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CK WITCO CORPORATION
(a Delaware corporation)
Floating Rate Notes due 2001
PURCHASE AGREEMENT
Dated: March 2, 2000
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Table of Contents
PURCHASE AGREEMENT
SECTION 1. Representations and Warranties by the Company..................2
(a) Representations and Warranties............................2
(i) Offering Memorandum...............................2
(ii) Incorporated Documents............................2
(iii) Independent Accountants...........................3
(iv) Financial Statements..............................3
(v) No Material Adverse Change in Business............3
(vi) Good Standing of the Company......................3
(vii) Good Standing of Designated Subsidiaries..........4
(viii) Capitalization....................................4
(ix) Authorization of Agreement........................4
(x) Authorization of the Indenture....................4
(xi) Authorization of the Securities...................4
(xii) Description of the Securities and the Indenture...5
(xiii) Absence of Defaults and Conflicts.................5
(xiv) Absence of Labor Dispute..........................6
(xv) Absence of Proceedings............................6
(xvi) Possession of Intellectual Property...............6
(xvii) Absence of Further Requirements...................6
(xviii) Possession of Licenses and Permits................6
(xix) Title to Property.................................7
(xx) Environmental Laws................................7
(xxi) Investment Company Act............................8
(xxii) Similar Offerings.................................8
(xxiii) Rule 144A Eligibility.............................8
(xxiv) No General Solicitation...........................8
(xxv) No Registration Required..........................8
(xxvi) Reporting Company.................................8
(xxvii) No Directed Selling Efforts.......................8
(xxviii)Year 2000.........................................9
(b) Officer's Certificates....................................9
SECTION 2. Sale and Delivery to Initial Purchaser; Closing................9
(a) Securities................................................9
(b) Payment...................................................9
SECTION 3. Covenants of the Company......................................10
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(a) Offering Memorandum......................................10
(b) Notice and Effect of Material Events.....................10
(c) Amendment to Offering Memorandum and Supplements.........10
(d) Rating of Securities.....................................10
(e) DTC......................................................10
(f) Use of Proceeds..........................................11
(g) Restriction on Sale of Securities........................11
SECTION 4. Payment of Expenses...........................................11
(a) Expenses.................................................11
(b) Termination of Agreement.................................11
SECTION 5. Conditions of Initial Purchaser's Obligations.................11
(a) Opinion of Counsel for Company...........................11
(b) Opinion of Counsel for Initial Purchaser.................12
(c) Officers' Certificate....................................12
(d) Accountants' Comfort Letter..............................12
(e) Bring-down Comfort Letter................................12
(f) Maintenance of Rating....................................12
(g) Additional Documents.....................................13
(h) Termination of Agreement.................................13
SECTION 6. Subsequent Offers and Resales of the Securities...............13
(a) Offer and Sale Procedures................................13
(i) Offers and Sales only to Qualified
Institutional Buyers or Non-U.S. Persons.........13
(ii) No General Solicitation..........................13
(iii) Purchases by Non-Bank Fiduciaries................14
(iv) Subsequent Purchaser Notification................14
(v) Restrictions on Transfer.........................14
(b) Covenants of the Company.................................14
(i) Integration......................................14
(ii) Rule 144A Information............................14
(iii) Restriction on Repurchases.......................14
(c) Qualified Institutional Buyer............................15
(d) Resale Pursuant to Rule 903 of Regulation S or
Rule 144A................................................15
(e) Additional Representations and Warranties of
Initial Purchaser........................................16
SECTION 7. Indemnification...............................................17
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(a) Indemnification of Initial Purchaser.....................17
(b) Indemnification of Company...............................17
(c) Actions against Parties; Notification....................18
SECTION 8. Contribution..................................................19
SECTION 9. Representations, Warranties and Agreements to
Survive Delivery..............................................20
SECTION 10. Termination of Agreement......................................20
(a) Termination; General.....................................21
(b) Liabilities..............................................21
SECTION 11. Notices.......................................................21
SECTION 12. Parties.......................................................21
SECTION 13. GOVERNING LAW AND TIME........................................21
SECTION 14. Effect of Headings............................................21
SCHEDULES
Schedule A - Pricing Information...................................Sch A-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.......................A-1
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CK WITCO CORPORATION
(a Delaware corporation)
$25,000,000
Floating Rate Notes due 2001
PURCHASE AGREEMENT
March 2, 2000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
CK Witco Corporation, a Delaware corporation (the "Company"), confirms its
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated (the "Initial Purchaser",), with respect to the issue and sale by
the Company and the purchase by the Initial Purchaser, of $25,000,000 aggregate
principal amount of the Company's Floating Rate Notes due 2001 (the
"Securities"). The Securities are to be issued pursuant to an indenture dated as
of March 1, 2000 (the "Indenture") between the Company and Citibank, N.A., as
trustee (the "Trustee"). Securities will be issued to Cede & Co. as nominee of
The Depository Trust Company ("DTC") pursuant to a letter agreement, to be dated
as of the Closing Time (as defined in Section 2(b)) (the "DTC Agreement"), among
the Company, the Trustee and DTC.
The Company understands that the Initial Purchaser proposes to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchaser may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time after this Agreement has been executed and delivered.
The Securities are to be offered and sold through the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "1933 Act"),
in reliance upon exemptions therefrom. Pursuant to the terms of the Securities
and the Indenture, investors that acquire Securities may only resell or
otherwise transfer such Securities if such Securities are hereafter registered
under the 1933 Act or if an exemption from the registration requirements of the
1933 Act is available (including the exemption afforded by Rule 144A ("Rule
144A") or Regulation S ("Regulation S") of the rules and regulations promulgated
under the 1933 Act by the Securities and Exchange Commission (the
"Commission")).
