EXHIBIT 4.1
BOWATER INCORPORATED
$400,000,000 61/2% Notes due 2013
PURCHASE AGREEMENT
June 16, 0000
Xxx Xxxx, Xxx Xxxx
UBS Securities LLC
As Representative of the Several Initial
Purchasers named in Schedule I hereto
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Bowater Incorporated, a Delaware corporation (the "Company"),
agrees with you as follows:
1. Issuance of Notes. The Company proposes to issue and
sell to the several parties named in Schedule I hereto (the "Initial
Purchasers"), for whom UBS Securities LLC (the "Representative") is acting as
representative, $400,000,000 aggregate principal amount of its 61/2% Notes due
2013 (the "Original Notes"). The Original Notes will be issued pursuant to an
indenture (the "Indenture"), to be dated June 19, 2003, between the Company and
The Bank of New York, as trustee (the "Trustee"). Capitalized terms used but not
otherwise defined herein shall have the meanings given to such terms in the
Indenture.
The Original Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "Act"). The Company has prepared a
preliminary offering memorandum, dated June 15, 2003 (the "Preliminary
Memorandum"), and a final offering memorandum dated and available for
distribution on the date hereof (the "Final Memorandum") relating to the Company
and the Original Notes.
The Initial Purchasers have advised the Company that the
Initial Purchasers intend, as soon as they deem practicable after this Purchase
Agreement (this "Agreement") has been executed and delivered, to resell (the
"Exempt Resales") the Original Notes purchased by the Initial Purchasers under
this Agreement in private sales exempt from registration under the Act on the
terms set forth in the Final Memorandum, as amended or supplemented, solely to
(i) persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBs"), and (ii)
other eligible purchasers pursuant to
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offers and sales that occur outside the United States within the meaning of
Regulation S under the Act; the persons specified in clauses (i) and (ii) are
sometimes collectively referred to herein as the "Eligible Purchasers."
Upon issuance of the Original Notes and until such time as the
same is no longer required under the applicable requirements of the Act, the
Original Notes shall bear the legend relating thereto set forth under "Notice to
Investors" in the Final Memorandum.
Holders (including subsequent transferees) of the Original
Notes will have the registration rights set forth in the registration rights
agreement (the "Registration Rights Agreement") to be dated the Closing Date (as
defined below) in form and substance reasonably satisfactory to the Initial
Purchasers and conforming to the description thereof in the Final Memorandum,
for so long as such Original Notes constitute "Registrable Notes" (as defined in
the Registration Rights Agreement). Pursuant to the Registration Rights
Agreement, the Company will agree to (i) file with the Securities and Exchange
Commission (the "Commission") under the circumstances set forth in the
Registration Rights Agreement, (a) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to a new issue of debt
securities (collectively with the Private Exchange Notes (as defined in the
Registration Rights Agreement), the "Exchange Notes" and, together with the
Original Notes, the "Notes") to be offered in exchange for the Original Notes
(the "Exchange Offer") and issued under the Indenture or an indenture
substantially identical to the Indenture and/or (b) under certain circumstances
set forth in the Registration Rights Agreement, a shelf registration statement
pursuant to Rule 415 under the Act (the "Shelf Registration Statement" and,
together with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the Original Notes,
and (ii) to use their reasonable best efforts to cause such Registration
Statements to be declared effective. This Agreement, the Notes, the Indenture
and the Registration Rights Agreement are hereinafter sometimes referred to
collectively as the "Note Documents."
The Company intends to apply the proceeds of the sale of the
Original Notes as described in the Final Memorandum under the heading "Use of
Proceeds."
2. Agreements to Sell and Purchase. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained in this Agreement, the Company
agrees to issue and sell to the Initial Purchasers, and the Initial Purchasers
agree to purchase from the Company, the aggregate principal amount of the
Original Notes set forth opposite their respective names in Schedule I hereto.
The purchase price for the Original Notes shall be 98.750% of the initial
offering price of 99.610%, plus accrued interest, if any from June 19, 2003 to
the Closing Date.
3. Delivery and Payment. Delivery of, and payment of the
purchase price for, the Original Notes shall be made at 10:00 a.m., New York
City time, on June 19, 2003 (such date and time, the "Closing Date") at the
offices of Xxxxxx Xxxxxx & Xxxxxxx LLP at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. The Closing Date and the location of delivery of and the form of payment
for the Original Notes may be varied by mutual agreement between the
Representative and the Company.
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The Original Notes to be purchased by the Initial Purchasers
hereunder will be represented by two or more definitive global notes in
book-entry form that will be deposited by or on behalf of the Company with The
Depositary Trust Company ("DTC") or its designated custodian. The Company will
deliver the Original Notes to the Representative, for the account of each
Initial Purchaser, against payment by the Initial Purchasers of the purchase
price therefor by means of transfer of immediately available funds to such
account or accounts specified by the Company on or prior to the Closing Date (or
by such means as the parties hereto shall agree prior to the Closing Date), by
causing DTC to credit the Original Notes to the account of the Representative at
DTC.
4. Agreements of the Company. The Company covenants and
agrees with the Initial Purchasers as follows:
(a) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers, without charge, with as many
copies of the Preliminary Memorandum (until such time as the Final
Memorandum is complete) and Final Memorandum, and any amendments or
supplements thereto, as the Initial Purchasers may reasonably request.
The Company consents to the use of the Preliminary Memorandum (until
such time as the Final Memorandum is complete) and Final Memorandum,
and any amendments and supplements thereto required pursuant to this
Agreement, by the Initial Purchasers in connection with Exempt Resales.
(b) Not to amend or supplement the Final Memorandum prior
to the Closing Date unless the Initial Purchasers shall previously have
been advised of, and shall not have reasonably objected to, such
amendment or supplement within a reasonable time, but in any event not
longer than two business days after being furnished with a copy of such
amendment or supplement.
(c) If, during the time that a Final Memorandum is
required to be delivered in connection with any Exempt Resales after
the date of this Agreement and prior to the consummation of the
Exchange Offer, any event shall occur that, in the judgment of the
Company or in the judgment of counsel to the Initial Purchasers, makes
any statement of a material fact in the Final Memorandum, as then
amended or supplemented, untrue or that requires the making of any
additions to or changes in the Final Memorandum in order to make the
statements in the Final Memorandum, as then amended or supplemented, in
the light of the circumstances under which they are made, not
misleading, or if it is necessary to amend or supplement the Final
Memorandum to comply with all applicable laws, the Company shall, upon
becoming aware of any such event, promptly notify the Initial
Purchasers of such event and prepare an appropriate amendment or
supplement to the Final Memorandum so that (i) the statements in the
Final Memorandum, as amended or supplemented, will, in the light of the
circumstances at the time that the Final Memorandum is delivered to
prospective Eligible Purchasers, not be misleading and (ii) the Final
Memorandum will comply with applicable law.
(d) To cooperate with the Initial Purchasers and counsel
to the Initial Purchasers in connection with the qualification or
registration of the Original Notes under the se-
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curities laws of such jurisdictions as the Initial Purchasers may
request and to continue such qualification in effect so long as
required for the Exempt Resales. Notwithstanding the foregoing, the
Company shall not be required to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or to file a general
consent to service of process in any such jurisdiction or subject
itself to taxation in any such jurisdiction where it is not then so
subject, or to incur expenses that the Company reasonably believes are
excessive in connection with such requested qualification or
registration.
(e) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, to confirm such advice in writing,
of the issuance by any securities commission of any stop order
suspending the qualification or exemption from qualification of any of
the Original Notes for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purpose by any securities
commission or other regulatory authority. The Company shall use its
reasonable best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemption of any of the Original
Notes under any securities laws, and if at any time any securities
commission or other regulatory authority shall issue an order
suspending the qualification or exemption of any of the Original Notes
under any securities laws, the Company shall use its reasonable best
efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(f) To pay all costs, expenses, fees, disbursements
(including fees, expenses and disbursements of counsel to the Company)
reasonably incurred and stamp, documentary or similar taxes incident to
and in connection with: (i) the preparation, printing and distribution
of the Preliminary Memorandum and the Final Memorandum and all
amendments and supplements thereto, (ii) all expenses (including travel
expenses) of the Company in connection with any meetings with
prospective investors in the Original Notes, (iii) the preparation,
notarization (if necessary) and delivery of the Note Documents and all
other agreements, memoranda, correspondence and documents prepared and
delivered in connection with this Agreement, (iv) the issuance,
transfer and delivery by the Company of the Original Notes to the
Initial Purchasers, (v) the qualification or registration of the Notes
for offer and sale under the securities laws of the several states of
the United States or provinces of Canada (including, without
limitation, the cost of printing and mailing preliminary and final Blue
Sky or legal investment memoranda and fees and disbursements of counsel
(including local counsel) to the Initial Purchasers relating thereto),
(vi) the furnishing of such copies of the Final Memorandum, and all
amendments and supplements thereto, as may be reasonably requested for
use in connection with Exempt Resales, (vii) the preparation of
certificates for the Notes, (viii) the application for quotation of the
Notes in The Portal Market ("PORTAL") of the National Association of
Securities Dealers, Inc. ("NASD"), including, but not limited to, all
listing fees and expenses, (ix) the approval of the Notes by DTC for
"book-entry" transfer, (x) the rating of the Notes by rating agencies,
(xi) the reasonable fees and expenses of the Trustee and its counsel
and (xii) the performance by the Company of its other obligations under
the Note Documents. In addition, if the transaction contemplated by
this agreement shall be terminated pursuant to clause (i) or (ii) of
Section 11(b), then, in addition to any other remedies that the Initial
Purchasers may have, the Company shall pay the rea-
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sonable fees, expenses and disbursements of counsel to the Initial
Purchasers. If the transaction contemplated by this agreement shall be
terminated pursuant to clauses (iii), (iv), (v) or (vi) of Section
11(b), then, in addition to any other remedies that the Initial
Purchasers may have, the Company and the Initial Purchasers shall each
pay one-half the reasonable fees, expenses and disbursements of counsel
to the Initial Purchasers. It is understood, however, that except as
expressly provided in this Section 4(f) and Section 6 hereof, the
Initial Purchasers will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of
the Notes by them and any advertising expenses incurred in connection
with any offers they may make.
