EXHIBIT 10.4
CAPITAL SECURITIES SUBSCRIPTION AGREEMENT
May 13, 2003
THIS CAPITAL SECURITIES SUBSCRIPTION AGREEMENT (this "Subscription
Agreement") is made among ▇▇▇▇▇▇▇▇ Capital Trust I, a statutory trust created
under the laws of the State of Delaware (the "Trust"), Chandler (U.S.A.), Inc.
(the "Company" and, collectively with the Trust, the "Offerors") and InCapS
Funding I, Ltd., a newly formed exempted company with limited liability
established under the laws of the Cayman Islands (the "Purchaser").
RECITALS:
A. The Trust desires to issue $13,000,000 of its InCapS(SM) (the
"Capital Securities"), with a liquidation amount of $1,000 per Capital
Security, representing undivided beneficial interests in the assets of the
Trust (the "Offering"), to be issued pursuant to an Amended and Restated
Declaration of Trust (the "Declaration"), by the Company, as Sponsor,
Wilmington Trust Company, as Institutional Trustee and Wilmington Trust
Company, as Delaware Trustee, the Administrators named therein, and the
holders, from time to time, of the Capital Securities, which Capital
Securities are to be guaranteed by the Company with respect to distributions
and payments upon liquidation, redemption and otherwise to the extent
provided in and pursuant to the terms of a Guarantee Agreement (the
"Guarantee") between the Company and Wilmington Trust Company, as Guarantee
Trustee; and
B. The proceeds from the sale of the Capital Securities will be
combined with the proceeds from the sale of the Common Securities by the Trust
to the Company and will be used by the Trust to purchase an equivalent
aggregate principal amount of Fixed Rate Junior Subordinated Debentures due
2033 of the Company (the "Debentures"), to be issued by the Company pursuant
to an Indenture (the "Indenture") to be executed by the Company, as Issuer,
and Wilmington Trust Company, as Debenture Trustee; and
C. The Purchaser intends to complete an offering of its securities
(the "CBO Offering") on or about May 22, 2003 or such other business day as
may be agreed upon by the Offerors and the placement agent ("Placement Agent")
identified in the Placement Agreement (the "Closing Date") and to use the
proceeds of the CBO Offering to, among other things, acquire the Capital
Securities from the Trust and other capital securities, senior notes and
surplus notes in a quantity and with other particular characteristics, in the
aggregate, sufficient to permit the successful completion of the CBO Offering;
and
D. In consideration of the premises and the mutual representations
and covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF CAPITAL SECURITIES
1.1. Upon the execution of this Subscription Agreement, subject to
the conditions precedent set forth in Section 1.5, the Purchaser hereby agrees
to purchase from the Trust 13,000 Capital Securities at a price equal to
$1,000 per Capital Security (the "Purchase Price") and the
Trust agrees to sell 13,000 of Capital Securities with a liquidation amount of
$1,000 per Capital Security to the Purchaser for the Purchase Price. The
rights and preferences of the Capital Securities will be set forth in the
Declaration in form and substance reasonably acceptable to the Purchaser. The
Purchase Price is payable by the Purchaser on the Closing Date in immediately
available funds to the account designated by Wilmington Trust Company against
delivery of the aforementioned Capital Securities.
1.2. The certificate for the Capital Securities shall be
authenticated by the Institutional Trustee and delivered in definitive form by
the Trust on the Closing Date to the Purchaser or its designee, shall be
registered in the name of the Purchaser and shall represent the aggregate
liquidation amount of the Capital Securities being purchased by the Purchaser.
1.3. Each of the provisions of the Placement Agreement, dated May 13,
2003 (the "Placement Agreement"), including the definitions therein, are
hereby incorporated by reference into this Subscription Agreement. In
addition, to the extent provided for in the Placement Agreement, the Purchaser
shall be entitled to the benefits of the Placement Agreement and shall be
entitled to enforce such obligations of the Offerors under the Placement
Agreement as fully as if the Purchaser were a party to such Placement
Agreement, it being agreed between the parties that any and all
representations, covenants and other agreements made by the Offerors to the
Placement Agent in the Placement Agreement shall be deemed to have also been
made to the Purchaser.