The Company has prepared and delivered to the Initial Purchaser copies of a
preliminary offering memorandum dated February 28, 2000 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to the Initial
Purchaser, on the date hereof or the next succeeding
day, copies of a final offering memorandum dated March 2, 2000 (the "Final
Offering Memorandum"), each for use by the Initial Purchaser in connection with
its solicitation of purchases of, or offering of, the Securities. "Offering
Memorandum" means, with respect to any date or time referred to in this
Agreement, the most recent offering memorandum (whether the Preliminary Offering
Memorandum or the Final Offering Memorandum, or any amendment or supplement to
either such document), including exhibits, amendments or supplements thereto and
any documents incorporated therein by reference, which has been prepared and
delivered by the Company to the Initial Purchaser in connection with its
solicitation of purchases of, or offering of, the Securities.
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the Offering
Memorandum (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
are incorporated by reference in the Offering Memorandum; and all references in
this Agreement to amendments or supplements to the Offering Memorandum shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the "1934 Act") which is incorporated by reference in the
Offering Memorandum.
SECTION 1. Representations and Warranties by the Company.
(a) Representations and Warranties. The Company represents and warrants to
the Initial Purchaser as of the date hereof and as of the Closing Time referred
to in Section 2(b) hereof, and agrees with the Initial Purchaser, as follows:
(i) Offering Memorandum. The Offering Memorandum does not, and at the
Closing Time will not, include an untrue statement of a material fact or
omit 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; provided that this representation, warranty and agreement shall
not apply to statements in or omissions from the Offering Memorandum made
in reliance upon and in conformity with information furnished to the
Company in writing by the Initial Purchaser expressly for use in the
Offering Memorandum.
(ii) Incorporated Documents. The Offering Memorandum as delivered from
time to time shall incorporate by reference the most recent Annual Reports
of the Company and its predecessors on Form 10-K filed with the Commission
and each Quarterly Report of the Company and its predecessors on Form 10-Q
and each Current Report of the Company and its predecessors on Form 8-K
filed with the Commission since the filing of the end of the fiscal year to
which such Annual Report relates. The documents incorporated or deemed to
be incorporated by reference in the Offering Memorandum at the time they
were or hereafter are filed with the Commission (as amended, supplemented
or superseded by any later filing made prior to the date hereof) complied
and will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder (the "1934
Act Regulations"), and, when read together with the other information in
the Offering Memorandum, at the time the Offering Memorandum was issued and
at the Closing Time, did not and will not include an untrue
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statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Offering
Memorandum are independent public accountants with respect to the Company
and its subsidiaries and predecessors within the meaning of Regulation S-X
under the 1933 Act.
(iv) Financial Statements. The financial statements, together with the
related schedules and notes, included in the Offering Memorandum present
fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Offering Memorandum present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial information
included in the Offering Memorandum present fairly the information shown
therein and, where derived from audited financial statements, have been
compiled on a basis consistent with that of the audited financial
statements included in the Offering Memorandum. The pro forma financial
statements of the Company and its subsidiaries and the related notes
thereto included in the Offering Memorandum have been prepared in
accordance with the Commission's rules and guidelines with respect to pro
forma financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Offering Memorandum, except as
otherwise stated therein, (A) there has been no material adverse change in
the condition, financial or otherwise, or in the earnings or business of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) there have been no
dividends paid by the Company, except for regular dividends on the common
stock, par value $.01 per share, of the Company (the "Common Stock").
(vi) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the state of Delaware and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Offering Memorandum and to enter into and perform its obligations under
this Agreement; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of
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property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Designated Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Designated Subsidiary" and, collectively, the
"Designated Subsidiaries") has been duly organized and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering
Memorandum and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Offering Memorandum, all of the issued
and outstanding capital stock of each Designated Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity, except when the failure to do so would not result in a Material
Adverse Effect; none of the outstanding shares of capital stock of the
Designated Subsidiaries was issued in violation of any preemptive or
similar rights of any securityholder of such Designated Subsidiary.
(viii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Offering Memorandum under the
caption "Capitalization" (except for subsequent issuances, if any, pursuant
to this Agreement, pursuant to reservations, agreements, employee benefit
plans referred to in the Offering Memorandum or pursuant to the exercise of
convertible securities or options referred to in the Offering Memorandum).
The shares of issued and outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock of the Company was issued
in violation of the preemptive or other similar rights of any
securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and, when executed and delivered by the Company
and the Trustee, will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xi) Authorization of the Securities. The Securities have been duly
authorized and, at the Closing Time, will have been duly executed by the
Company and, when
4
authenticated, issued and delivered in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor as
provided in this Agreement, will constitute valid and binding obligations
of the Company, enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers) reorganization, moratorium or similar laws affecting enforcement
of creditors' rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture.
(xii) Description of the Securities and the Indenture. The Securities
and the Indenture will conform in all material respects to the respective
statements relating thereto contained in the Offering Memorandum.
(xiii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which or any
of them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject (collectively, "Agreements
and Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement, the Indenture and the Securities and any other agreement or
instrument entered into or issued or to be entered into or issued by the
Company in connection with the transactions contemplated hereby or thereby
or in the Offering Memorandum and the consummation of the transactions
contemplated herein and in the Offering Memorandum (including the issuance
and sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Offering Memorandum under the caption "Use
of Proceeds") and compliance by the Company with its obligations hereunder
have been duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or a Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to, the Agreements and Instruments
except for such conflicts, breaches or defaults or liens, charges or
encumbrances that, singly or in the aggregate, would not result in a
Material Adverse Effect, nor will such action result in any significant
violation of the provisions of the charter or by-laws of the Company or any
of its subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
5
(xiv) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any of its
subsidiaries' principal suppliers, manufacturers, customers or contractors,
which, in any case, may reasonably be expected to result in a Material
Adverse Effect.
