1
Exhibit 4(l)
INSILCO CORPORATION
10.25% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
August 7, 1997
Xxxxxxx, Xxxxx & Co.,
XxXxxxxx & Company Securities, Inc.,
Citicorp Securities, Inc.,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Insilco Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$150,000,000 principal amount of the 10.25% Senior Subordinated Notes due 2007
specified above (the "Notes" or the "Securities"). The net proceeds from the
issuance of the Notes will be used (i) to fund the purchase of up to 2,857,142
shares of the Company's common stock, par value $0.001 per share (the "Common
Stock") at a price of $38.50 per share from shareholders of the Company by way
of a tender offer by the Company which commenced on July 11, 1997, (ii) to repay
loans under the New Credit Facility (as such term is defined in the Offering
Circular (as defined below)), (iii) to pay fees and expenses of the Transactions
(as such term is defined in the Offering Circular) and (iv) for general
corporate purposes.
1. The Company represents and warrants to, and agrees with, each of
the Purchasers that:
(a) A preliminary offering circular, dated July 28, 1997 (the
"Preliminary Offering Circular") and an offering circular, dated August 7,
1997 (the "Offering Circular") have been prepared in connection with the
offering of the Securities. The Exchange Act Reports (as defined below),
when they were or are filed with the United States Securities and Exchange
Commission (the "Commission"), conformed or will conform in all material
respects to the applicable requirements of the United States Securities
Exchange Act of 1934 (the "Exchange Act") and the applicable
-1-
2
rules and regulations of the Commission thereunder. The Preliminary
Offering Circular, the Offering Circular and any amendments or supplements
thereto did not and will not, as of their respective dates, and the
Exchange Act Reports did not and will not, as of their respective filing
dates, 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; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by a Purchaser through Xxxxxxx, Sachs & Co. expressly for use
therein. "Exchange Act Reports" means the Company's Annual Report on Form
10-K for its most recently ended fiscal year and all subsequent documents
filed by the Company with the Commission pursuant to Section 13(a), 13(c),
13(e) or 15(d) of the Exchange Act;
(b) Other than as set forth or contemplated in the Offering
Circular, neither the Company nor any of its Subsidiaries (as such term is
defined in the Offering Circular under "Description of the Notes") has
sustained since the date of the latest audited financial statements
included in the Offering Circular any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, in each case which would have a material adverse
effect on the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
Subsidiaries taken as a whole (a "Material Adverse Effect"); and, since
the respective dates as of which information is given in the Offering
Circular, there has not been any change in the consolidated capital stock
or long-term debt (other than pursuant to the New Credit Facility) of the
Company or any of its Subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
Subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Offering Circular;
(c) The Company and its Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such liens as have been incurred pursuant
to the New Credit Facility and with such exceptions as are described in
the Offering Circular or as would not have a Material Adverse Effect; and
any real property and buildings held under lease by the Company and its
Subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as would not have a Material Adverse Effect;
(d) The Company and each of its Subsidiaries has been duly
incorporated and is validly existing as a corporation, in good standing
under the laws of its jurisdiction of incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Offering Circular, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it
owns or leases
-2-
3
properties or conducts any business in each case so as to require such
qualification, except where the failure to be so qualified in any such
jurisdiction would not have a Material Adverse Effect;
(e) The Company had at June 30, 1997 an authorized capitalization as
set forth in the Offering Circular, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; all of the issued shares of
capital stock of each Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares and except as otherwise set forth in the
Offering Circular) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims except such liens
as have been incurred pursuant to the New Credit Facility; and, on the
date of the Indenture (as defined below), each Subsidiary of the Company
other than Thermal Components, Inc. will be a "Restricted Subsidiary"
within the meaning of the Indenture;
(f) The Notes have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated (assuming due execution by a duly authorized officer of the
Trustee), issued and delivered by the Company and will constitute valid
and legally binding obligations of the Company entitled to the benefits
provided by the indenture to be dated as of August 12, 1997 (the
"Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee"), under which they are to be issued, which will be substantially
in the form previously delivered to you; the Indenture has been duly
authorized by the Company and, when executed and delivered by the Company
and the Trustee, the Indenture will constitute a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; the Indenture, when executed and delivered by
the Company and the Trustee, will be in a form which meets the
