EXHIBIT 1.1
$300,000,000
CNF INC.
6.70% SENIOR DEBENTURES DUE 2034
PURCHASE AGREEMENT
April 27, 2004
Citigroup Global Markets Inc.
Xxxxxx Xxxxxxx & Co. Incorporated,
As representatives of the Initial Purchasers
named in Schedule I hereto,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CNF Inc., a Delaware corporation (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the several parties
named in Schedule I hereto (the "Initial Purchasers"), for whom you (the
"Representatives") are acting as representatives, an aggregate of $300,000,000
principal amount of the Senior Debentures specified above (the "Securities").
1. The Company represents and warrants to, and agrees with, each of the
Initial Purchasers that:
(a) A preliminary offering memorandum, dated April 26,
2004 (the "Preliminary Offering Memorandum") and an offering
memorandum, dated April 27, 2004 (the "Offering Memorandum"), have been
prepared in connection with the offering of the Securities. Any
reference to the Preliminary Offering Memorandum or the Offering
Memorandum shall also be deemed to refer to, and include, all documents
filed with the United States Securities and Exchange Commission (the
"Commission") pursuant to Section 13(a), 13(c) or 15(d) of the United
States Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or prior to the date of the Preliminary Offering Memorandum
or the Offering Memorandum, as the case may be, that are incorporated
by reference therein; and any reference to the Preliminary Offering
Memorandum or the Offering Memorandum, as the case may be, as amended
or supplemented, as of any specified date, shall be deemed to include
any documents filed with the Commission pursuant to Section 13(a),
13(c) or 15(d) of the Exchange Act after the date of the Preliminary
Offering Memorandum or the Offering Memorandum, as the case may be, and
prior to such specified date that are incorporated by reference
therein, provided that in any such case is prior to the completion of
the distribution of the Securities. All documents filed under the
Exchange Act and incorporated by reference in the Preliminary Offering
Memorandum or the Offering Memorandum, as the case may
be, or any amendment or supplement thereto are hereinafter called the
"Exchange Act Reports." The Preliminary Offering Memorandum, on the
date thereof, did not contain any untrue statement of a material fact
or omit to state any 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. On the date
hereof and at the Time of Delivery (as defined in Section 4(a) hereof),
the Offering Memorandum did not, and will not (and any amendment or
supplement thereto, at the date thereof and at the Time of Delivery,
will not) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
foregoing representations and warranties shall not apply to statements
or omissions in the Preliminary Offering Memorandum or the Offering
Memorandum or any amendment or supplement thereto made in reliance upon
and in conformity with information furnished to the Company in writing
by any Initial Purchaser through either of the Representatives
expressly for use therein.
(b) The Exchange Act Reports, when they were filed with
the Commission, conformed in all material respects to the requirements
of the Exchange Act, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further Exchange Act Reports incorporated by reference in the Offering
Memorandum, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act, and will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(c) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
with corporate power and corporate authority under such laws to own,
lease and operate its properties and conduct its business as described
in the Offering Memorandum; and the Company is duly qualified to
transact business as a foreign corporation and is in good standing in
each other jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, considered as one enterprise.
(d) Each of Con-Way Transportation Services, Inc., Menlo
Worldwide, LLC, Menlo Logistics, Inc., and Menlo Worldwide Forwarding,
Inc. and (each individually, a "Significant Subsidiary" and
collectively, the "Significant Subsidiaries") is a corporation or
limited liability company, as the case may be, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with power and authority under such laws to own, lease and
operate its properties and conduct its business as described in the
Offering Memorandum; and each Significant Subsidiary is duly qualified
to transact business as a foreign corporation or limited liability
company, as the case may be, and is in good standing in each other
jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such
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qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, considered as one enterprise. All
of the outstanding shares of capital stock or other equity interests,
as the case may be, of each Significant Subsidiary have been duly
authorized and validly issued and are fully paid and, with respect to
each Significant Subsidiary that is a corporation, non-assessable and
are owned by the Company (except for directors' qualifying shares) or,
in the case of Menlo Logistics, Inc. and Menlo Worldwide Forwarding,
Inc., by Menlo Worldwide, LLC, free and clear of any pledge, lien,
security interest, charge, claim, equity, encumbrance or adverse
interest of any kind (except for restrictions on transfer arising under
federal or state securities or blue sky laws).
(e) None of the subsidiaries of the Company, other than
Con-Way Transportation Services, Inc. and Menlo Worldwide, LLC, is a
"significant subsidiary," as such term is defined in Rule 1-02(w) of
Regulation S-X of the Securities Act.
(f) The Securities have been duly authorized and, when
issued and delivered pursuant to this Purchase Agreement and
authenticated in the manner provided in the Indenture dated as of March
8, 2000 (the "Base Indenture") between the Company and The Bank of New
York, as successor in interest to Bank One Trust Company, National
Association, as trustee (the "Trustee"), as supplemented by
Supplemental Indenture No. 1 to be dated as of the Time of Delivery
(the "Supplemental Indenture" and, together with the Base Indenture,
the "Indenture"), will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding obligations
of the Company entitled to the benefits provided by the Indenture,
under which they are to be issued, enforeceable against the Company in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws relating or affecting
creditors' rights generally or by general equitable principals. The
Exchange Securities (as defined in paragraph (j) of this Section 1)
have been duly authorized for issuance by the Company, and when issued
and authenticated in accordance with the terms of the Indenture and the
Exchange Offer (defined below) will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company, entitled to the benefits
provided by the Indenture, enforceable against the Company in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws relating or affecting
creditors' rights generally or by general equitable principals.