(xv) Absence of Proceedings. Except as disclosed in the Offering
Memorandum, there is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company or any of its subsidiaries which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets of the Company and its subsidiaries as a whole or the
consummation of the transactions contemplated by this Agreement or the
performance by the Company of its obligations hereunder. No pending legal
or governmental proceeding to which the Company or any of its subsidiaries
is a party or of which any of their respective property or assets is the
subject which are not described in the Offering Memorandum, including
ordinary routine litigation incidental to the business, could reasonably be
expected to result in a Material Adverse Effect.
(xvi) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
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, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, except where the failure to do so would not have a
Material Adverse Effect, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement or for the due execution, delivery or
performance of the Indenture by the Company, except such as have been
already obtained.
(xviii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regu-
6
latory agencies or bodies necessary to conduct the business now operated by
them, except where the failure to do so would not have a Material Adverse
Effect; the Company and its subsidiaries are in compliance with the terms
and conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Offering Memorandum, (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries or (c) could not reasonably be expected
to have a Material Adverse Effect; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, are in full force and effect, and neither the Company nor
any of its subsidiaries has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any of its subsidiaries under any of the leases or subleases mentioned
above, or affecting or questioning the rights of such the Company or any
subsidiary thereof to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xx) Environmental Laws. Except as described in the Offering
Memorandum and except such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company nor
any of its subsidiaries is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the
7
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous
Materials or Environmental Laws.
(xxi) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will not be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(xxii) Similar Offerings. Neither the Company nor any of its
affiliates, as such term is defined in Rule 501(b) under the 1933 Act
(each, an "Affiliate"), has, directly or indirectly, solicited any offer to
buy, sold or offered to sell or otherwise negotiated in respect of, or will
solicit any offer to buy, sell or offer to sell or otherwise negotiate in
respect of, in the United States or to any United States citizen or
resident, any security which is or would be integrated with the sale of the
Securities in a manner that would require the Securities to be registered
under the 1933 Act.
(xxiii) Rule 144A Eligibility. The Securities are eligible for resale
pursuant to Rule 144A and will not be, at the Closing Time, of the same
class as securities listed on a national securities exchange registered
under Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer
quotation system.
(xxiv) No General Solicitation. None of the Company, its Affiliates or
any person acting on its or any of their behalf (other than the Initial
Purchaser, as to whom the Company makes no representation) has engaged or
will engage, in connection with the offering of the Securities, in any form
of general solicitation or general advertising within the meaning of Rule
502(c) under the 1933 Act.
(xxv) No Registration Required. Subject to compliance by the Initial
Purchaser with the agreements, procedures, representations and warranties
set forth in Section 6 hereof, it is not necessary in connection with the
offer, sale and delivery of the Securities to the Initial Purchaser and to
each Subsequent Purchaser in the manner contemplated by this Agreement and
the Offering Memorandum to register the Securities under the 1933 Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "1939 Act").
(xxvi) Reporting Company. The Company is subject to the reporting
requirements of Section 13 or Section 15(d) of the 1934 Act.
(xxvii) No Directed Selling Efforts. With respect to those Securities
sold in reliance on Regulation S, (A) none of the Company, its Affiliates
or any person acting on its or their behalf (other than the Initial
Purchaser, as to whom the Company makes no representation) has engaged or
will engage in any directed selling efforts within the meaning of
Regulation S and (B) each of the Company and its Affiliates and any person
acting on its or their behalf (other than the Initial Purchaser, as to whom
the Company makes no
8
representation) has complied and will comply with the offering restrictions
requirement of Regulation S.
(xxviii) Year 2000. The Company and its subsidiaries have implemented
a comprehensive, detailed program to analyze and address the risk that the
computer hardware and software used by them may be unable to recognize and
properly execute date-sensitive functions involving certain dates prior to
and any dates after December 31, 1999 (the "Year 2000 Problem"), and has
determined that any such risk that has not been remedied will be remedied
on a timely basis without material expense and will not have a material
adverse effect upon the financial condition and results of operations of
the Company and its subsidiaries, taken as a whole; and to the Company's
best knowledge, each supplier, vendor, customer or financial service
organization used or serviced by the Company and its subsidiaries has
remedied the Year 2000 Problem, although the failure by any such supplier,
vendor, customer or financial service organization to remedy the Year 2000
Problem could have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole. The Company is in compliance with the
Commission's staff legal bulletin No. 5 dated January 12, 1998 related to
Year 2000 compliance.
(b) Officer's Certificates. Any certificate signed by any duly authorized
officer of the Company or any of its subsidiaries delivered to the Initial
Purchaser or counsel to the Initial Purchaser shall be deemed a representation
and warranty by the Company to the Initial Purchaser as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Initial Purchaser; Closing.
(a) Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company, at the price set forth in Schedule A, $25,000,000 the
aggregate principal amount of Securities. The Company shall not be obligated to
deliver any of the Securities except upon payment for all of the Securities to
be purchased as provided herein.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the office of Cravath, Swaine
& ▇▇▇▇▇, Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at
such other place as shall be agreed upon by the Initial Purchaser and the
Company, at 9:00 A.M. (eastern time) on March 7, 2000, or such other time not
later than ten business days after such date as shall be agreed upon by the
Initial Purchaser and the Company (such time and date of payment and delivery
being herein called the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Initial Purchaser for the account of the Initial Purchaser of certificates
for the Securities to be purchased by it.
9
SECTION 3. Covenants of the Company. The Company covenants with the Initial
Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will furnish
to the Initial Purchaser, without charge, such number of copies of the
Preliminary Offering Memorandum (until the Final Offering Memorandum is
available), the Final Offering Memorandum and any amendments and supplements
thereto and documents incorporated by reference therein as the Initial Purchaser
may reasonably request.
