorandum.
(g) Prior to the First Closing Date, the Initial
Purchaser and the Company shall have validly entered into the
Registration Rights Agreement, in form and substance reasonably
satisfactory to the Initial Purchaser and the Company.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Initial Purchaser herein contained, the Company, its
affiliates and any person acting on its or their behalf, covenant with the
Initial Purchaser as follows:
(a) The Company, its affiliates and any person acting on
its or their behalf will not, directly or indirectly:
(i) offer or sell the Securities in the United
States by any form of general solicitation or general
advertising (within the meaning of Regulation D under the
Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; or
(ii) sell, solicit any offers to buy or offer to
sell or otherwise negotiate in respect of any security in a
manner that would require registration of the Securities under
the Securities Act in accordance with the theory of
"integration" referred to in Regulation D under the Securities
Act.
(b) While any Security remains outstanding, during any
period in which the Company is not subject to Section 13 or Section
15(d) of the Exchange Act and its securities are not exempt from
Section 12(g) thereof pursuant to Rule 12g3-2(b) thereunder, the
Company will upon request make available to the Initial Purchaser, to
any holder of Securities, and to any prospective purchaser designated
by any holder of Securities, the information regarding the Company
specified in, and satisfying the requirements of, Rule 144A(d)(4) under
the Securities Act.
(c) The Company will prepare the Offering Memorandum in a
form approved by the Initial Purchaser, and before amending or
supplementing the Offering Memorandum, will furnish to the Initial
16
Purchaser a copy of each such proposed amendment or supplement and will
not deliver any such proposed amendment or supplement to which the
Initial Purchaser reasonably objects.
(d) As soon as practicable but in no event later than the
New York Business Day (as defined below) next succeeding the date of
this Agreement and from time to time during the period that in the
reasonable opinion of counsel for the Initial Purchaser a Offering
Memorandum is required by law to be delivered in connection with Exempt
Resales by the Initial Purchaser, the Company will furnish the Initial
Purchaser, in New York City, with copies of the Offering Memorandum and
each amendment or supplement thereto, together with any independent
accountants' report contained in the Offering Memorandum, and any
amendment or supplement containing amendments to the financial
statements covered by such report, signed by the accountants, and
additional copies thereof in such quantities as the Initial Purchaser
from time to time reasonably requests, and if, at any time prior to the
consummation of any Exempt Resale, any event shall have occurred as a
result of which, in the judgment of the Company or in the opinion of
counsel for the Initial Purchaser, the Offering Memorandum 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 when such Offering Memorandum is delivered, not misleading,
or, if for any other reason it shall be necessary or desirable, during
such same period to amend or supplement the Offering Memorandum, the
Company will prepare and furnish without charge to the Initial
Purchaser and to any dealer in securities as many copies as the Initial
Purchaser may from time to time reasonably request of the amended
Offering Memorandum or supplement to the Offering Memorandum which will
correct such statement or omission or effect such compliance. For the
purposes of this paragraph, "New York Business Day" shall mean any day
that is not a day on which banking institutions in New York are
generally authorized or required by law or regulation to close;
(e) During the period of ninety (90) days from the date
of this Agreement, the Company will not, without the prior written
consent of the Initial Purchaser (A) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any
Securities, Common Stock or any similar securities or any security
convertible into or exercisable or exchangeable for or repayable with
Securities, Common Stock or similar securities; or
17
(B) directly or indirectly, enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, the economic
equivalent of ownership of any Securities, Common Stock or similar
securities or any security convertible into or exercisable or
exchangeable for or repayable with Securities, Common Stock or similar
securities whether any such swap or transaction is to be settled by
delivery of Securities, Common Stock or similar securities or by cash.
