EXHIBIT 1
Execution Copy
$300,000,000
XXXXXX INDUSTRIES, INC.
5.25% Senior Notes due 2007
guaranteed by
XXXXXX INDUSTRIES, LTD.
Purchase Agreement
June 17, 2002
X.X. Xxxxxx Securities Inc.
Banc of America Securities LLC
As Representatives of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxx Industries, Inc., an Ohio corporation (the "Company"), proposes
to issue and sell to the several Initial Purchasers listed in Schedule 1 hereto
(the "Initial Purchasers"), for whom you are acting as representatives (the
"Representatives"), $300,000,000 principal amount of its 5.25% Senior Notes due
2007 (the "Securities"). The Securities will be issued pursuant to an Indenture
dated as of January 15, 1990 among the Company and The Chase Manhattan Bank
(National Association), as trustee, as supplemented by the First Supplemental
Indenture, dated as of May 15, 2002, and the Second Supplemental Indenture, to
be dated as of June 21, 2002, both between the Company, Xxxxxx Industries, Ltd.,
a company existing under the laws of Bermuda (the "Guarantor"), and JPMorgan
Chase Bank, as trustee (the "Trustee") (as so supplemented, the "Indenture").
The Securities will be guaranteed on an unsecured senior basis by the Guarantor
(the "Guarantee").
The Securities will be sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance upon an exemption therefrom. The Company and the Guarantor have
prepared a preliminary offering memorandum dated June 17, 2002 (the "Preliminary
Offering Memorandum") and will prepare an offering memorandum dated the date
hereof (the "Offering Memorandum") setting forth information concerning the
Company, the Guarantor and the Securities. Copies of the Preliminary Offering
Memorandum have been, and copies of the Offering Memorandum will be, delivered
by the Company and the Guarantor to the Initial Purchasers pursuant to the terms
of this Agreement. The Company and the Guarantor hereby confirm that they have
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and resale of the Securities by the
Initial Purchasers in the manner contemplated by this
Agreement. Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum. References herein to the
Preliminary Offering Memorandum and the Offering Memorandum shall be deemed to
refer to and include any document incorporated by reference therein.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement, to be dated the Closing Date (as defined below)
and substantially in the form attached hereto as Exhibit A (the "Registration
Rights Agreement"), pursuant to which the Company and the Guarantor will agree
to file one or more registration statements with the Securities and Exchange
Commission (the "Commission") providing for the registration under the
Securities Act of the Securities or the Exchange Securities referred to (and as
defined) in the Registration Rights Agreement.
The Company and the Guarantor hereby confirm their agreement with the
several Initial Purchasers concerning the purchase and resale of the Securities,
as follows:
1. Purchase and Resale of the Securities. (a) The Company agrees to
issue and sell the Securities to the several Initial Purchasers as provided in
this Agreement, and each Initial Purchaser, on the basis of the representations,
warranties and agreements set forth herein and subject to the conditions set
forth herein, agrees, severally and not jointly, to purchase from the Company
the respective principal amount of Securities set forth opposite such Initial
Purchaser's name in Schedule 1 hereto at a price equal to 99.29% of the
principal amount thereof. The Company will not be obligated to deliver any of
the Securities except upon payment for all the Securities to be purchased as
provided herein.
(b) The Company understands that the Initial Purchasers intend to offer
the Securities and the Guarantee for resale on the terms set forth in the
Offering Memorandum. Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that:
(i) it is a qualified institutional buyer within the meaning
of Rule 144A under the Securities Act (a "QIB") and an accredited
investor within the meaning of Rule 501(a) under the Securities Act;
(ii) it has not solicited offers for, or offered or sold, and
will not solicit offers for, or offer or sell, the Securities or the
Guarantee by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D under the
Securities Act ("Regulation D") or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act; and
(iii) it has not solicited offers for, or offered or sold, and
will not solicit offers for, or offer or sell, the Securities or the
Guarantee as part of their initial offering except:
(A) within the United States to persons whom it
reasonably believes to be QIBs in transactions pursuant to
Rule 144A under the Securities Act ("Rule 144A") and in
connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of the
Securities is aware that such sale is being made in reliance
on Rule 144A; or
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(B) in accordance with the restrictions set forth in
Annex A hereto.
(c) Each Initial Purchaser acknowledges and agrees that the Company and
the Guarantor and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 5(f) and 5(g), counsel for the Company and the
Guarantor and counsel for the Initial Purchasers, respectively, may rely upon
the accuracy of the representations and warranties of the Initial Purchasers,
and compliance by the Initial Purchasers with their agreements, contained in
paragraph (b) above (including Annex A hereto), and each Initial Purchaser
hereby consents to such reliance.
(d) The Company acknowledges and agrees that the Initial Purchasers may
offer and sell Securities and the Guarantee to or through any affiliate of an
Initial Purchaser and that any such affiliate may offer and sell Securities and
the Guarantee purchased by it to or through any Initial Purchaser, provided that
any such offers or sales shall be made in accordance with the provisions of this
Agreement.
2. Payment and Delivery. (a) Payment for and delivery of the Securities
will be made at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx at 10:00 A.M., New
York City time, on June 21, 2002, or at such other time or place on the same or
such other date, not later than the fifth business day thereafter, as the
Representatives and the Company may agree upon in writing. The time and date of
such payment and delivery is referred to herein as the "Closing Date".
(b) Payment for the Securities shall be made by wire transfer in
immediately available funds to the account(s) specified by the Company to the
Representatives against delivery to the nominee of The Depository Trust Company,
for the account of the Initial Purchasers, of one or more global notes
representing the Securities (collectively, the "Global Note"), with any transfer
taxes payable in connection with the sale of the Securities duly paid by the
Company. The Global Note will be made available for inspection by the
Representatives not later than 1:00 P.M., New York City time, on the business
day prior to the Closing Date.
3. Representations and Warranties of the Company and the Guarantor. The
Company and the Guarantor jointly and severally represent and warrant to each
Initial Purchaser that:
(a) Offering Memorandum. The Preliminary Offering Memorandum, as of its
date, did not, and the Offering Memorandum, in the form first used by the
Initial Purchasers to confirm sales of the Securities did not, and as of the
Closing Date, will not, contain any 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 that the Company and the Guarantor make no representation or warranty
with respect to any statements or omissions made in reliance upon and in
conformity with information furnished to the Company and the Guarantor in
writing by any Initial Purchaser through the Representatives expressly for use
in the Preliminary Offering Memorandum and the Offering Memorandum.