(g) The Base Indenture has been duly authorized, executed
and delivered and constitutes a valid and legally binding obligation of
the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer or other similar laws
relating or affecting creditors' rights generally or by general
equitable principals and except as rights to indemnification and
contribution may be limited by applicable law or public policy.
(h) The Supplemental Indenture has been duly authorized
and, when executed and delivered by the Company at the Time of Delivery
(assuming the due authorization,
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execution and delivery thereof by the Trustee), the Supplemental
Indenture will constitute a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer or other similar laws
relating or affecting creditors' rights generally or by general
equitable principals and except as rights to indemnification and
contribution may be limited by applicable law or public policy.
(i) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) The exchange and registration rights agreement, to be
dated as of April 30, 2004 (the "Registration Rights Agreement"),
between the Company and the Initial Purchasers, has been duly
authorized and, when executed and delivered by the Company (assuming
the due authorization, execution and delivery thereof by the Initial
Purchasers), the Registration Rights Agreement will constitute a valid
and legally binding obligation of the Company, enforceable in
accordance with its terms, except to the extent enforceability may be
limited by subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer
or other similar laws relating or affecting creditors' rights generally
or by general equitable principals and except as rights to
indemnification and contribution under the Registration Rights
Agreement may be limited by applicable law or public policy. The
Registration Rights Agreement will conform in all material respects to
the description thereof contained in the Offering Memorandum and will
be in substantially the form previously delivered to you. Pursuant to
the Registration Rights Agreement, the Company will agree to file with
the Commission, under the circumstances set forth therein, (i) a
registration statement under the Securities Act relating to another
series of debt securities of the Company with terms substantially
identical to the Securities (the "Exchange Securities") to be offered
in exchange for the Securities (the "Exchange Offer") and (ii) to the
extent required by the Registration Rights Agreement, a shelf
registration statement pursuant to Rule 415 of the Securities Act
relating to the resale by certain holders of the Securities, and in
each case, to use its reasonable best efforts to cause such
registration statements to be declared effective.
(k) The Securities and the Indenture conform, and the
Exchange Securities will conform, as to legal matters in all material
respects to the descriptions thereof contained in the Offering
Memorandum.
(l) The Company had at the date indicated in the Offering
Memorandum a duly authorized, issued and outstanding capitalization as
set forth in the Offering Memorandum under the caption
"Capitalization." All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable.
(m) The Company is not in violation of its charter or
by-laws, and none of the Significant Subsidiaries is in violation of
its charter (or, in the case of Menlo Worldwide LLC, limited liability
company agreement) or by-laws, except, in each case, for any such
violations which, individually and in the aggregate, would not have a
material adverse
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effect on the Company and its subsidiaries, considered as one
enterprise, and except as otherwise set forth in the Offering
Memorandum, none of the Company or any of the Significant Subsidiaries
is in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
to which it is a party or by which it is bound or to which any of its
properties is subject, except for such defaults that would not have a
material adverse effect on the Company and its subsidiaries, considered
as one enterprise. The issue and sale of the Securities and the
Exchange Securities, the execution, delivery and performance by the
Company of this Purchase Agreement, the Securities, the Exchange
Securities, the Indenture and the Registration Rights Agreement and the
compliance by the Company with all of its obligations under this
Purchase Agreement, the Securities, the Exchange Securities, the
Indenture and the Registration Rights Agreement and the consummation of
the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Company
and do not and will not result in any violation of the charter or
by-laws of the Company or any Significant Subsidiary, and do not and
will not violate or conflict with, or result in a breach 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 or any of the Significant
Subsidiaries under any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which the Company or
any of the Significant Subsidiaries is a party or by which it is bound
or to which any of their respective properties are subject or any
existing applicable law, rule, regulation, judgment, order or decree of
any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of the Significant
Subsidiaries or any of their respective properties (except for such
violations, conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise).
(n) No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than under the Securities Act of 1933, as amended (the
"Securities Act"), the Exchange Act, the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the securities or blue sky
laws of the various states and of foreign jurisdictions) is required
for the valid authorization, issuance, sale and delivery of the
Securities and the Exchange Securities, for the execution, delivery or
performance by the Company of this Purchase Agreement, the Registration
Rights Agreement, the Indenture and the Securities and the Exchange
Securities or for the consummation by the Company of the transactions
contemplated hereby or thereby, except such of the foregoing as will be
obtained prior to the Time of Delivery.
(o) Except as disclosed in the Offering Memorandum, there
is no action, suit or proceeding before or by any government,
governmental instrumentality or court, domestic or foreign, now pending
or, to the knowledge of the Company, threatened against or affecting,
the Company or any of the Significant Subsidiaries or any of their
respective officers, as applicable, in their capacity as such, in which
there is a reasonable possibility of an adverse decision that would (i)
result in any material adverse change in
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the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as
one enterprise, (ii) materially and adversely affect the properties or
assets of the Company and its subsidiaries, considered as one
enterprise, or (iii) materially and adversely affect the consummation
of the transactions contemplated in this Purchase Agreement or the
Registration Rights Agreement; the aggregate of all pending legal or
governmental proceedings that are not described in the Offering
Memorandum to which the Company or any of the Significant Subsidiaries
is a party or which affect any of their respective properties and in
which there is a reasonable possibility of an adverse decision,
including ordinary routine litigation incidental to the business of,
the Company or any of its subsidiaries, would not have a material
adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise; and there are no contracts
or other documents that would be required to be described in a
prospectus to a registration statement under the Securities Act that
are not described in the Offering Memorandum.