requirements for qualification under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"); and the Securities and the Indenture
will conform in all material respects to the descriptions thereof in the
Offering Circular and will be in substantially the form previously
delivered to you;
(g) The Exchange and Registration Rights Agreement between the
Company and the Purchasers to be dated as of August 12, 1997 (the
"Registration Rights Agreement"), which shall be substantially in the form
previously delivered to you, has been duly authorized by the Company, and,
when executed and delivered by the Company (assuming due authorization,
execution and delivery by the Purchasers), will constitute a valid and
legally binding agreement of the Company enforceable in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles, and will
conform in all material respects to the description thereof in the
Offering Circular;
(h) Prior to the date hereof, neither the Company nor any of its
affiliates
-3-
4
has taken any action which is designed to or which has constituted or
which might have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in connection
with the offering of the Securities;
(i) The issue and sale of the Securities, the execution and delivery
of this Agreement, the Indenture, the Securities and the Registration
Rights Agreement and the compliance by the Company with all of the
provisions of the Securities, the Indenture, this Agreement and the
Registration Rights Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, sale/leaseback
agreement, loan agreement, lease or other agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Subsidiaries is subject, except for
any such conflicts, breaches, violations or defaults as would not have a
Material Adverse Effect, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any United
States court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of its or their properties,
except for any violation of any such statute, order, rule or regulation as
would not have a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Indenture or the Registration Rights
Agreement, except in connection with registration statements to be filed
by the Company with the Commission pursuant to the United States
Securities Act of 1933, as amended (the "Act"), pursuant to Section 5(l)
hereof, any related qualification of the Indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), the filing
of a notice on Form D by the Company with the Commission pursuant to
Section 5(h) hereof, the filing by the Company with the Commission of
reports under the Exchange Act and such consents, approvals,
authorizations, registrations, notifications or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Purchasers;
(j) Neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound, except for any such default as would
not have a Material Adverse Effect;
(k) The statements set forth in the Offering Circular under the
caption "Description of the Notes", insofar as they purport to constitute
a summary of the terms of the Securities, and in the Offering Circular
under the captions "Summary", "Risk Factors", "Management's Discussion and
Analysis of Financial Condition and Results of Operations", "Business and
Properties" and "Offer and Resale", insofar as
-4-
5
they purport to describe the provisions of the laws and documents referred
to therein, are accurate and complete in all material respects;
(l) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or any of
its Subsidiaries is a party or of which any property of the Company or any
of its Subsidiaries is the subject which, if determined adversely to the
Company or any of its Subsidiaries, would individually or in the aggregate
have a Material Adverse Effect; and, to the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(m) When the Securities are issued and delivered pursuant to this
Agreement, none of the Securities will be of the same class (within the
meaning of Rule 144A under the 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;
(n) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(o) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be, an "investment company" as such term
is defined in the United States Investment Company Act of 1940, as amended
(the "Investment Company Act");
(p) Neither the Company nor any person acting on its behalf (other
than the Purchasers and their respective affiliates (except for the
Company, its Subsidiaries and its joint ventures), as to which the Company
makes no representation, warranty or agreement) has offered or sold the
Securities by means of any general solicitation or general advertising
within the meaning of Rule 502(c) under the Act or, with respect to
Securities sold outside the United States to non-U.S. persons (as defined
in Rule 902 under the Act), by means of any directed selling efforts
within the meaning of Rule 902 under the Act and the Company and any
person acting on its behalf (other than the Purchasers and their
respective affiliates (except for the Company, its Subsidiaries and its
joint ventures), as to which the Company makes no representation, warranty
or agreement) has complied with and will implement the "offering
restriction" within the meaning of such Rule 902;
(q) Within the preceding six months, neither the Company nor any
other person acting on its behalf 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 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 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 Xxxxxxx, Xxxxx & Co.),
is made under restrictions and other circumstances reasonably designed not
to affect the status of
-5-
6
the offer and sale of the Securities in the United States and to U.S.