(b) Incorporated Documents. The documents incorporated by reference in
the Preliminary Offering Memorandum and the Offering Memorandum, when filed with
the
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Commission, conformed or will conform, as the case may be, as of their
respective dates of filing, in all material respects with the requirements of
the Exchange Act and did not and will not as of their respective dates of filing
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(c) Financial Statements. The financial statements and the related
notes thereto included or incorporated by reference in the Preliminary Offering
Memorandum and the Offering Memorandum comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as
applicable, and present fairly the financial position of the Company and its
subsidiaries as of the dates indicated and the results of their operations and
the changes in their cash flows for the periods specified; such financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods covered thereby;
and the other financial information included or incorporated by reference in the
Preliminary Offering Memorandum and the Offering Memorandum has been derived
from the accounting records of the Company and its subsidiaries and presents
fairly the information shown thereby.
(d) No Material Adverse Change. Since the date of the most recent
financial statements included or incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum, (i) there has not been any
material change in the capital stock (other than in connection with the
reincorporation of the Company in Bermuda) or long-term debt of the Company, the
Guarantor or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
business, properties, management, financial position or results of operations of
the Guarantor and its subsidiaries taken as a whole; (ii) none of the Company,
the Guarantor or any of its subsidiaries has entered into any transaction or
agreement that is material to the Guarantor and its subsidiaries taken as a
whole or incurred any liability or obligation, direct or contingent, that is
material to the Guarantor and its subsidiaries taken as a whole; and (iii) none
of the Company, the Guarantor or any of its subsidiaries has sustained any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
disturbance or dispute or any action, order or decree of any court or arbitrator
or governmental or regulatory authority, except in each case as otherwise
disclosed in the Preliminary Offering Memorandum or the Offering Memorandum.
(e) Organization and Good Standing. The Company, the Guarantor and each
of their respective significant subsidiaries have been duly incorporated and are
validly existing and in good standing under the laws of their respective
jurisdictions of organization, 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, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a material adverse effect on
the business, properties, management, financial position or results of
operations of the Guarantor and its subsidiaries taken as a whole or on the
performance by the Company and the Guarantor of their obligations under the
Securities and the Guarantee (a "Material Adverse
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Effect"). The subsidiaries listed in Schedule 2 to this Agreement are the only
significant subsidiaries of the Guarantor or the Company.
(f) Capitalization. The Guarantor has an authorized capitalization of
250 million shares of Class A common stock, 150 million shares of Class B common
stock and 10 million shares of preferred stock; and all the outstanding shares
of capital stock or other equity interests of the Company and each significant
subsidiary of the Guarantor or the Company have been duly authorized and validly
issued, are fully paid and non-assessable and all shares that are owned directly
or indirectly by the Guarantor are owned free and clear of any lien, charge,
encumbrance, security interest, restriction on voting or transfer or any other
claim of any third party.
(g) Due Authorization. The Company and the Guarantor have the corporate
right, power and authority to execute and deliver this Agreement, the
Securities, the Indenture (including the Guarantee set forth therein), the
Exchange Securities and the Registration Rights Agreement (collectively, the
"Transaction Documents") and to perform their respective obligations hereunder
and thereunder.
(h) The Indenture. The Indenture has been duly authorized by the
Company and the Guarantor and, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company and the Guarantor enforceable against
the Company and the Guarantor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability (collectively, the "Enforceability
Exceptions"); and on the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of the
Commission applicable to an indenture that is qualified thereunder.
(i) The Securities and the Guarantee. The Securities have been duly
authorized by the Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein, will be
duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company enforceable against the Company in accordance
with their terms, subject to the Enforceability Exceptions, and will be entitled
to the benefits of the Indenture; and the Guarantee has been duly authorized by
the Guarantor and, when the Securities have been duly executed, authenticated,
issued and delivered as provided in the Indenture and paid for as provided
herein, the Guarantee will be a valid and legally binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms,
subject to the Enforceability Exceptions, and will be entitled to the benefits
of the Indenture.
(j) The Exchange Securities. On the Closing Date, the Exchange
Securities, together with the related guarantee, will have been duly authorized
by the Company and the Guarantor, respectively, and, when the Exchange
Securities have been duly executed, authenticated, issued and delivered as
contemplated by the Registration Rights Agreement, the Exchange Securities and
the related guarantee will be duly and validly issued and outstanding and will
constitute the respective valid and legally binding obligations of the Company,
as issuer, and the Guarantor, as
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guarantor, enforceable against the Company and the Guarantor in accordance with
their terms, subject to the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture.
(k) Purchase and Registration Rights Agreements. This Agreement has
been duly authorized, executed and delivered by the Company and the Guarantor
and constitutes a valid and legally binding agreement of the Company and the
Guarantor, subject to the Enforceability Exceptions, except that rights to
indemnity and contribution thereunder may be limited by applicable law and
public policy; and the Registration Rights Agreement has been duly authorized by
the Company and the Guarantor and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute a
valid and legally binding agreement of the Company and the Guarantor enforceable
against the Company and the Guarantor in accordance with its terms, subject to
the Enforceability Exceptions, and except that rights to indemnity and
contribution thereunder may be limited by applicable law and public policy.
(l) Descriptions of the Transaction Documents. Each Transaction
Document conforms in all material respects to the description thereof contained
in the Offering Memorandum.
(m) No Violation or Default. None of the Company, the Guarantor or any
of its subsidiaries is (i) in violation of its charter, by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, 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
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company, the Guarantor or any of its subsidiaries is a
party or by which the Company, the Guarantor or any of its subsidiaries is bound
or to which any of the property or assets of the Company, the Guarantor or any
of its subsidiaries is subject; or (iii) in violation of any law or statute or
any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses (ii) and
(iii) above, for any such default or violation that would not, individually or
in the aggregate, have a Material Adverse Effect.
(n) No Conflicts. The execution, delivery and performance by the
Company and the Guarantor of each of the Transaction Documents to which each is
a party, the issuance and sale of the Securities (including the Guarantee) and
compliance by the Company and the Guarantor with the terms thereof and the
consummation of the transactions contemplated by the Transaction Documents will
not (i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company, the Guarantor or any of its subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company, the Guarantor or any of its subsidiaries is a party or by
which the Company, the Guarantor or any of its subsidiaries is bound or to which
any of the property or assets of the Company, the Guarantor or any of its
subsidiaries is subject, (ii) result in any violation of the provisions of the
charter, by-laws or similar organizational documents of the Company, the
Guarantor or any of its subsidiaries or (iii) result in the violation of any law
or statute or any judgment, order, rule or regulation of any court or arbitrator
or governmental or regulatory authority, except, in the case of clause (i)
above, for any such
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conflict, breach or violation that would not, individually or in the aggregate,
have a Material Adverse Effect.