1.4. If any condition specified herein or in the Placement Agreement
shall not have been fulfilled when and as required to be fulfilled by, on
behalf of or in respect of the Offerors or the Capital Securities or the
Subordinated Debt Securities, this Subscription Agreement may be terminated by
the Purchaser by notice to the Offerors at any time at or prior to the Closing
Date, and such termination shall be without liability of any party to any
other party except as provided in Section 5(i) of the Placement Agreement and
except that Sections 1, 7, and 8 of the Placement Agreement shall survive any
such termination and remain in full force and effect.
1.5. If the CBO Offering is not successfully completed for any
reason, including, without limitation, as a result of the inability of the
Purchaser to acquire sufficient capital securities, senior notes and surplus
notes from the Trust and other issuers and sellers in a quantity and with
other particular characteristics, in the aggregate, sufficient to satisfy
rating agency criteria with respect to expected ratings on the securities to
be issued by the Purchaser and other criteria deemed necessary or advisable by
the Purchaser, all obligations of the Purchaser hereunder and any claims
against the Purchaser hereunder shall automatically terminate and be
extinguished and shall not thereafter revive.
1.6. Notwithstanding any other provision of this Subscription
Agreement, the obligations of the Purchaser hereunder are limited recourse
obligations of the Purchaser, payable solely from the proceeds of the CBO
Offering, and if the CBO Offering is not completed or the proceeds of the CBO
Offering are insufficient to satisfy the obligations of the Purchaser, all
obligations of the Purchaser hereunder and any claims against the Purchaser
hereunder shall be extinguished and shall not thereafter revive. No recourse
shall be had to any subscriber, officer, director, employee, administrator,
shareholder, incorporator or agent of the Purchaser or their
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respective successors or assigns for any obligations hereunder. The Trust,
Wilmington Trust Company (on behalf of the Trust) and the Company further
agree (i) not to take any action in respect of any claims hereunder against
any subscriber, officer, director, employee, administrator, shareholder,
incorporator or agent of the Purchaser and (ii) not to institute against the
Purchaser any insolvency, bankruptcy, reorganization, liquidation or similar
proceedings in any jurisdiction until one year and one day or, if longer, the
applicable preference period then in effect, as the case may be, shall have
elapsed since the final payments to the holders of the securities issued by
the Purchaser in connection with the CBO Offering.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1. The Purchaser understands and acknowledges that (i) none of the
Capital Securities, the Subordinated Debt Securities or the Guarantee (the
"Offeror Securities") have been or will be registered under the Securities Act
of 1933, as amended (the "Securities Act"), or any other applicable securities
laws, (ii) the Offeror Securities are being offered for sale by the Offerors
in transactions not requiring registration under the Securities Act, and (iii)
the Offeror Securities may not be offered, sold, pledged or otherwise
transferred by the Purchaser except in compliance with the registration
requirements of the Securities Act, or any other applicable securities laws,
pursuant to an exemption therefrom or in a transaction not subject thereto.
2.2. The Purchaser represents and warrants that (i) it is not a "U.S.
person" (as such term is defined in Rule 902 under the Securities Act), (ii)
it is not acquiring the Capital Securities for the account or benefit of any
U.S. person, and (iii) the offer and sale of Capital Securities to the
Purchaser constitutes an "offshore transaction" under Regulation S under the
Securities Act.
2.3. The Purchaser represents and warrants that it is purchasing the
Capital Securities for its own account, for investment and not with a view to,
or for offer or sale in connection with, any distribution thereof in violation
of the Securities Act or other applicable securities laws, subject to any
requirement of law that the disposition of its property be at all times within
its control and subject to its ability to resell such Capital Securities
pursuant to an effective registration statement under the Securities Act or
pursuant to an exemption therefrom or in a transaction not subject thereto,
and the Purchaser agrees to the legends and transfer restrictions applicable
to the Capital Securities contained in the Declaration.
2.4. The Purchaser, a Cayman Islands company whose business includes
the issuance of certain notes and acquiring the Capital Securities and other
similar securities, has had the opportunity to ask questions of, and receive
answers and request additional information from, the Offerors and is aware
that it may be required to bear the economic risk of an investment in the
Capital Securities.