(g) To use the proceeds from the sale of the Original
Notes in the manner described in the Final Memorandum under the caption
"Use of Proceeds."
(h) To do and perform all things required to be done and
performed under this Agreement by them prior to or after the Closing
Date and to satisfy all conditions precedent on their part to the
delivery of the Original Notes.
(i) Not to, and not to permit any of its Subsidiaries (as
defined in Section 5(a)(iv)) to, sell, offer for sale or solicit offers
to buy any security (as defined in the Act) that would be integrated
with the sale of the Original Notes in a manner that would require the
registration under the Act of the sale of the Original Notes to the
Initial Purchasers or any Eligible Purchasers.
(j) During the period of two years following the Closing
Date, not to and to use its reasonable best efforts to cause its
affiliates (as defined in Rule 144 under the Act) not to, resell any of
the Original Notes that have been reacquired by any of them.
(k) Not to engage, not to allow any of its Subsidiaries
to engage, and to use their reasonable best efforts to cause their
other affiliates and any person acting on their behalf (other than, in
any case, the Initial Purchasers and any of their affiliates, as to
whom the Company makes no covenant) not to engage, in any form of
general solicitation or general advertising (within the meaning of Rule
502(c) of Regulation D under the Act) in connection with any offer or
sale of the Original Notes in the United States prior to the
effectiveness of a registration statement with respect to the Notes.
(l) Not to engage, not to allow any of its Subsidiaries
to engage, and to use its reasonable best efforts to cause its other
affiliates and any person acting on its behalf (other than, in any
case, the Initial Purchasers and any of their affiliates, as to whom
the Company makes no covenant) not to engage, in any directed selling
effort with respect to the Original Notes, and to comply with the
offering restrictions requirement of Regulation S under the Act. Terms
used in this paragraph have the meanings given to them by Regulation S.
(m) From and after the Closing Date, for so long as any
of the Notes remain outstanding and are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act and during any period in
which the Company is not subject to Section 13 or 15(d) of
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the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
to make available upon request the information required by Rule
144A(d)(4) under the Act to (i) any holder or beneficial owner of Notes
in connection with any sale of such Notes and (ii) any prospective
purchaser of such Notes from any such holder or beneficial owner
designated by the holder or beneficial owner. The Company will pay the
reasonable expenses of printing and distributing such documents.
(n) To comply in all material respects with all of its
agreements set forth in the Registration Rights Agreement.
(o) To comply in all material respects with all of its
obligations set forth in the representations letter of the Company to
DTC relating to the approval of the Notes by DTC for "book-entry"
transfer and to use its best efforts to obtain approval of the Notes by
DTC for "book-entry" transfer.
(p) To use its reasonable best efforts to effect the
inclusion of the Original Notes in PORTAL.
(q) Prior to the Closing Date, to furnish without charge
to the Initial Purchasers, (i) as soon as they have been prepared by
the Company, a copy of any regularly prepared final internal financial
statements of the Company and its Subsidiaries for any period
subsequent to the period covered by the financial statements appearing
in the Final Memorandum, (ii) all other reports and other
communications (financial or otherwise) that the Company mails or
otherwise make available to security holders and (iii) such other
information as the Initial Purchasers shall reasonably request;
provided, however, that the Company's obligations under this paragraph
(q) shall be deemed to be satisfied to the extent that any information
required by clauses (i) through (iii) is filed and publicly available
via XXXXX.
(r) Not to distribute prior to the Closing Date any
offering material in connection with the offer and sale of the Original
Notes other than the Preliminary Memorandum and the Final Memorandum.
(s) During the period of two years after the Closing Date
or, if earlier, until such time as the Original Notes are no longer
restricted securities (as defined in Rule 144 under the Act), not to be
or become a closed-end investment company required to be registered,
but not registered, under the Investment Company Act of 1940, as
amended.
(t) In connection with the offering, until the Initial
Purchasers shall have notified the Company of the completion of the
resale of the Notes, not to, and not to permit any of their affiliates
(as such term is defined in Rule 501(b) of Regulation D under the Act)
to, either alone or with one or more other persons, bid for or purchase
for any account in which they or any of their affiliates have a
beneficial interests any Notes; and none of the Company nor any of its
affiliates will make bids or purchases for the purpose of creating
actual, or apparent, active trading in, or of raising the price of, the
Notes.
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5. Representations and Warranties. (a) The Company
represents and warrants to the Initial Purchasers that:
(i) The Final Memorandum has been prepared for
use in connection with the Exempt Resales. Neither the
Preliminary Memorandum nor the Final Memorandum as of its
respective issue date, and on the Closing Date the Final
Memorandum, will contain any untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being
understood that, subsequent to the issue date of the
Preliminary Memorandum, the Company and the Initial Purchasers
agreed (A) to an additional term of the Notes, which would
allow the Company to redeem the Notes in certain
circumstances, (B) that only one tranche of Notes (instead of
two tranches with different maturity dates) would be offered
and sold, (C) that the Company would use a portion of the
proceeds to repay a portion of a $200 million accounts
receivable securitization arrangement and (D) that the terms
described in clauses (A), (B) and (C) would be reflected in
the Final Memorandum); provided, however, that the Company
makes no representation or warranty with respect to (i)
information contained in or omitted from the Preliminary
Memorandum or the Final Memorandum, as supplemented or
amended, in reliance upon and in conformity with the
information furnished to the Company in writing, including by
electronic transmission, by or on behalf of the Initial
Purchasers relating to the Initial Purchasers expressly for
inclusion in the Preliminary Memorandum, the Final Memorandum
or any supplement or amendment thereto or (ii) information
contained in or omitted from the Preliminary Memorandum or the
Final Memorandum, as supplemented or amended, in reliance upon
and in conformity with the information furnished to the
Company by any other third party. No order preventing the use
of the Preliminary Memorandum or the Final Memorandum, or any
order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of
the Act, has been issued or, to the knowledge of the Company
or the Subsidiaries, has been threatened.
(ii) The documents incorporated by reference in
the Final Memorandum heretofore filed with the Commission were
filed in a timely manner and, when they were filed (or, if any
amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects
to the requirements of the Exchange Act and the rules and
regulations thereunder, and any further incorporated documents
so filed will, when they are filed, conform in all material
respects with the requirements of the Exchange Act and the
rules and regulations thereunder; no such document when it was
filed (or, if an amendment with respect to any such document
was filed, when such amendment was filed), 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 no such further
document, when it is filed, will contain an untrue statement
of a material fact or will omit to state a material fact
re-
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quired to be stated therein or necessary in order to make the
statements therein not misleading.
(iii) There are no securities of the Company that
are listed on a national securities exchange registered under
Section 6 of the Exchange Act or that are quoted in a United
States automated interdealer quotation system of the same
class as the Notes within the meaning of Rule 144A under the
Act.
(iv) As of the Closing Date, the Company shall
have an authorized capitalization as set forth under the
heading "Capitalization" in the Final Memorandum. All of the
issued and outstanding shares of capital stock or other equity
interests of the Company have been duly authorized and validly
issued, are fully paid and nonassessable and were not issued
in violation of any preemptive or similar rights. Attached
hereto as Schedule II is a true and complete list of each
subsidiary of the Company that would be a "Significant
Subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X under the Act, their jurisdictions of incorporation or
formation, type of entity and percentage equity ownership by
the Company (all such Significant Subsidiaries, the
"Subsidiaries"). The entities listed on Schedule II hereto are
the only Subsidiaries, direct or indirect, of the Company. All
of the issued and outstanding shares of capital stock or other
equity interests of each of the Company's Subsidiaries have
been duly and validly authorized and issued, are fully paid
and nonassessable, were not issued in violation of any
preemptive or similar rights and, except as set forth in the
Final Memorandum (including any documents incorporated by
reference therein), and except for (A) the 1,000 shares of
non-voting, nonconvertible preferred stock issued by Bowater
Canada Inc. to Fraser and Xxxxxx and (B) the 1,000 shares of
non-voting, nonconvertible preferred stock issued by Bowater
Canadian Forest Products Inc. to Fraser and Xxxxxx, are owned,
directly or indirectly, by the Company free and clear of all
Liens (as defined in the Indenture) (other than those imposed
by the Act or the securities or "Blue Sky" laws of certain
jurisdictions). Except as set forth in the Final Memorandum
(including any documents incorporated by reference therein),
there are no outstanding options, warrants or other rights to
acquire or purchase, or instruments convertible into or
exchangeable for, any shares of capital stock of any of the
Company's Subsidiaries. No holder of any securities of the
Company or any of the Subsidiaries is entitled to have such
securities (other than the Notes) registered under any
registration statement contemplated by the Registration Rights
Agreement or any other agreement.