persons contemplated by this Agreement as transactions exempt from the
registration provisions of the Act;
(r) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its Subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(s) The Company on behalf of itself and its Subsidiaries maintains
insurance (or self-insurance) of the types and in the amounts reasonably
believed by the Company to be adequate for its and its Subsidiaries'
respective businesses and to be consistent with the insurance coverage
customarily maintained by other businesses in its industry, including
insurance covering real and personal property owned or leased by the
Company or its Subsidiaries against theft, damage, destruction and all
other risks customarily insured against, all of which insurance is in full
force and effect except as would not have a Material Adverse Effect; and
(t) No holder of any security of the Company has or will have any
right to require the registration of such security by virtue of any
transactions contemplated by this Agreement or the Registration Rights
Agreement other than any such right hereunder or under the Registration
Rights Agreement or any such right that has been expressly waived in
writing.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 97% of the principal amount thereof, plus accrued interest, if any,
from August 12, 1997 to the Time of Delivery hereunder, the principal amount of
Notes set forth opposite the name of such Purchaser in Schedule I hereto, plus
any additional principal amount of Notes that such Purchaser may become
obligated to purchase pursuant to Section 9 hereof.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company as set
forth in Annex I to this Agreement and as follows:
(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 Act in transactions meeting the requirements of
Rule 144A or (ii) upon the terms and conditions set forth in Annex I to this
Agreement;
(b) It is an "accredited investor" within the meaning of Rule 501 under
the Act; and
(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 Act.
-6-
7
4. (a) The Securities to be purchased by each 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 Xxxxxxx, Sachs & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by wire
transfer to an account specified by the Company of Federal (same day) funds, by
causing DTC to credit the Securities to the account of Xxxxxxx, Xxxxx & Co. at
DTC. The Company will cause the certificates representing the global Securities
to be made available to Xxxxxxx, Sachs & Co. 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 August 12, 1997
(unless postponed pursuant to Section 9 hereof) or such other time and date as
Xxxxxxx, Xxxxx & Co. 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 Purchasers
pursuant to Section 7(j) hereof, will be delivered at such time and date at the
offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 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 at 10:00 a.m., New York City time, 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 Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make no
amendment or any supplement to the Offering Circular which shall be disapproved
by you promptly after reasonable notice thereof; and to furnish you with copies
thereof;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement, to furnish the Purchasers with
copies of the Offering Circular, and from time to time, to furnish the
Purchasers with additional copies
-7-
8
thereof and of each amendment or supplement thereto in such quantities as you
may from time to time reasonably request; and if, at any time prior to the
expiration of nine months after the date of the Offering Circular, any event
shall have occurred as a result of which the Offering Circular as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Offering
Circular is delivered, not misleading, or, if for any other reason it shall be
necessary or desirable during such same period to amend or supplement the
Offering Circular, to notify you and upon your request to prepare and furnish
without charge to each Purchaser and to any dealer in securities as many copies
as you may from time to time reasonably request of an amended Offering Circular
or a supplement to the Offering Circular which will correct such statement or
omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing until
the date 180 days after the Time of Delivery, not to offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder, any securities of
the Company that are substantially similar to the Notes or that are convertible
into or exchangeable for, or otherwise represent a right to acquire, any such
securities, except as provided hereunder or with the prior written consent of
Xxxxxxx, Sachs & Co.;
(e) Not to be or become, at any time prior to the expiration of two 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)(i) of Rule 144A under the Act
with respect to the Securities;