(p) Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended, ("ERISA") that is maintained, administered or contributed to
by the Company or any of its subsidiaries for employees or former
employees of the Company or its subsidiaries has been maintained in
compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended, ("Code"),
except where the failure to comply would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise. No prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code has occurred with respect to
any such plan excluding transactions effected pursuant to a statutory
or administrative exemption, except where such prohibited transaction
would not have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise. For each such plan which is
subject to the funding rules of Section 412 of the Code or Section 302
of ERISA no "accumulated funding deficiency" as defined in Section 412
of the Code has been incurred, except where the "accumulated funding
deficiency" has been waived by the Internal Revenue Service, and the
deficiency would not have a material adverse effect on the Company and
its subsidiaries, considered as one enterprise. There is no reasonable
likelihood that the Company or any of its subsidiaries could incur
liability under Title IV of ERISA or suffer the imposition of one or
more liens under ERISA or the Code with respect to any such plan or
other employee benefit plan, except as otherwise disclosed in or
contemplated by the Offering Memorandum or except for such liability or
lien which would not have a material adverse effect on the Company and
its subsidiaries, considered as one enterprise. With respect to any
employee benefit plan that is a multiemployer plan as defined in
Section 3(37) of ERISA, or another plan not sponsored by the Company,
the representations in this paragraph (n) of Section 1 are made to the
best knowledge and belief of the Company.
(q) The Company has no knowledge of any actionable
violation by the Company or any of its subsidiaries of any federal,
state or local law relating to employment and employment practices,
discrimination in the hiring, promotion or pay of employees, or any
applicable wage or hour laws, which, individually or in the aggregate,
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would result in a material adverse effect on the Company and its
subsidiaries, considered as one enterprise. There is (i) no material
unfair labor practice complaint pending or, to the knowledge of the
Company, threatened against the Company before the National Labor
Relations Board or any state or local labor relations board, nor are
any material grievance or arbitration proceedings arising under any
collective bargaining agreement pending or, to the knowledge of the
Company, threatened against the Company, (ii) no labor strike, dispute,
slowdown or stoppage ("Labor Dispute") in which the Company is
involved, nor, to the knowledge of the Company, is any Labor Dispute
imminent, other than routine disciplinary and grievance matters, and
(iii) except as disclosed in or contemplated by the Offering
Memorandum, no question concerning union representation within the
meaning of the National Labor Relations Act existing with respect to
the employees of the Company and, to the knowledge of the Company, no
union organizing activities are taking place by employees of the
Company or any of its subsidiaries, which, with respect to any matter
specified in clauses (i), (ii) or (iii) above, whether considered
singly or in the aggregate, would have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise.
(r) KPMG LLP, who reported upon the audited financial
statements and related notes included or incorporated by reference in
the Offering Memorandum, is an independent public accountant with
respect to the Company in accordance with the provisions of the
Securities Act and the rules and regulations of the Commission
thereunder.
(s) The financial statements, together with the related
notes and schedules thereto, included or incorporated by reference in
the Offering Memorandum present fairly in all material respects the
consolidated financial position, results of operations and cash flow of
the Company and its subsidiaries at the respective dates and for the
respective periods to which they apply; such statements and related
notes and schedules thereto have been prepared in accordance with U.S.
generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the
other financial and statistical information and data set forth in the
Offering Memorandum in all material respects, present fairly the
information purported to be shown thereby at the respective dates or
for the respective periods to which they apply and, to the extent that
such information is set forth in or has been derived from the financial
statements and accounting books and records of the Company, have been
prepared on a basis consistent with such financial statements and the
books and records of the Company.
(t) Since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated therein or
contemplated thereby, there has not been (i) any material adverse
change, or any development involving a prospective material adverse
change, in the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, whether or not arising in the ordinary
course of business, (ii) any transaction or agreement entered into by
the Company, whether or not arising in the ordinary course of business,
that is material to the Company and its subsidiaries, considered as one
enterprise, (iii) any dividend or distribution of any kind declared,
paid or made by the Company on its capital stock, except for regular
periodic dividends on its capital stock or
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on the preferred securities of its subsidiary trust, or (iv) any change
in the capital stock or long-term debt of the Company or any of its
subsidiaries, except for the issuance of the Company's common stock
upon the conversion of the Company's Series B Cumulative Convertible
Preferred Stock or upon conversion of the preferred securities of the
Company's subsidiary trust, or the issuance of capital stock, options
and other securities under existing officer, director or employee
benefit plans or upon the exercise of options issued under existing or
prior officer, director or employee benefit plans, or the purchase by
the Company or any of its subsidiaries of the Company's common stock in
connection with its Thrift and Stock Plan in accordance with past
practice, and except for changes in long-term debt in the ordinary
course of business.