(o) No Consents Required. No consent, approval, authorization, filing,
order, registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution, delivery and
performance by the Company and the Guarantor of each of the Transaction
Documents to which each is a party, the issuance and sale of the Securities
(including the Guarantee) and compliance by the Company and the Guarantor with
the terms thereof and the consummation of the transactions contemplated by the
Transaction Documents, except for such consents, approvals, authorizations,
filings, orders and registrations or qualifications as may be required (i) under
applicable state securities laws in connection with the purchase and resale of
the Securities by the Initial Purchasers and (ii) with respect to the Exchange
Securities (including the related guarantee) under the Securities Act and
applicable state securities laws as contemplated by the Registration Rights
Agreement.
(p) Legal Proceedings. Except as described in the Preliminary Offering
Memorandum or the Offering Memorandum, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to which the
Company, the Guarantor or any of its subsidiaries is or may be a party or to
which any property of the Company, the Guarantor or any of its subsidiaries is
or may be the subject that, individually or in the aggregate, if determined
adversely to the Company, the Guarantor or any of its subsidiaries, could
reasonably be expected to have a Material Adverse Effect; and to the best
knowledge of the Company and the Guarantor, no such investigations, actions,
suits or proceedings are threatened or, to the best knowledge of the Company and
the Guarantor, contemplated by any governmental or regulatory authority or
threatened by others.
(q) Title to Intellectual Property. Except as would not, individually
or in the aggregate, have a Material Adverse Effect, the Company, the Guarantor
and its subsidiaries own or possess adequate rights to use all material patents,
patent applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the conduct of
their respective businesses as now operated by them; and neither the Company,
the Guarantor nor its subsidiaries has received any notice of any claim of
infringement of or conflict with any such rights of others that if determined
adversely to the Company, the Guarantor or its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect.
(r) No Labor Disputes. No labor disturbance by or dispute with
employees of the Company, the Guarantor or any of their subsidiaries exists or,
to the best knowledge of the Company and the Guarantor, is contemplated or
threatened, that would have a Material Adverse Effect.
(s) Compliance With Environmental Laws. The Company, the Guarantor and
its subsidiaries (i) are in compliance with any and all applicable federal,
state, local and foreign laws, rules and regulations, decisions and orders
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"), (ii) have received and are in compliance
with all permits,
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licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses; and (iii) have not received notice of
any actual or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except in any such case for any such failure to comply with, or
failure to receive required permits, licenses or approvals or liability, as
would not, individually or in the aggregate, have a Material Adverse Effect.
(t) Independent Accountants. Ernst & Young, LLP, who have certified the
consolidated financial statements of the Company and its subsidiaries, are
independent public accountants with respect to the Company and its subsidiaries
within the meaning of Rule 101 of the Code of Professional Conduct of the
American Institute of Certified Public Accountants and its interpretations and
rulings thereunder.
(u) Investment Company Act. Neither the Company nor the Guarantor is,
and after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Offering Memorandum
neither of them will be, an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission thereunder
(collectively, "Investment Company Act").
(v) No Broker's Fees. None of the Company, the Guarantor or any of its
subsidiaries is a party to any contract, agreement or understanding with any
person (other than this Agreement) that would give rise to a valid claim against
any of them or any Initial Purchaser for a brokerage commission, finder's fee or
like payment in connection with the offering and sale of the Securities.
(w) Rule 144A Eligibility. On the Closing Date, the Securities will not
be of the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in an automated
inter-dealer quotation system; and each of the Preliminary Offering Memorandum
and the Offering Memorandum, as of its respective date, contains or will contain
all the information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act.
(x) No Integration. None of the Company, the Guarantor or any of their
affiliates (as defined in Rule 501(b) of Regulation D) has, directly or through
any agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act), that
is or will be integrated with the sale of the Securities or the Guarantee in a
manner that would require registration of the Securities or the Guarantee under
the Securities Act.
(y) No General Solicitation or Directed Selling Efforts. None of the
Company, the Guarantor or any of their affiliates or any other person acting on
its or their behalf (other than the Initial Purchasers, as to which no
representation is made) has (i) solicited offers for, or offered or sold, the
Securities or the Guarantee by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act or (ii) engaged in any
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directed selling efforts within the meaning of Regulation S under the Securities
Act ("Regulation S"), offered or sold the Securities or the Guarantee being
offered and sold in reliance on Regulation S other than in offshore
transactions, and all such persons have complied with the offering restrictions
requirement of Regulation S.
(z) Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained in Section
1(b) (including Annex A hereto) and their compliance with their agreements set
forth therein, it is not necessary, in connection with the issuance and sale of
the Securities or the Guarantee to the Initial Purchasers and the offer, resale
and delivery of the Securities or the Guarantee by the Initial Purchasers in the
manner contemplated by this Agreement and the Offering Memorandum, to register
the Securities or the Guarantee under the Securities Act or to qualify the
Indenture under the Trust Indenture Act.
(aa) No Stabilization. Neither the Company nor the Guarantor has taken,
directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities or the Guarantee.
(bb) Forward-Looking Statements. No forward-looking statement (within
the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained or incorporated by reference in the Preliminary Offering
Memorandum and the Offering Memorandum has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
4. Further Agreements of the Company and the Guarantor. The Company and
the Guarantor jointly and severally covenant and agree with each Initial
Purchaser that:
(a) Delivery of Copies. The Company and the Guarantor will deliver to
the Initial Purchasers as many copies of the Preliminary Offering Memorandum and
the Offering Memorandum (including all amendments and supplements thereto) as
the Representatives may reasonably request.
(b) Amendments or Supplements. Before making or distributing any
amendment or supplement to the Preliminary Offering Memorandum or the Offering
Memorandum, the Company and the Guarantor will furnish to the Representatives
and counsel for the Initial Purchasers a copy of the proposed amendment or
supplement for review, and will not distribute any such proposed amendment or
supplement to which the Representatives reasonably object.
(c) Notice to the Representatives. The Company and the Guarantor will
advise the Representatives promptly, and confirm such advice in writing, (i) of
the issuance by any governmental or regulatory authority of any order preventing
or suspending the use of the Preliminary Offering Memorandum or the Offering
Memorandum or the initiation or threatening of any proceeding for that purpose;
(ii) of the occurrence of any event at any time prior to the completion of the
initial offering of the Securities as a result of which the Offering Memorandum
as then amended or supplemented would include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Offering Memorandum
is delivered to a purchaser, not misleading; and (iii) of the receipt by the
Company or the Guarantor of any notice with respect to
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any suspension of the qualification of the Securities for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company and the Guarantor will use their reasonable best
efforts to prevent the issuance of any such order preventing or suspending the
use of the Preliminary Offering Memorandum or the Offering Memorandum or
suspending any such qualification of the Securities and, if any such order is
issued, to obtain as soon as possible the withdrawal thereof.