(g) If requested by you at any time when any of the Securities are
outstanding, to use its best efforts to cause such Securities to be eligible for
the PORTAL trading system of the National Association of Securities Dealers,
Inc.;
(h) To file with the Commission, not later than 15 days after the Time of
Delivery, five copies of a notice on Form D under the Act (one of which will be
manually signed by a person duly authorized by the Company); to otherwise comply
with the requirements of Rule 503 under the Act; and to furnish promptly to you
evidence of each such required timely filing (including a copy thereof);
(i) To furnish to the holders of the Securities within 90 days after the
end of each fiscal year (or such other period as is prescribed by the Commission
for the filing of Annual Reports on Form 10-K, whether or not the Company is
required to file such reports) 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,
within 45 days after the end of each of the first three quarters of each fiscal
year (or such other period as is prescribed by the Commission for the filing of
-8-
9
Quarterly Reports on Form 10-Q, whether or not the Company is required to file
such reports) (beginning with the fiscal quarter ending after the date of the
Offering Circular), consolidated summary financial information of the Company
and its Subsidiaries for such quarter in reasonable detail, which reports and
information, so long as the Company is filing with the Commission Annual Reports
on Form 10-K and Quarterly Reports on Form 10-Q, will consist of such Annual
Reports and Quarterly Reports;
(j) During a period of five years from the date of the Offering Circular,
to furnish to you copies of all reports or other communications (financial or
other) furnished to stockholders of the Company, and to deliver to you (i) 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 (ii)
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);
(k) 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 Act), other than Xxxxxxx, Xxxxx & Co., to, resell any of the
Securities that have been reacquired by any of them except pursuant to an
effective registration statement under the Act;
(l) To execute and deliver the Registration Rights Agreement prior to the
Time of Delivery and, pursuant thereto, (A)(i) to file with the Commission
within 60 days after the Time of Delivery a registration statement under the Act
relating to an offer to exchange (such offer, the "Exchange Offer") any and all
of the Securities for a like aggregate principal amount of debt securities
issued by the Company, with terms substantially identical to the Securities
except that such debt securities shall have been registered pursuant to an
effective registration statement under the Act and shall not contain certain
provisions for additional interest (the "Exchange Securities"), and to use its
best efforts to cause such registration statement to be declared or become
effective as soon as practicable, but in no case later than 115 days after the
Time of Delivery, all in a manner which will permit persons who acquire the
Exchange Securities to resell the Exchange Securities pursuant to Section 4(1)
of the Act, or (ii) if prior to consummation of such Exchange Offer certain
existing Commission interpretations are changed such that the Exchange
Securities received by holders of Securities other than certain restricted
holders are not or would not be, upon receipt, transferable by each such holder
without restriction under the Act, in lieu thereof, to file and use its best
efforts to cause to be declared or become effective under the Act, no later than
100 days after such registration statement is filed, a "shelf" registration
statement relating to the resale of the Securities and (B)(i) on the date that
the registration statement filed pursuant to Clause A(i) or Clause A(ii) above
is filed with the Commission, to file a "shelf" registration statement (which
may be the registration statement filed pursuant to either Clause A(i) or Clause
A(ii) above if permitted by the rules and regulations of the Commission)
providing for the registration of, and the sale on a continuous or delayed basis
in secondary transactions by Xxxxxxx, Sachs & Co. of, Securities (in the event
of the filing of a "shelf" registration statement pursuant to Clause A(ii)
above) or Exchange Securities (in the event of an Exchange Offer pursuant to
-9-
10
Clause A(i) above) and (ii) to use its best efforts to cause the registration
statement filed pursuant to Clause B(i) above to become or be declared effective
on or prior to the date (w) the Exchange Offer is completed pursuant to Section
2(a) of the Registration Rights Agreement or (x) the registration statement
filed pursuant to Clause A(ii) above becomes or is declared effective; and
(m) To use the net proceeds received by the Company from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "The Transactions and Use of Proceeds".
