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Exhibit 4.2
THE XXXXXXX-XXXXXXXX COMPANY
$150,000,000 7.375% Debentures Due 2027
$150,000,000 7.450% Debentures Due 2097
PURCHASE AGREEMENT
New York, New York
February 4, 1997
Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Xxxxxxx-Xxxxxxxx Company, an Ohio corporation (the
"Company"), proposes to issue and sell to Salomon Brothers Inc (the "Initial
Purchaser") as set forth on Schedule I hereto, $150,000,000 principal amount of
its 7.375% Debentures due 2027 (the "2027 Debentures") and $150,000,000
principal amount of its 7.450% Debentures due 2097 (the "2097 Debentures" and
collectively with the 2027 Debentures, the "Debentures"). The Debentures are to
be issued under an indenture (the "Indenture") dated as of February 1, 1996,
between the Company and The Chase Manhattan Bank (formerly known as Chemical
Bank), as trustee.
The sale of the Debentures to the Initial Purchaser will be
made without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
that you will offer and sell the Debentures purchased hereunder in accordance
with Section 4 hereof as soon as you deem advisable.
In connection with the sale of the Debentures, the Company has
prepared a preliminary offering memorandum, dated January 28, 1997 (including
any and all exhibits thereto and any information incorporated by reference
therein, the "Preliminary Memorandum"), and a final offering memorandum, dated
February 4, 1997 (including any and all exhibits thereto and any information
incorporated by reference therein, the "Final Memorandum"). Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain information
concerning the Company and the Debentures.
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The Company hereby confirms that it has authorized the use of the Preliminary
Memorandum and the Final Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Debentures by the Initial Purchaser.
Unless stated to the contrary, all references herein to the Final Memorandum are
to the Final Memorandum at the Execution Time (as defined below) and are not
meant to include any amendment or supplement, or any information incorporated by
reference therein, subsequent to the Execution Time and any references herein to
the terms "amend", "amendment" or "supplement" with respect to the Final
Memorandum shall be deemed to refer to and include any information filed under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), subsequent
to the Execution Time which is incorporated by reference therein.
The holders of the Debentures will be entitled to the
benefits, and bound by the terms and conditions, of the Registration Agreement
dated the date hereof between the Company and the Initial Purchaser (the
"Registration Agreement").
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to the Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The Final
Memorandum, at the date hereof, does not, and at the Closing Date (as
defined below) will not (and any amendment or supplement thereto, at
the date thereof and at the Closing Date, will not), contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representation or warranty as to the
information contained in or omitted from the Preliminary Memorandum or
the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of the Initial Purchaser specifically
for inclusion therein.
(b) Neither the Company, nor any of its Affiliates (as defined
in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")), nor any person (other than the Initial Purchaser) acting on its
or their behalf has, directly or indirectly, made offers or sales of
any security, or solicited offers to buy any security, under
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circumstances that would require the registration of the Debentures
under the Securities Act.
(c) Neither the Company, nor any of its Affiliates, nor any
person (other than the Initial Purchaser) acting on its or their behalf
has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or
sale of the Debentures.
(d) The Debentures satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(e) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), without taking account of any exemption
arising out of the number of holders of the Company's securities.
(f) The Company is subject to and in full compliance with the
reporting requirements of Section 13 of the Exchange Act.
(g) The Company has not paid or agreed to pay to any person
any compensation for soliciting another to purchase any securities of
the Company (except as contemplated by this Agreement).