(b) Notice and Effect of Material Events. Until the earliest to occur of
(i) the initial resale by the Initial Purchaser and (ii) 30 days from the date
hereof (the "End Date"), the Company will as promptly as practicable notify the
Initial Purchaser, and confirm such notice in writing, of (x) any filing made by
the Company of information relating to the offering of the Securities with any
securities exchange or any other regulatory body in the United States or any
other jurisdiction, and (y) prior to the End Date, any material changes in or
affecting the condition, financial or otherwise, or the earnings or business of
the Company and its subsidiaries considered as one enterprise which (i) make any
statement in the Offering Memorandum false or misleading or (ii) are not
disclosed in the Offering Memorandum. In such event or if during such time prior
to the End Date any event shall occur as a result of which it is necessary, in
the reasonable opinion of any of the Company, its counsel, the Initial Purchaser
or counsel for the Initial Purchaser, to amend or supplement the Final Offering
Memorandum in order that the Final Offering Memorandum not include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in the light of the circumstances
then existing, the Company will forthwith amend or supplement the Final Offering
Memorandum by preparing and furnishing to the Initial Purchaser an amendment or
amendments of, or a supplement or supplements to, the Final Offering Memorandum
(in form and substance satisfactory in the reasonable opinion of counsel for the
Initial Purchaser) so that, as so amended or supplemented, the Final Offering
Memorandum will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. Prior to the End
Date, the Company will advise the Initial Purchaser promptly of any proposal to
amend or supplement the Offering Memorandum. Neither the consent of the Initial
Purchaser, nor the Initial Purchaser's delivery of any such amendment or
supplement, shall constitute a waiver of any of the conditions set forth in
Section 5 hereof.
(d) Rating of Securities. The Company shall take all reasonable action
necessary to enable Standard & Poor's Ratings Services, a division of McGraw
Hill, Inc. ("S&P"), and ▇▇▇▇▇'▇ Investors Service Inc. ("Moody's") to provide
their respective credit ratings of the Securities.
(e) DTC. The Company will cooperate with the Initial Purchaser and use its
reasonable best efforts to permit the Securities to be eligible for clearance
and settlement through the facilities of DTC.
10
(f) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds".
(g) Restriction on Sale of Securities. During a period ending on the
earlier of (i) the date that the initial distribution of notes by the Initial
Purchaser is complete and (ii) 30 days from the date of the Offering Memorandum,
the Company will not, without the prior written consent of the Initial
Purchaser, directly or indirectly, issue, sell, offer or agree to sell, grant
any option for the sale of, or otherwise dispose of, any other debt securities
of the Company that are substantially similar to the Securities or securities of
the Company that are convertible into, or exchangeable for or otherwise
represent a right to acquire, the Securities or such other debt securities.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation,
printing, delivery to the Initial Purchaser and any filing of the Offering
Memorandum (including financial statements and any schedules or exhibits and any
document incorporated therein by reference) and of each amendment or supplement
thereto, (ii) the printing and delivery to the Initial Purchaser of this
Agreement, the Indenture and such other documents as may be required to be
printed in connection with the offering, purchase, sale, issuance or delivery of
the Securities, (iii) the preparation, issuance and delivery of the certificates
for the Securities to the Initial Purchaser, including any transfer taxes, any
stamp or other duties payable upon the sale, issuance and delivery of the
Securities to the Initial Purchaser and any charges of DTC in connection
therewith, (iv) the fees and disbursements of the Company's counsel, accountants
and other advisors, (v) the reasonable fees and disbursements of counsel for the
Initial Purchaser in connection with the preparation of the Blue Sky Survey, and
any supplement thereto, (vi) the fees and expenses of the Trustee, including the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities, and (vii) any fees payable in connection with the
rating of the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Initial Purchaser in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company shall reimburse the Initial Purchaser for their
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Initial Purchaser.
SECTION 5. Conditions of Initial Purchaser's Obligations. The obligations
of the Initial Purchaser hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of its subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Opinion of Counsel for Company. At the Closing Time, the Initial
Purchaser shall have received the favorable opinions, dated as of the Closing
Time, of the General Counsel of the Company and of Wachtell, Lipton, ▇▇▇▇▇ &
▇▇▇▇, special counsel for the Company, in form and substance reasonably
satisfactory to counsel for the Initial Purchaser, substantially to the effect
set forth in Exhibit A hereto. In giving such opinion such counsel may rely, as
to all matters
11
governed by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation Law of
the State of Delaware, upon the opinions of counsel satisfactory to the Initial
Purchaser. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(b) Opinion of Counsel for Initial Purchaser. At the Closing Time, the
Initial Purchaser shall have received the favorable opinion, dated as of the
Closing Time, of Cravath, Swaine & ▇▇▇▇▇, counsel for the Initial Purchaser,
with respect to the matters set forth in (i), (ii), (vi) through (ix),
inclusive, (xvi) and the penultimate paragraph of Exhibit A hereto. In giving
such opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Initial Purchaser. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(c) Officers' Certificate. At the Closing Time, there shall not have been
since the date hereof or since the respective dates as of which information is
given in the Final Memorandum, exclusive of any amendments or supplements
thereto after the date hereof, any Material Adverse Effect or any development
involving a prospective Material Adverse Effect, and the Initial Purchaser shall
have received a certificate of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company, dated as
of the Closing Time, to the effect that (i) there has been no such Material
Adverse Effect or any development involving a prospective Material Adverse
Effect, (ii) the representations and warranties in Section 1 hereof are true and
correct with the same force and effect as though expressly made at and as of the
Closing Time, and (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the Closing Time.