(v) Each of the Company and the Subsidiaries (a)
is a corporation, partnership or other entity duly organized
and validly existing under the laws of the jurisdiction of its
incorporation or organization, as the case may be; (b) has all
requisite corporate or other power and authority necessary to
own its property and carry on its business as now being
conducted; and (c) is qualified to do business and is in good
standing in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary
and where failure to be so
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qualified and in good standing individually or in the
aggregate could reasonably be expected to have a Material
Adverse Effect. A "Material Adverse Effect" means any material
adverse effect on the business, condition (financial or
other), results of operations, performance, properties or
prospects of the Company and its subsidiaries, taken as a
whole.
(vi) The Company has all requisite corporate or
other power and authority to execute, deliver and perform all
of its obligations under the Note Documents to which it is a
party and to consummate the transactions contemplated by the
Note Documents to be consummated on its part and, without
limitation, the Company has all requisite corporate power and
authority to issue, sell and deliver and perform its
obligations under the Notes.
(vii) This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(viii) The Indenture has been duly and validly
authorized by the Company and, when duly executed and
delivered by the Company (assuming the due authorization,
execution and delivery thereof by the Trustee), will be a
legal, valid and binding obligation of the Company,
enforceable in all material respects against the Company in
accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors'
rights generally and by general principles of equity and the
discretion of the court before which any proceeding therefor
may be brought. The Indenture, when executed and delivered,
will conform in all material respects to the description
thereof in the Final Memorandum.
(ix) The Original Notes have been duly and
validly authorized for issuance and sale to the Initial
Purchasers by the Company and, when issued, authenticated and
delivered by the Company against payment by the Initial
Purchasers in accordance with the terms of this Agreement and
the Indenture, the Original Notes will be legal, valid and
binding obligations of the Company, entitled to the benefits
of the Indenture and enforceable in all material respects
against the Company in accordance with their terms, except as
the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws now of hereafter in effect affecting the
enforcement of creditors' rights generally and by general
principles of equity and the discretion of the court before
which any proceeding therefor may be brought. The Original
Notes, when issued, authenticated and delivered, will conform
in all material respects to the description thereof in the
Final Memorandum.
(x) The Exchange Notes have been, or upon the
Closing Date will be, duly and validly authorized for issuance
by the Company and, when issued, authenticated and delivered
by the Company in accordance with the terms of the
Registration Rights Agreement, the Exchange Offer and the
Indenture, the Ex-
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change Notes will be legal, valid and binding obligations of
the Company, entitled to the benefits of the Indenture and
enforceable in all material respects against the Company in
accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors'
rights generally and by general principles of equity and the
discretion of the court before which any proceeding therefor
may be brought.
(xi) The Registration Rights Agreement has been
duly and validly authorized by the Company and, when duly
executed and delivered by the Company (assuming the due
authorization, execution and delivery thereof by the Initial
Purchasers), will constitute a legal, valid and binding
obligation of the Company, enforceable in all material
respects against the Company in accordance with its terms,
except that (A) the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights generally and
(ii) general principles of equity and the discretion of the
court before which any proceeding therefor may be brought and
(B) any rights to indemnity or contribution thereunder may be
limited by federal and state securities laws and public policy
considerations. The Registration Rights Agreement will conform
in all material respects to the description thereof in the
Final Memorandum.
(xii) All taxes, fees and other governmental
charges that are due and payable by the Company on or prior to
the Closing Date in connection with the execution, delivery
and performance of the Note Documents and the execution,
delivery and sale of the Original Notes shall have been paid
by or on behalf of the Company at or prior to the Closing
Date.
(xiii) None of the Company or the Subsidiaries is
(A) in violation of its charter, bylaws or other constitutive
documents, (B) in default (or, with notice or lapse of time or
both, would be in default) in the performance or observance of
any obligation, agreement, covenant or condition contained in
any bond, debenture, note, indenture, mortgage, deed of trust,
loan or credit agreement, lease, license, franchise agreement,
authorization, permit, certificate or other agreement or
instrument to which any of them is a party or by which any of
them is bound or to which any of their assets or properties is
subject (collectively, "Agreements and Instruments"), or (C)
in violation of any law, statute, rule, regulation, judgment,
order or decree of any domestic or foreign court with
jurisdiction over any of them or any of their assets or
properties or other governmental or regulatory authority,
agency or other body, which, in the case of clauses (B) and
(C) herein, would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
There exists no condition that, with notice, the passage of
time or otherwise, would constitute a default by the Company
or the Subsidiaries under any such document or instrument or
result in the imposition of any
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penalty or the acceleration of any indebtedness, other than
penalties, defaults or conditions that would not have a
Material Adverse Effect.
(xiv) The execution, delivery and performance by
the Company of the Note Documents to which it is a party
including the consummation of the offer and sale of the
Original Notes do not or will not violate, conflict with or
constitute a breach of any of the terms or provisions of, or a
default under (or an event that with notice or the lapse of
time, or both, would constitute a default under), or require
consent under, or result in the creation or imposition of a
lien, charge or encumbrance on any property or assets of any
of the Company or any Subsidiary or an acceleration of any
indebtedness of the Company or any Subsidiary pursuant to, (i)
the charter, bylaws or other constitutive documents of any of
the Company or any Subsidiary, (ii) assuming the consummation
of the transactions contemplated thereby, any Agreements and
Instruments, (iii) any law, statute, rule or regulation
applicable to the Company or any Subsidiary or their
respective assets or properties or (iv) any judgment, order or
decree of any domestic or foreign court or governmental agency
or authority having jurisdiction over the Company or any
Subsidiary or their respective assets or properties, other
than, in the case of each of clauses (i) through (iv),
violations, conflicts, breaches or defaults, or creations or
impositions of liens, charges or encumbrances or accelerations
of indebtedness that would not have a Material Adverse Effect.
Assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 5(b) of this Agreement, no
consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any
court or governmental agency, body or administrative agency,
domestic or foreign, is required to be obtained or made by the
Company or any Subsidiary for the execution, delivery and
performance by the Company or any Subsidiary of the Note
Documents to which it is a party including the consummation of
any of the transactions contemplated thereby, except (w) such
as have been or will be obtained or made on or prior to the
Closing Date, (x) registration of the Exchange Offer or resale
of the Notes under the Act pursuant to the Registration Rights
Agreement, (y) qualification of the Indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"),
in connection with the issuance of the Exchange Notes or (z)
such other consents, approvals, authorizations, registrations
or qualifications as may be required under federal or state
securities laws in connection with the issuance of the Notes
and the Exempt Resales. No consents or waivers from any other
person or entity are required for the execution, delivery and
performance of this Agreement or any of the other Note
Documents or the consummation of any of the transactions
contemplated thereby, other than such consents and waivers as
have been obtained or will be obtained prior to the Closing
Date.
(xv) Except as set forth in the Final Memorandum
(including any documents incorporated by reference therein),
there is (A) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official,
domestic or foreign, now pending or, to the knowledge of the
Company or any Sub-
-12-
sidiary, threatened, to which any of the Company or any
Subsidiary is or may be a party or to which the business,
assets or property of such person is or may be subject, (B) no
statute, rule, regulation or order that has been enacted,
adopted or issued or, to the knowledge of the Company, that
has been proposed by any governmental body or agency, domestic
or foreign, (C) no injunction, restraining order or order of
any nature by a federal or state court or foreign court of
competent jurisdiction to which any of the Company or any
Subsidiary is or may be subject that (x) in the case of clause
(A) above, if determined adversely to any of the Company or
any Subsidiary, would reasonably be expected, either
individually or in the aggregate, (1) to have a Material
Adverse Effect or (2) to interfere with or adversely affect
the issuance of the Notes in any jurisdiction or adversely
affect the consummation of the transactions contemplated by
any of the Note Documents and (y) in the case of clauses (B)
and (C) above, would reasonably be expected, either
individually or in the aggregate, (1) to have a Material
Adverse Effect or (2) to interfere with or adversely affect
the issuance of the Notes in any jurisdiction or adversely
affect the consummation of the transactions contemplated by
any of the Note Documents. Every request of any securities
authority or agency of any jurisdiction for additional
information with respect to the Notes that has been received
by the Company or any Subsidiary or their counsel prior to the
date hereof has been, or will prior to the Closing Date be,
complied with in all material respects.
(xvi) Except as would not reasonably be expected
to have a Material Adverse Effect, no labor disturbance by the
employees of any of the Company or the Subsidiaries exists or,
to the knowledge of the Company, is imminent.