2.5. The Purchaser is an exempted company with limited liability duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction where it is organized, with full power and authority to execute,
deliver and perform this Subscription Agreement, to
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make the representations and warranties specified herein, and to consummate
the transactions contemplated herein and it has full right and power to
subscribe for the Capital Securities.
2.6. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any governmental body, agency
or court having jurisdiction over the Purchaser, other than those that have
been made or obtained, is necessary or required for the performance by the
Purchaser of its obligations under this Subscription Agreement or to
consummate the transactions contemplated herein.
2.7. This Subscription Agreement has been duly authorized, executed
and delivered by the Purchaser.
2.8. The Purchaser is not in violation of or default under any term
of its Memorandum of Association or Articles of Association, of any provision
of any mortgage, indenture, contract, agreement, instrument or contract to
which it is a party or by which it is bound or of any judgment, decree, order,
writ or, to its knowledge, any statute, rule or regulation applicable to the
Purchaser which would prevent the Purchaser from performing any material
obligation set forth in this Subscription Agreement. The execution, delivery
and performance of and compliance with this Subscription Agreement, and the
consummation of the transactions contemplated herein, will not, with or
without the passage of time or giving of notice, result in any such violation
or default or the suspension, revocation, impairment, forfeiture or
non-renewal of any permit, license, authorization or approval applicable to
the Purchaser, its business or operations or any of its assets or properties
which would prevent the Purchaser from performing any material obligations set
forth in this Subscription Agreement.
2.9. The Purchaser understands and acknowledges that the Offerors
will rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agrees that if any of the
foregoing acknowledgments, representations, warranties or agreements cease to
be accurate, it shall promptly notify the Offerors.
2.10. The Purchaser understands that no public market exists for any
of the Capital Securities, and that it is unlikely that a public market will
ever exist for the Capital Securities.
ARTICLE III
MISCELLANEOUS
3.1. Any notice or other communication given hereunder shall be
deemed sufficient if in writing and sent by registered or certified mail,
return receipt requested, international courier, or delivered by hand against
written receipt therefor, or by facsimile transmission and confirmed by
telephone, to the following addresses, or such other address as may be
furnished to the other parties as herein provided:
To the Offerors: Chandler (U.S.A.), Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To the Purchaser: InCapS Funding I, Ltd.
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ House
South Church Street
▇▇▇▇▇▇ Town, Grand Cayman
Cayman Islands
Attention: Directors
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
To the Purchaser
for service of
all process: CT Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Unless otherwise expressly provided herein, notices shall be deemed to
have been given when received.
3.2. This Subscription Agreement shall not be changed, modified or
amended except by a writing signed by the parties hereto.
3.3. Upon the execution and delivery of this Subscription Agreement
by the parties hereto, this Subscription Agreement shall become a binding
obligation of each such party with respect to the matters covered herein,
including those incorporated by reference from the Placement Agreement.
3.4. THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW. EACH OF THE TRUST, THE PURCHASER AND THE
COMPANY, ON BEHALF OF ITSELF AND ITS SUBSIDIARIES (INCLUDING, WITHOUT
LIMITATION, THE TRUST), HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF
NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS
AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY
DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT. EACH OF THE TRUST, THE PURCHASER AND THE
COMPANY, ON BEHALF
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OF ITSELF AND ITS SUBSIDIARIES (INCLUDING, WITHOUT LIMITATION, THE TRUST),
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
3.5. The parties hereto agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action
as may be necessary or appropriate to carry out the purposes and intent of
this Subscription Agreement.
3.6. This Subscription Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
SIGNATURES APPEAR ON THE FOLLOWING PAGE
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IN WITNESS WHEREOF, this Subscription Agreement is agreed to and accepted
as of the day and year first written above.
CHANDLER (U.S.A.), INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
President
▇▇▇▇▇▇▇▇ CAPITAL TRUST I
By: /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇
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W. ▇▇▇▇▇ ▇▇▇▇▇▇
Administrator
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IN WITNESS WHEREOF, I have set my hand the day and year first written
above.
INCAPS FUNDING I, LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
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