(d) Accountants' Comfort Letter. At the time of the execution of this
Agreement, the Initial Purchaser shall have received from KPMG LLP a letter
dated such date, in form and substance reasonably satisfactory to the Initial
Purchaser, containing statements and information of the type ordinarily included
or as otherwise agreed in accountants' "comfort letters" to the Initial
Purchaser with respect to the financial statements and certain financial
information contained in the Offering Memorandum.
(e) Bring-down Comfort Letter. At the Closing Time, the Initial Purchaser
shall have received from KPMG LLP a letter, dated as of the Closing Time, to the
effect that it reaffirms the statements made in the letter furnished pursuant to
subsection (d) of this Section, except that the specified date referred to shall
be a date not more than three business days prior to the Closing Time.
(f) Maintenance of Rating. At the Closing Time, the Securities shall be
rated at least BAA3 by Moody's and BBB by S&P, and the Company shall have
delivered to the Initial Purchaser a letter dated the Closing Time, from each
such rating agency, or other evidence satisfactory to the Initial Purchaser,
confirming that the Securities have such ratings; and since the date of this
Agreement, there shall not have occurred a downgrading in the rating assigned to
the Se-
12
curities or any of the Company's other securities by any "nationally recognized
statistical rating agency", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and no such securities rating
agency shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of the Securities or any of the
Company's other securities.
(g) Additional Documents. At the Closing Time, counsel for the Initial
Purchaser shall have been furnished with such documents as they may reasonably
require for the purpose of enabling them to pass upon the issuance and sale of
the Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Initial Purchaser
and counsel for the Initial Purchaser.
(h) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchaser by notice to the Company at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 7, 8 and 9 shall survive any such termination and remain in
full force and effect.
SECTION 6. Subsequent Offers and Resales of the Securities.
(a) Offer and Sale Procedures. The Initial Purchaser and the Company hereby
establish and agree to observe the following procedures in connection with the
offer and sale of the Securities:
(i) Offers and Sales only to Qualified Institutional Buyers or
Non-U.S. Persons. Offers and sales of the Securities shall only be made (A)
to persons whom the offeror or seller reasonably believes to be qualified
institutional buyers, as defined in Rule 144A under the 1933 Act
("Qualified Institutional Buyers") and, 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 it that each
such account is a Qualified Institutional Buyer to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A and
in each case, in transactions in accordance with Rule 144A or (B) in the
case of offers or sales made outside the United States, to non-U.S. persons
outside the United States, as defined in Regulation S under the 1933 Act,
to whom the offeror or seller reasonably believes offers and sales of the
Securities may be made in reliance upon Regulation S under the 1933 Act.
The Initial Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws
thereof, and that it will take at its own expense whatever action is
required to permit its purchase and resale of the Securities in such
jurisdictions.
(ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the ▇▇▇▇ ▇▇▇) will be
used in the United States in connection with the offering or sale of the
Securities.
13
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
Subsequent Purchaser of a Security acting as a fiduciary for one or more
third parties, each third party shall, in the judgment of the Initial
Purchaser, be an Institutional Accredited Investor or a Qualified
Institutional Buyer or a non-U.S. person outside the United States.
(iv) Subsequent Purchaser Notification. The Initial Purchaser will
take reasonable steps to inform, and cause each of its U.S. Affiliates to
take reasonable steps to inform, persons acquiring Securities from the
Initial Purchaser or affiliate, as the case may be, in the United States
that the Securities (A) have not been and will not be registered under the
1933 Act, (B) are being sold to them without registration under the 1933
Act in reliance on Rule 144A or in accordance with another exemption from
registration under the 1933 Act, as the case may be, and (C) may not be
offered, sold or otherwise transferred except (1) to the Company, (2)
outside the United States in accordance with Regulation S, or (3) inside
the United States in accordance with (x) Rule 144A to a person whom the
seller reasonably believes is a Qualified Institutional Buyer that is
purchasing such Securities for its own account or for the account of a
Qualified Institutional Buyer to whom notice is given that the offer, sale
or transfer is being made in reliance on Rule 144A or (y) pursuant to
another available exemption from registration under the 1933 Act.
(v) Restrictions on Transfer. The transfer restrictions and the other
provisions set forth in the Offering Memorandum under the heading "Notice
to Investors", including the legend required thereby, shall apply to the
Securities except as otherwise agreed by the Company and the Initial
Purchaser.
(b) Covenants of the Company. The Company covenants with the Initial
Purchaser as follows:
(i) Integration. The Company agrees that it will not and will cause
its Affiliates not to, directly or indirectly, solicit any offer to buy,
sell or make any offer or sale of, or otherwise negotiate in respect of,
securities of the Company of any class if, as a result of the doctrine of
"integration" referred to in Rule 502 under the 1933 Act, such offer or
sale would render invalid (for the purpose of (i) the sale of the
Securities by the Company to the Initial Purchaser, (ii) the resale of the
Securities by the Initial Purchaser to Subsequent Purchasers or (iii) the
resale of the Securities by such Subsequent Purchasers to others) the
exemption from the registration requirements of the 1933 Act provided by
Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or
otherwise.
(ii) Rule 144A Information. The Company agrees that, in order to
render the Securities eligible for resale pursuant to Rule 144A under the
1933 Act, while any of the Securities remain outstanding, it will make
available, upon request, to any holder of Securities or prospective
purchasers of Securities the information specified in Rule 144A(d)(4),
unless the Company furnishes information to the Commission pursuant to
Section 13 or 15(d) of the 1934 Act.
(iii) Restriction on Repurchases. Until the expiration of two years
after the original issuance of the Securities, the Company will not, and
will cause its Affiliates not
14
to, resell any Securities which are "restricted securities" (as such term
is defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial
owner or otherwise (except as agent acting as a securities broker on behalf
of and for the account of customers in the ordinary course of business in
unsolicited broker's transactions), except in compliance with the 1933 Act.