The foregoing sentence shall not apply (i) in connection with the
offering and sale of any Securities to the Initial Purchaser pursuant
to this Agreement; (ii) to any purchases, issuances or grants of
options, rights or warrants under the Company's employee or director
compensation and benefits plans, or used for similar employee
compensation or benefit purposes; (iii) to any purchases and issuances
under the Company's direct stock purchase and dividend reinvestment
plan or (iv) to shares of Common Stock used as consideration for
acquisitions or issued in connection with strategic alliances (provided
that the recipient of any such shares of Common Stock agrees to be
bound by the transfer restrictions set forth herein for the unexpired
remaining term thereof);
(f) The Company will arrange for the qualification of the
Securities for sale under the laws ("BLUE SKY LAWS") of such states in
the United States as the Initial Purchaser designates and will continue
such qualifications in effect so long as required for the resale of the
Securities by the Initial Purchaser; provided that the Company will not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any such state.
(g) The Company consents to the use of the Offering
Memorandum, in accordance with the Offering Memorandum and the Blue Sky
Laws of the jurisdictions in which the Securities are offered by the
Initial Purchasers and by all dealers to whom Securities may be sold,
in connection with the offering and sale of the Securities.
(h) So long as any of the Securities are outstanding, the
Company will furnish to the Initial Purchaser (i) promptly after it is
available, a copy of each report of the Company filed with any stock
exchange or the Commission and (ii) from time to time such other
information concerning the Company as the Initial Purchaser may
reasonably request.
(i) The Company and its affiliates have not taken, nor
will any of them take, directly or indirectly, any action designed to
or that might reasonably be expected to cause or result in
stabilization or manipulation
18
of the price of the Securities or the Common Stock to facilitate the
sale or resale of the Securities. Except as permitted by the Securities
Act, the Company will not distribute any offering material in
connection with the Exempt Resales.
(j) The Company will take all reasonable action necessary
to permit the Securities to be designated Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") market securities in
accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. relating to trading in the
PORTAL market.
(k) The Company will take all reasonable action necessary
to enable Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc. ("S&P"), and ▇▇▇▇▇'▇ Investors Service, Inc.
("MOODY'S") to provide their respective ratings of the Securities.
(1) The Company will cooperate with the Initial Purchaser
and use its reasonable best efforts to permit the Securities to be
eligible for clearance and settlement through the facilities of The
Depository Trust Company.
(m) The Company will use an amount equal to the net
proceeds from the offering of the Securities solely as set forth under
the caption "Use of Proceeds" in the Offering Memorandum.
(n) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company
will pay all expenses incident to the performance of its obligations
under this Agreement, including: (i) expenses associated with the
preparation, printing and distribution of the Offering Memorandum and
all amendments and supplements thereto; (ii) the preparation, issuance
and delivery of the Securities; (iii) the fees and disbursements of
counsel for the Company and the Company's accountants and of the
Trustee and its counsel, (iv) the costs of qualification of the
Securities under state securities or blue sky laws in accordance with
the provisions of Section 6(f), including filing fees and the fees and
disbursements of counsel for the Initial Purchaser in connection
therewith and in connection with the preparation of any blue sky or
legal investment memoranda; (v) the costs of printing and delivery to
the Initial Purchaser in quantities as herein above stated of copies of
the Offering Memorandum and any amendments or supplements thereto; (vi)
the costs of printing and delivery to the Initial Purchaser of copies
of any blue sky or legal investment memoranda; (vii)
19
any fees charged by rating agencies for the rating of the Securities;
(viii) the fees (including listing fees) and expenses incurred in
connection with the application for quotation of the Securities in the
PORTAL market; (ix) any expenses incurred by the Company in connection
with any "road show" presentation to potential investors, including
without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval
of the Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and (x) the
performance by the Company of their other obligations under this
Agreement to the extent not provided for above.
(o) The Company will use its reasonable best efforts to
do and perform all things required or necessary to be done and
performed under this Agreement by them prior to the applicable Closing
Date, and to satisfy all conditions precedent to the Initial
Purchaser's obligations hereunder to purchase the Securities.