2. PURCHASE AND SALE. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to the Initial Purchaser, and the Initial Purchaser
agrees to purchase from the Company, (i) at a purchase price of 99.056% of the
principal amount thereof, plus accrued interest, if any, from February 10, 1997,
to the Closing Date, the principal amount of 2027 Debentures set forth opposite
the Initial Purchaser's name in Schedule I hereto and (ii) at a purchase price
of 98.464% of the principal amount thereof, plus accrued interest, if any, from
February 10, 1997, to the Closing Date, the principal amount of 2097 Debentures
set forth opposite the Initial Purchaser's name in Schedule I hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Debentures shall be made at 10:00 AM, New York City time, on February 10, 1997,
or such later date (not later than February 17, 1997), as the Initial Purchaser
shall designate, which date and time may be postponed by agreement between the
Initial Purchaser and the Company (such date and time of delivery and payment
for the Debentures being herein called the "Closing Date"). Delivery of the
Debentures shall be made to the Initial Purchaser against payment by the Initial
Purchaser of the
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purchase price thereof to or upon the order of the Company by wire transfer of
immediately available funds or such other manner of payment as may be agreed by
the Company and the Initial Purchaser. Delivery of the Debentures shall be made
at such location as the Initial Purchaser shall reasonably designate at least
one business day in advance of the Closing Date. Certificates for the Debentures
shall be registered in such names and in such denominations as the Initial
Purchaser may request not less than three full business days in advance of the
Closing Date.
The Company agrees to have the Debentures available for
inspection, checking and packaging by the Initial Purchaser in New York, New
York, not later than 1:00 p.m. on the business day prior to the Closing Date.
4. OFFERING OF DEBENTURES. The Initial Purchaser, represents
and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell,
any Debentures except to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Debentures is
aware that such sale is being made in reliance on Rule 144A.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Debentures by means of any form of
general solicitation or general advertising (within the meaning of
Regulation D), except pursuant to a registered public offering as
provided in the Registration Agreement.
5. AGREEMENTS. The Company agrees with the Initial Purchaser
that:
(a) The Company will furnish to the Initial Purchaser and to
Counsel for the Initial Purchaser, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as it may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act which
are incorporated by reference therein, without the prior written
consent of the Initial Purchaser; PROVIDED, HOWEVER, that, prior to the
completion of the distribution of the Debentures by the Initial
Purchaser (as
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determined by the Initial Purchaser), the Company will not file any
document under the Exchange Act which is incorporated by reference in
the Final Memorandum unless, prior to such proposed filing, the Company
has furnished the Initial Purchaser with a copy of such document for
their review and has reasonably considered the comments promptly made
thereon by the Initial Purchaser. The Company will promptly advise the
Initial Purchaser when any document filed under the Exchange Act which
is incorporated by reference in the Final Memorandum shall have been
filed with the Securities and Exchange Commission (the "Commission").
(c) If at any time prior to the completion of the sale of the
Debentures by the Initial Purchaser (as determined by the Initial
Purchaser), any event occurs as a result of which the Final Memorandum,
as then amended or supplemented, would include any untrue statement of
a material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, or if it should be necessary to amend
or supplement the Final Memorandum to comply with applicable law, the
Company will promptly notify the Initial Purchaser of the same and,
subject to the requirements of paragraph (b) of this Section 5, will
prepare and provide to the Initial Purchaser pursuant to paragraph (a)
of this Section 5 an amendment or supplement which will correct such
statement or omission or effect such compliance.
(d) The Company will use its best efforts to arrange for the
qualification of the Debentures for sale by the Initial Purchaser under
the laws of such jurisdictions as the Initial Purchaser may designate
and to maintain such qualifications in effect so long as required for
the sale of the Debentures. The Company will promptly advise the
Initial Purchaser of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Debentures
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
(e) The Company will not, and will not permit any of its
Affiliates to, resell any Debentures that have been acquired by any of
them.
(f) Neither the Company, nor any of its Affiliates, nor any
person (other than the Initial Purchaser) acting on its or their behalf
will, directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would
require the registration of the Debentures under the Securities Act.
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(g) Neither the Company, nor any of its Affiliates, nor any
person (other than the Initial Purchaser) acting on its or their behalf
will engage in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or
sale of the Debentures, except pursuant to a registered public offering
as provided in the Registration Agreement.
