EXHIBIT 10.14
CAPITAL SECURITIES SUBSCRIPTION AGREEMENT
December 5, 2003
THIS CAPITAL SECURITIES SUBSCRIPTION AGREEMENT (this "Subscription
Agreement") is made among Xxxxxxxx Capital Trust II, a statutory trust created
under the laws of the State of Delaware (the "Trust"), Chandler (U.S.A.), Inc.
(the "Company" and, collectively with the Trust, the "Offerors") and InCapS
Funding II, Ltd., a newly formed exempted company with limited liability
established under the laws of the Cayman Islands (the "Purchaser").
RECITALS:
A. The Trust desires to issue 7,000 of its InCapS SM (the "Capital
Securities"), with a liquidation amount of $1,000 per Capital Security,
representing undivided beneficial interests in the assets of the Trust (the
"Offering"), to be issued pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), by the Company, as Sponsor, Wilmington Trust
Company, as Institutional Trustee and Wilmington Trust Company, as Delaware
Trustee, the Administrators named therein, and the holders, from time to time,
of the Capital Securities, which Capital Securities are to be guaranteed by the
Company with respect to distributions and payments upon liquidation, redemption
and otherwise to the extent provided in and pursuant to the terms of a
Guarantee Agreement (the "Guarantee") between the Company and Wilmington Trust
Company, as Guarantee Trustee; and
B. The proceeds from the sale of the Capital Securities will be
combined with the proceeds from the sale of the Common Securities by the Trust
to the Company and will be used by the Trust to purchase an equivalent
aggregate principal amount of Floating Rate Junior Subordinated Debentures due
2034 of the Company (the "Debentures"), to be issued by the Company pursuant to
an Indenture (the "Indenture") to be executed by the Company, as Issuer, and
Wilmington Trust Company, as Debenture Trustee; and
C. The Purchaser intends to complete an offering of its securities (the
"CBO Offering") on or about December 16, 2003 or such other business day as may
be agreed upon by the Offerors and the placement agent ("Placement Agent")
identified in the Placement Agreement (the "Closing Date") and to use the
proceeds of the CBO Offering to, among other things, acquire the Capital
Securities from the Trust and other capital securities, senior notes and
surplus notes in a quantity and with other particular characteristics, in the
aggregate, sufficient to permit the successful completion of the CBO Offering;
and
D. In consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF CAPITAL SECURITIES
1.1. Upon the execution of this Subscription Agreement, subject to the
conditions precedent set forth in Section 1.5, the Purchaser hereby agrees to
purchase from the Trust 7,000 Capital Securities at a price equal to $1,000 per
Capital Security (the "Purchase Price") and the
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Trust agrees to sell 7,000 Capital Securities with a liquidation amount of
$1,000 per Capital Security to the Purchaser for the Purchase Price. The
rights and preferences of the Capital Securities will be set forth in the
Declaration in form and substance reasonably acceptable to the Purchaser. The
Purchase Price is payable by the Purchaser on the Closing Date in immediately
available funds to the account designated by Wilmington Trust Company against
delivery of the aforementioned Capital Securities.
1.2. The certificate for the Capital Securities shall be authenticated by
the Institutional Trustee and delivered in definitive form by the Trust on the
Closing Date to the Purchaser or its designee, shall be registered in the name
of the Purchaser and shall represent the aggregate liquidation amount of the
Capital Securities being purchased by the Purchaser.
1.3. Each of the provisions of the Placement Agreement, dated December 5,
2003 (the "Placement Agreement"), including the definitions therein, are hereby
incorporated by reference into this Subscription Agreement. In addition, to
the extent provided for in the Placement Agreement, the Purchaser shall be
entitled to the benefits of the Placement Agreement and shall be entitled to
enforce such obligations of the Offerors under the Placement Agreement as fully
as if the Purchaser were a party to such Placement Agreement, it being agreed
between the parties that any and all representations, covenants and other
agreements made by the Offerors to the Placement Agent in the Placement
Agreement shall be deemed to have also been made to the Purchaser.