(u) The Company and the Significant Subsidiaries each
owns, possesses or has obtained all governmental licenses, permits,
certificates, consents, orders, approvals and other authorizations
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as presently conducted, and the
Company has not received any notice of proceedings relating to
revocation or modification of any such licenses, permits, certificates,
consents, orders, approvals or authorizations, except in each case for
such licenses, permits, certificates, consents, orders, approvals and
other authorizations or revocations or modifications thereof which
would not have a material adverse effect on the Company and its
subsidiaries considered as one enterprise. Each of the Company and the
Significant Subsidiaries is in compliance with all laws and regulations
relating to the conduct of its business as conducted as of the date of
the Offering Memorandum, except where the failure to be in compliance
would not have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
(v) The Company is not and, after giving effect to the
offering and the sale of the Securities, will not be an "investment
company" or a company controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(w) Except as would not, singly or in the aggregate, have
a material adverse effect on the Company and its subsidiaries,
considered as one enterprise, and except as otherwise set forth in or
contemplated by the Offering Memorandum, (i) none of the Company or any
of its subsidiaries is in violation of any federal, state or local laws
and regulations relating to pollution or protection of human health or
the environment, including, without limitation, laws and regulations
relating to emissions, discharges, releases or threatened releases of
toxic or hazardous substances, materials or wastes, or petroleum and
petroleum products ("Materials of Environmental Concern"), or otherwise
relating to the protection of human health and safety, or the use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, "Environmental Laws"), which
violation includes, but is not limited to, noncompliance with, or lack
of, any permits or other environmental authorizations, and (ii) (A)
none of the Company or any of its subsidiaries has received any
communication (written or oral), whether from a governmental authority
or otherwise, alleging any such violation or noncompliance, and there
are no circumstances, either past, present or that are reasonably
foreseeable, that could reasonably be expected to lead to any such
violation in the future, (B) there is no pending or, to the knowledge
of the Company, threatened claim, action,
8
investigation or notice (written or oral) by any person or entity
alleging potential liability for investigatory, cleanup, or
governmental response costs, or natural resources or property damages,
or personal injuries, attorney's fees or penalties relating to (x) the
presence, or release into the environment, of any Materials of
Environmental Concern at any location owned or operated by the Company
or any of its subsidiaries now or in the past, or (y) circumstances
forming the basis of any violation or potential violation, of any
Environmental Law (collectively, "Environmental Claims"), and (C) there
are no past or present actions, activities, circumstances, conditions,
events or incidents that could form the basis of any Environmental
Claim against the Company or any of its subsidiaries or against any
person or entity for whose acts or omissions the Company or any of its
subsidiaries is or may reasonably be expected to be liable, either
contractually or by operation of law. In the ordinary course of
business, the Company and/or certain of its subsidiaries, as
appropriate, have conducted environmental investigations of, and have
reviewed reasonably available information regarding, the business,
properties and operations of the Company and its subsidiaries, and of
other properties within the vicinity of their business, properties and
operations, as appropriate for the circumstances of each such property
and operation; on the basis of such reviews and investigations, the
Company has reasonably concluded that, except as disclosed or
contemplated by the Offering Memorandum, any costs and liabilities
associated with such matters would not have, singly or in the
aggregate, a material adverse effect on the Company and its
subsidiaries, considered as one enterprise, or otherwise require
disclosure in the Offering Memorandum.
(x) No person has the right to require the Company to
register any securities for offering and sale under the Securities Act
by reason of the issue and sale of the Securities or the filing of a
registration statement in connection with the Exchange Offer.
(y) The Company and each of the Significant Subsidiaries
have timely filed (or have had timely filed on their behalf) all
material Tax returns required by applicable law to be filed by them
prior to the date hereof (taking into account any properly granted
extensions of time to file any Tax returns), and all such Tax returns
are true, complete, and correct in all material respects. Except as
otherwise stated or described in the Offering Memorandum, the Company
and each of the Significant Subsidiaries have paid (or have had paid on
their behalf) all material Taxes (as defined below) due or claimed to
be due from the Company, other than those (i) currently payable without
penalty or interest or (ii) being contested in good faith and by
appropriate proceedings. Other than Tax items relating to proposed
assessments or Audits (as defined below) which have been disclosed to
counsel for the Initial Purchasers or which are set forth or described
in the Offering Memorandum, there are no other Tax items that are
currently under examination by any Tax Authority (as defined below) or,
to the best knowledge of the Company, that could result in a proposed
deficiency if examined by a Tax Authority in respect of which there is
a reasonable possibility of a determination that would be adverse to
the Company and that would have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise.
For purposes of this paragraph (w) of Section 1:
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"Taxes" shall mean all federal, state, local and
foreign taxes, and other assessments of a similar nature,
whether imposed directly or through withholding, including any
interest, additions to tax or penalties applicable thereto.
"Audit" shall mean any audit, assessment of Taxes,
other examination by any tax authority, proceeding or appeal
of such proceeding relating to Taxes.
"Tax Authority" means the Internal Revenue Service
and any other domestic or foreign governmental authority
responsible for the administration of any Taxes.
(z) None of the Company or any of the Significant
Subsidiaries has taken or will take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or result
in stabilization or manipulation of the price of the Securities.
(aa) Any certificate signed by any officer of the Company
and delivered to you or your counsel on or after the date of this
Purchase Agreement shall be deemed a representation and warranty by the
Company to you as to the matters covered thereby.
(bb) When the Securities are issued and delivered pursuant
to this Purchase Agreement, the Securities will not be of the same
class (within the meaning of Rule 144A under the Securities Act) as
securities which are listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in a U.S.
automated inter-dealer quotation system.
(cc) The Company is subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act.
(dd) It is not necessary, in connection with the offer,
sale and delivery of the Securities to the Initial Purchasers under
this Purchase Agreement or in connection with the offer, initial resale
and delivery of the Securities by the Initial Purchasers in the manner
contemplated by this Purchase Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act, assuming that the Initial
Purchasers have not and will not breach Section 3 of this Purchase
Agreement.
(ee) Assuming compliance with the representations made by
the Initial Purchasers in Section 3 hereof, (i) neither the Company nor
any person acting on its behalf has offered or sold the Securities by
means of any general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act or, with respect to
Securities sold outside the United States to non-U.S. persons (as
defined in Rule 902 under the Securities Act), by means of any directed
selling efforts within the meaning of Rule 902 under the Securities Act
and (ii) the Company, any affiliate of the Company and any person
acting on its or their behalf has complied with and will implement the
"offering restriction" within the meaning of such Rule 902.