(d) Ongoing Compliance of the Offering Memorandum. If at any time prior
to the completion of the initial offering of the Securities (i) any event shall
occur or condition shall exist as a result of which the Offering Memorandum as
then amended or supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, not misleading or (ii) it is necessary
to amend or supplement the Offering Memorandum to comply with law, the Company
and the Guarantor will immediately notify the Initial Purchasers thereof and
forthwith prepare and, subject to paragraph (b) above, file with the Commission
any document to be incorporated by reference therein and furnish to the Initial
Purchasers such amendments or supplements to the Offering Memorandum as may be
necessary so that the statements in the Offering Memorandum as so amended or
supplemented (or including such document to be incorporated by reference
therein) will not, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that the Offering
Memorandum will comply with law.
(e) Blue Sky Compliance. The Company and the Guarantor will cooperate
with the Initial Purchasers to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives
shall reasonably request and will continue such qualifications in effect so long
as required for the offering and resale of the Securities; provided that neither
the Company nor the Guarantor shall be required to (i) qualify as a foreign
corporation or other entity or as a dealer in securities in any such
jurisdiction where it would not otherwise be required to so qualify, (ii) file
any general consent to service of process in any such jurisdiction or (iii)
subject itself to taxation in any such jurisdiction if it is not otherwise so
subject.
(f) Clear Market. During the period from the date hereof through and
including the Closing Date, the Company and the Guarantor will not, without the
prior written consent of the Representatives, offer, sell, contract to sell or
otherwise dispose of any debt securities issued or guaranteed by the Company or
the Guarantor and having a tenor of more than one year.
(g) Use of Proceeds. The Company will apply the net proceeds from the
sale of the Securities as described in the Offering Memorandum under the heading
"Use of Proceeds".
(h) Supplying Information. While the Securities remain outstanding and
are "restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company and the Guarantor will, during any period in which
the Guarantor is not subject to and in compliance with Section 13 or 15(d) of
the Exchange Act, furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon the request of
such holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
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(i) DTC. The Company and the Guarantor will assist the Initial
Purchasers in arranging for the Securities to be eligible for clearance and
settlement through The Depository Trust Company ("DTC").
(j) No Resales by the Company and the Guarantor. Until the issuance of
the Exchange Securities, the Company and the Guarantor will not, and will not
permit any of their affiliates (as defined in Rule 144 under the Securities Act)
to, resell any of the Securities that have been acquired by any of them, except
for Securities purchased by the Company, the Guarantor or any of their
affiliates and resold in a transaction registered under the Securities Act.
(k) No Integration. None of the Company, the Guarantor or any of their
affiliates (as defined in Rule 501(b) of Regulation D) will, directly or through
any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities or the Guarantee in a manner that
would require registration of the Securities or the Guarantee under the
Securities Act.
(l) No General Solicitation or Directed Selling Efforts. None of the
Company, the Guarantor or any of their affiliates or any other person acting on
their behalf (other than the Initial Purchasers, as to which no covenant is
given) will (i) solicit offers for, or offer or sell, the Securities or the
Guarantee by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act or (ii)
engage in any directed selling efforts within the meaning of Regulation S,
offered or sold the Securities or the Guarantee being offered and sold in
reliance on Regulation S other than in offshore transactions, and all such
persons will comply with the offering restrictions requirement of Regulation S.
(m) No Stabilization. Neither the Company nor the Guarantor will take,
directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities or the Guarantee.
(n) Filing of Exchange Act Documents. The Guarantor and the Company
will file promptly all reports and any definitive proxy or information
statements required to be filed by the Guarantor and the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act.
5. Conditions of Initial Purchasers' Obligations. The obligation of
each Initial Purchaser to purchase Securities on the Closing Date as provided
herein is subject to the performance by the Company and the Guarantor of their
respective covenants and other obligations hereunder and to the following
additional conditions:
(a) Representations and Warranties. The representations and warranties
of the Company and the Guarantor contained herein shall be true and correct on
the date hereof and on and as of the Closing Date; and the statements of the
Company, the Guarantor and their respective officers made in any certificates
delivered pursuant to this Agreement shall be true and correct on and as of the
Closing Date.
(b) No Downgrade. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded the
Securities or any other debt
11
securities or preferred stock issued or guaranteed by the Company or the
Guarantor by any "nationally recognized statistical rating organization", as
such term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act; and (ii) no such organization shall have publicly announced that
it has under surveillance or review, or has changed its outlook with respect to,
its rating of the Securities or of any other debt securities or preferred stock
issued or guaranteed by the Company or the Guarantor (other than an announcement
with positive implications of a possible upgrading).
(c) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement, no event or condition of a type described in Section
3(d) hereof shall have occurred or shall exist, which event or condition is not
described in the Offering Memorandum (excluding any amendment or supplement
thereto or any document filed with the Commission after the date hereof and
incorporated by reference therein) and the effect of which in the judgment of
the Representatives makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement and the Offering Memorandum.
(d) Officer's Certificate. The Representatives shall have received on
and as of the Closing Date a certificate of an executive officer of the Company
and of the Guarantor who has specific knowledge of the Company's or the
Guarantor's financial matters and is satisfactory to the Representatives (i)
confirming that such officer has carefully reviewed the Offering Memorandum and,
to the best knowledge of such officer, the representation set forth in Section
3(a) hereof is true and correct, (ii) confirming that the other representations
and warranties of the Company and the Guarantor in this Agreement are true and
correct and that the Company and the Guarantor have complied with all agreements
and satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date and (iii) to the effect set forth in
paragraphs (a) through (c) above.
(e) Comfort Letters. On the date of this Agreement and on the Closing
Date, Ernst & Young LLP shall have furnished to the Representatives, at the
request of the Company and the Guarantor, letters, dated the respective dates of
delivery thereof and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representatives, containing statements and
information of the type customarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and certain financial
information contained or incorporated by reference in the Preliminary Offering
Memorandum and the Offering Memorandum; provided that the letter delivered on
the Closing Date shall use a "cut-off" date no more than three business days
prior to the Closing Date.
(f) Opinion of Counsel for the Company and the Guarantor. (i) Squire,
Xxxxxxx & Xxxxxxx, L.L.P., counsel for the Company and the Guarantor, (ii)
Xxxxxxx, Xxxxxxxx & Xxxxx, Bermuda counsel for the Guarantor and (iii) Xxxxx
Xxxxxxxxxx, General Counsel to the Company and the Guarantor, shall have each
furnished to the Representatives, at the request of the Company and the
Guarantor, their written opinion, each dated the Closing Date and addressed to
the Initial Purchasers, in form and substance reasonably satisfactory to the
Representatives, to the effect set forth in Annexes B, C and D, respectively,
hereto.
12
(g) Opinion of Counsel for the Initial Purchasers. The Representatives
shall have received on and as of the Closing Date an opinion of Xxxxxxx Xxxxxxx
& Xxxxxxxx, counsel for the Initial Purchasers, with respect to such matters as
the Representatives may reasonably request, and such counsel shall have received
such documents and information as they may reasonably request to enable them to
pass upon such matters.