(xvii) Except as set forth in the Final Memorandum
(including any documents incorporated by reference therein),
the Company and each Subsidiary (A) is in compliance with, or
not subject to costs or liabilities under laws, regulations,
rules of common law, orders and decrees, as in effect as of
the date hereof, and any present judgments and injunctions
issued or promulgated thereunder relating to pollution or
protection of public and employee health and safety, the
environment or hazardous or toxic substances or wastes,
pollutants or contaminants applicable to it or its business or
operations or ownership or use of its property ("Environmental
Laws"), other than noncompliance or such costs or liabilities
that would not reasonably be expected to have a Material
Adverse Effect, and (B) possesses all permits, licenses or
other approvals required under applicable Environmental Laws,
except where the failure to possess any such permit, license
or other approval would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse
Effect. All currently pending and, to the knowledge of the
Company, threatened proceedings, notices of violation,
demands, notices of potential responsibility or liability,
suits and existing environmental investigations by any
governmental authority which the Company or the Subsidiaries
could reasonably expect to result in a Material Adverse Effect
are fully and accurately described in all material respects in
the Final Memorandum
-13-
(including any documents incorporated by reference therein).
The Company and each Subsidiary maintains a system of internal
environmental management controls sufficient to provide
reasonable assurance of compliance in all material respects of
its business facilities, real property and operations with
requirements of applicable Environmental Laws.
(xviii) The Company and each Subsidiary has (A) all
licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has made all
declarations and filings with, all applicable authorities, all
self-regulatory authorities and all courts and other tribunals
(each, an "Authorization") necessary to engage in the business
conducted by it in the manner described in the Final
Memorandum (including any documents incorporated by reference
therein), except where failure to hold such Authorizations
would not be reasonably expected to have a Material Adverse
Effect, and (B) no reason to believe that any governmental
body or agency, domestic or foreign, is considering limiting,
suspending or revoking any such Authorization, except where
such limitation, suspension or revocation would not reasonably
be expected to have a Material Adverse Effect. All such
Authorizations are valid and in full force and effect and the
Company and each Subsidiary is in compliance in all material
respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the
regulatory authorities having jurisdiction with respect to
such Authorizations, except for any invalidity, failure to be
in full force and effect or noncompliance with any
Authorization that would not reasonably be expected to have a
Material Adverse Effect.
(xix) The Company and each Subsidiary has valid
title in fee simple to all items of real property and title to
all personal property owned by each of them, in each case free
and clear of any pledge, lien, encumbrance, security interest
or other defect or claim of any third party, except (i) as
such does not materially and adversely affect the value of
such property and does not interfere with the use made or
proposed to be made of such property by the Company or such
Subsidiary to an extent that such interference would have a
Material Adverse Effect, and (ii) liens set forth in the Final
Memorandum (including any documents incorporated by reference
therein). Any real property and buildings held under lease by
the Company or any such Subsidiary are held under valid,
subsisting and enforceable leases, with such exceptions as do
not materially interfere with the use made or proposed to be
made of such property and buildings by the Company or such
Subsidiary.
(xx) The Company and each Subsidiary owns,
possesses or has the right to employ all patents, patent
rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names
(collectively, the "Intellectual Property") necessary to
conduct the businesses operated by it as described in the
Final Memorandum (including any
-14-
documents incorporated by reference therein), except where the
failure to own, possess or have the right to employ such
Intellectual Property would not reasonably be expected to have
a Material Adverse Effect. None of the Company or any
Subsidiary has received any notice of infringement of or
conflict with (and neither knows of any such infringement or a
conflict with) asserted rights of others with respect to any
of the foregoing that would reasonably be expected to have a
Material Adverse Effect. The use of the Intellectual Property
in connection with the business and operations of the Company
and the Subsidiaries does not infringe on the rights of any
person, except for such infringement as would not reasonably
be expected to have a Material Adverse Effect.
(xxi) All tax returns required to be filed by the
Company and each Subsidiary have been filed in all
jurisdictions where such returns are required to be filed; and
all taxes, including withholding taxes, value added and
franchise taxes, penalties and interest, assessments, fees and
other charges due or claimed to be due from such entities or
that are due and payable have been paid, other than those
being contested in good faith and for which reserves have been
provided in accordance with generally accepted accounting
principles in effect from time to time ("GAAP") or those
currently payable without penalty or interest and except where
the failure to make such required filings or payment would not
reasonably be expected to have a Material Adverse Effect. To
the knowledge of the Company, there are no material proposed
additional tax assessments against any of the Company and the
Subsidiaries or their assets or property.
(xxii) Neither the Company nor the Subsidiaries has
any material liability for any prohibited transaction or
accumulated funding deficiency (within the meaning of Section
412 of the Code) or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other
plan which is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), to which the
Company or any of the Subsidiaries makes or ever has made a
contribution and in which any employee of the Company or any
of the Subsidiaries is or has ever been a participant. With
respect to such plans, the Company and each of the
Subsidiaries is in compliance in all material respects with
all applicable provisions of ERISA.
(xxiii) Neither the Company nor any Subsidiary is an
"investment company" or a company "controlled" by an
"investment company" incorporated in the United States within
the meaning of the Investment Company Act of 1940, as amended.
(xxiv) There are no holders of securities of the
Company or any Subsidiary who have the right to request or
demand that the Company or any Subsidiary register under the
Act any of such securities held by any such holder.
(xxv) The Company and each Subsidiary maintain a
system of internal accounting controls that the Company
reasonably believes is sufficient to provide
-15-
reasonable assurance that: (A) transactions are executed in
accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to
permit preparation of its financial statements in conformity
with GAAP and to maintain accountability for assets; (C)
access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the
recorded accountability for its assets is compared with the
existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xxvi) Except as described in the Final Memorandum
(including any documents incorporated by reference therein),
the Company and each Subsidiary maintain insurance covering
its properties, assets, operations and businesses, and such
insurance is of such type and in such amounts in accordance
with customary industry practice to protect the Company and
the Subsidiaries and their businesses.
(xxvii) Neither the Company nor (to its knowledge)
any of its affiliates (as defined in Rule 501(b) of Regulation
D under the Act) has (A) taken, directly or indirectly, any
action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or
resale of the Original Notes or (B) sold, bid for, purchased
or paid any person any compensation for soliciting purchases
of the Original Notes in a manner that would require
registration of the Original Notes under the Act or paid or
agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company in a
manner that would require registration of the Original Notes
under the Act.
(xxviii) Neither the Company nor (to its knowledge)
any of its affiliates (as defined in Rule 144 under the Act)
has, directly or through any agent (other than the Initial
Purchasers or any affiliate of the Initial Purchasers, as to
which no representation is made), sold, offered for sale,
contracted to sell, pledged, solicited offers to buy or
otherwise disposed of or negotiated in respect of, any
security (as defined in the Act) that is currently or will be
integrated with the sale of the Original Notes in a manner
that would require the registration of the Original Notes
under the Act.
(xxix) None of the Company or (to its knowledge)
any of its affiliates, or any person acting on its or their
behalf (other than the Initial Purchasers, as to whom the
Company makes no representation), is engaged in any directed
selling effort with respect to the Original Notes, and each of
them has complied with the offering restrictions requirement
of Regulation S under the Act. Terms used in this paragraph
have the meaning given to them by Regulation S.
(xxx) No form of general solicitation or general
advertising that isprohibited by the Act in connection with
offers or sales such as the Exempt Resales was used by the
Company or any of its representatives (other than the Initial
Purchasers, as to whom the Company makes no representation) in
connection with the of-
-16-
fer and sale of any of the Original Notes or in connection
with Exempt Resales, including, but not limited to, articles,
notices or other communications published in any newspaper,
magazine or similar medium or broadcast over television or
radio or displayed on any computer terminal, or any seminar or
meeting whose attendees have been invited by any general
solicitation or general advertising. Neither the Company nor
any of its affiliates has entered into, and neither the
Company nor any of its affiliates will enter into, any
contractual arrangement with respect to the distribution of
the Original Notes except for this Agreement.
(xxxi) As of March 31, 2003, neither the Company
nor any Subsidiary had any material liabilities or
obligations, direct or contingent, that were not set forth in
the Company's consolidated balance sheet as of such date or in
the notes thereto set forth in the Final Memorandum (including
any documents incorporated by reference therein). Since March
31, 2003, except as set forth or contemplated in the Final
Memorandum (including any documents incorporated by reference
therein), (a) neither the Company nor any Subsidiary has (1)
incurred any liabilities or obligations, direct or contingent,
that would reasonably be expected to have a Material Adverse
Effect, or (2) entered into any material transaction not in
the ordinary course of business, (b) there has not been any
event or development with respect to the business or condition
(financial or other) of the Company and the Subsidiaries that,
either individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect, (c) there has been
no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock, other than
the Company's regular quarterly dividend, and (d) there has
not been any change in the non-current portion of long-term
debt of the Company or any of the Subsidiaries.
(xxxii) Neither the Company nor any of the
Subsidiaries (or any agent thereof acting on their behalf) has
taken, and none of them will take, any action that might cause
this Agreement or the issuance or sale of the Notes to violate
Regulation T, U or X of the Board of Governors of the Federal
Reserve System, as in effect, or as the same may hereafter be
in effect, on the Closing Date.
(xxxiii) The Company has received a representation
from KPMG LLP that they are independent accountants within the
meaning of the Act. The historical financial statements and
the notes thereto included and incorporated by reference in
the Final Memorandum present fairly in all material respects
the consolidated financial position and results of operations
of the Company and its subsidiaries at the respective dates
and for the respective periods indicated. Such financial
statements have been prepared in accordance with GAAP applied
on a consistent basis throughout the periods presented (except
as disclosed in the Final Memorandum (including any documents
incorporated by reference therein)). The other financial and
statistical information and data included in the Final
Memorandum are accurately presented in all material respects
and prepared on a basis consistent
-17-
with the financial statements and the books and records of the
Company and its subsidiaries.
