Exhibit 1
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
500,000 Shares of Common Stock, Par Value $.01 Per Share
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PURCHASE AGREEMENT
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December 28, 1999
Credit Suisse First Boston Corporation,
00 Xxxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Ladies and Gentlemen:
Financial Security Assurance Holdings Ltd., a New York corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Credit Suisse First Boston Corporation ("CSFB") 500,000 shares
of common stock, par value $.01 per share, of the Company (the "Securities").
1. The Company represents and warrants to, and agrees with, CSFB that:
(a) A registration statement on Form S-3 (File No. 333-74165) in
respect of the Securities has been filed with the Securities and
Exchange Commission (the "Commission"); such registration statement, in
the form heretofore delivered to you, and excluding exhibits thereto
but including all documents incorporated by reference in the prospectus
contained therein (other than Post-Effective Amendment No. 1 thereto),
have been declared effective by the Commission in such form; no other
document (other than Post-Effective Amendment No. 1 thereto) with
respect to such registration statement or document incorporated by
reference therein has heretofore been filed with the Commission; and no
stop order suspending the
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effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission; the various parts of such registration statement, including
all exhibits thereto but excluding Form T-1 and including (i) the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under Securities Act of 1933 (the
"Act") in accordance with Section 5(a) hereof and deemed by virtue of
Rule 430A under the Act to be part of the registration statement at the
time it was declared effective and (ii) the documents incorporated by
reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective, each
as amended at the time such part of the registration statement became
effective, are hereinafter collectively called the "Registration
Statement"; such final prospectus, in the form first filed pursuant to
Rule 424(b) under the Act, is hereinafter called the "Prospectus"; any
reference herein to the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Act, as of the date of such Prospectus,
any reference to any amendment or supplement to the Prospectus shall be
deemed to refer to and include any documents filed after the date of
such Prospectus under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated by reference in such Prospectus;
and any reference to any amendment to the Registration Statement shall
be deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by
reference in the Registration Statement;
(b) No order preventing or suspending the use of any Prospectus has
been issued by the Commission, and each Prospectus, at the time of
filing thereof, conformed in all material respects to the requirements
of the Act, and the rules and regulations of the Commission thereunder,
and did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, 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 CSFB regarding CSFB expressly
for use therein;
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed
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and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; 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 CSFB regarding CSFB
expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements
of the Act and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; 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 CSFB regarding CSFB
expressly for use therein;
(e) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus 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 Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or of Financial Security
Assurance Inc. or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus;
(f) 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 as are described in the
Prospectus or such as do not materially affect the value of such
property and do not interfere
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with the use made and proposed to be made of such property by the
Company and its subsidiaries; 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 are
not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its
subsidiaries;
(g) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of New
York, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, 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 properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation;
(h) The Company has an authorized capitalization as set forth in
the Prospectus, 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; and 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 the preferred shares of Financial
Security Assurance International Ltd.) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims;
(i) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly issued and
delivered and will be fully paid and non-assessable;
(j) The issue and sale of the Securities and the execution and
delivery by the Company of this Agreement and the compliance by the
Company with all of the provisions of this Agreement and the
consummation of the transactions herein 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, loan agreement 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, 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 court or governmental
agency or body having
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jurisdiction over the Company or any of its subsidiaries or any of
their properties; 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, except such as have been obtained and made under the
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase of the Securities by CSFB;
(k) 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 material 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;
(l) The statements set forth in the Prospectus under the caption
"Description of Common Stock", insofar as they purport to constitute a
summary of the terms of the Securities and under the caption "Plan of
Distribution", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair;
(m) Other than as set forth in the Prospectus, 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, or to the knowledge of the Company
otherwise affecting the Company or any of its subsidiaries, which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
current or future financial position, shareholders' equity or results
of operations of the Company and its subsidiaries; and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(n) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(o) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
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(p) This Agreement has been duly authorized, executed and delivered
by the Company; and
(q) PricewaterhouseCoopers 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.
2. Subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to CSFB, and CSFB agrees to purchase from the Company, the
Securities, at a purchase price of $54.20 per share, in an aggregate amount of
$27,100,000, and CSFB advises the Company that (a) CSFB will make a distribution
of the securities to Credit Suisse Financial Products and (b) Credit Suisse
Financial Products shall acquire the Securities from CSFB for investment
purposes only and not with a view to distribution.
3. CSFB will not sell the Securities except as provided in Section 2 of
this Agreement.
4. (a) The time and date of delivery of and payment for the Securities
shall be 9:30 a.m., New York City time, on such Business Day prior to December
31, 1999 as CSFB and the Company may agree upon in writing. Such time and date
are herein called the "Time of Delivery". Simultaneous with the signing of this
Agreement, CSFB will provide such information as required by the Company with
respect to delivery of the Securities to be purchased by CSFB hereunder.