(c) Qualified Institutional Buyer. The Initial Purchaser represents and
warrants to, and agrees with, the Company that it is a Qualified Institutional
Buyer and an "accredited investor" within the meaning of Rule 501(a) under the
1933 Act (an "Accredited Investor").
(d) Resale Pursuant to Rule 903 of Regulation S or Rule 144A. The Initial
Purchaser understands that the Securities have not been and will not be
registered under the 1933 Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the 1933 Act or pursuant to an exemption from
the registration requirements of the 1933 Act. The Initial Purchaser represents,
warrants and agrees, that, except as permitted by Section 6(a) above, it has
offered and sold Securities and will offer and sell Securities (i) as part of
their distribution at any time and (ii) otherwise until forty days after the
later of the date upon which the offering of the Securities commences and the
Closing Time, only in accordance with Rule 903 of Regulation S, Rule 144A under
the 1933 Act or another applicable exemption from the registration requirements
of the 1933 Act. Accordingly, neither the Initial Purchaser, its affiliates nor
any persons acting on their behalf have engaged or will engage in any directed
selling efforts with respect to the Securities pursuant to Regulation S, and the
Initial Purchaser, its affiliates and any person acting on their behalf have
complied and will comply with the offering restriction requirements of
Regulation S. The Initial Purchaser agrees that, at or prior to confirmation of
a sale of Securities pursuant to Regulation S it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it or through it during the
restricted period a confirmation or notice to substantially the following
effect: The Initial Purchaser represents, warrants and agrees with respect to
offers and sales outside the United States that:
(i) it understands that no action has been or will be taken in any
jurisdiction by the Company that would permit a public offering of the
Securities or possession or distribution of either Memorandum or any other
offering or publicity material relating to the Securities, in any country
or jurisdiction where action for that purpose is required;
(ii) it will comply with all applicable laws and regulations in each
jurisdiction in which it acquires, offers, sells or delivers Securities or
has in its possession or distributes either Memorandum or any such other
material, in all cases at its own expense;
(iii) the Securities have not been and will not be registered under
the 1933 Act and may not be offered or sold within the United States or to,
or for the account or benefit of, U.S. persons except in accordance with
Regulations S under the 1933 Act or pursuant to another exemption from the
registration requirements of the 1933 Act;
(iv) it has (1) not offered or sold and will not offer or sell in the
United Kingdom, by means of any document, any Securities other than to any
persons whose ordinary business it is to buy and sell shares or debentures,
whether as a principal or agent, or in
15
circumstances which do not constitute an offer to the public within the
meaning of the Companies ▇▇▇ ▇▇▇▇, as amended (2) complied and will comply
with all applicable provisions of the Financial Services ▇▇▇ ▇▇▇▇ with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (3) only issued or passed on
and will only issue and pass onto any persons in the United Kingdom any
document received by it in connection with the issue of the Securities if
that person is of a kind described in Article 9(3) of the Financial
Services ▇▇▇ ▇▇▇▇ (Investment Advertisement) (Exemptions) Order 1988 or is
a person to whom the document may otherwise lawfully by issued or passed
on;
(v) it understands that the Securities have not been and will not be
registered under the Securities and Exchange Law of Japan, and represents
that it has not offered or sold, and agrees that it will not offer or sell,
and Securities, directly or indirectly in Japan or to or from any resident
of Japan except (i) pursuant to an exemption from the registration
requirements of the Securities and Exchange Law of Japan and (ii) in
compliance with any other applicable requirements of Japanese Law;
(vi) At or prior to confirmation of a sale of Securities pursuant to
Regulation S it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it or through it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
United States Securities Act of 1933 (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 (i) as part of their distribution
at any time and (ii) otherwise until forty days after the later of the
date upon which the offering of the Securities commenced and the date
of closing, except in either case in accordance with Regulation S or
Rule 144A under the Securities Act. Terms used above have the meaning
given to them by Regulation S."
Terms used in the above paragraph have the meanings given to them by
Regulation S.
(e) Additional Representations and Warranties of Initial Purchaser. The
Initial Purchaser represents and agrees that it has not entered and will not
enter into any contractual arrangements with respect to the distribution of the
Securities, except with its affiliates or with the prior written consent of the
Company. The Initial Purchaser hereby agrees that, prior to or simultaneously
with the confirmation of sale by the Initial Purchaser to any purchaser of any
of the Securities purchased by the Initial Purchaser from the Company pursuant
to this Agreement, the Initial Purchaser shall deliver to all such purchasers
with addresses in the United States and, to the extent required by applicable
law, to other purchasers a copy of the Offering Memorandum (any and amendment or
supplement thereto that the Company shall have furnished to the Initial
Purchaser prior to the date of such confirmation of sale). The Initial Purchaser
further agrees that, without the prior written consent of the Company, the
Initial Purchaser will not disseminate any written materials to holders of the
Securities for or in connection with the transactions contemplated by this
Agreement other than the Offering Memorandum.
16
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchaser. The Company agrees to indemnify
and hold harmless the Initial Purchaser and each person, if any, who controls
the Initial Purchaser within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever (at least quarterly) arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Offering Memorandum or the Final Offering Memorandum (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever (at least quarterly) to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
7(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, (at least quarterly)
(including the reasonable fees and disbursements of counsel), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information furnished
to the Company by the Initial Purchaser expressly for use in the Offering
Memorandum (or any amendment thereto); provided, further, that, with
respect to any loss, liability, claim, damage or expense arising out of any
untrue statement or omission or alleged untrue statement or omission
contained in any Preliminary Offering Memorandum or the Final Offering
Memorandum (or any amendment or supplement thereto), the indemnity
contained in this Section shall not inure to the benefit of the Initial
Purchaser (or any person who controls the Initial Purchaser) if (i) a copy
of the Final Offering Memorandum or amendment or supplement thereto was to
be sent or given to such purchasers with addresses in the United States
and, to the extent required by applicable law, to other purchasers, at or
prior to the written confirmation of the sale of the applicable Securities
together with all amendments or supplements thereto available at such time
and was not sent or given and (ii) such untrue statement or omission or
alleged untrue statement or omission was corrected in the Final Offering
Memorandum or in any amendment or supplement thereto available at such
time.