(xxxiv) Except as described in the section entitled
"Plan of Distribution" in the Final Memorandum, there are no
contracts, agreements or understandings between the Company or
any of its Subsidiaries and any other person other than the
Initial Purchasers that would give rise to a valid claim
against the Company, any such Subsidiary or the Initial
Purchasers for a brokerage commission, finder's fee or like
payment in connection with the issuance, purchase and sale of
the Notes.
(xxxv) The statistical and market-related data and
forward-looking statements (within the meaning of Section 27A
of the Act and Section 21E of the Exchange Act) included in
the Final Memorandum are based on or derived from sources that
the Company believes to be reliable and accurate in all
material respects and represent their good faith estimates
that are made on the basis of data derived from such sources.
(xxxvi) As of the Closing Date, each of the
representations and warranties of the Company and the
Subsidiaries set forth in each of the Note Documents will be
true and correct as if made at and as of such date (other than
to the extent any such representation or warranty is expressly
made as to only a certain other date).
(xxxvii) Each certificate signed by any officer of
the Company and delivered to the Initial Purchasers or counsel
for the Initial Purchasers pursuant to, or in connection with,
this Agreement shall be deemed to be a representation and
warranty by the Company to the Initial Purchasers as to the
matters covered by such certificate.
The Company acknowledges that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 8 of this Agreement, counsel to the Company and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations, and the Company hereby consents to such reliance.
(b) Each Initial Purchaser acknowledges that it is
purchasing the Original Notes pursuant to a private sale exemption from
registration under the Securities Act, and that the Original Notes have not been
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except
pursuant to an exemption from the registration requirements of the Securities
Act. Each Initial Purchaser represents, warrants and covenants to the Company
that:
(i) It is a QIB with such knowledge and
experience in financial and business matters as are necessary
in order to evaluate the merits and risks of an investment in
the Notes.
-18-
(ii) (A) Neither it, nor any person acting on its
behalf, has or will solicit offers for, or offer or sell, the
Original Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Act and (B) it has and will
solicit offers for the Original Notes only from, and will
offer and sell the Original Notes only (1) in transactions
meeting the requirements of Rule 144A, to persons whom such
Initial Purchaser reasonably believes to be QIBs or, if any
such person is buying for one or more institutional accounts
for which such person is acting as fiduciary or agent, only
when such person has represented to the Initial Purchasers
that each such account is a QIB to whom notice has been given
that such sale or delivery is being made in reliance on Rule
144A, and, in each case, in reliance on the exemption from the
registration requirements of the Act pursuant to Rule 144A, or
(2) in transactions meeting the requirements of Regulation S,
to persons other than U.S. persons (as defined in Regulation
S) outside the United States in reliance on the exemption from
the registration requirements of the Act provided by
Regulation S.
(iii) With respect to offers and sales outside the
United States:
(A) the Initial Purchasers understand that
no action has been taken or will be taken in any
jurisdiction by the Company that would permit a
public offering of the Original Notes, or possession
or distribution of the Preliminary Memorandum or
Final Memorandum or any other offering or publicity
material relating to the Original Notes, in any
country or jurisdiction where action for that purpose
is required.
(B) the Initial Purchasers will comply with
all applicable laws and regulations in each
jurisdiction in which they acquire, offer, sell or
deliver Notes or have in their possession or
distribute either any Final Memorandum or any such
other material, in all cases at their own expense;
and
(C) the Initial Purchasers have offered the
Original Notes and will offer and sell the Original
Notes (1) as part of its distribution at any time and
(2) otherwise until 40 days after the later of the
commencement of the offering of the Original Notes
and the Closing Date (the "Distribution Compliance
Period"), only in accordance with Rule 903 of
Regulation S or another exemption from the
registration requirements of the Act. Accordingly,
none of the Initial Purchasers, their affiliates or
any persons acting on their behalf have engaged or
will engage in any directed selling efforts (within
the meaning of Regulation S) with respect to the
Original Notes, and any such persons have complied
and will comply with the offering restrictions
requirements of Regulation S, including, during the
Distribution Compliance Period:
(1) no such offer or sale will be made
to a U.S. person or for the account or benefit of a U.S.
person (other than an Initial Purchaser); and
-19-
(2) it, its Affiliates and any person
acting on its behalf, if selling Notes to another Initial
Purchaser, a dealer or a person receiving a selling
concession, fee or other remuneration in respect of the Notes,
will send a confirmation or other notice to the purchaser
stating that the purchaser is subject to the same restrictions
on offers and sales as set forth in this Section 5(b).
Terms used in this Section 5(b)(iii) have the meanings given
to them by Regulation S.
(iv) The source of funds being used by it to acquire the
Original Notes does not include the assets of any "employee benefit
plan" (within the meaning of Section 3 of ERISA) or any "plan" (within
the meaning of Section 4975 of the Code).
(v) Each Initial Purchaser agrees not to sell, prior to
the expiry of a period of six months from the Closing Date, any notes
to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom within
the meaning of the Public Offers of Securities Regulations 1995. Each
Initial Purchaser agrees that it will only communicate or cause to be
communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the Financial Services
and Markets Act 2000 (the "FSMA")) received by such Initial Purchaser
in connection with the issue or sale of any notes in circumstances in
which section 21(1) of the FSMA does not apply to the Company. Each
Initial Purchaser has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by such Initial
Purchaser in relation to the notes in, from or otherwise involving the
United Kingdom.
The Initial Purchasers understand that the Company and, for
purposes of the opinions to be delivered to them pursuant to Section 8 hereof,
counsel to the Company and counsel to the Initial Purchasers will rely upon the
accuracy and truth of the foregoing representations, and the Initial Purchasers
hereby consent to such reliance.
6. Indemnification. (a) The Company agrees to indemnify and hold
harmless the Initial Purchasers, each person, if any, who controls the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, the agents, employees, officers and directors of the Initial
Purchasers and the agents, employees, officers and directors of any such
controlling person from and against any and all losses, liabilities, claims,
damages and expenses whatsoever (including, but not limited, to reasonable
attorneys' fees and any and all reasonable out-of-pocket expenses actually
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all reasonable
amounts paid in settlement of any claim or litigation (in the manner set forth
in clause (c) below)) (collectively, "Losses") to which they or any of them may
become subject under the Act, the Exchange Act or otherwise insofar as such
Losses (or actions in respect thereof) arise
-20-
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Memorandum or the Final Memorandum,
or in any supplement thereto or amendment thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company will not be
liable under this Section 6(a) as a result of the terms described in clauses
(A), and (B) of Section 5(a)(i) of this Agreement, or in any such case to the
extent, but only to the extent, that any such Loss 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
information relating to the Initial Purchasers furnished to the Company by or on
behalf of the Initial Purchasers expressly for use therein, provided, however,
that with respect to any untrue statement or omission from the Preliminary
Memorandum the indemnity agreement contained in this Section 6(a) shall not
inure to the benefit of any Initial Purchaser to the extent that the sale to the
person asserting any such Loss was an initial resale by such Initial Purchaser
and any such Loss of or with respect to such Initial Purchaser results from the
fact that both (A) to the extent required by applicable law, a copy of the Final
Memorandum was not sent or given to such person at or prior to the written
confirmation of the sale of the Notes to such person and (B) the untrue
statement in or omission from the Preliminary Memorandum was corrected in the
Final Memorandum. This indemnity agreement will be in addition to any liability
that the Company may otherwise have, including, but not limited to, liability
under this Agreement.
(b) The Initial Purchasers agree to indemnify and hold harmless
the Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, and each of its
respective agents, employees, officers and directors and the agents, employees,
officers and directors of any such controlling person from and against any
Losses to which they or any of them may become subject under the Act, the
Exchange Act or otherwise insofar as such Losses (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 or the Final
Memorandum, 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 necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to the extent, that any such Loss arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with information relating to the
Initial Purchasers furnished in writing, including by electronic transmission,
to the Company by or on behalf of the Initial Purchasers expressly for use
therein. The Company and the Initial Purchasers acknowledge that the information
described in Section 9 is the only information furnished in writing, including
by electronic transmission, by the Initial Purchasers to the Company expressly
for use in the Preliminary Memorandum or the Final Memorandum.