7 COVENANTS OF THE INITIAL PURCHASER.
(a) The Initial Purchaser acknowledges that the
Securities have not been and will not be registered under the
Securities Act and agrees that it, its affiliates and any person acting
on its or their behalf:
(i) will not offer or sell the Securities in the
United States by any form of general solicitation or general
advertising (within the meaning of Regulation D under the
Securities Act) or in any manner involving a public offering
within the meaning of Section 4 (2) if the Securities Act; and
(ii) will offer or sell the Securities only to
persons whom it reasonably believes to be qualified
institutional buyers ("QIBS") within the meaning of Rule 144 A
under the Securities Act in compliance with Rule 144 A.
8. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless the
Initial Purchaser, its directors, its officers, its employees and each
person, if any, who controls the Initial Purchaser within the meaning
of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including,
20
without limitation, any legal or other expenses reasonably incurred by
the Initial Purchaser or any such controlling person in connection with
defending or investigating any such action or claim) caused by (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Offering Memorandum or any amendment thereof (as
amended or supplemented, if the Company shall have furnished any
amendments or supplements thereto) or (ii) caused by any omission or
alleged omission to state in the Offering Memorandum or any amendment
thereof (as amended or supplemented, if the Company shall have
furnished any amendments or supplements thereto) a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages
or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to
the Initial Purchaser furnished to the Company in writing by the
Initial Purchaser expressly for use in the Offering Memorandum or any
amendments or supplements thereto.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Company, its directors, its officers, its employees and
each person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Company to
the Initial Purchaser, but only with reference to information relating
to the Initial Purchaser furnished to the Company in writing by the
Initial Purchaser expressly for use in the Offering Memorandum or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to either paragraph (a) or (b)
of this Section 8, such person (the "INDEMNIFIED PARTY") shall promptly
notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel, (ii) the
indemnifying party shall have failed to assume the defense of such
action or employ counsel reasonably
21
satisfactory to the indemnified party or (iii) the named parties to any
such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. Such firm shall be
designated in writing by the Initial Purchaser, in the case of the
parties indemnified pursuant to Section 8(a), and by the Company, in
the case of parties indemnified pursuant to Section 8(b). It is
understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable
for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be reimbursed as they are incurred. The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be
unreasonably withheld), settle, compromise or consent to the entry of
any judgment with respect to any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding and does not
include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 8 is unavailable to an indemnified
party or insufficient in respect of any losses, claims., damages or
liabilities referred to therein, then each indemnifying party under
such paragraph, in lieu of
22
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the Initial Purchaser on the other hand from the
offering and sale of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Initial Purchaser on the other hand
in connection with the statements or omissions that 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 Initial Purchaser on the other hand in
connection with the offering of the Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering
of the Securities (before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Initial Purchaser, in each case as set forth in the Offering
Memorandum, bears to the aggregate initial offering price of the
Securities. The relative fault of the Company on the one hand and the
Initial Purchaser on the other hand 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 by the
Initial Purchaser and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
(e) The Company and the Initial Purchaser agree that it
would not be just or equitable if contribution pursuant to this Section
8 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) of this Section 8. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or
appearing as a third party witness in any such action or claim.
Notwithstanding the provisions of this Section 8, the Initial Purchaser
shall not be required to contribute any amount in excess of the amount
by which the total price at which the Securities purchased by it
exceeds the amount of any damages that the Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The remedies provided
for in
23
this Section 8 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at
law or in equity.
(f) The indemnity and contribution provisions contained
in this Section 8 and the representations, warranties and other
statements of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on
behalf of the Initial Purchaser or any person controlling the Initial
Purchaser or by or on behalf of the Company, its officers or directors
or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.
(g) The Initial Purchaser confirms and the Company
acknowledges that the statements with respect to the offering of the
Securities by the Initial Purchaser set forth on the last paragraph of
the cover page, the second sentence of the second paragraph of text
under "Plan of Distribution" and the third, fourth, eighth, ninth,
tenth, eleventh and twelfth paragraphs of text under "Plan of
Distribution" in the Offering Memorandum are correct and constitute the
only information concerning the Initial Purchaser furnished in writing
to the Company by or on behalf of the Initial Purchaser specifically
for inclusion in the Offering Memorandum.