(b) Indemnification of Company. The Initial Purchaser severally agrees to
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the
17
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Offering Memorandum in reliance upon and in conformity with written
information furnished to the Company by the Initial Purchaser expressly for use
in the Offering Memorandum, and shall reimburse the Company for any and all
expenses reasonably incurred by the Company in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to the indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder except to the extent it is
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by the Initial Purchaser
and shall be reasonably acceptable to the Company, and, in the case of parties
indemnified pursuant to Section 7(b) above, counsel to the indemnified parties
shall be selected by the Company and shall be reasonably acceptable to the
Initial Purchaser. An indemnifying party may participate at its own expense in
the defense of any such action and, to the extent it wishes, shall be entitled
to assume the defense of any such action with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or action,
the indemnifying party shall not be liable to the indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that an indemnified party shall have
the right to employ its own counsel in any such action, but the fees, expenses
and other charges of such counsel for the indemnified party will be at the
expense of such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (ii)
the indemnified party has reasonably concluded (based upon advice of counsel to
the indemnified party) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (iii) a conflict or potential conflict exists (based
upon advice of counsel to the indemnified party) between the indemnified party
and the indemnifying party (in which case the indemnifying party will not have
the right to direct the defense of such action on behalf of the indemnified
party) or (iv) the indemnifying party has not in fact employed counsel
reasonably satisfactory to the indemnified party to assume the defense of such
action within a reasonable time after receiving notice of the commencement of
the action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
In no event shall counsel to the indemnifying party (except with the consent of
the indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. Each indemnified party shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. No indemnified party seeking or otherwise eligible for
indemnification or contribution hereunder will,
18
without the prior written consent of the indemnifying party (which shall not be
unreasonably withheld), settle, compromise, consent to the entry of any judgment
in or otherwise seek to terminate any action, claim, suit, investigation or
proceeding pursuant to which indemnity or contribution is or may be available
hereunder. No indemnifying party shall, without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section or Section 8
hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party. Notwithstanding, this Section 7(c), if at
any time an indemnified party shall have requested the indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, the
indemnifying party shall not be liable for any settlement of the nature
contemplated by this Section 7(c) effected without its consent if such
indemnifying party (i) reimburses such indemnified party in accordance with such
request to the extent it considers such request to be reasonable and (ii)
provides written notice to the indemnified party substantiating the unpaid
balance as unreasonable, in each case prior to the date of such settlement.
SECTION 8. Contribution. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Initial Purchaser on the other hand from the offering of the Securities pursuant
to this Agreement or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Initial Purchaser on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Initial Purchaser on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company, on the one hand, and the total underwriting discount received by
the Initial Purchaser, on the other, bear to the aggregate initial offering
price of the Securities.
The relative fault of the Company on the one hand and the Initial Purchaser
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchaser and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
19
The Company and the Initial Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section, the Initial Purchaser shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities purchased and sold by it hereunder exceeds
the amount of any damages which the Initial Purchaser has otherwise been
required to pay under Section 7(b) by reason of such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls the Initial
Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Initial Purchaser,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
Subject to the initial sentence of Section 1(a), all representations, warranties
and agreements contained in this Agreement or in certificates of officers of the
Company or any of its subsidiaries submitted pursuant hereto shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Initial Purchaser or controlling person, or by or on behalf
of the Company, and shall survive delivery of the Securities to the Initial
Purchaser.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Initial Purchaser may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Final Offering
Memorandum exclusive of any amendment or supplement thereto after the date
hereof, any material adverse change in the condition, financial or otherwise, or
in the earnings or business affairs of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Initial Purchaser,
impracticable to market the Securities or to enforce contracts for the sale of
20
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the NASDAQ System has been suspended or materially limited,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 7,
8 and 9 shall survive such termination and remain in full force and effect.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchaser shall be directed to it at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇ ▇▇▇▇▇, Vice President; notices to the
Company shall be directed to it at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇- 2559,
attention of Senior Vice President and General Counsel; with a copy to Wachtell,
Lipton, ▇▇▇▇▇ & ▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchaser and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchaser and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchaser and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
the Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
21
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Initial Purchaser and the Company in accordance with its terms.
Very truly yours,
CK WITCO CORPORATION
By:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By
Authorized Signatory
22
SCHEDULE A
CK WITCO CORPORATION
$25,000,000
Floating Rate Notes due 2001
1. The purchase price to be paid by the Initial Purchasers for the Floating
Rate Notes shall be 99.85% of the principal amount thereof.
2. The interest rate on the Floating Rate Notes shall be LIBOR plus 1.00%
per annum.
Sch A-1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)*
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Delaware.1
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Offering
Memorandum (except where the failure to have such power and authority would not
have a Material Adverse Effect) and to enter into and perform its obligations
under the Purchase Agreement.1
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.2
(iv) Each Designated Subsidiary has been duly incorporated and is validly
existing as a corporation under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering Memorandum.