(h) No Legal Impediment to Issuance. No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any federal, state or foreign governmental or regulatory authority
that would, as of the Closing Date, prevent the issuance or sale of the
Securities or the issuance of the Guarantee; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Securities or the issuance of
the Guarantee.
(i) Good Standing. The Representatives shall have received on and as of
the Closing Date satisfactory evidence of the good standing of the Company, the
Guarantor and their respective significant subsidiaries in their respective
jurisdictions of organization and their good standing in such other
jurisdictions as the Representatives may reasonably request, in each case in
writing or any standard form of telecommunication, from the appropriate
governmental authorities of such jurisdictions.
(j) Registration Rights Agreement. The Initial Purchasers shall have
received a counterpart of the Registration Rights Agreement that shall have been
executed and delivered by a duly authorized officer of the Company and the
Guarantor.
(k) DTC. The Securities shall be eligible for clearance and settlement
through DTC.
(l) Additional Documents. On or prior to the Closing Date, the Company
and the Guarantor shall have furnished to the Representatives such further
certificates and documents as the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
6. Indemnification and Contribution.
(a) Indemnification of the Initial Purchasers. The Company and the
Guarantor jointly and severally agree to indemnify and hold harmless each
Initial Purchaser, its affiliates, directors and officers and each person, if
any, who controls such Initial Purchaser within the meaning of 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, without limitation,
reasonable legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted, as such fees and expenses are
incurred), joint or several, that arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or
supplement thereto), or any omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except insofar as
such losses, claims, damages or liabilities arise
13
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information furnished to the Company and the Guarantor in writing by any Initial
Purchaser through the Representatives expressly for use therein; provided, that
with respect to any such untrue or alleged untrue statement in or omission or
alleged ommission from the Preliminary Offering Memorandum, the indemnity
agreement contained in this paragraph (a) shall not inure to the benefit of any
Initial Purchaser to the extent that the sale to the person asserting any such
loss, claim, damage or liability was an initial resale by such Initial Purchaser
and any such loss, claim, damage or liability of or with respect to such Initial
Purchaser results from the fact that both (i) a copy of the Offering Memorandum
(excluding any documents incorporated by reference therein) was not sent or
given to such person at or prior to the written confirmation of the sale of such
Securities to such person and (ii) the untrue or alleged untrue statement in or
omission or alleged ommission from such Preliminary Offering Memorandum was
corrected in the Offering Memorandum unless, in either case, such failure to
deliver the Offering Memorandum was a result of non-compliance by the Company
and the Guarantor with the provisions of Section 4 hereof.
(b) Indemnification of the Company and the Guarantor. Each Initial
Purchaser agrees, severally and not jointly, to indemnify and hold harmless the
Company, the Guarantor, their respective directors and officers, and each
person, if any, who controls the Company or the Guarantor within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the indemnity set forth in paragraph (a) above, but only with respect
to any losses, claims, damages or liabilities that arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information furnished to the
Company and the Guarantor in writing by any Initial Purchaser through the
Representatives expressly for use in the Preliminary Offering Memorandum and the
Offering Memorandum (or any amendment or supplement thereto), it being
understood and agreed that the only such information consists of the following
information in the Preliminary Offering Memorandum and the Offering Memorandum:
(i) the first sentence of the third paragraph, (ii) the fourth sentence of the
ninth paragraph, (iii) the sixth paragraph and (iv) the first sentence of the
tenth paragraph under the heading "Plan of Distribution".
(c) Notice and Procedures. If any suit, action, proceeding (including
any governmental or regulatory investigation), claim or demand shall be brought
or asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 6 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying
Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 6. If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others entitled to indemnification pursuant to this
Section 6 that the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel
14
shall be at the expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed to the contrary;
(ii) the Indemnifying Person has failed within a reasonable time to retain
counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified
Person shall have reasonably concluded that there may be legal defenses
available to it that are different from or in addition to those available to the
Indemnifying Person; or (iv) the named parties in any such proceeding (including
any impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding 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 Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for any Initial
Purchaser, its affiliates, directors and officers and any control persons of
such Initial Purchaser shall be designated in writing by the Representatives and
any such separate firm for the Company, the Guarantor and any control persons of
the Company and the Guarantor shall be designated in writing by the Company and
the Guarantor. The Indemnifying Person shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by this paragraph, the Indemnifying Person
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 the Indemnifying Person of such request and (ii) the Indemnifying
Person shall not have reimbursed the Indemnified Person in accordance with such
request prior to the date of such settlement. No Indemnifying Person shall,
without the written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified Person
is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (x) includes an
unconditional release of such Indemnified Person, in form and substance
reasonably satisfactory to such Indemnified Person, from all liability on claims
that are the subject matter of such proceeding and (y) does not include any
statement as to or any admission of fault, culpability or a failure to act by or
on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a)
and (b) above is unavailable to an Indemnified Person or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person 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 and the Guarantor on the one hand and the
Initial Purchasers on the other from the offering of the Securities or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and the
Guarantor on the one hand and the Initial Purchasers on the other 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
15
relative benefits received by the Company and the Guarantor on the one hand and
the Initial Purchasers on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the
Company from the sale of the Securities and the total discounts and commissions
received by the Initial Purchasers in connection therewith, as provided in this
Agreement, bear to the aggregate offering price of the Securities. The relative
fault of the Company and the Guarantor on the one hand and the Initial
Purchasers on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Guarantor or by the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) Limitation on Liability. The Company, the Guarantor and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 6 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this
Section 6, in no event shall an Initial Purchaser be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by such Initial Purchaser with respect to the offering of the
Securities exceeds the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 6 are several in proportion to their respective
purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 6
are not exclusive and shall not limit any rights or remedies that may otherwise
be available to any Indemnified Person at law or in equity.
7. Termination. This Agreement may be terminated in the absolute
discretion of the Representatives, by notice to the Company and the Guarantor,
if after the execution and delivery of this Agreement and prior to the Closing
Date (i) trading generally shall have been suspended or materially limited on
the New York Stock Exchange or the over-the-counter market; (ii) trading of any
securities issued or guaranteed by the Company or the Guarantor shall have been
suspended on any exchange or in any over-the-counter market; (iii) there shall
have occurred a material disruption of securities settlement or clearance
services; (iv) a general moratorium on commercial banking activities shall have
been declared by federal or New York State authorities; or (v) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis, either within or outside the United States,
that, in the judgment of the Representatives, is material and adverse and makes
it impracticable or
16
inadvisable to proceed with the offering, sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement and the Offering
Memorandum.