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(ff) Within the preceding six months, neither the Company
nor any other person acting on behalf of the Company has offered or
sold to any person any Securities, or any securities of the same or a
similar class as the Securities, other than Securities offered or sold
to the Initial Purchasers hereunder. The Company will take reasonable
precautions designed to insure that any offer or sale, direct or
indirect, in the United States or to any U.S. person (as defined in
Rule 902 under the Securities Act) of any Securities or any
substantially similar security issued by the Company, within six months
subsequent to the date on which the distribution of the Securities has
been completed (as notified to the Company by the Representatives), is
made under restrictions and other circumstances reasonably designed not
to affect the status of the offer and sale of the Securities in the
United States and to U.S. persons contemplated by this Purchase
Agreement as transactions exempt from the registration provisions of
the Securities Act.
(gg) There is and has been no failure on the part of the
Company or, to the knowledge of the Company, and any of the Company's
directors or officers, in their capacities as such, to comply with any
applicable provision of the Sarbanes Oxley Act of 2002 and the rules
and regulations promulgated in connection therewith (the "Sarbanes
Oxley Act") that are currently effective, including Section 402 related
to loans and Sections 302 and 906 related to certifications, other than
any such failure that would not reasonably be expected to have a
material adverse effect on the Company and its subsidiaries, considered
as one enterprise.
2. Subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to each of the Initial Purchasers, and each of
the Initial Purchasers agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 96.654% of the principal amount thereof, plus
accrued interest, if any, from April 30, 2004 to the Time of Delivery hereunder,
the principal amount of Securities set forth opposite the name of such Initial
Purchaser in Schedule I hereto.
3. Upon the authorization by you of the release of the
Securities, the several Initial Purchasers propose to offer the Securities for
sale upon the terms and conditions set forth in this Purchase Agreement and the
Offering Memorandum and each Initial Purchaser hereby represents and warrants
to, and agrees with the Company that:
(a) It will offer and sell the Securities only to: (i)
persons who it reasonably believes are "qualified institutional buyers"
("QIBs") within the meaning of Rule 144A under the Securities Act in
transactions meeting the requirements of Rule 144A; or (ii) in the case
of offers or sales outside the United States, to persons other than
U.S. persons ("Non-U.S. Persons," which term shall include dealers or
other professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than an estate
or trust)) in reliance on Regulation S;
(b) It is an "Accredited Investor" of the sort specified
in clauses (1), (2), (3) or (7) in Rule 501 (a) of Regulation D under
the Securities Act;
11
(c) It will not offer or sell the Securities by any form
of general solicitation or general advertising, including but not
limited to the methods described in Rule 502(c) under the Securities
Act;
(d) Each Initial Purchaser understands that the
Securities have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act.
Each Initial Purchaser severally represents and agrees that, except as
permitted by Section 4(a) above, it has offered and sold the Securities
and will offer and sell the Securities (i) as part of its distribution
at any time and (ii) otherwise until forty days after the later of the
date upon which the offering of the Securities commences and the Time
of Delivery, only in accordance with Rule 903 of Regulation S.
Accordingly, neither the Initial Purchasers, their affiliates nor any
persons acting on their behalf have engaged or will engage in any
directed selling efforts with respect to Securities sold hereunder
pursuant to Regulation S, and the Initial Purchasers, their affiliates
and any person acting on their behalf have complied and will comply
with the offering restriction requirements of Regulation S. Each
Initial Purchaser severally agrees that, at or prior to confirmation of
a sale of Securities pursuant to Regulation S it will have sent to each
distributor, dealer or person receiving a selling concession, fee or
other remuneration that purchases such Securities from it during the
restricted period a confirmation or notice to substantially the
following effect:
"The securities covered hereby have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered and 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 and the final closing date, except in either case
in accordance with Regulation S (or Rule 144A if available)
under the Securities Act. Terms used above have the meaning
given to them by Regulation S."
(e) It has not offered or sold and, prior to the expiry
of a period of six months from the Time of Delivery, will not offer or
sell any Securities included in this offering 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 Public
Offers of Securities Regulations 1995;
(f) It has only communicated and 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 Financial Services and Markets Act 2000
("FSMA")) received by it in connection with the issue or sale of any
12
Securities included in this offering in circumstances in which section
21(1) of the FSMA does not apply to us; and
(g) 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 included in this offering in, from or otherwise
involving the United Kingdom.
4. (a) The Securities to be purchased by each Initial
Purchaser hereunder will be represented by one or more definitive
global Securities in book-entry form which will be deposited by or on
behalf of the Company with The Depository Trust Company ("DTC") or its
designated custodian. The Company will deliver the Securities to the
Representatives. for the account of each Initial Purchaser, against
payment by or on behalf of such Initial Purchaser of the purchase price
therefor by wire transfer in Federal (same day) funds, by causing DTC
to credit the Securities to the account of the Representatives. at DTC.