9. TERMINATION. This Agreement shall be subject to termination by
notice given by the Initial Purchaser to the Company, if (a) after the execution
and delivery of this Agreement and prior to the applicable Closing Date any of
the events described in Section 5(a) shall have occurred or (b) (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United States
shall have occurred or (iv) there shall have occurred any outbreak or escalation
of hostilities (including, without limitation, an act of terrorism) or any
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of the Initial
Purchaser, impracticable or inadvisable to market the Securities on the terms
and in the manner contemplated in the Offering
24
Memorandum. Notice of such cancellation shall be given to the Company by
telecopy or telephone but shall be subsequently confirmed by letter.
10. EFFECTIVENESS. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
11. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. If this
Agreement shall be terminated by the Initial Purchaser because of any failure or
refusal on the part of the Company to comply with the terms or to fulfill any of
the conditions of this Agreement, or if for any reason the Company shall be
unable to perform its obligations under this Agreement, the Company will
reimburse the Initial Purchaser for all out-of-pocket expenses (including the
fees and disbursements of its counsel) reasonably incurred by the Initial
Purchaser hi connection with this Agreement and the offering contemplated
hereunder.
12. NOTICES. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or
sent by mail, telex or facsimile transmission to ▇▇▇▇▇▇. Brothers Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Syndicate Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇) with a copy, in the case of
any notice pursuant to Section 8(c), to the Director of Litigation,
Office of the General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission c/o The ▇▇▇▇▇▇▇▇ Companies, Inc.,
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer (Fax:
▇▇▇-▇▇▇-▇▇▇▇).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
13. SUCCESSORS. This Agreement shall inure to the benefit of and
be binding upon the Initial Purchaser, the Company and their respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
the Initial Purchaser within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the
25
persons referred to in this Section 13, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
15. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
16. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
17. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
18. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
26
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchaser.
Very truly yours,
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President Finance &
CFO
Accepted as of the date hereof:
By: ▇▇▇▇▇▇ BROTHERS INC.
_______________________________
Name:
Title:
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchaser.
Very truly yours,
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
By: ___________________________
Name:
Title:
Accepted as of the date hereof:
By: ▇▇▇▇▇▇ BROTHERS INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
EXHIBIT A
OPINION OF ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ESQ.,
SENIOR VICE PRESIDENT AND GENERAL COUNSEL OF
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
1. The Company and each of its Significant Subsidiaries have been
duly incorporated or otherwise validly organized or validly formed and are
validly existing in good standing under the laws of their respective
jurisdictions of formation or incorporation, have the requisite power and
authority to own their property and to conduct their business as described in
the Offering Memorandum and are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, except to the extent such failure to be qualified or in good
standing would not reasonably be expected to have a Material Adverse Effect,
and all of the issued shares of capital stock of each Significant Subsidiary
have been duly and validly authorized and issued and are fully paid,
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
2. The Company and its Significant Subsidiaries each has all
Licenses necessary to own, hold, or lease, as the case may be, and to operate
its properties and to carry on its business as presently conducted, except where
the failure to possess such Licenses could not reasonably be expected to have a
Material Adverse Effect, and, to the best of such counsel's knowledge, neither
the Company nor any of its subsidiaries has received any notice of proceedings
relating to revocation or modification of any such Licenses, except to the
extent that any such revocation or modification could not reasonably be expected
to have a Material Adverse Effect;
3. The Company is not in violation of its charter or bylaws, and,
to the best of such counsel's knowledge, the Company is not (i) in default, and
no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any Material Contract, or (ii) in violation
of any law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject, except as disclosed in the Offering
Memorandum, and in case of (i) and (ii), for such defaults or violations are not
reasonably expected to have a Material Adverse Effect;
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4. Each of the Purchase Agreement, the Registration Rights
Agreement, the Indenture, the Rights Agreement and the Securities have been duly
authorized, executed, and delivered by the Company.
5. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Registration Rights Agreement, the Securities and the Indenture will not
contravene any law applicable to the Company, or the Certificate of
Incorporation or By-laws of the Company or any Material Contract, or any
judgment, order, decree of any governmental body, agency or court having
jurisdiction over the Company. This paragraph 5 does not include any opinion
regarding any federal or state securities or Blue Sky laws or regulations.
6. The Company has filed all documents with the Commission that
it is required to file under the Exchange Act and the rules and regulations of
the Commission thereunder, and such documents (other than the financial
statements, including the notes thereto, and related schedules therein, and the
other financial and accounting data, as to which such counsel need express no
opinion) conformed, when filed, in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder;
7. To the best of such counsel's knowledge, other than as set
forth or incorporated by reference in the Offering Memorandum, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or threatened against
the Company or to which any of its properties are subject that could reasonably
be expected to result in any Material Adverse Effect, or that could reasonably
be expected to adversely affect the consummation of the transactions
contemplated by this Agreement;
8. All of the outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and non-assessable and are not
subject to any preemptive or similar statutory rights;
9. The Common Stock issuable upon conversion of the Securities
has been duly authorized by the Company and validly reserved for issuance by the
Company upon such conversion by all necessary corporate action, and such Common
Stock, when duly issued upon conversion, will be validly issued, fully paid and
non-assessable; no holder thereof will be subject to personal liability solely
by reason of being such a holder; the issuance of such Common Stock upon such
conversion will not be subject to preemptive rights; and the preferred stock
purchase rights under the Rights Agreement to which holders of shares of such
Common Stock will be entitled, have been duly authorized and, when issued
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together with such shares of Common Stock will be validly issued and the Common
Stock will conform in all material respects to the description thereof contained
in the Offering Memorandum;
10. Such counsel shall state that such counsel or personnel under
such counsel's supervision have participated in conferences with officers and
other representatives of the Company, the Company's outside counsel,
representatives of the independent auditors for the Company, your
representatives and your counsel at which the contents of the Offering
Memorandum and related matters were discussed and, although such counsel is not
passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Offering Memorandum; on the basis of the foregoing, no facts
have come to such counsel's attention that have led such counsel to believe that
the Offering Memorandum, as of its date or as of the applicable Closing Date,
contained or contains an untrue statement of material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that such counsel need not express an opinion or belief with respect to the
financial statements, schedules and other financial and accounting data included
or incorporated by reference in the Offering Memorandum.
"MATERIAL CONTRACT" means all agreements and instruments included in the list of
exhibits in the Company's Annual Report on Form 10-K for the year ended December
31, 2002, Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 and
Current Reports on Form 8-K filed subsequent to such Annual Report (except for
employment agreements, stock option plans, stock election plans, stock incentive
plans, officer and director indemnification agreements and deferred compensation
plans, all of which are excluded).
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EXHIBIT B
OPINION OF WHITE & CASE LLP
1. The Securities, when executed and authenticated in accordance
with the terms of the Indenture and delivered to and paid for by the Initial
Purchaser, will be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and to general
equitable principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
2. The Indenture has been duly executed and delivered by the
Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights generally
and to general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
3. The Registration Rights Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and to general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at law), and
except to the extent that the rights to indemnity and contribution contained
therein may be limited by applicable state or federal securities laws or the
public policy underlying such laws.
4. The Purchase Agreement has been duly executed and delivered by
the Company.