8. Defaulting Initial Purchaser. (a) If, on the Closing Date, any
Initial Purchaser defaults on its obligation to purchase the Securities that it
has agreed to purchase hereunder, the non-defaulting Initial Purchasers may in
their discretion arrange for the purchase of such Securities by other persons
satisfactory to the Company and the Guarantor on the terms contained in this
Agreement. If, within 36 hours after any such default by any Initial Purchaser,
the non-defaulting Initial Purchasers do not arrange for the purchase of such
Securities, then the Company and the Guarantor shall be entitled to a further
period of 36 hours within which to procure other persons satisfactory to the
non-defaulting Initial Purchasers to purchase such Securities on such terms. If
other persons become obligated or agree to purchase the Securities of a
defaulting Initial Purchaser, either the non-defaulting Initial Purchasers or
the Company and the Guarantor may postpone the Closing Date for up to five full
business days in order to effect any changes that in the opinion of counsel for
the Company and the Guarantor or counsel for the Initial Purchasers may be
necessary in the Offering Memorandum or in any other document or arrangement,
and the Company and the Guarantor agree to promptly prepare any amendment or
supplement to the Offering Memorandum that effects any such changes. As used in
this Agreement, the term "Initial Purchaser" includes, for all purposes of this
Agreement unless the context otherwise requires, any person not listed in
Schedule 1 hereto that, pursuant to this Section 8, purchases Securities that a
defaulting Initial Purchaser agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company and the Guarantor as provided
in paragraph (a) above, the aggregate principal amount of such Securities that
remains unpurchased does not exceed one-eleventh of the aggregate principal
amount of all the Securities, then the Company and the Guarantor shall have the
right to require each non-defaulting Initial Purchaser to purchase the principal
amount of Securities that such Initial Purchaser agreed to purchase hereunder
plus such Initial Purchaser's pro rata share (based on the principal amount of
Securities that such Initial Purchaser agreed to purchase hereunder) of the
Securities of such defaulting Initial Purchaser or Initial Purchasers for which
such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company and the Guarantor as provided
in paragraph (a) above, the aggregate principal amount of such Securities that
remains unpurchased exceeds one-eleventh of the aggregate principal amount of
all the Securities, or if the Company and the Guarantor shall not exercise the
right described in paragraph (b) above, then this Agreement shall terminate
without liability on the part of the non-defaulting Initial Purchasers. Any
termination of this Agreement pursuant to this Section 8 shall be without
liability on the part of the Company or the Guarantor, except that the Company
and the Guarantor will continue to be liable for the payment of expenses as set
forth in Section 9 hereof and except that the provisions of Section 6 hereof
shall not terminate and shall remain in effect.
17
(d) Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company, the Guarantor or any
non-defaulting Initial Purchaser for damages caused by its default.
9. Payment of Expenses. (a) Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company and the Guarantor jointly and severally agree to pay or cause to be
paid all costs and expenses incident to the performance of their respective
obligations hereunder, including without limitation, (i) the costs incident to
the authorization, issuance, sale, preparation and delivery of the Securities
and any taxes payable in that connection; (ii) the costs incident to the
preparation and printing of the Preliminary Offering Memorandum and the Offering
Memorandum (including any amendment or supplement thereto) and the distribution
thereof; (iii) the costs of reproducing and distributing each of the Transaction
Documents; (iv) the fees and expenses of the Company's and the Guarantor's
counsel and independent accountants; (v) the fees and expenses incurred in
connection with the registration or qualification and determination of
eligibility for investment of the Securities under the laws of such
jurisdictions as the Representatives may designate and the preparation, printing
and distribution of a Blue Sky Memorandum (including the related reasonable fees
and expenses of counsel for the Initial Purchasers); (vi) any fees charged by
rating agencies for rating the Securities; (vii) the fees and expenses of the
Trustee and any paying agent (including related reasonable fees and expenses of
any counsel to such parties); (viii) all expenses and application fees incurred
in connection with the approval of the Securities for book-entry transfer by
DTC; and (ix) all expenses incurred by the Company and the Guarantor in
connection with any "road show" presentation to potential investors.
(b) If (i) this Agreement is terminated pursuant to Section 7, (ii) the
Company for any reason fails to tender the Securities for delivery to the
Initial Purchasers or (iii) the Initial Purchasers decline to purchase the
Securities for any reason permitted under this Agreement, the Company and the
Guarantor jointly and severally agree to reimburse the Initial Purchasers for
all out-of-pocket costs and expenses (including the fees and expenses of their
counsel) reasonably incurred by the Initial Purchasers in connection with this
Agreement and the offering contemplated hereby.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and any controlling persons referred to herein, and the
affiliates, officers and directors of each Initial Purchaser and the directors
and officers of the Company and the Guarantor referred to in Section 6 hereof.
Nothing in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein. No purchaser of Securities from any
Initial Purchaser shall be deemed to be a successor merely by reason of such
purchase.
11. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantor and the
Initial Purchasers contained in this Agreement or made by or on behalf of the
Company, the Guarantor or the Initial Purchasers pursuant to this Agreement or
any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any
18
termination of this Agreement or any investigation made by or on behalf of the
Company, the Guarantor or the Initial Purchasers.
12. Certain Defined Terms. For purposes of this Agreement, (a) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act; (b) the term "business day" means
any day other than a day on which banks are permitted or required to be closed
in New York City; (c) the term "Exchange Act" means the Securities Exchange Act
of 1934, as amended; (d) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act; and (e) the term "significant subsidiary" has the
meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act.
13. Miscellaneous. (a) Authority of the Representatives. Any action by
the Initial Purchasers hereunder may be taken by the Representatives on behalf
of the Initial Purchasers, and any such action taken by the Representatives
shall be binding upon the Initial Purchasers.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Initial
Purchasers shall be given to the Representatives c/o X.X. Xxxxxx Securities
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000);
Attention: Transaction Execution Group. Notices to the Company and the Guarantor
shall be given to them at Xxxxxx Industries, Inc., 000 Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx 00000 (fax: (000) 000-0000); Attention: Vice President and
Treasurer.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which
may include counterparts delivered by any standard form of telecommunication),
each of which shall be an original and all of which together shall constitute
one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
(f) Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
19
If the foregoing is in accordance with your understanding, please
indicate your acceptance of this Agreement by signing in the space provided
below.
Very truly yours,
XXXXXX INDUSTRIES, INC.
By
-------------------------------------
Title:
XXXXXX INDUSTRIES, LTD.
By
-------------------------------------
Title:
Accepted: June 17, 2002
X.X. XXXXXX SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
For themselves and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
By: X.X. Xxxxxx Securities Inc.
By:
-----------------------------
Authorized Signatory
Schedule 1
Initial Purchaser Principal Amount
----------------- ----------------
X.X. Xxxxxx Securities Inc. $ 105,000,000
Banc of America Securities LLC $ 105,000,000
PNC Capital Markets, Inc. $ 22,500,000
Xxxxxxx Xxxxx Xxxxxx Inc. $ 22,500,000
UBS Warburg LLC $ 22,500,000
Wachovia Securities, Inc. $ 22,500,000
-------------
Total $ 300,000,000
Schedule 2
Significant Subsidiaries
Xxxxxx Bussmann, Inc.