The Company will cause the certificates representing the Securities to
be made available to the Representatives for checking at least
twenty-four hours prior to the Time of Delivery (as defined below) at
the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30
a.m., New York City time, on April 30, 2004 or such other time and date
as the Representatives and the Company may agree upon in writing. Such
time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery
by or on behalf of the parties hereto pursuant to Section 7 hereof,
including the cross-receipt for the Securities and any additional
documents requested by the Initial Purchasers pursuant to Section 7
hereof, will be delivered at such time and date at the offices of
Mayer, Brown, Xxxx & Maw LLP, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000 (the "Closing Location"), and the Securities will be
delivered at the Designated Office, all at the Time of Delivery. A
meeting will be held at the Closing Location on the New York Business
Day next preceding the Time of Delivery, at which meeting the final
drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Initial Purchasers:
(a) The Company will not amend or supplement the Offering
Memorandum without the prior written consent of the Representatives,
which consent shall not be unreasonably withheld;
(b) The Company will cooperate with the Initial
Purchasers in endeavoring to qualify the Securities for sale under the
securities laws of such jurisdictions as the Initial Purchasers may
reasonably have designated in writing and will make such applications,
file such documents and furnish such information as may be reasonably
required for that purpose; provided that the Company shall not be
required to qualify as a foreign
13
corporation or to file a general consent to service of process in any
jurisdiction where it is not now so qualified or required to file such
a consent. The Company will, from time to time, prepare and file such
statements, reports and other documents, as are or may be required to
continue such qualifications in effect for so long a period as the
Representatives may reasonably request for distribution of the
Securities;
(c) To furnish the Initial Purchasers with copies of the
Offering Memorandum and each amendment or supplement thereto and
additional written and electronic copies thereof in such quantities as
you may from time to time reasonably request. If at any time prior to
the date on which all of the Securities shall have been sold by the
Initial Purchasers, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of counsel to the
Representatives, it becomes necessary to amend or supplement the
Offering Memorandum in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
or, if it is necessary at any time to amend or supplement the Offering
Memorandum to comply with applicable law, the Company promptly will
prepare an appropriate amendment or supplement to the Offering
Memorandum so that the Offering Memorandum as so amended or
supplemented will not contain statements that, in light of the
circumstances under which they were made, are misleading, or so that
the Offering Memorandum will comply with applicable law. We will
prepare and furnish without charge to each Initial Purchaser and to any
dealer in securities as many written and electronic copies as you may
from time to time reasonably request of an amended Offering Memorandum
or a supplement to the Offering Memorandum which will correct such
statement or omission or affect such compliance;
(d) During the period beginning from the date hereof and
continuing until the date six months after the Time of Delivery, not to
offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder and the Registration Rights Agreement, any
securities of the Company that are substantially similar to the
Securities;
(e) Not to be or become, at any time prior to the
expiration of three years after the Time of Delivery, an open-end
investment company, unit investment trust, closed-end investment
company or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act;
(f) At any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, for the benefit of holders
from time to time of Securities, to furnish at its expense, upon
request, to holders of Securities and prospective purchasers of
securities information (the "Additional Issuer Information") satisfying
the requirements of subsection (d)(4) of Rule 144A under the Securities
Act;
(g) If not otherwise available on the Commission's
Electronic Data Gathering, Analysis, and Retrieval ("XXXXX") system, to
furnish to the holders of the Securities as soon as practicable after
the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each
of the first three quarters of each fiscal year (beginning
14
with the fiscal quarter ending after the date of the Offering
Memorandum), to make available consolidated summary financial
information of the Company and its subsidiaries for such quarter in
reasonable detail;
(h) During a period of one year from the date of the
Offering Memorandum, to furnish to you, if not available on XXXXX or
the Company's website, copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to
deliver to you as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
securities exchange on which the Securities or any class of securities
of the Company is listed; and to the extent consistent with Regulation
FD under the Securities Act and to the extent that such additional
information has been made available to the stockholders of the Company,
such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to
the Commission);
(i) During the period of two years after the Time of
Delivery, the Company will not, and will not permit any of its
"affiliates" (as defined in Rule 144 under the Securities Act) to,
resell any of the Securities which constitute "restricted securities"
under Rule 144 that have been reacquired by any of them;
(j) The Company will cooperate with the Representatives
and use its reasonable best efforts to permit the Securities to be
eligible for clearance and settlement through The Depository Trust
Company and, if necessary, Euroclear and Clearstream Banking and
Euroclear Bank S.A./N.V.;
(k) To use the net proceeds received by it from the sale
of the Securities pursuant to this Purchase Agreement in the manner
specified in the Offering Memorandum under the caption "Use of
Proceeds".