(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 CSFB pursuant to
Section 7(h) hereof, will be delivered at the offices of the Company, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000 (the "Closing Location"), at the Time of Delivery. A
meeting will be held at the Closing Location at 2:00 p.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 City are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with CSFB:
(a) To prepare a prospectus supplement (the "Prospectus Supplement") in a
form approved by you and to file such Prospectus Supplement pursuant to Rule
424(b)(2) under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement, to
make no further amendment or any supplement to the Registration Statement
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or Prospectus prior to the Time of Delivery which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to
the date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities as
contemplated in this Agreement; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the use of
any prospectus or suspending any such qualification, to promptly use its best
efforts to obtain the withdrawal of such order;
(b) The Company shall not be required (i) to qualify the Securities for
offering and sale under the securities laws of any jurisdiction, it being
understood that any such qualification shall be the sole responsibility of CSFB,
or (ii) to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish CSFB with five copies of the Prospectus, and, if at any time
prior to the expiration of nine months after the time of issue of the Prospectus
in connection with the offering or sale of the Securities hereunder any event
shall have occurred as a result of which the Prospectus 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
light of the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act, to notify CSFB and upon your
request to furnish without charge to CSFB five copies of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or omission
or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c)), an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158);
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(e) [Reserved];
(f) To make available 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, shareholders' 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 with the fiscal quarter ending
after the effective date of the Registration Statement), consolidated summary
financial information of the Company and its subsidiaries for such quarter in
reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you upon request copies of all reports or
other communications (financial or other) furnished to shareholders, and to
deliver to you upon request (i) as soon as they are available, copies of any
reports, definitive proxy statements and financial statements filed with the
Commission or any national 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 in connection with the transactions
contemplated by this Agreement (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 shareholders generally
or to the Commission); and
(h) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement substantially in the manner specified in the
Prospectus under the caption "Use of Proceeds".
6. The Company covenants and agrees with CSFB 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 registration of the
Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement and the
Prospectus and amendments and supplements thereto and the delivery of copies
thereof to CSFB; (ii) the fees, disbursements and expenses of the Company's
counsel in producing this Agreement and closing documents in connection with the
offering, purchase, sale and delivery of the Securities; (iii) any fees charged
by securities rating services for rating the Securities; and (iv) the cost of
preparing the Securities. It is understood, however, that, except as provided in
this Section, and Sections 8 and 11 hereof, CSFB will pay all of its own costs
and expenses, including the fees of its counsel, transfer taxes on resale of any
of the Securities by them, any filing fees incident to, and the fees and
disbursements of counsel for CSFB in connection with, any required review by the
National
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Association of Securities Dealers, Inc. of the terms of the sale of the
Securities and any other costs not explicitly to be paid by the Company under
this Section 6.
7. The obligations of CSFB hereunder shall be subject, in its 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 precedent:
(a) A prospectus supplement shall have been filed with the Commission
pursuant to Rule 424(b)(2) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) [Reserved];
(c) Xxxxx X. Xxxxx, Esq., Secretary and General Counsel for 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 New York, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, 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
nonassessable;
(iii) The Company 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 so
as to require such qualification or is subject to no material liability or
disability by reason of the failure to be so qualified in any such jurisdiction
(such counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company, provided that such counsel shall state
that he believes that both you and he are justified in relying upon such
opinions and certificates);
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(iv) Each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares of capital stock of
each such subsidiary have been duly and validly authorized and issued, are fully
paid and non-assessable, and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that he believes that both
you and he are justified in relying upon such opinions and certificates);
(v) To the best of such counsel's knowledge, the Company and its
subsidiaries have good and marketable title in fee simple to all real property
owned by them, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; 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 are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries (in giving the opinion in this clause, such counsel
may state that no examination of record titles for the purpose of such opinion
has been made, and that he is relying upon a general review of the titles of the
Company and its subsidiaries, upon opinions of local counsel and abstracts,
reports and policies of title companies rendered or issued at or subsequent to
the time of acquisition of such property by the Company or its subsidiaries,
upon opinions of counsel to the lessors of such property and, in respect of
matters of fact, upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that he believes that both
you and he are justified in relying upon such opinions, abstracts, reports,
policies and certificates);
(vi) To the best of such counsel's knowledge and other than as set forth in
the Prospectus, 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 on the current or future
consolidated financial position, shareholders' equity or results of operations
of the Company and its subsidiaries; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vii) This Agreement has been duly authorized, executed and delivered by the
Company;
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(viii) The Securities have been duly authorized, issued and delivered and
are fully paid and non-assessable; and the Securities conform to the
descriptions thereof in the Prospectus;
(ix) To the best of such counsel's knowledge, the issue and sale of the
Securities and the compliance by the Company with all of the provisions of the
Securities and this 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, loan agreement 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, nor will such actions 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 court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties;
(x) No consent, approval, authorization, order, registration, filing 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, except such as have
been obtained and made under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Securities by CSFB;
(xi) Neither the Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws, or to the best of such counsel's
knowledge, in default in the performance or observance of any material
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;
(xii) The statements set forth in the Prospectus under the caption