Xxxxxx Lighting, Inc.
Xxxxxx Power Systems, Inc.
Xxxxxx Power Tools, Inc.
ANNEX A
Restrictions on Offers and Sales Outside the United States
In connection with offers and sales of Securities or the Guarantee
outside the United States:
(a) Each Initial Purchaser acknowledges that neither the Securities nor
the Guarantee have been registered under the Securities Act or may be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons except pursuant to an exemption from, or in transactions not subject to,
the registration requirements of the Securities Act.
(b) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) Such Initial Purchaser has offered and sold the Securities
and the Guarantee, and will offer and sell the Securities and the
Guarantee, (A) as part of their distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the
offering of the Securities and the Guarantee and the Closing Date, only
in accordance with Regulation S under the Securities Act ("Regulation
S") or Rule 144A or any other available exemption from registration
under the Securities Act.
(ii) None of such Initial Purchaser or any of its affiliates
or any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities
or the Guarantee, and all such persons have complied and will comply
with the offering restrictions requirement of Regulation S.
(iii) At or prior to the confirmation of sale of any
Securities or the Guarantee sold in reliance on Regulation S, such
Initial Purchaser will have sent to each distributor, dealer or other
person receiving a selling concession, fee or other remuneration that
purchases Securities or the Guarantee from it during the distribution
compliance period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering of
the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule
144A or any other available exemption from registration under
the Securities Act. Terms used above have the meanings given
to them by Regulation S."
(iv) Such Initial Purchaser has not and will not enter into
any contractual arrangement with any distributor with respect to the
distribution of the Securities or the
Guarantee, except with its affiliates or with the prior written consent
of the Company and the Guarantor.
Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in
this Agreement have the meanings given to them by Regulation S.
(c) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) it has not offered or sold and prior to the date six
months after the Closing Date will not offer or sell any Securities or
the Guarantee to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted
and will not result in an offer to the public in the United Kingdom
within the meaning of the United Kingdom Public Offers of Securities
Regulations 1995 (as amended);
(ii) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
Section 21 of the United Kingdom Financial Services and Markets Act
2000 (the "FSMA")) received by it in connection with the issue or sale
of any Securities of the Guarantee in circumstances in which Section
21(1) of the FSMA does not apply to the Company or the Guarantor; and
(iii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation
to the Securities or the Guarantee in, from or otherwise involving the
United Kingdom.
(d) Each Initial Purchaser acknowledges that no action has been or will
be taken by the Company and the Guarantor that would permit a public offering of
the Securities or the Guarantee, or possession or distribution of the
Preliminary Offering Memorandum, the Offering Memorandum or any other offering
or publicity material relating to the Securities or the Guarantee, in any
country or jurisdiction where action for that purpose is required.
ANNEX B
FORM OF OPINION OF SQUIRE, XXXXXXX & XXXXXXX, L.L.P.
Squire, Xxxxxxx & Xxxxxxx, L.L.P. shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
below:
(a) The Company has been duly incorporated and is validly existing and
in good standing under the laws of Ohio
(b) The Company has the corporate right, power and authority to execute
and deliver each of the Transaction Documents to which it is a party and to
perform its obligations thereunder.
(c) The Indenture has been duly authorized, executed and delivered by
the Company and the Guarantor and, assuming due execution and delivery thereof
by the Trustee, constitutes a valid and legally binding agreement of the Company
and the Guarantor enforceable against the Company and the Guarantor in
accordance with its terms, subject to the Enforceability Exceptions; and the
Indenture conforms in all material respects with the requirements of the Trust
Indenture Act and the rules and regulations of the Commission applicable to an
indenture that is qualified thereunder.
(d) The Securities have been duly authorized, executed and delivered by
the Company and, when duly authenticated as provided in the Indenture and paid
for as provided in this Agreement, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
(e) The Guarantee of the Securities has been duly authorized by the
Guarantor and, when the Securities have been duly executed, authenticated,
issued and delivered as provided in the Indenture and paid for as provided in
this Agreement, such Guarantee will be a valid and legally binding obligation of
the Guarantor, enforceable against the Guarantor in accordance with its terms,
subject to the Enforceability Exceptions, and will be entitled to the benefits
of the Indenture.
(f) The Exchange Securities have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered as contemplated by
the Registration Rights Agreement, the Exchange Securities will be duly and
validly issued and outstanding and will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance with
their terms, subject to the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture.
(g) The Guarantee of the Exchange Securities has been duly authorized
by the Guarantor and, when the Exchange Securities have been duly executed,
authenticated, issued and
delivered as contemplated by the Registration Rights Agreement, such Guarantee
will be a valid and legally binding obligation of the Guarantor, enforceable
against the Guarantor in accordance with its terms, subject to the
Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
(h) This Agreement has been duly authorized, executed and delivered by
the Company and the Guarantor and constitutes a valid and legally binding
agreement of the Company and the Guarantor, subject to the Enforceability
Exceptions, except that rights to indemnity and contribution thereunder may be
limited by applicable law and public policy.
(i) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor and, when duly executed
and delivered by the other parties thereto, will constitute a valid and legally
binding agreement of the Company and the Guarantor enforceable against the
Company and the Guarantor in accordance with its terms, subject to the
Enforceability Exceptions, and except that rights to indemnity and contribution
thereunder may be limited by applicable law and public policy.
(j) Each Transaction Document conforms in all material respects to the
description thereof contained in the Preliminary Offering Memorandum and the
Offering Memorandum.
(k) No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by the Company
and the Guarantor of each of the Transaction Documents to which each is a party,
the issuance and sale of the Securities and the Guarantee and compliance by the
Company and the Guarantor with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required (i) under applicable state securities laws in connection with
the purchase and resale of the Securities and the related Guarantee by the
Initial Purchasers and (ii) with respect to the Exchange Securities and the
related Guarantee under the Securities Act and applicable state securities laws
as contemplated by the Registration Rights Agreement.
(l) The descriptions in the Offering Memorandum of statutes, legal,
governmental and regulatory proceedings and contracts and other documents are
accurate in all material respects; and the statements in the Offering Memorandum
under the heading "Certain Tax Considerations," to the extent that they
constitute summaries of matters of law or regulation or legal conclusions,
fairly summarize the matters described therein in all material respects.
(m) Neither the Company nor the Guarantor is, and after giving effect
to the offering and sale of the Securities and the related Guarantee and the
application of the proceeds thereof as described in the Offering Memorandum
neither of them will be, an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act.