(c) Promptly after receipt by an indemnified party under
subsection 6(a) or 6(b) above of notice of the commencement of any action, suit
or proceeding (collectively, an "action"), such indemnified party shall, if a
claim in respect thereof is to be made against the indemni-
-21-
fying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement of such action
(but the failure so to notify an indemnifying party shall not relieve such
indemnifying party from any liability that it may have under this Section 6
except to the extent that it has been prejudiced in any material respect by such
failure). In case any such action is brought against any indemnified party, and
it notifies an indemnifying party of the commencement of such action, the
indemnifying party will be entitled to participate in such action, and to the
extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense of such action with counsel satisfactory to such indemnified
party. Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such action, but the
reasonable fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by the indemnifying parties in connection with
the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to take charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) the named
parties to such action (including any impleaded parties) include such
indemnified party and the indemnifying parties (or such indemnifying parties
have assumed the defense of such action), and such indemnified party or parties
shall have reasonably concluded that there may be defenses available to it or
them that are different from or additional to those available to one or all of
the indemnifying parties (in which case the indemnifying parties shall not have
the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such reasonable fees and expenses of
counsel shall be borne by the indemnifying parties. In no event shall the
indemnifying party be liable for the fees and expenses of more than one counsel
(together with appropriate local counsel) at any time for all indemnified
parties in connection with any one action or separate but substantially similar
or related actions arising in the same jurisdiction out of the same general
allegations or circumstances. An indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent which
consent may not be unreasonably withheld. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by paragraph (a) or (b) of this Section 6, then the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 45 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 45 days prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 of this
Agreement is for any reason held to be unavailable from the indemnifying party,
or is insufficient to hold harmless a party indemnified under Section 6 of this
Agreement, each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such aggregate Losses (i) in
such pro-
-22-
portion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Original Notes or (ii) if such allocation is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company,
on the one hand, and the Initial Purchasers, on the other hand, in connection
with the statements or omissions that resulted in such Losses, as well as any
other relevant equitable considerations. The relative benefits received by the
Company, on the one hand, and the Initial Purchasers, on the other hand, shall
be deemed to be in the same proportion as (x) the total proceeds from the
offering of Original Notes (net of discounts and commissions but before
deducting expenses) received by the Company are to (y) the total discounts and
commissions received by the Initial Purchasers in connection with the offering.
The relative fault of the Company, on the one hand, and the Initial Purchasers,
on the other hand, 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 or the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission or alleged statement or omission.
The Company and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7, (i) in no case shall the Initial Purchasers be
required to contribute any amount in excess of the amount by which the total
discount applicable to the Original Notes pursuant to this Agreement exceeds the
amount of any damages that the Initial Purchasers have otherwise been required
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(a) of the Act) shall be entitled to
contribution (within the meaning of Section 11(f) of the Act) from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person, if any, who controls the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as the Initial Purchasers, and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and each director, officer, employee and agent
of the Company shall have the same rights to contribution as the Company. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made against another party or parties under this Section 7,
notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 7 or otherwise, except to the extent that it has been
prejudiced in any material respect by such failure; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 6 for purposes of indemnification. Anything in this
section to the contrary notwithstanding, no party shall be liable for
contribution with respect to any action or claim settled without its written
consent, provided, however, that such written consent was not unreasonably
withheld.
-23-
8. Conditions of Initial Purchasers' Obligations. The
obligations of the Initial Purchasers to purchase and pay for the Original
Notes, as provided for in this Agreement, shall be subject to satisfaction of
the following conditions prior to or concurrently with such purchase:
(a) All of the representations and warranties of the
Company contained in this Agreement shall be true and correct, or true
and correct in all material respects where such representations and
warranties are not qualified by materiality or Material Adverse Effect,
on the date of this Agreement and, in each case after giving effect to
the transactions contemplated hereby, on the Closing Date, except that
if a representation and warranty is made as of a specific date, and
such date is expressly referred to therein, such representation and
warranty shall be true and correct (or true and correct in all material
respects, as applicable) as of such date. The Company shall have
performed or complied with all of the agreements and covenants
contained in this Agreement and required to be performed or complied
with by it at or prior to the Closing Date.
(b) The Final Memorandum shall have been printed and
copies distributed to the Initial Purchasers on the day following the
date of this Agreement or at such later date as the Initial Purchasers
may determine. No stop order suspending the qualification or exemption
from qualification of the Original Notes in any jurisdiction shall have
been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency that would, as of the Closing Date, prevent the
issuance of the Original Notes or consummation of the Exchange Offer;
except as disclosed in the Final Memorandum (including any documents
incorporated therein by reference), no action, suit or proceeding shall
have been commenced and be pending against or affecting or, to the best
knowledge of the Company, threatened against the Company and/or any
Subsidiary before any court or arbitrator or any governmental body,
agency or official that would reasonably be expected to have a Material
Adverse Effect; and no stop order preventing the use of the Preliminary
Memorandum or the Final Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration
requirements of the Act shall have been issued.
(d) At the Closing Date there shall not have occurred any
downgrading, nor shall any notice have been received by the Company of
(i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement, in the rating
accorded any securities of or guaranteed by the Company or any
Subsidiary of the Company by any "nationally recognized statistical
rating organization," as that term is defined in Rule 436(g)(2)
promulgated under the Securities Act.
(e) The Initial Purchasers shall have received
certificates, dated the Closing Date, signed by two authorized officers
of the Company confirming, as of the Closing
-24-
Date, to their knowledge, the matters set forth in paragraphs (a), (b),
(c) and (d) of this Section 8.
(f) The Initial Purchasers shall have received on the
Closing Date opinions dated the Closing Date, addressed to the Initial
Purchasers, of (i) Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A., counsel to
the Company, and (ii) Xxxxx X. Xxxxx, general counsel for the Company
substantially in the form of Exhibits A-1 and A-2, respectively,
attached hereto and in form and substance reasonably satisfactory to
the Initial Purchasers and counsel to the Initial Purchasers.
(g) The Initial Purchasers shall have received on the
Closing Date an opinion (reasonably satisfactory in form and substance
to the Initial Purchasers) dated the Closing Date of Xxxxxx Xxxxxx &
Xxxxxxx LLP, counsel to the Initial Purchasers.
(h) The Initial Purchasers shall have received a "comfort
letter" from KPMG LLP, independent public accountants for the Company,
dated the date of this Agreement, addressed to the Initial Purchasers
and in form and substance reasonably satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers. In addition, the
Initial Purchasers shall have received a "bring-down comfort letter"
from KPMG LLP, dated as of the Closing Date, addressed to the Initial
Purchasers and in form and substance reasonably satisfactory to the
Initial Purchasers and counsel to the Initial Purchasers.
(i) The Company shall have entered into the Indenture and
the Registration Rights Agreement and each of the Initial Purchasers
shall have received copies, conformed as executed, thereof.
(j) All government authorizations required in connection
with the issue and sale of the Notes as contemplated under this
Agreement and the performance of the Company's obligations hereunder
and under the Indenture and the Notes shall be in full force and
effect.
(k) The Initial Purchasers shall have been furnished with
wiring instructions for the application of the proceeds of the Original
Notes in accordance with this Agreement and such other information as
it may reasonably request.
(l) Xxxxxx Xxxxxx & Xxxxxxx LLP, counsel to the Initial
Purchasers, shall have been furnished with such documents as they may
reasonably request to enable them to review or pass upon the matters
referred to in this Section 8 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions contained in this Agreement.
(m) The Original Notes shall be eligible for trading in
the PORTAL market upon issuance.
-25-
(n) All agreements set forth in the representation letter
of the Company to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer shall have been complied with in all material
respects.
If any of the conditions specified in this Section 8 shall not
have been fulfilled in all material respects when and as required by this
Agreement to be fulfilled (or waived by the Initial Purchasers), this Agreement
may be terminated by the Initial Purchasers on notice to the Company at any time
at or prior to the Closing Date, and such termination shall be without liability
of any party to any other party. Notwithstanding any such termination, the
provisions of Sections 4(f), 6, 7, 9,and 10 shall remain in effect.
The documents required to be delivered by this Section 8 will
be delivered at the office of counsel for the Initial Purchasers on the Closing
Date.
9. Initial Purchasers' Information. The Company and the
Initial Purchasers severally acknowledge that the statements with respect to the
delivery of the Original Notes to the Initial Purchasers set forth in paragraphs
4, 6, 7 and 8 under the caption "Plan of Distribution" in the Preliminary
Memorandum and the Final Memorandum constitute the only information furnished in
writing, including by electronic transmission, by the Initial Purchasers
expressly for use in the Preliminary Memorandum or the Final Memorandum.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements contained in this
Agreement, including the agreements contained in Section 4(f), the indemnity
agreements contained in Section 6 and the contribution agreements contained in
Section 7 shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Initial Purchasers or any controlling
person thereof or by or on behalf of the Company or any controlling person
thereof, and shall survive delivery of and payment for the Original Notes to and
by the Initial Purchasers. The agreements contained in Sections 4(f), 6, 7, and
9 shall survive the termination of this Agreement, including pursuant to Section
11.
11. Effective Date of Agreement; Termination. (a) This
Agreement shall become effective upon execution and delivery of a counterpart
hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to
terminate this Agreement at any time prior to the Closing Date by notice to the
Company from the Initial Purchasers, without liability (other than with respect
to Sections 4(f), 6 and 7) on the Initial Purchasers' part to the Company if, on
or prior to such date, (i) the Company shall have failed, refused or been unable
to perform in any material respect any agreement on its part to be performed
under this Agreement when and as required, (ii) any other condition to the
obligations of the Initial Purchasers under this Agreement to be fulfilled by
the Company pursuant to Section 8 is not fulfilled when and as required in any
material respect, (iii) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market shall have
been suspended or materially limited, or minimum prices shall have been
established thereon by the Commission, or by such exchange or other regulatory
body or governmental authority having jurisdiction, (iv) a general banking
moratorium shall have been declared by federal or New York
-26-
authorities, (v) there is an outbreak or escalation of hostilities or other
national or international calamity, in any case involving the United States, on
or after the date of this Agreement, or if there has been a declaration by the
United States of a national emergency or war or other national or international
calamity or crisis (economic, political, financial or otherwise) which affects
the U.S. and international markets, making it, in the Initial Purchasers'
reasonable judgment, impracticable to proceed with the offering or delivery of
the Original Notes on the terms and in the manner contemplated in the Final
Memorandum or (vi) there shall have been such a material adverse change in
general economic, political or financial conditions or the effect (or potential
effect if the financial markets in the United States have not yet opened) of
international conditions on the financial markets in the United States shall be
such as, in the Initial Purchasers' reasonable judgment, to make it inadvisable
or impracticable to proceed with the offering or delivery of the Notes on the
terms and in the manner contemplated in the Final Memorandum.