1.4. If any condition specified herein or in the Placement Agreement
shall not have been fulfilled when and as required to be fulfilled by, on
behalf of or in respect of the Offerors or the Capital Securities or the
Subordinated Debt Securities, this Subscription Agreement may be terminated by
the Purchaser by notice to the Offerors at any time at or prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Section 5(i) of the Placement Agreement and except
that Sections 1, 7, and 8 of the Placement Agreement shall survive any such
termination and remain in full force and effect.
1.5. If the CBO Offering is not successfully completed for any reason,
including, without limitation, as a result of the inability of the Purchaser to
acquire sufficient capital securities, senior notes and surplus notes from the
Trust and other issuers and sellers in a quantity and with other particular
characteristics, in the aggregate, sufficient to satisfy rating agency criteria
with respect to expected ratings on the securities to be issued by the
Purchaser and other criteria deemed necessary or advisable by the Purchaser,
all obligations of the Purchaser hereunder and any claims against the Purchaser
hereunder shall automatically terminate and be extinguished and shall not
thereafter revive.
1.6. Notwithstanding any other provision of this Subscription Agreement,
the obligations of the Purchaser hereunder are limited recourse obligations of
the Purchaser, payable solely from the proceeds of the CBO Offering, and if
the CBO Offering is not completed or the proceeds of the CBO Offering are
insufficient to satisfy the obligations of the Purchaser, all obligations of
the Purchaser hereunder and any claims against the Purchaser hereunder shall
be extinguished and shall not thereafter revive. No recourse shall be had to
any subscriber, officer, director, employee, administrator, shareholder,
incorporator or agent of the Purchaser or their
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respective successors or assigns for any obligations hereunder. The Trust,
Wilmington Trust Company (on behalf of the Trust) and the Company further
agree (i) not to take any action in respect of any claims hereunder against
any subscriber, officer, director, employee, administrator, shareholder,
incorporator or agent of the Purchaser and (ii) not to institute against the
Purchaser any insolvency, bankruptcy, reorganization, liquidation or similar
proceedings in any jurisdiction until one year and one day or, if longer, the
applicable preference period then in effect, as the case may be, shall have
elapsed since the final payments to the holders of the securities issued by
the Purchaser in connection with the CBO Offering.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1. The Purchaser understands and acknowledges that (i) none of the
Capital Securities, the Subordinated Debt Securities or the Guarantee (the
"Offeror Securities") have been or will be registered under the Securities Act
of 1933, as amended (the "Securities Act"), or any other applicable securities
laws, (ii) the Offeror Securities are being offered for sale by the Offerors in
transactions not requiring registration under the Securities Act, and (iii) the
Offeror Securities may not be offered, sold, pledged or otherwise transferred
by the Purchaser except in compliance with the registration requirements of the
Securities Act, or any other applicable securities laws, pursuant to an
exemption therefrom or in a transaction not subject thereto.
2.2. The Purchaser represents and warrants that (i) it is not a "U.S.
person" (as such term is defined in Rule 902 under the Securities Act), (ii)
it is not acquiring the Capital Securities for the account or benefit of any
U.S. person, and (iii) the offer and sale of Capital Securities to the
Purchaser constitutes an "offshore transaction" under Regulation S under the
Securities Act.
2.3. The Purchaser represents and warrants that it is purchasing the
Capital Securities for its own account, for investment and not with a view to,
or for offer or sale in connection with, any distribution thereof in violation
of the Securities Act or other applicable securities laws, subject to any
requirement of law that the disposition of its property be at all times within
its control and subject to its ability to resell such Capital Securities
pursuant to an effective registration statement under the Securities Act or
pursuant to an exemption therefrom or in a transaction not subject thereto,
and the Purchaser agrees to the legends and transfer restrictions applicable
to the Capital Securities contained in the Declaration.
2.4. The Purchaser, a Cayman Islands company whose business includes the
issuance of certain notes and acquiring the Capital Securities and other
similar securities, has had the opportunity to ask questions of, and receive
answers and request additional information from, the Offerors and is aware
that it may be required to bear the economic risk of an investment in the
Capital Securities.
2.5. The Purchaser is an exempted company with limited liability duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction where it is organized, with full power and authority to execute,
deliver and perform this Subscription Agreement, to
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make the representations and warranties specified herein, and to consummate
the transactions contemplated herein and it has full right and power to
subscribe for the Capital Securities.