6. The Company covenants and agrees with the several 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 Circular and the
Offering Circular and any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Purchasers and dealers; (ii) the cost of
printing, word processing or otherwise producing any Agreement among Purchasers,
this 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 for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the 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; (v) the cost of
preparing the Securities; (vi) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; (vii) any cost incurred in
connection with the designation of the Securities for trading in PORTAL; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section; provided, however, that the Purchasers agree to pay the Company
$375,000 as reimbursement for a portion of the costs and expenses incurred by
the Company pursuant to this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the 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 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, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) Xxxxxxxx & Xxxxxxxx, counsel for the Purchasers, shall have furnished
to you such opinion or opinions, dated the Time of Delivery, with respect to the
incorporation of the Company, the validity of the Indenture, the Securities and
the Registration Rights Agreement, the Offering Circular and such other related
matters as you may reasonably
-10-
11
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;
(b) Xxxxxxx X. Xxxx, Vice President, General Counsel and Secretary of the
Company, shall have furnished to you his written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of Delaware,
with corporate power and authority to own its properties and conduct its
business as described in the Offering Circular;
(ii) Each Subsidiary of the Company listed on Schedule II hereto
(collectively, the "Significant Subsidiaries") is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own its properties
and conduct its business as described in the Offering Circular;
(iii) At June 30, 1997 the Company had an authorized capitalization
as set forth in the Offering Circular, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
(iv) To the knowledge of such counsel, the Company and each of its
Significant Subsidiaries has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or conducts
any business in each case so as to require such qualification, except
where the failure to be so qualified in any such jurisdiction would not
have a Material Adverse Effect;
(v) All of the issued shares of capital stock of each Significant
Subsidiary and, to the knowledge of such counsel, each other Subsidiary of
the Company incorporated under the laws of any state of the United States
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims except such liens as have been
incurred pursuant to the New Credit Facility;
(vi) To such counsel's knowledge and other than as set forth in the
Offering Circular, there are no legal or governmental proceedings pending
to which the Company or any of its Subsidiaries is a party or of which any
property of the Company or any of its Subsidiaries is the subject which,
if determined adversely to the Company or any of its Subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and, to
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vii) The issue and sale of the Securities, the execution and
delivery of this Agreement, the Indenture, the Securities and the
Registration Rights Agreement and the compliance by the Company with all
of the provisions of the Securities, the Indenture, this Agreement and the
Registration Rights Agreement and the consummation of the transactions
herein and therein contemplated will not conflict
-11-
12
with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement, lease or other agreement or
instrument known to such counsel to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound or to which any of the property or assets of the Company or any
of its Subsidiaries is subject, except for any such conflicts, breaches,
violations or defaults as would not have a Material Adverse Effect nor
will such actions result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or, to the
knowledge of such counsel, any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of its or their properties,
except for any violation of any such statute, order, rule or regulation as
would not have a Material Adverse Effect;
(viii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
having jurisdiction over the Company or any of its Significant
Subsidiaries or any of its or their properties is required for the issue
and sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement, the Indenture or the
Registration Rights Agreement, except in connection with registration
statements to be filed by the Company with the Commission pursuant to
Section 5(l) hereof, any related qualification of the Indenture under the
Trust Indenture Act, the filing of a notice on Form D by the Company with
the Commission pursuant to Section 5(h) hereof, the filing by the Company
with the Commission of reports under the Exchange Act and such consents,
approvals, authorizations, registrations, notifications or qualifications
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the Purchasers;
(ix) Neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound, except for any such default as would
not have a Material Adverse Effect; and
(x) The Exchange Act Reports (other than the financial statements
and related schedules therein, as to which such counsel need express no
opinion), when they were filed with the Commission, complied as to form in
all material respects with the requirements of the Exchange Act, and the
rules and regulations of the Commission thereunder; and such counsel has
no reason to believe that any of such documents, when they were so filed,
contained an untrue statement of a material fact or omitted 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 when such documents were so filed, not misleading.