(c) Any notice of termination pursuant to this Section 11
shall be given at the address specified in Section 12 below by telephone, telex,
telephonic facsimile or telegraph, confirmed in writing by letter.
(d) [Intentionally Omitted]
(e) Subject to Section 6 and this Section 11, if, at the
time of purchase, any Initial Purchaser shall default in its obligation to take
up and pay for the Original Notes to be purchased by it at such time hereunder
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of this Section 11) and if the aggregate
principal amount of Original Notes which all Initial Purchasers so defaulting
shall have agreed but failed to take up and pay for at such time does not exceed
10% of the total aggregate principal amount of Original Notes to be purchased at
such time, the non-defaulting Initial Purchasers shall take up and pay for (in
addition to the aggregate number of Original Notes they are obligated to
purchase at such time pursuant to Section 2 hereof) the aggregate principal
amount of Original Notes agreed to be purchased by all such defaulting Initial
Purchasers at such time, as hereinafter provided. Such Original Notes shall be
taken up and paid for by such non-defaulting Initial Purchaser or Initial
Purchasers in such amount or amounts as the Representative may designate with
the consent of each Initial Purchaser so designated or, in the event no such
designation is made, such Original Notes shall be taken up and paid for by all
non-defaulting Initial Purchasers pro rata in proportion to the aggregate
principal amount of Original Notes set opposite the names of such non-defaulting
Initial Purchasers in Schedule I.
Without relieving any defaulting Initial Purchaser from its
obligations hereunder, the Company agrees with the non-defaulting Initial
Purchasers that it will not sell any Original Notes hereunder unless all of the
Original Notes are purchased by the Initial Purchasers (or by substituted
Initial Purchasers selected by the Representative with the approval of the
Company or selected by the Company with the Representative's approval).
If a new Initial Purchasers or Initial Purchasers are
substituted by the Initial Purchasers or by the Company for a defaulting Initial
Purchaser or Initial Purchasers in accordance with the foregoing provision, the
Company or the Representative shall have the right to postpone
-27-
the time of purchase for a period not exceeding five business days in order that
any necessary changes in the Final Memorandum and other documents may be
effected.
The term "Initial Purchaser" as used in this Agreement shall
refer to and include any Initial Purchaser substituted under this Section 11
with like effect as if such substituted Initial Purchaser had originally been
named in Schedule A.
If, at the time of purchase, the aggregate principal amount of
Original Notes which the defaulting Initial Purchaser or Initial Purchasers
agreed to purchase exceeds 10% of the total principal amount of Original Notes
which all Initial Purchasers agreed to purchase hereunder, and if neither the
non-defaulting Initial Purchasers nor the Company shall make arrangements within
the five business day period stated above for the purchase of all the Original
Notes which the defaulting Initial Purchaser or Initial Purchasers agreed to
purchase hereunder, this Agreement shall be terminated without further act or
deed and without any liability on the part of the Company to any non-defaulting
Initial Purchaser and without any liability on the part of any non-defaulting
Initial Purchaser to the Company. Nothing in this paragraph, and no action taken
hereunder, shall relieve any defaulting Initial Purchaser from liability in
respect of any default of such Initial Purchaser under this Agreement. If this
Agreement is terminated as contemplated in this paragraph, or if the Initial
Purchasers otherwise fail to perform in any material respect their obligations
hereunder, then, in addition to any other remedies that the Company may have,
the defaulting Initial Purchasers shall be jointly and severally liable for the
reasonable fees, expenses and disbursements of Company's counsel.
12. Notice. All communications with respect to or under
this Agreement, except as may be otherwise specifically provided in this
Agreement, shall be in writing and, if sent to the Initial Purchasers, shall be
mailed, delivered, or, telegraphed or telecopied and confirmed in writing to UBS
Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (telephone: (212)
000-0000, fax number: (000)-000-0000), Attention: Syndicate Department; and if
sent to the Company, shall be mailed, delivered or, telegraphed or telecopied
and confirmed in writing to Bowater Incorporated, 00 Xxxx Xxxxxxxxxx Xxx, X.X.
Xxx 0000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000 (telephone: (000) 000-0000, fax:
(000) 000-0000), Attention: Treasurer, with a copy to (for informational
purposes only): Attention: Bowater Incorporated, 00 Xxxx Xxxxxxxxxx Xxx, X.X.
Xxx 0000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: General Counsel,
facsimile no. (000) 000-0000.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, first class and postage prepaid, if
mailed; when receipt acknowledged by telecopier machine, if telecopied; and one
business day after being timely delivered to a nationally recognized, reputable
next day air courier.
13. Parties. This Agreement shall inure solely to the
benefit of, and shall be binding upon, the Initial Purchasers, the Company and
the controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors
-28-
and assigns" shall not include a purchaser, in its capacity as such, of Notes
from the Initial Purchasers.
14. Construction. This Agreement shall be construed in
accordance with the internal laws of the State of New York (without giving
effect to any provisions thereof relating to conflicts of law).
15. Captions. The captions included in this Agreement are
included solely for convenience of reference and are not to be considered a part
of this Agreement.
16. Counterparts. This Agreement may be executed in
various counterparts that together shall constitute one and the same instrument.
If the foregoing Purchase Agreement correctly sets forth the
understanding among the Company and the Initial Purchasers, please so indicate
in the space provided below for the purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Company and the
Initial Purchasers.
[-signature page follows-]
-29-
BOWATER INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
--------------------
Name:
Title:
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name:
Title:
Confirmed and accepted as of the date first above written:
UBS SECURITIES LLC
By: /s/ Xxxx Xxxxx
------------------------
Name: Xxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxx
------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
For itself and the other several Initial Purchasers named in Schedule I to the
foregoing Agreement.
SCHEDULE I
-------------------------------------------------------------------
PRINCIPAL AMOUNT OF
NOTES
INITIAL PURCHASER(a) (IN MILLIONS)
-------------------------------------------------------------------
UBS Securities LLC $140.0
-------------------------------------------------------------------
X.X. Xxxxxx Securities Inc. 80.0
-------------------------------------------------------------------
Scotia Capital (USA) Inc. 32.0
-------------------------------------------------------------------
BMO Xxxxxxx Xxxxx Corp. 32.0
-------------------------------------------------------------------
Wachovia Securities, Inc. 32.0
-------------------------------------------------------------------
SunTrust Capital Markets, Inc. 32.0
-------------------------------------------------------------------
BNY Capital Markets Inc. 17.4
-------------------------------------------------------------------
TD Securities (USA) Inc. 17.3
-------------------------------------------------------------------
Banc of America Securities LLC 17.3
-------------------------------------------------------------------
-------------------------------------------------------------------
Total $400.0
-------------------------------------------------------------------
----------------
(a) Legal names to be confirmed by banks
SCHEDULE II
JURISDICTION OF
% OWNED BY INCORPORATION
SUBSIDIARY TYPE OF ENTITY THE COMPANY OR ORGANIZATION
---------- -------------- ----------- ---------------
Bowater Canada Finance Corporation Corporation 100% Nova Scotia
Bowater Canada Inc. Corporation 100%(1) Canada
Bowater Canadian Forest Products Inc. Corporation 100%(2) Canada
Bowater Canadian Holdings Incorporated Corporation 100% Nova Scotia
Bowater Finance Company Inc. Corporation 100% Delaware
Bowater Foreign Sales Corporation Corporation 100% Barbados
Bowater Funding Inc. Corporation 100% Delaware
Bowater Nuway Inc. Corporation 100% Delaware
Bowater U.S. Holdings Inc. Corporation 100% Delaware
(1) Bowater Canada Inc. has issued 1,000 shares of non-voting, nonconvertible
preferred stock to Fraser and Xxxxxx.
(2) Bowater Canadian Forest Products Inc. has issued 1,000 shares of
non-voting, nonconvertible preferred stock to Fraser and Xxxxxx
EXHIBIT A-1
FORM OF OPINION OF WYCHE, BURGESS,
XXXXXXX & XXXXXX, P.A.
The opinion of Wyche, Burgess, Xxxxxxx & Xxxxxx, P.A., counsel
for the Company (capitalized terms not otherwise defined herein shall have the
meanings provided in the Purchase Agreement, to which this is an Exhibit), to be
delivered pursuant to Section 8(f) of the Purchase Agreement shall be to the
effect that:
(i) None of the Company or any Subsidiary is an
"investment company" or a company "controlled" by an
"investment company" incorporated in the United States within
the meaning of the Investment Company Act of 1940, as amended.
(ii) To our knowledge, none of the Company or any
Subsidiary (or any agent thereof acting on their behalf) has
taken any action that is reasonably likely to cause the
Purchase Agreement or the issuance or sale of the Notes to
violate Regulations T, U or X of the Board of Governors of the
Federal Reserve System as in effect on the Closing Date.