6. The Company covenants and agrees with the several Initial
Purchasers that the Company will pay or cause to be paid the following: (i) the
fees, disbursements and expenses of the Company's counsel and accountants in
connection with the issue of the Securities and all other expenses in connection
with the preparation, printing and filing of the Preliminary Offering Memorandum
and the Offering Memorandum and any amendments and supplements thereto and the
mailing and delivering of copies thereof to the Initial Purchasers and dealers;
(ii) the cost of printing or producing any agreement among the Initial
Purchasers, this Purchase Agreement, the Indenture, the Registration Rights
Agreement, the blue sky and legal investment memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities and the Exchange
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the reasonable fees and disbursements of counsel
for the Initial Purchasers in connection with such qualification and in
connection with the blue sky and legal investment surveys; (iv) any fees charged
by securities rating services for rating the Securities and the Exchange
Securities; (v) the cost of preparing the Securities and the Exchange
Securities; (vi) the fees and expenses of the Trustee and any agent
15
of the Trustee and the reasonable fees and disbursements of counsel for the
Trustee in connection with the Indenture, the Securities and the Exchange
Securities; (vii) any cost incurred in connection with the designation of the
Securities for trading in PORTAL; and (viii) all other reasonable costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Initial Purchasers will pay all of their own costs and expenses, including the
fees of their counsel, transfer taxes on resale of any of the Securities by
them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Initial Purchasers hereunder shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company herein are, at and as of the Time
of Delivery, true and correct in all material respects, the condition that the
Company shall have performed all of its obligations hereunder theretofore to be
performed in all material respects, and the following additional conditions:
(a) Mayer, Brown, Xxxx & Maw LLP, counsel for the Initial
Purchasers, shall have furnished to you such opinion or opinions, dated
the Time of Delivery, in form and substance reasonably satisfactory to
the Initial Purchasers, with respect to the issuance and sale of the
Securities, the Indenture, the Registration Rights Agreement, the
Offering Memorandum and other related matters as the Initial Purchasers
may reasonably require, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(b) Skadden, Arps, Slate, Meager & Flow LLP, counsel for
the Company, shall have furnished to you their written opinion, dated
the Time of Delivery, in form and substance satisfactory to you and in
substantially the form attached hereto as Annex A, and the Company's
General Counsel shall have furnished to you his written opinion, dated
the Time of Delivery, in form and substance satisfactory to you and in
substantially the form attached hereto as Annex B;
(c) On the date of the Offering Memorandum prior to the
execution of this Purchase Agreement and also at the Time of Delivery,
KPMG LLP shall have furnished to you letters, dated the respective
dates of delivery thereof, in form and substance reasonably
satisfactory to the Representatives of the type described in AICPA
Statement on Auditing Standards No. 72;
(d) (i) Since the date of the latest audited financial
statements included or incorporated by reference in the Offering
Memorandum, except as otherwise set forth in or contemplated by the
Offering Memorandum, there shall not have been any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in
the ordinary course of business, of the Company and its subsidiaries,
taken as a whole, from that described in the Offering Memorandum, (ii)
since the date of the latest audited financial statements included or
incorporated by reference in the Offering Memorandum and except as
contemplated therein there shall not have been any material adverse
change, or any development involving a prospective material adverse
change, in the capital stock or the long-term debt of the Company from
16
that set forth in the Offering Memorandum, (iii) the Company shall have
no liability or obligation, direct or contingent, which is material to
the Company and its subsidiaries, taken as a whole, other than those
reflected in or contemplated by the Offering Memorandum and (iv) since
the date of the latest audited financial statements included or
incorporated by reference in the Offering Memorandum, the Company has
not sustained any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Offering Memorandum, the effect of which, in any such case described in
clause (i), (ii), (iii) or (iv), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
in inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in this Purchase
Agreement and in the Offering Memorandum;
(e) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities by
any "nationally recognized statistical rating organization", as that
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, with possible
negative implications, its rating of any of the Company's debt
securities;
(f) At the Time of Delivery, the Securities shall have a
rating of at least Baa3 from Xxxxx'x Investors Service, Inc. and at
least BBB- from Standard & Poor's Corporation as evidenced in writing
from such rating agencies or by other evidence reasonably satisfactory
to the Representatives; and
(g) The Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of
the Company reasonably satisfactory to you as to the accuracy in all
material respects of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the
Company in all material respects of all of its obligations hereunder to
be performed at or prior to such Time of Delivery, as to the matters
set forth in subsections (d) and (e) of this Section and as to such
other matters as you may reasonably request.
If any of the conditions specified in this Section 7 shall not have
been fulfilled in all material respects when and as provided in this Purchase
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Purchase Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Initial Purchasers and
counsel for the Initial Purchasers, this Purchase Agreement and all obligations
of the Initial Purchasers hereunder may be cancelled at, or at any time prior
to, the Time of Delivery by the Initial Purchasers. Notice of such cancellation
shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
8. (a) The Company will indemnify and hold harmless each Initial
Purchaser against any losses, claims, damages or liabilities, joint or
several, to which such Initial Purchaser may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any
17
Preliminary Offering Memorandum or the Offering Memorandum, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and will reimburse each Initial
Purchaser for any legal or other expenses reasonably incurred by such
Initial Purchaser in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any Preliminary Offering Memorandum or the
Offering Memorandum or any such amendment or supplement in reliance
upon and in conformity with written information furnished to the
Company by any Initial Purchaser through either of the Representatives
expressly for use therein.
(b) Each Initial Purchaser will, severally and not
jointly, indemnify and hold harmless the Company against any losses,
claims, damages or liabilities to which the Company may become subject,
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Offering Memorandum or the
Offering Memorandum, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Offering Memorandum or the
Offering Memorandum or any such amendment or supplement in reliance
upon and in conformity with written information furnished to the
Company by such Initial Purchaser through the Representatives expressly
for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof. No
indemnification provided for in Section 8(a) or (b) shall be available
to any party who shall fail to give notice as provided in this Section
8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially
prejudiced by the failure to give such notice, but the failure to give
such notice shall not relieve the indemnifying party or parties from
any liability which it or they may have to the indemnified party for
contribution or otherwise than on account of the provisions of Section
8(a) or (b). In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not,
18
except with the written consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Initial Purchasers on the other
from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice
required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and
the Initial Purchasers on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Initial Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by
the Initial Purchasers, in each case as set forth in the Offering
Memorandum. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company on the one hand or
the Initial Purchasers on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation (even if
the Initial Purchasers were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party
in
19
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Initial
Purchaser shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by
it and distributed to investors were offered to investors exceeds the
amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. The Initial Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise
have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Initial Purchaser within the meaning
of the Securities Act; and the obligations of the Initial Purchasers
under this Section 8 shall be in addition to any liability which the
respective Initial Purchasers may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of the
Company and to each person, if any, who controls the Company within the
meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder, you
may in your discretion arrange for you or another party or other
parties to purchase such Securities on the terms contained herein. If
within thirty-six hours after such default by any Purchaser you do not
arrange for the purchase of such Securities, then the Company shall be
entitled to a further period of thirty-six hours within which to
procure another party or other parties reasonably satisfactory to you
to purchase such Securities on such terms. In the event that, within
the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Securities, or the Company
notifies you that it has so arranged for the purchase of such
Securities, you or the Company shall have the right to postpone the
Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering
Memorandum, or in any other documents or arrangements, and the Company
agrees to prepare promptly any amendments to the Offering Memorandum
which may thereby be made necessary. The term "Purchaser" as used in
this Purchase Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a party
to this Purchase Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Purchaser or Purchasers by
you and the Company as provided in subsection (a) above, the aggregate
principal amount of such Securities which remains unpurchased does not
exceed one-eleventh of the aggregate principal amount of all the
Securities, then the Company shall have the right to require each
non-defaulting Purchaser to purchase the principal amount of Securities
which such Purchaser agreed to purchase hereunder and, in addition, to
require each non-defaulting Purchaser to purchase its pro rata share
(based on the principal amount of Securities which such Purchaser
agreed to purchase hereunder) of the Securities of such defaulting
Purchaser or Purchasers for which such arrangements have not been made;
but nothing herein shall relieve a defaulting Purchaser from liability
for its default.