(c) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel for the Company,
shall have furnished to you their written opinion or opinions, dated the Time of
Delivery,
-12-
13
substantially in the form of Annex III hereto;
(d) On the date of the Offering Circular, prior to the execution of this
Agreement, and also at the Time of Delivery, KPMG Peat Marwick LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex II hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex II(a) hereto and a draft of the
form of letter to be delivered as of the Time of Delivery is attached as Annex
II(b) hereto);
(e) (i) Neither the Company nor any of its Subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular there
shall not have been any change in the capital stock or long-term debt (other
than pursuant to the New Credit Facility) of the Company or any of its
Subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
Subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in Clause (i) or (ii),
is in the judgment of the Purchasers so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in this Agreement and in
the Offering Circular;
(f) 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 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;
(g) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the National Association of
Securities Dealers Automated Quotations National Market ("NASDAQ"); (ii) a
suspension or material limitation in trading in the Company's securities on
NASDAQ; (iii) a general moratorium on commercial banking activities declared by
either Federal or New York State authorities; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Purchasers 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 Circular; or (v) 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 Purchasers, would materially and adversely affect the financial markets
or the markets for the Securities and other debt securities;
-13-
14
(h) The Securities have been designated for trading on PORTAL;
(i) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of offering circulars on the New York
Business Day next succeeding the date of this Agreement;
(j) Prior to the Time of Delivery, the Company shall have received from
the Lenders (as such term is defined in the New Credit Facility) the approvals
relating to the terms of the Notes and the Indenture required pursuant to
Section 9.01(xi)(C) of the New Credit Facility; and
(k) The Company shall have furnished or caused to be furnished to you at
the Time of Delivery certificates of officers of the Company satisfactory to you
as to the accuracy of the representations and warranties of the Company herein
at and as of such Time of Delivery, as to the performance by the Company of all
of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsection (e) of this Section and as
to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser against
any losses, claims, damages or liabilities, joint or several, to which such
Purchaser may become subject, under the 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 Circular or the Offering
Circular, 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 not misleading, and will reimburse each Purchaser
for any legal or other expenses reasonably incurred by such 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 Circular or the
Offering Circular or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Purchaser
through Xxxxxxx, Sachs & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the 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 Circular or the Offering Circular, 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 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 Circular or the Offering Circular
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Purchaser through Xxxxxxx,
Xxxxx & Co. expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in
-14-
15
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; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. 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, except with the
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 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 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 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 Purchasers, in each case
as set forth in the Offering Circular. The relative fault shall be determined by
reference to, among other
-15-
16
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 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 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 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 connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Purchaser shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities purchased by it and distributed to investors were
offered to investors exceeds the amount of any damages which such Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Purchasers' obligations in this
subsection (d) to contribute are several in proportion to their respective
purchase 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
Purchaser within the meaning of the Act; and the obligations of the Purchasers
under this Section 8 shall be in addition to any liability which the respective
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 Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, the non-defaulting
Purchasers may in their discretion arrange for the non-defaulting Purchasers 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
the non-defaulting Purchasers 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 satisfactory to the
non-defaulting Purchasers to purchase such Securities on such terms. In the
event that, within the respective prescribed periods, the non-defaulting
Purchasers notify the Company that the non-defaulting Purchasers have so
arranged for the purchase of such Securities, or the Company notifies the
non-defaulting Purchasers that it has so arranged for the purchase of such
Securities, the non-defaulting Purchasers 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
Circular, or in any other documents or arrangements, and the Company agrees to
prepare promptly any amendments to the Offering Circular which in the opinion of
the non-defaulting Purchasers may thereby be made necessary. The term
"Purchaser" as used in this Agreement shall include any person substituted under
this Section with like effect as if such person had originally been a party to
this Agreement with respect to such Securities.
-16-
17
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by the non-defaulting
Purchasers 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 for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by the non-defaulting
Purchasers 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, then
this 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. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
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 Purchaser or any controlling person of any 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.
11. If this Agreement shall be terminated pursuant to Section 9 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 for all out-of-pocket expenses
approved in writing by you, including 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.
12. 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 agreement on behalf of any Purchaser made or given
by you jointly or by Xxxxxxx, Sachs & Co. on behalf of you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to any of the Purchasers shall be delivered or sent by mail,
telex or facsimile transmission
-17-
18
to you in care of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Registration Department; 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 Circular, Attention: Secretary; provided,
however, that any notice to a Purchaser pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Purchaser at
its address set forth in its Purchasers' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the 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 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 Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This 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-
19
If the foregoing is in accordance with your understanding, please sign and
return to us six 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 Purchasers and the Company.
It is understood that your acceptance of this letter on behalf of each of the
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.
Very truly yours,
INSILCO CORPORATION
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President and General Counsel
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
Citicorp Securities, Inc.
McDonald & Company
By: /s/ Xxxxxxx, Sachs & Co.