(iii) The statements under the caption "Principal
U.S. Federal Income Tax Considerations" in the Final
Memorandum, insofar as such statements constitute a summary of
legal matters, documents or proceedings referred to therein,
fairly summarize in all material respects such legal matters,
documents and proceedings.
(iv) The material terms of the Original Notes
conform as to legal matters in all material respects to the
description thereof contained in the Final Memorandum.
We have participated in the preparation of the Final
Memorandum. From time to time we have had discussions with officers, directors
and employees of the Company and the Subsidiaries, the independent accountants
who examined the consolidated financial statements of the Company and its
Subsidiaries included in the Final Memorandum, and the Initial Purchasers, at
which the contents of the Final Memorandum and related matters were discussed.
We have not independently verified and are not passing upon, and do not assume
responsibility for, the accuracy, completeness or fairness of the information
contained in the Final Memorandum. Based upon the participation and discussions
described above, however, no facts have come to our attention that cause us to
believe that the Final Memorandum, as of its date or on the date
-2-
hereof included or includes any untrue statement of a material fact, or omitted
or omits 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 (it being understood that we have not been requested to and do not
make any comment with respect to the operating statistics, financial statements
and the notes thereto, financial schedules, and other financial, statistical and
accounting data included (or incorporated by reference) therein).
EXHIBIT A-2
FORM OF OPINION OF GENERAL COUNSEL
FOR THE COMPANY
The opinion of Xxxxx X. Xxxxx, general counsel for the Company
(capitalized terms not otherwise defined herein shall have the meanings provided
in the Purchase Agreement, to which this is an Exhibit), to be delivered
pursuant to Section 8(f) of the Purchase Agreement shall be to the effect that:
(i) Each of the Company and the Subsidiaries (a)
is a corporation, partnership or other entity validly existing
and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite corporate or other power
and authority necessary to own its property and carry on its
business as now being conducted, and (c) is qualified to do
business and is in good standing in all jurisdictions in which
the nature of the business conducted by it makes such
qualification necessary and where failure to be so qualified
and in good standing individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.
(ii) The Company has all requisite corporate or
other power and authority to execute, deliver and perform all
of its obligations under the Note Documents to which it is a
party and to consummate the transactions contemplated by the
Note Documents to be consummated on its part and, without
limitation, the Company has all requisite corporate power and
authority to issue, sell and deliver the Notes.
(iii) Each document filed pursuant to the Exchange
Act and incorporated by reference in the Final Memorandum
(except for operating statistics, financial statements and the
notes thereto, financial schedules, and other financial,
statistical and accounting data included (or incorporated by
reference) therein, as to which I do not express any opinion)
when filed with the Commission complied as to form in all
material respects with the requirements of the Exchange Act
and the applicable rules and regulations of the Commission
thereunder.
(iv) The Purchase Agreement has been duly and
validly authorized, executed and delivered by the Company.
(v) The Indenture has been duly and validly
authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery by the
Trustee, constitutes a legal, valid and binding obligation of
the Company, enforceable in all material respects against the
Company in accordance with its terms, except that (A) the
enforcement thereof may be limited by bankruptcy,
-2-
insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws, now or hereafter in effect, relating to
the enforcement of creditors' rights generally and by general
principles of equity (regardless of whether considered in a
proceeding in equity or at law) and the discretion of the
court before which any proceeding therefor may be brought and
(B) any rights to indemnity or contribution thereunder may be
limited by applicable laws and public policy considerations..
(vi) The Original Notes have been duly and
validly authorized for issuance and sale to the Initial
Purchasers by the Company and, when issued, authenticated
under the Indenture and delivered by the Company against
payment by the Initial Purchasers in accordance with the terms
of the Purchase Agreement and the Indenture, the Original
Notes will be legal, valid and binding obligations of the
Company, entitled to the benefits of the Indenture and
enforceable in all material respects against the Company in
accordance with their terms, except that (A) the enforcement
thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other
similar laws, now or hereafter in effect, relating to the
enforcement of creditors' rights generally and by general
principles of equity (regardless of whether considered in a
proceeding in equity or at law) and the discretion of the
court before which any proceeding therefor may be brought and
(B) any rights to indemnity or contribution thereunder may be
limited by applicable laws and public policy considerations..
(vii) The Exchange Notes have been, duly and
validly authorized for issuance by the Company and, when
issued, authenticated under the Indenture and delivered by the
Company in accordance with the terms of the Registration
Rights Agreement, the Exchange Offer and the Indenture, the
Exchange Notes will be legal, valid and binding obligations of
the Company, entitled to the benefits of the Indenture and
enforceable against the Company in material accordance with
their terms, except that (A) as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws, now or hereafter
in effect, relating to the enforcement of creditors' rights
generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law) and
the discretion of the court before which any proceeding
therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by applicable laws and
public policy considerations.
(viii) The Registration Rights Agreement has been
duly and validly authorized, executed and delivered by the
Company and, assuming the due authorization, execution and
deliver by the Initial Purchasers, constitutes a legal, valid
and binding obligation of the Company enforceable in all
material respects against the Company in accordance with its
terms, except that (A) the enforce-
-3-
ment thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other
similar laws, now or hereafter in effect, relating to the
enforcement of creditors' rights generally and by general
principles of equity (regardless of whether considered in a
proceeding in equity or at law) and the discretion of the
court before which any proceeding therefor may be brought and
(B) any rights to indemnity or contribution thereunder may be
limited by applicable laws and public policy considerations.
(ix) None of the execution, delivery and
performance by the Company of the Transaction Documents to
which it is a party including the consummation of the offer
and sale of the Original Notes does or will violate, conflict
with or constitute a breach of any of the terms or provisions
of, or a default under (or an event that with notice or the
lapse of time, or both, would constitute a default under), or
require consent under, or result in the creation or imposition
of a lien, charge or encumbrance on any property or assets of
the Company or any Subsidiary or an acceleration of any
indebtedness of the Company pursuant to, (A) the charter,
bylaws or other constitutive documents of the Company, (B)
assuming the consummation of the transactions contemplated
thereby, any Agreement or Instrument, (C) any law, statute,
rule or regulation applicable to the Company or its assets or
properties or (D) any judgment, order or decree of any
domestic or foreign court or governmental agency or authority
having jurisdiction over the Company or it assets or
properties other than, in the case of each of clauses (A)
through (D), violations, conflicts, breaches, defaults,
creations or impositions of liens, charges or encumbrances, or
accelerations of indebtedness that would not have a Material
Adverse Effect.
(x) No consent, approval, authorizations or
other order of, or registration or filing with, any court or
other governmental or regulatory authority or agency is
required for the Company's execution, delivery and performance
of the Transaction Documents, or the issuance and delivery of
the Original Notes or the Exchange Notes, or consummation of
the transactions contemplated hereby and thereby and by the
Final Memorandum, except such as may be required under federal
and state securities laws and except for the order of the
Commission declaring the Exchange Offer Registration Statement
or the Shelf Registration Statement effective.
(xi) To my knowledge, there does not exist any
judgment, order, injunction or other restraint issued by or
filed with any court with respect to the transactions
contemplated by the Transaction Documents or the performance
by the Company of its obligations under the Transaction
Documents.
(xii) None of the Company or any Subsidiary is an
"investment company" or a company "controlled" by an
"investment company" incorporated in the
-4-
United States within the meaning of the Investment Company Act
of 1940, as amended.
(xiii) The statements under the caption "Principal
U.S. Federal Income Tax Considerations" in the Final
Memorandum, insofar as such statements constitute a summary of
legal matters, documents or proceedings referred to therein,
fairly summarize in all material respects such legal matters,
documents and proceedings.
(xiv) To my knowledge and other than as set forth
in the Final Memorandum or disclosed in any document filed by
the Company with the Commission and incorporated by reference
into the Final Memorandum, there are no pending actions, suits
or proceedings against or affecting the Company or any of its
properties that, if determined adversely to the Company,
could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or could materially
and adversely affect the ability of the Company to perform its
obligations under the Transaction Documents or that are
otherwise material in the context of the issuance and sale of
the Notes or issuance of the Exchange Notes; and no such
actions, suits or proceedings are, to my knowledge,
threatened.
(xv) The Company is not (a) in violation of its
charter, bylaws or other constitutive documents or (b) in
default (or, with notice or lapse of time or both, would be in
default) in the performance or observance of any obligation,
agreement, covenant or condition contained in any of the
Agreements and Instruments that, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect.
I have participated in the preparation of the Final
Memorandum. From time to time I have had discussions with officers, directors
and employees of the Company and the Subsidiaries, the independent accountants
who examined the consolidated financial statements of the Company and the
Subsidiaries included in the Final Memorandum, and the Initial Purchasers, at
which the contents of the Final Memorandum and related matters were discussed. I
have not independently verified and am not passing upon, and do not assume
responsibility for, the accuracy, completeness or fairness of the information
contained in the Final Memorandum. Based upon the participation and discussions
described above, however, no facts have come to my attention that cause me to
believe that the Final Memorandum, as of its date or as of the date hereof,
contained or contains an untrue statement of a material fact, or omitted or
omits 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 (it being understood that I have not been requested to and do not
make any comment with respect to the operating statistics, financial statements
and the notes thereto, financial schedules, and other financial, statistical and
accounting data included (or incorporated by reference therein)).