20
(c) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Purchaser or Purchasers by
you and the Company as provided in subsection (a) above, the aggregate
principal amount of Securities which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of all the Securities,
or if the Company shall not exercise the right described in subsection
(b) above to require non-defaulting Purchasers to purchase Securities
of a defaulting Purchaser or Purchasers, then this Purchase Agreement
shall thereupon terminate, without liability on the part of any
non-defaulting Purchaser or the Company, except for the expenses to be
borne by the Company and the Purchasers as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Purchaser from liability for
its default.
10. This Agreement may be terminated at, or at any time prior to,
the Time of Delivery by the Representatives with written notice to the Company,
if any of the following has occurred: (a) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (b) a suspension
or material limitation in trading in the Company's securities on the New York
Stock Exchange; (c) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities or a material
disruption in commercial banking or securities settlement or clearance services
in the United States; (d) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war or other crisis or calamity, if the effect of any such event
specified in this clause (d) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in the Offering
Memorandum; or (e) the occurrence of any material adverse change in the
existing, financial, political or economic conditions in the United States or
elsewhere which, in the judgment of the Representatives, would materially and
adversely affect the financial markets or the markets for the Securities and
other debt securities.
11. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Initial
Purchasers, as set forth in this Purchase Agreement or made by or on behalf of
them, respectively, pursuant to this Purchase Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Initial Purchaser or any
controlling person of any Initial Purchaser, or the Company, or any officer or
director or controlling person of the Company, and shall survive delivery of and
payment for the Securities.
12. If this Purchase Agreement shall be terminated pursuant to
Section 9 or Section 10(a), (c), (d) or (e) hereof, the Company shall not then
be under any liability to any Purchaser except as provided in Sections 6 and 8
hereof; but, if for any other reason, the Securities are not delivered by or on
behalf of the Company as provided herein, the Company will reimburse the
Purchasers through you for all out-of-pocket expenses approved in writing by
you, including the reasonable fees and disbursements of counsel, reasonably
incurred by the Purchasers in making preparations for the purchase, sale and
delivery of the Securities, but the Company shall then be under no further
liability to any Purchaser except as provided in Sections 6 and 8 hereof.
13. In all dealings hereunder, you shall act on behalf of each of
the Purchasers, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or
21
agreement on behalf of any Purchaser made or given by you jointly or by either
Citigroup Global Markets Inc. or Xxxxxx Xxxxxxx & Co. Incorporated.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Initial Purchasers shall be delivered or sent by mail,
telex or facsimile transmission to you as the Representatives in care of both
Citigroup Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Registration Department, and Xxxxxx Xxxxxxx & Co. Incorporated, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Offering Memorandum, Attention:
Assistant Secretary, with a copy to the General Counsel at the same address.
14. This Purchase Agreement shall be binding upon, and inure
solely to the benefit of, the Initial Purchasers, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Initial Purchaser, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this Purchase
Agreement. No purchaser of any of the Securities from any Initial Purchaser
shall be deemed a successor or assign by reason merely of such purchase.
15. Time shall be of the essence of this Purchase Agreement.
16. This Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17. This Purchase Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
18. The Company is authorized, subject to applicable law, to
disclose any and all aspects of this potential transaction that are necessary to
support any U.S. federal income tax benefits expected to be claimed with respect
to such transaction, without the Purchasers imposing any limitation of any kind.
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If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Initial Purchasers and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Initial Purchasers is pursuant to the authority set forth in a form
of Agreement among Purchasers, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof (other than yourselves).
Very truly yours,
CNF INC.
By:___________________________________
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President and Treasurer
Accepted as of the date hereof:
CITIGROUP GLOBAL MARKETS INC.
XXXXXX XXXXXXX & CO. INCORPORATED
BY: CITIGROUP GLOBAL MARKETS INC.
By:________________________
Name: Xxxxxxx X. Xxx
Title: Vice President
SCHEDULE I
Principal Amount of Firm
Initial Purchasers Securities to be Purchased
------------------ --------------------------
Citigroup Capital Markets Inc...................... US $ 135,000,000
Xxxxxx Xxxxxxx & Co. Incorporated.................. $ 135,000,000
ABN AMRO Incorporated.............................. $ 7,500,000
Banc of America Securities LLC..................... $ 7,500,000
X.X. Xxxxxx Securities Inc......................... $ 7,500,000
PNC Capital Markets, Inc........................... $ 7,500,000
Total.................................... U.S. $ 300,000,000
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