-----------------------------------------
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Purchasers
-19-
20
SCHEDULE I
PURCHASER PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
PURCHASED
---------
Xxxxxxx, Xxxxx & Co....................................... $ 112,500,000
XxXxxxxx & Company Securities, Inc........................ $ 22,500,000
Citicorp Securities, Inc.................................. $ 15,000,000
Total............................................... $ 150,000,000
=============
-20-
21
SCHEDULE II
Xxxxxxx Connector Systems, Inc.
Xxxxxxx Stamping Corporation
Signal Transformer Co., Inc.
Xxxxxx Publishing Company
Steel Parts Corporation
-21-
22
ANNEX I
(1) The Securities have not been and will not be registered under the 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 Act or pursuant to an exemption from the registration requirements of the
Act. Each Purchaser represents that it has offered and sold the Securities, and
will offer and sell the Securities (i) as part of their distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S under the Act or pursuant to Paragraph 2 of this Annex I.
Accordingly, each Purchaser agrees that neither it, its affiliates nor any
persons acting on its or their behalf has engaged or will engage in any directed
selling efforts with respect to the Securities, and it and they have complied
and will comply with the offering restrictions requirement of Regulation S. Each
Purchaser agrees that, at or prior to confirmation of sale of Securities (other
than a sale pursuant to Rule 144A or pursuant to Paragraph 2 of this Annex I),
it will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases 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
U.S. Securities Act of 1933 (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 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."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Securities, except with its affiliates or with the prior written consent of
the Company.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities 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, (ii) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the
AI-1
23
issuance of the Securities to a person who is of a kind described in Article
11(3) of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1996 of Great Britain or is a person to whom the document may
otherwise be lawfully issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with Xxxxxxx, Sachs & Co.'s express written consent and then only at its own
risk and expense.
AI-2
24
ANNEX II
Pursuant to Section 7(d) of the Purchase Agreement, KPMG Peat Marwick LLP
shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its Subsidiaries within the meaning of the Securities Exchange Act
of 1934 (the "Exchange Act") and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the consolidated financial statements and financial
statement schedules audited by them and included in the Offering Circular comply
as to form in all material respects with the requirements of the Exchange Act
and the related published rules and regulations thereunder;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company and its
Subsidiaries for the five most recent fiscal years included in the Offering
Circular agrees with the corresponding amounts (after restatements where
applicable) in the audited consolidated financial statements for such five
fiscal years;
(iv) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its Subsidiaries, inspection of the minute books of the Company and its
Subsidiaries since the date of the latest audited financial statements included
in the Offering Circular, inquiries of officials of the Company and its
Subsidiaries responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Offering Circular are not in conformity with generally accepted accounting
principles applied on the basis substantially consistent with the basis
for the audited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Offering Circular;
(B) any other unaudited income statement data and balance sheet
items included in the Offering Circular do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited data
and items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited
AII-1
25
consolidated financial statements included in the Offering Circular;
(C) any unaudited financial statements which were not included in
the Offering Circular but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited income
statement data and balance sheet items included in the Offering Circular
and referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included in the Offering Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to form in
all material respects with the accounting requirements of the Exchange Act
and the related published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the historical amounts
in the compilation of those statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options and
stock appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest consolidated financial statements included in
the Offering Circular) or any increase in the consolidated long-term debt
of the Company and its Subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items specified by the
Purchasers, or any increases in any items specified by the Purchasers, in
each case as compared with amounts shown in the latest consolidated
balance sheet included in the Offering Circular except in each case for
changes, increases or decreases which the Offering Circular discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest consolidated
financial statements included in the Offering Circular to the specified
date referred to in Clause (E) there were any decreases in consolidated
net revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Purchasers, or any
increases in any items specified by the Purchasers, in each case as
compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Purchasers, except
in each case for decreases or increases which the Offering Circular
discloses have occurred or may occur or which are described in such
letter; and
(v) In addition to the examination referred to in their report(s) included
in the Offering Circular and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraphs (iii) and (iv) above,
they have carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information
AII-2
26
specified by the Purchasers, which are derived from the general accounting
records of the Company and its Subsidiaries, and which appear in the Offering
Circular, and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its Subsidiaries and
have found them to be in agreement.
AII-3