Each Designated Subsidiary organized under the laws of a state of the United
States is in good standing under the laws of its organization and is duly
qualified as a foreign corporation to transact business and is in good standing
in each state in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect; all of the issued and outstanding capital stock of each
Designated Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of our knowledge and information, is owned
by the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.2
(v) The Purchase Agreement has been duly authorized, executed and delivered
by the Company.1
(vi) The Indenture has been duly authorized, executed and delivered by the
Company and (assuming the due authorization, execution and delivery thereof by
the Trustee) constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (in-
----------------------
* The paragraphs followed by footnote 1 will be given both by the Company
Counsel and WLR&K; paragraphs followed by footnote 2 will be given by the
Company Counsel only; paragraphs followed by footnote 3 will be given by WLR&K
only; and paragraphs followed by footnote 4 may be divided between the Company
Counsel and WLR&K.
A - 1
cluding, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, or by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).1
(vii) The Securities are in the form contemplated by the Indenture, have
been duly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in the manner provided in the Indenture (assuming
the due authorization, execution and delivery of the Indenture by the Trustee)
and issued and delivered against payment of the purchase price therefor, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium (including,
without limitation, all laws relating to fraudulent transfers), or other similar
laws relating to or affecting enforcement of creditor's rights generally, or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law), and will be entitled to the benefits of the
Indenture.1
(viii) The Securities and the Indenture conform in all material respects to
the descriptions thereof contained in the Offering Memorandum under "Description
of the Notes".3
(ix) The documents incorporated by reference in the Offering Memorandum
(other than the financial statements and supporting schedules therein, as to
which no opinion need be rendered), when they were filed with the Commission
complied as to form in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder.2
(x) There is not pending or, to the best of our knowledge, threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any subsidiary
thereof is subject, before or brought by any court or governmental agency or
body, which might reasonably be expected to result in a Material Adverse Effect,
or the consummation of the transactions contemplated in the Purchase Agreement
or the performance by the Company of its obligations thereunder or the
transactions contemplated by the Offering Memorandum.2
(xi) The information in the Offering Memorandum under "Summary-The
Offering" "Description of the Notes", "Certain Federal Income Tax
Considerations" and "Exchange Offer; Registration Rights," to the extent that it
constitutes summaries of legal matters or legal proceedings, or legal
conclusions, has been reviewed by us and fairly summarizes the matters described
therein.3
(xii) All descriptions in the Offering Memorandum of contracts and other
documents to which the Company or any of its subsidiaries are a party are
accurate in all material respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments that would be required to be described in the Offering
Memorandum that are not described or referred to in the Offering Memorandum
other than those described or referred to therein or incorporated by reference
thereto, and the descriptions thereof or references thereto are correct in all
material respects.2
A - 2
(xiii) To the best of our knowledge, neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws and no default by the
Company or any of its subsidiaries exists in the due performance or observance
of any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Offering Memorandum or
incorporated by reference therein, except as would not reasonably be expected
to, individually or in the aggregate, have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole.2
(xiv) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than such as may be required under the
applicable securities laws of the various jurisdictions in which the Securities
will be offered or sold, as to which we need express no opinion) by the Company
or its subsidiaries is necessary or required in connection with the due
authorization, execution and delivery of the Purchase Agreement or the due
execution, delivery or performance of the Indenture by the Company or for the
offering, issuance, sale or delivery of the Securities to the Initial Purchaser
or the resale by the Initial Purchaser in accordance with the terms of the
Purchase Agreement, provided that the foregoing is limited to the laws of the
State of New York, the general corporation law of the State of Delaware, and the
laws of the United States of America, that, in our experience, are normally
applicable to transactions of the type provided in the Purchase Agreement and
the Registration Rights Agreement.4
(xv) Assuming compliance by all parties with the terms and conditions of
the Purchase Agreement and Indenture, it is not necessary in connection with the
offer, sale and delivery of the Securities to the Initial Purchaser and to each
Subsequent Purchaser in the manner contemplated by the Purchase Agreement and
the Offering Memorandum to register the Securities under the 1933 Act or to
qualify the Indenture under the Trust Indenture Act.3
(xvi) The execution, delivery and performance of the Purchase Agreement,
the DTC Agreement, the Indenture and the Securities and the consummation of the
transactions contemplated in the Purchase Agreement and in the Offering
Memorandum (including the use of the proceeds from the sale of the Securities as
described in the Offering Memorandum under the caption "Use Of Proceeds") and
compliance by the Company with its obligations under the Purchase Agreement, the
Indenture and the Securities do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined in Section 1(a)(xiii) of the
Purchase Agreement) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary thereof pursuant to any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument,
known to us, to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any subsidiary thereof is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect), nor will such action result in any violation of (A)
the charter or by-laws of the Company or any of its subsidiaries, or any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to us, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its Designated
Subsidiaries or any of the respective properties, assets, or operations or (B)
the General Corporation Law of the State of Delaware, the laws of the State of
New York or the laws of the United States
A - 3
of America. Such counsel need not express any opinion in this clause (xvi),
however, as to (i) the blue sky laws of any state, (ii) laws other than those
that, in our experience, are normally applicable to transactions of the type
provided for by the Purchase Agreement and the Registration Agreement and (iii)
any consent or authorization which may have become applicable to the Company as
a result of the Initial Purchaser's involvement in the Purchase Agreement or the
Registration Rights Agreement because of the Initial Purchaser's legal or
regulatory status or because of any other facts specifically pertaining to the
Initial Purchaser.4
(xvii) The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.3
Nothing has come to our attention that would lead us to believe that the
Offering Memorandum or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom as to which we need make no statement and
except as to documents incorporated by reference), at the time the Offering
Memorandum was issued, at the time any such amended or supplemented Offering
Memorandum was issued or at the Closing Time, included or includes 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.1
The foregoing opinions and statements may be subject to assumptions,
qualifications and limitations customary in similar transactions.
A - 4