(n) Assuming the accuracy of the representations, warranties and
agreements of the Company, the Guarantor and the Initial Purchasers contained in
this Agreement, it is not necessary, in connection with the issuance and sale of
the Securities and the Guarantee to the
Initial Purchasers and the offer, resale and delivery of the Securities and the
Guarantee by the Initial Purchasers in the manner contemplated by this Agreement
and the Offering Memorandum, to register the Securities or the Guarantee under
the Securities Act or to qualify the Indenture under the Trust Indenture Act.
Such counsel shall also state that they have participated in
conferences with representatives of the Company and the Guarantor and with
representatives of their independent accountants and counsel at which
conferences the contents of the Offering Memorandum [and any amendment and
supplement thereto, if applicable] and related matters were discussed and,
although such counsel assume no responsibility for the accuracy, completeness or
fairness of the Offering Memorandum [or any amendment or supplement thereto, if
applicable] (except as expressly provided above), nothing has come to the
attention of such counsel to cause such counsel to believe that the Offering
Memorandum [or any amendment or supplement thereto, if applicable], as of its
date or the Closing Date, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (other than the financial statements and other financial
information contained or incorporated by reference therein, as to which such
counsel need express no belief).
In rendering such opinion, such counsel may rely as to matters of fact
on certificates of responsible officers of the Company and the Guarantor and
public officials that are furnished to the Initial Purchasers and may make
necessary assumptions as to matters relating to Bermuda law.
The opinion of Squire, Xxxxxxx & Xxxxxxx, L.L.P. described above shall
be rendered to the Initial Purchasers at the request of the Company and the
Guarantor and shall so state therein.
ANNEX C
FORM OF OPINION OF XXXXXXX, XXXXXXXX & XXXXX
Xxxxxxx, Xxxxxxxx & Xxxxx shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Guarantor, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
below:
(a) The Guarantor has been duly organized and is validly existing and
in good standing under the laws of Bermuda, is duly qualified to do business and
is in good standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, and has the
corporate power and authority necessary to own or hold its properties and to
conduct the business in which it is engaged as described in the Offering
Memorandum, except where the failure to be so qualified or have such power or
authority would not, individually or in the aggregate, have a Material Adverse
Effect.
(b) The Guarantor has the corporate right, power and authority to
execute and deliver each of the Transaction Documents to which it is a party and
to perform its obligations thereunder; and all action required to be taken for
the due and proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions contemplated
thereby by Guarantor has been duly and validly taken.
(c) The execution, delivery and performance by the Guarantor of each of
the Transaction Documents to which it is a party do not and will not violate,
conflict with or constitute a default under (i) any requirement of any law or
any regulation of Bermuda or (ii) the constitutional documents of the Guarantor,
and will not create any charge or lien over the assets of the Guarantor.
(d) Except as otherwise provided in such opinion, no consent, license
or authorization of, filing with, or other act by or in respect of, any
governmental authority or court of Bermuda is required to be obtained by the
Guarantor in connection with the execution, delivery or performance by the
Guarantor of the Transaction Documents to which it is a party, or to ensure the
legality, validity, admissibility into evidence or enforceability as to the
Guarantor of the Transaction Documents to which it is a party.
In rendering such opinion, such counsel may rely as to matters of fact
on certificates of responsible officers of the Company and the Guarantor and
public officials that are furnished to the Initial Purchasers.
The opinion of Xxxxxxx, Xxxxxxxx & Xxxxx described above shall be
rendered to the Initial Purchasers at the request of the Company and the
Guarantor and shall so state therein.
ANNEX D
FORM OF OPINION OF XXXXXX INDUSTRIES, INC.
General Counsel of the Company shall have furnished to the Initial
Purchasers her written opinion, as counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
below:
(a) The Company and each of the significant subsidiaries of the Company
have been duly organized and are validly existing and in good standing under the
laws of their respective jurisdictions of organization, 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, and have the corporate power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged as described in the Offering Memorandum,
except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a Material Adverse Effect.
(b) The Guarantor has an authorized capitalization of 250 million Class
A Common Shares, par value $0.01 per share, 150 million Class B Common Shares,
par value $0.01 per share, and 10,000 Preferred Shares, par value $0.01 per
share ; and all the outstanding shares of capital stock or other equity
interests of the Company and each other significant subsidiary of the Company
have been duly authorized and validly issued, and are fully paid and
non-assessable.
(c) The Company has the corporate right, power and authority to execute
and deliver each of the Transaction Documents to which it is a party and to
perform its obligations thereunder.
(d) The execution, delivery and performance by the Company and the
Guarantor of each of the Transaction Documents to which each is a party, the
issuance and sale of the Securities and the Guarantee and compliance by the
Company and the Guarantor with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents will not (i) to the best
knowledge of such counsel, conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company, the Guarantor or any of their subsidiaries pursuant
to, any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company, the Guarantor or any of their subsidiaries is a
party or by which the Company, the Guarantor or any of their subsidiaries is
bound or to which any of the property or assets of the Company, the Guarantor or
any of their subsidiaries is subject, (ii) result in any violation of the
provisions of the charter, by-laws or similar organizational documents of the
Company, the Guarantor or any of their subsidiaries or (iii) result in the
violation of any law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory authority applicable to
the Company or the
Guarantor, except, in the case of clause (i) above, for any such conflict,
breach or violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(e) To the best knowledge of such counsel, except as described in the
Offering Memorandum, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company, the
Guarantor or any of their subsidiaries is or may be a party or to which any
property of the Company, the Guarantor or any of their subsidiaries is or may be
the subject that, individually or in the aggregate, if determined adversely to
the Company, the Guarantor or any of their subsidiaries, could reasonably be
expected to have a Material Adverse Effect; and, to the best knowledge of such
counsel, no such investigations, actions, suits or proceedings are threatened or
contemplated by any governmental or regulatory authority or threatened by
others.
(f) The descriptions in the Offering Memorandum of statutes, legal,
governmental and regulatory proceedings and contracts and other documents are
accurate in all material respects.
Such counsel shall also state that she has participated in conferences
with representatives of the Company and the Guarantor and with representatives
of their independent accountants and counsel at which conferences the contents
of the Offering Memorandum [and any amendment and supplement thereto, if
applicable] and related matters were discussed and, although such counsel assume
no responsibility for the accuracy, completeness or fairness of the Offering
Memorandum [or any amendment or supplement thereto, if applicable] (except as
expressly provided above), nothing has come to the attention of such counsel to
cause such counsel to believe that the Offering Memorandum [or any amendment or
supplement thereto, if applicable], as of its date or the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (other
than the financial statements and other financial information contained or
incorporated by reference therein, as to which such counsel need express no
belief).
In rendering such opinion, such counsel may rely as to matters of fact
on certificates of responsible officers of the Company and the Guarantor and
public officials that are furnished to the Initial Purchasers.
EXHIBIT A
Form of Registration Rights Agreement