(h) So long as any of the Debentures are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities
Act, the Company will, during any period in which it is not subject to
and in compliance with Section 13 or 15(d) of the Exchange Act, provide
to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities,
upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the
Securities Act. Such information provided by the Company will not, at
the date thereof, contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. This covenant is intended to be for the benefit of the
holders, and the prospective purchasers designated by such holders,
from time to time of such restricted securities.
(i) The Company will cooperate with the Initial Purchaser and
use its best efforts to permit the Debentures to be eligible for
clearance and settlement through The Depository Trust Company.
(j) The Company will not, until 10 business days following the
Closing Date, without the prior written consent of the Initial
Purchaser, offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any debt
securities issued or guaranteed by the Company (other than (i) the
Debentures, (ii) pursuant to a registered public offering as provided
in the Registration Agreement, (iii) the 6.25% Notes due 2000, the
6.50% Notes due 2002 and the 6.85% Notes due 2007 offered pursuant to
the Prospectus Supplement dated as of February 4, 1997, (iv) commercial
paper with a maturity which does not exceed 270 days, (v) debt
securities issued by foreign wholly owned subsidiaries of the Company
and (vi) borrowings under the Company's five-year and 364 day revolving
credit agreements).
6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASER. The
obligations of the Initial Purchaser to purchase the Debentures shall be subject
to the accuracy of the represen-
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tations and warranties on the part of the Company contained herein at the date
and time that this Agreement is executed and delivered by the parties hereto
(the "Execution Time") and the Closing Date, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Company shall have furnished to the Initial Purchaser
the opinion of the Vice President, General Counsel and Secretary of the
Company, dated the Closing Date, 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 Ohio, with full corporate power to own
its properties and conduct its business as described in the
Final Memorandum and is qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the Company and its subsidiaries
taken as a whole. The Company's significant subsidiaries (as
defined in Rule 405 under the Securities Act) (the
"Subsidiaries") are duly incorporated and validly existing as
corporations in good standing under the laws of the
jurisdiction in which it is organized, each with full
corporate power and authority to own properties and conduct
business as described in the Final Memorandum, and are duly
qualified to do business as foreign corporations and are in
good standing under the laws of each jurisdiction which
requires such qualification wherein each such Subsidiary owns
or leases material properties or conducts material business
except where the failure to so qualify would not have a
material adverse effect on the operations of the Company and
its Subsidiaries taken as a whole;
(ii) all the outstanding shares of capital stock of the
Company and each Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Final Memorandum,
all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
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(iii) the Company's authorized equity capitalization
is as set forth in the Final Memorandum;
(iv) the Indenture has been duly authorized, executed
and delivered, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect); the Debentures have been duly and validly
authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid
for by the Initial Purchaser pursuant to this Agreement, will
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture; and the statements
set forth under the heading "Description of Debentures" in the
Final Memorandum, insofar as such statements purport to
summarize certain provisions of the Debentures and the
Indenture, provide a fair summary of such provisions;
(v) this Agreement and the Registration Agreement
have been duly authorized, executed and delivered and
constitute legal, valid and binding instruments enforceable
against the Company in accordance with their terms;
(vi) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein or in the
Registration Agreement, except such as may be required under
the Securities Act or the Exchange Act with respect to the
Registration Agreement and the transactions contemplated
thereunder and such as may be required under the blue sky or
state securities laws in connection with the purchase and sale
of the Debentures by the Initial Purchaser and such other
approvals (specified in such opinion) as have been obtained;
and
(vii) neither the issue and sale of the Debentures,
the execution and delivery of the Indenture, this Agreement or
the Registration Agreement, the consummation of any other of
the transactions herein or therein contemplated nor the
fulfillment of the terms hereof or thereof will conflict with,
result in a breach or violation of, or constitute a default
under the Amended Articles of Incorporation or the Code of
Regulations, as amended, of the Company or the terms of any
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indenture or other agreement or instrument known to such
counsel and to which the Company or any of its subsidiaries is
a party or bound by any judgment, order or decree known to
such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries.