"Description of Common Stock", insofar as they purport to constitute a summary
of the terms of the Securities, and under the caption "Plan of Distribution",
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(xiii) The Company is not an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the Investment Company
Act;
(xiv) The documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), when
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they became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder; and he has no reason to believe that any of such documents, when
such documents became effective or were so filed, as the case may be, contained,
in the case of a registration statement which became effective under the Act, an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or, in the case of other documents which were filed under the Act or the
Exchange Act with the Commission, an untrue statement of a material fact or
omitted to state a material fact 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; and
(xv) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and regulations
thereunder; although he does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referred to in the opinion in
subsection (xii) of this Section 7(c), he has no reason to believe that, as of
its effective date, the Registration Statement or any further amendment thereto
made by the Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need express
no opinion) contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) 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 or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus or any further amendment or supplement
thereto made by the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; the
descriptions in the Registration Statement and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are accurate and
fairly present the information required to be shown; and he does not know of any
amendment to the Registration Statement required to be filed or of legal or
governmental proceedings required to be described in the Registration Statement
or the Prospectus which are not described as required or any contracts or other
documents of a character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the Prospectus
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or required to be described in the Registration Statement or the Prospectus
which are not filed or incorporated by reference or described as required;
(d) [Reserved];
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus 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 Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt 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, shareholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in Clause (i) or
(ii), is in the judgment of CSFB so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in the Prospectus;
(f) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities; or in the financial strength
or claims paying ability of Financial Security Assurance Inc. 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 or Financial Security Assurance Inc.'s financial strength or
claims paying ability;
(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; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, or any other substantial national
or international calamity or emergency, if the effect of any such event
specified in this subsection 7(g) in the judgment of CSFB makes it impracticable
or inadvisable to proceed with the purchase or the delivery of the Securities on
the terms and in the manner contemplated in the Prospectus; and
14
(h) 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 no stop order suspending the effectiveness of such registration
statement having been issued and to the knowledge of such officers no proceeding
for that purpose having been initiated or threatened by the Commission, as to
the matters set forth in subsections (a) and (e) of this Section and as to such
other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless CSFB, its directors,
officers and each person, if any, who controls it within the meaning of Section
15 of the Act, against any losses, claims, damages or liabilities, joint or
several, to which CSFB 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 the Registration Statement or the Prospectus, or
any amendment or supplement thereto or any related preliminary prospectus, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse CSFB for any legal or
other expenses reasonably incurred by CSFB 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 the Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by CSFB regarding CSFB expressly for use therein.
(b) CSFB 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 the Registration
Statement or the Prospectus, or any amendment or supplement thereto or any
related preliminary prospectus, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or 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 the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by CSFB
regarding CSFB 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; it being understood and agreed that CSFB has not
15
furnished any written information to the Company expressly for use in the
Registration Statement or the Prospectus.
(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 CSFB 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 CSFB on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions
16
in respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company, on the one hand and CSFB 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, if any, received by CSFB. 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 CSFB on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. CSFB shall not be required to contribute any amount in
excess of the amount by which the total price at which the Securities purchase
by it and distributed to Credit Suisse Financial Products exceeds the amount of
any damages which CSFB has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. The Company
and CSFB agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by PRO RATA allocation 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. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(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 officer and director of and to each
person, if any, who controls CSFB within the meaning of the Act; and the
obligations of CSFB under this Section 8 shall be in addition to any liability
which CSFB 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. [Reserved]
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and CSFB, 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 CSFB or any controlling person
CSFB, or the Company, or any officer or director or controlling person of the
Company, and shall survive delivery of and payment for the Securities.
17
11. If the Securities are not delivered by or on behalf of the Company as
provided herein, due to a breach by the Company of its obligations hereunder,
the Company will reimburse CSFB for all out-of-pocket expenses, including fees
and disbursements of counsel, reasonably incurred by CSFB, in negotiating and
executing this Agreement, but the Company shall then be under no further
liability to CSFB except as provided in Sections 6 and 8 hereof.
12. All statements, requests, notices and agreements hereunder shall be in
writing, and if to CSFB shall be delivered or sent by mail, telex or facsimile
transmission to you as set forth on the first page of this Agreement; 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 Registration Statement,
Attention: General Counsel. 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, CSFB, 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 CSFB, 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
CSFB shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
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.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company, and upon the acceptance hereof by you, this
letter and such acceptance hereof shall constitute a binding agreement between
CSFB and the Company.
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Very truly yours,
FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.
By: /s/ XXXX X. XXXXXXXX
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
Accepted as of the date hereof:
By: CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ XXXXXX XXXXXX
----------------------------
Name: Xxxxxx Xxxxxx
Title: Managing Director