2.6. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any governmental body, agency or
court having jurisdiction over the Purchaser, other than those that have been
made or obtained, is necessary or required for the performance by the Purchaser
of its obligations under this Subscription Agreement or to consummate the
transactions contemplated herein.
2.7. This Subscription Agreement has been, or will be prior to the
Closing Date, duly authorized, executed and delivered by the Purchaser.
2.8. The Purchaser is not in violation of or default under any term of
its Memorandum of Association or Articles of Association, of any provision of
any mortgage, indenture, contract, agreement, instrument or contract to which
it is a party or by which it is bound or of any judgment, decree, order, writ
or, to its knowledge, any statute, rule or regulation applicable to the
Purchaser which would prevent the Purchaser from performing any material
obligation set forth in this Subscription Agreement. The execution, delivery
and performance of and compliance with this Subscription Agreement, and the
consummation of the transactions contemplated herein, will not, with or without
the passage of time or giving of notice, result in any such violation or
default or the suspension, revocation, impairment, forfeiture or non-renewal of
any permit, license, authorization or approval applicable to the Purchaser, its
business or operations or any of its assets or properties which would prevent
the Purchaser from performing any material obligations set forth in this
Subscription Agreement.
2.9. The Purchaser understands and acknowledges that the Offerors will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agrees that if any of the
foregoing acknowledgments, representations, warranties or agreements cease to
be accurate, it shall promptly notify the Offerors.
2.10. The Purchaser understands that no public market exists for any of
the Capital Securities, and that it is unlikely that a public market will ever
exist for the Capital Securities.
ARTICLE III
MISCELLANEOUS
3.1. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, international courier, or delivered by hand against written
receipt therefor, or by facsimile transmission and confirmed by telephone, to
the following addresses, or such other address as may be furnished to the other
parties as herein provided:
To the Offerors: Chandler (U.S.A.), Inc.
X.X. Xxx 0
Xxxxxxxx, Xxxxxxxx 00000
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Attention: R. Xxxxxxx Xxxxxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
To the Purchaser: InCapS Funding II, Ltd.
x/x Xxxxxx Xxxxxxx Xxxxxxx
X.X. Xxx 0000 XX
Xxxxxxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Attention: Directors
Telephone: 000-000-0000
Fax: 000-000-0000
To the Purchaser
for service of
all process: CT Corporation
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, X.X. 00000
Unless otherwise expressly provided herein, notices shall be deemed to
have been given when received.
3.2. This Subscription Agreement shall not be changed, modified or
amended except by a writing signed by the parties hereto.
3.3. Upon the execution and delivery of this Subscription Agreement by
the parties hereto, this Subscription Agreement shall become a binding
obligation of each such party with respect to the matters covered herein,
including those incorporated by reference from the Placement Agreement.
3.4. THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW. EACH OF THE TRUST, PURCHASER AND THE COMPANY, ON
BEHALF OF
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ITSELF AND ITS SUBSIDIARIES (INCLUDING, WITHOUT LIMITATION, THE TRUST), HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK
STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY SUIT,
ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS
CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH OF
THE TRUST, PURCHASER AND THE COMPANY, ON BEHALF OF ITSELF AND ITS SUBSIDIARIES
(INCLUDING, WITHOUT LIMITATION, THE TRUST), IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
3.5. The parties hereto agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
3.6. This Subscription Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
SIGNATURES APPEAR ON THE FOLLOWING PAGE
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IN WITNESS WHEREOF, this Subscription Agreement is agreed to and accepted
as of the day and year first written above.
CHANDLER (U.S.A.), INC.
By: /s/ Xxxx X. Xxxxx
---------------------------
Xxxx X. Xxxxx
President
XXXXXXXX CAPITAL TRUST II
By: /s/ Xxxx X. Xxxx
---------------------------
Xxxx X. Xxxx
Administrator
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IN WITNESS WHEREOF, I have set my hand the day and year first written
above.
INCAPS FUNDING II, LTD.
By: /s/ Xxxxx Xxxxxx
------------------------
Name: Xxxxx Xxxxxx
Title: Director