Such counsel shall also state that nothing has caused
him to believe that at the Execution Time or the Closing Date the Final
Memorandum contains or contained an untrue statement of a material fact
or omits 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, not misleading (including in each case, for the
avoidance of doubt, the documents incorporated by reference therein as
of such date, but other than the financial statements and other
financial and statistical information contained therein as to which
such counsel need express no opinion).
In rendering such opinion, such counsel may rely (A)
as to matters involving the application of laws of any jurisdiction
other than the State of Ohio or the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to Counsel for the Initial Purchaser and (B) as to matters
of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.
All references in this Section 6(a) to the Final
Memorandum shall be deemed to include any amendment or supplement
thereto at the Closing Date.
(b) The Company shall have furnished to the Initial Purchaser
the opinion of Xxxxxx & Xxxxxx, counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Debentures conform to the description thereof
contained in the Final Memorandum;
(ii) the Indenture has been duly qualified under the
Trust Indenture Act; and
(iii) no registration of the Debentures under the
Securities Act is required for the offering or sale of the
Debentures to the Initial Purchaser or in connection with the
initial resale of such Debentures by the Initial Purchaser in
accordance with this
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Agreement, it being understood that no opinion is expressed as
to any subsequent resale of any Debenture.
Such counsel shall also state that nothing has caused
them to believe that at the Execution Time the Final Memorandum
contained 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, not misleading
(except for the documents incorporated by reference in the Final
Memorandum and the financial statements and other financial and
statistical information contained therein, as to which such counsel
need not express any opinion).
In rendering such opinion, such counsel may rely (A)
as to matters involving the application of laws of the State of Ohio,
to the extent deemed proper and specified in such opinion, upon the
opinion of the Vice President, General Counsel and Secretary of the
Company and (B) as to matters of fact, to the extent they deem proper,
on certificates of responsible officers of the Company and public
officials.
All references in this Section 6(b) to the Final
Memorandum shall be deemed to include any amendment or supplement
thereto at the Closing Date.
(c) The Initial Purchaser shall have received from Cravath,
Swaine & Xxxxx, counsel for the Initial Purchaser such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale
of the Debentures, the Final Memorandum (as amended or supplemented at
the Closing Date) and other related matters as the Initial Purchaser
may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(d) The Company shall have furnished to the Initial Purchaser
a certificate of the Company, signed by the Senior Vice
President-Finance, Treasurer and Chief Financial Officer and Vice
President and Assistant Treasurer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with
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the same effect as if made on the Closing Date, and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum, there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(e) At the Execution Time and at the Closing Date, Ernst &
Young LLP shall have furnished to the Initial Purchaser a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, substantially in the forms attached hereto as Exhibits A
and B.
(f) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum, there shall
not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (e) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its
subsidiaries the effect of which, in any case referred to in clause (i)
or (ii) above, is, in the judgment of the Initial Purchaser, so
material and adverse as to make it impractical or inadvisable to market
the Debentures as contemplated by the Final Memorandum.
(g) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Securities Act) or any
notice given of any intended or potential decrease in any such rating
or of a possible change in any such rating that does not indicate the
direction of the possible change.
(h) Prior to the Closing Date, the Registration Agreement
shall have been executed and delivered to the Initial Purchaser and the
Trustee and the Company shall have furnished to the Initial Purchaser
such further information, certificates and documents as the Initial
Purchaser may reasonably request.
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If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Initial Purchaser and Cravath, Swaine
& Xxxxx, counsel for the Initial Purchaser, this Agreement and all obligations
of the Initial Purchaser hereunder may be canceled at, or at any time prior to,
the Closing Date by the Initial Purchaser. Notice of such cancellation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
The documents required to be delivered by this Section 6 will
be delivered at the office of Cravath, Swaine & Xxxxx, counsel for the Initial
Purchaser, at Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the
Closing Date.
7. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. The Company
will pay all costs, expenses, fees, disbursements and taxes incident to (i) the
preparation by the Company, printing and distribution of the Final Memorandum,
each Preliminary Memorandum and all amendments and supplements to any of them
prior to or during the period specified in Section 5(c), (ii) the printing
(including duplication costs) and delivery of this Agreement, and all other
agreements, memoranda, correspondence and other documents printed and delivered
in connection with the offering of the Debentures, (iii) the offer and sale of
the Debentures, and (iv) the performance by the Company of its other obligations
under this Agreement.
In addition, if the sale of the Debentures provided for herein
is not consummated because any condition to the obligations of the Initial
Purchaser set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 9 hereof or because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
Initial Purchaser in payment for the Debentures on the Closing Date, the Company
will reimburse the Initial Purchaser upon demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Debentures.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser, the directors, officers,
employees and agents of the Initial Purchaser and each person who controls the
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities,
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joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Memorandum, the Final Memorandum or any information provided by
the Company to any holder or prospective purchaser of Debentures pursuant to
Section 5(h), or in any amendment thereof or supplement thereto, 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,
in the light of the circumstances under which they were made, not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; PROVIDED,
HOWEVER, that (i) the Company will 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
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by the Initial Purchaser specifically for
inclusion therein and (ii) such indemnity with respect to the Preliminary
Memorandum or the Final Memorandum shall not inure to the benefit of the Initial
Purchaser (or any person controlling the Initial Purchaser) from whom the person
asserting any such loss, claim, damage or liability purchased the Debentures
which are the subject thereof if such person did not receive a copy of the Final
Memorandum (or the Final Memorandum as supplemented) excluding documents
incorporated therein by reference at or prior to the confirmation of the sale of
such Debentures to such person and the untrue statement or omission of a
material fact contained in the Preliminary Memorandum was corrected in the Final
Memorandum (or the Final Memorandum as supplemented). This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Company, its directors, its officers, and each person who controls
the Company within the meaning of either the Securities Act or the Exchange Act,
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact in the written information
relating to the Initial Purchaser furnished to the Company by or
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on behalf of the Initial Purchaser specifically for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or supplement thereto),
or arise out of or are based upon the omission or alleged omission to state in
such written information a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending such loss, claim,
damage, liability or action. This indemnity agreement will be in addition to any
liability which the Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and under the heading "Plan of Distribution" in the Preliminary Memorandum
and the Final Memorandum constitute the only information furnished in writing by
or on behalf of the Initial Purchaser for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure to so notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reason-
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ably concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding. Any indemnifying party shall not be liable for any
settlement, compromise or consent of any proceeding effected by the indemnified
party without the written consent, of the indemnifying party (which consent
shall not be unreasonably withheld) unless the indemnifying party has waived its
right to appoint counsel to represent the indemnified party in such proceeding
in which case the indemnified party may effect such a settlement, compromise or
consent without the consent of the indemnifying party.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchaser agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively, "Losses") to which the Company and the Initial
Purchaser may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company and by the Initial Purchaser from the
offering of the Debentures; PROVIDED, HOWEVER, that in no case shall the Initial
Purchaser be responsible for any amount in excess of the purchase discount or
commission applicable to the Debentures purchased by the Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Initial Purchaser shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the Initial
Purchaser in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before
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deducting expenses), and benefits received by the Initial Purchaser shall be
deemed to be equal to the total purchase discounts and commissions received by
the Initial Purchaser from the Company in connection with the purchase of the
Debentures hereunder. Relative fault shall be determined by reference to whether
any alleged untrue statement or omission relates to information provided by the
Company or the Initial Purchaser. The Company and the Initial Purchaser agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act and each director, officer, employee and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser,
and each person who controls the Company within the meaning of either the
Securities Act or the Exchange Act and each officer and director of the Company
shall have the same rights to contribution as the Company, subject in each case
to the applicable terms and conditions of this paragraph (d).