5. The issuance of the Securities and the execution, delivery and
performance by the Company of the Purchase Agreement, the Indenture, the
Securities and the Registration Rights Agreement do not violate, or require any
filing with or approval of any governmental authority or regulatory body of the
State of New York or the United States of America under, any law or regulation
of
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the State of New York or the United States of America applicable to the Company,
except the declaration of effectiveness by the Commission of the registration
statement filed pursuant to the Registration Rights Agreement, the Common Stock
into which the Securities are convertible being accepted for listing on the New
York Stock Exchange, and such consents, approvals, authorizations, registrations
or qualifications as have been obtained and made and as may be required under
the state securities or "blue sky laws" in connection with the purchase and
distribution of the Securities by the Initial Purchaser (as to which we express
no opinion).
6. The execution, delivery and performance by the Company of the
Purchase Agreement, the Registration Rights Agreement, the Securities and the
Indenture will not violate (i) the Certificate of Incorporation or By-laws of
the Company, (ii) the terms of any Material Contract, or (iii) any order,
judgment or decree of any court or other agency of government known to such
counsel.
7. The Company is not, and immediately after giving effect to the
offering of the Securities and the application of the proceeds therefrom as
contemplated by the Offering Memorandum will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
8. The Common Stock issuable upon conversion of the Securities
has been duly authorized by the Company and validly reserved for issuance by the
Company upon such conversion by all necessary corporate action, and such Common
Stock, when duly issued upon conversion pursuant to the Indenture, will be
validly issued, fully paid and non-assessable; no holder thereof will be subject
to personal liability solely by reason of being such a holder; the issuance of
such Common Stock upon such conversion will not be subject to preemptive rights;
and the preferred stock purchase rights under the Rights Agreement to which
holders of shares of such Common Stock will be entitled, will be validly issued
and the Common Stock will conform in all material respects to the description
thereof contained in the Offering Memorandum.
9. The statements set forth in the Offering Memorandum under the
caption "Description of the Debentures", insofar as they purport to constitute a
summary of the terms of the Indenture, the Registration Rights Agreement and the
Securities fairly summarize in all material respects the terms thereof. The
authorized capital stock of the Company conforms as to legal matters to the
description thereof in the Final Offering Memorandum. The statements under the
caption "Certain United States Federal Income Tax Considerations," insofar as
such statements constitute matters of United States law, are accurate in all
material respects, subject to the qualifications and limitations set forth
therein.
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10. Assuming (i) the accuracy of the representations and
warranties of the Company set forth in Section 1 of this Agreement, (ii) the due
performance by the Company of the covenants and agreements set forth in Section
6 of this Agreement, (iii) the compliance by the Initial Purchaser with the
offering and transfer procedures and the restrictions described in the Offering
Memorandum and its covenants and agreements in Sections 2 and 7 of this
Agreement and (iv) the accuracy of the representations and warranties of the
Initial Purchaser set forth in Section 2 of this Agreement, the offer, sale and
delivery of the Securities to the Initial Purchaser in the manner contemplated
by this Agreement and the Offering Memorandum and the initial resale of the
Securities by the Initial Purchaser in the manner contemplated in the Offering
Memorandum and this Agreement, do not require registration under the Securities
Act or qualification of the Indenture or the Declaration under the TIA, it being
understood that such counsel expresses no opinion as to any subsequent resale of
any Security.
11. Such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent auditors for the Company, your
representatives and your counsel at which the contents of the Offering
Memorandum and related matters were discussed and, although such counsel is not
passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Offering Memorandum, on the basis of the foregoing, no facts
have come to such counsel's attention that have led such counsel to believe that
the Offering Memorandum, as of its date or as of the applicable Closing Date,
contained or contains an untrue statement of material fact or omitted or omits
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that such
counsel need not express an opinion or belief with respect to the financial
statements, schedules and other financial and accounting data included or
incorporated by reference in the Offering Memorandum.
"MATERIAL CONTRACT" means all agreements and instruments included in the list of
exhibits in the Company's Annual Report on Form 10-K for the year ended December
31, 2002, Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 and
Current Reports on Form 8-K filed subsequent to such Annual Report (except for
employment agreements, stock option plans, stock election plans, stock incentive
plans, officer and director indemnification agreements and deferred compensation
plans, all of which are excluded).
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