9. TERMINATION. This Agreement shall be subject to termination
in the absolute discretion of the Initial Purchaser, by notice given to the
Company prior to delivery of and payment for the Debentures, if prior to such
time (i) trading in any of the Company's securities shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Initial Purchaser, impracticable or inadvisable to
proceed with the offering or delivery of the Debentures as contemplated by the
Final Memorandum.
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchaser set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchaser or the Company
or any of the officers, directors or controlling persons
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referred to in Section 8 hereof, and will survive delivery of and payment for
the Debentures. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
11. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Initial Purchaser, will be
mailed, delivered or telegraphed and confirmed to them, care of Salomon Brothers
Inc, at Xxxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000; or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 000
Xxxxxxxx Xxxxxx, X.X., Xxxxxxxxx, Xxxx, 00000, attention: Xxxxx X. Xxxxxxxx,
Esq., Vice President, General Counsel and Secretary.
12. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and, except as expressly set forth in Section 5(h) hereof, no other person will
have any right or obligation hereunder.
13. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
14. BUSINESS DAY. For purposes of this Agreement, "business
day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which banking institutions in The City of New York, New York are
authorized or obligated by law, executive order or regulation to close.
15. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and the Initial Purchaser.
Very truly yours,
The Xxxxxxx-Xxxxxxxx Company
By /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President-
Finance, Treasurer
and Chief Financial
Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
By /s/ Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: Associate
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SCHEDULE I
Principal Amount Principal Amount
of 2027 Debentures of 2097 Debentures
Initial Purchaser to be Purchased to be Purchased
----------------- --------------- ---------------
Salomon Brothers Inc.......................... $150,000,000 $150,000,000
------------ ------------
Total................................. $150,000,000 $150,000,000
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EXHIBIT A
*Intentionally Omitted*
A-1
21
EXHIBIT B
*Intentionally Omitted*
B-1
22
Annex 1
[SALOMON BROTHERS INC LETTERHEAD]
_____________, 0000
Xxxxx & Young LLP
[address]
Ladies and Gentlemen:
Reference is hereby made to the Purchase Agreement (the
Agreement") dated [ ], 1997 between the undersigned (the "Initial
Purchaser"), and The Xxxxxxx-Xxxxxxxx Company (the "Company") pursuant to which
the Company will sell to the Initial Purchaser, and the Initial Purchaser will
purchase from the Company, $150,000,000 principal amount of the Company's
[ ]% Debentures Due 2027 and $150,000,000 principal amount of the Company's
[ ]% Debentures Due 2097 (the "Debentures").
Pursuant to Section 6(e) of the Purchase Agreement, you are
required to deliver certain letters, in form and substance satisfactory to us,
setting forth the matters described in such Section (the "Auditor's Letters").
In connection with your delivery of the Auditor's Letters, we confirm to you
that:
(i) we are knowledgeable with respect to the due diligence
review process that would be performed if this placement of Debentures
were being registered pursuant to the Securities Act of 1933, as
amended (the "Act"); and
(ii) we will be reviewing certain information relating to the
Company that will be included or incorporated by reference in the Final
Memorandum (as defined in the Purchase Agreement) and this review
process, applied to the information relating to the Company, will be
substantially consistent with the due diligence review process that we
would perform if this placement of Debentures were being registered
pursuant to the Act.
In accordance with the foregoing, we hereby request that you
deliver to us the Auditor's Letters.
This letter is being furnished to you solely for the purpose
of obtaining the Auditor's Letters and may not be relied
Annex 1-1
23
upon or used by you for any other purpose, or given or shown to any other
person, without our prior written consent.
Very truly yours,
SALOMON BROTHERS INC
By__________________________
Name:
Title:
Annex 1-2
