EXHIBIT 4.10
IMC GLOBAL INC.
(a Delaware corporation)
$200,000,000
6-1/2% Notes due 2003
$100,000,000
7-3/8% Debentures due 2018
--------------------------------
PURCHASE AGREEMENT
--------------------------------
Dated: August 6, 1998
Table of Contents
Page
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SECTION 1. Representations and Warranties..................................... 2
(a) Representations and Warranties by the Company............................. 3
(b) Officer's Certificates.................................................... 9
SECTION 2. Sale and Delivery to Initial Purchasers; Closing................... 9
(a) Securities................................................................ 9
(b) Payment................................................................... 9
(c) Qualified Institutional Buyer.............................................10
(d) Denominations; Registration...............................................10
SECTION 3. Covenants of the Company...........................................10
(a) Offering Memorandum.......................................................10
(b) Notice and Effect of Material Events......................................10
(c) Amendment to Offering Memorandum and Supplements..........................11
(d) Qualification of Securities for Offer and Sale............................11
(e) Rating of Securities......................................................11
(f) DTC.......................................................................11
(g) Use of Proceeds...........................................................11
(h) Restriction on Sale of Securities.........................................11
SECTION 4. Payment of Expenses................................................11
(a) Expenses..................................................................11
(b) Termination of Agreement..................................................12
SECTION 5. Conditions of Initial Purchasers' Obligations......................12
(a) Opinion of Counsel for Company............................................12
(b) Opinion of Counsel for Initial Purchasers.................................12
(c) Officers' Certificate.....................................................13
(d) Accountant's Comfort Letters..............................................13
(e) Bring-down Comfort Letter.................................................13
(f) Maintenance of Rating.....................................................13
(g) Registration Rights Agreement.............................................13
(h) Additional Documents......................................................13
(i) Termination of Agreement..................................................14
SECTION 6. Subsequent Offers and Resales of the Securities....................14
(a) Offer and Sale Procedures.................................................14
(b) Covenants of the Company..................................................15
SECTION 7. Indemnification....................................................16
(a) Indemnification of Initial Purchasers.....................................16
(b) Indemnification of Company, Directors and Officers........................17
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(c) Actions against Parties; Notification................................... 17
(d) Settlement without Consent if Failure to Reimburse...................... 18
SECTION 8. Contribution.................................................... 18
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.. 19
SECTION 10. Termination of Agreement........................................ 19
(a) Termination; General.................................................... 19
(b) Liabilities............................................................. 20
SECTION 11. Default By One or More of The Initial Purchasers................ 20
SECTION 12. Notices......................................................... 20
SECTION 13. Parties......................................................... 21
SECTION 14. GOVERNING LAW AND TIME.......................................... 21
SECTION 15. Effect of Headings.............................................. 21
ii
$200,000,000
6-1/2% Notes due 2003
$100,000,000
7-3/8% Debentures due 2018
IMC GLOBAL INC.
(a Delaware corporation)
PURCHASE AGREEMENT
August 6, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
CHASE SECURITIES INC.
SALOMON BROTHERS INC
c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
IMC Global Inc., a Delaware corporation (the "Company"), confirms its
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and ▇.▇. ▇▇▇▇▇▇ Securities Inc., Chase Securities
Inc. and Salomon Brothers Inc (collectively, the "Initial Purchasers", which
term shall also include any initial purchaser substituted as hereinafter
provided in Section 11 hereof), with respect to the issue and sale by the
Company and the purchase by the Initial Purchasers, acting severally and not
jointly, of the respective principal amounts set forth in Schedule A of
$200,000,000 aggregate principal amount of the Company's 6-1/2% Notes due 2003
and $100,000,000 aggregate principal amount of the Company's 7-3/8% Debentures
due 2018 (collectively, the "Securities"). The Securities are to be issued
pursuant to an indenture dated as of August 1, 1998 (the "Indenture", which
term, as used herein, includes the Officers' Certificate (as defined in the
Indenture) establishing the form and terms of the Securities pursuant to Section
2.1 of the Indenture), between the Company and The Bank of New York, as trustee
(the "Trustee"). Securities issued in book-entry form 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.
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The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time after the date of this Agreement. The Securities are to
be offered and sold through the Initial Purchasers 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") 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 each Initial Purchaser copies of
a preliminary offering memorandum dated July 27, 1998 (the "Preliminary Offering
Memorandum") and has prepared and will deliver to each Initial Purchaser, on the
date hereof or the next succeeding day, copies of a final offering memorandum
dated August 6, 1998 (the "Final Offering Memorandum"), each for use by such
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 any exhibits
thereto and the documents incorporated by reference therein, which has been
prepared and delivered by the Company to the Initial Purchasers in connection
with their solicitation of purchases of, or offering of, the Securities.
All references in this Agreement to financial statements and schedules and
other information which are "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, as amended (the "1934 Act"), which is incorporated by
reference in the Offering Memorandum.
The holders of Securities will be entitled to the benefits of a
Registration Rights Agreement, in substantially the form attached hereto as
Exhibit C with such changes as shall be agreed to by the parties hereto (the
"Registration Rights Agreement"), pursuant to which the Company will file a
registration statement (the "Registration Statement") with the Commission
registering the Securities or the Exchange Notes and Exchange Debentures
referred to in the Registration Rights Agreement under the 1933 Act.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company represents
and warrants to each Initial Purchaser as of the date hereof and as of the
Closing Time referred to in Section 2(b) hereof, and agrees with each Initial
Purchaser as follows:
(i) Similar Offerings. The Company has not, directly or indirectly,
solicited any offer to buy or offered to sell, and will not, directly or
indirectly, solicit any offer to buy or offer to sell, 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.
(ii) 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 written information furnished to the Company in writing
by any Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Offering
Memorandum.
(iii) Independent Accountants. The accountants who certified certain
of the financial statements and supporting schedules of the Company and its
subsidiaries, of ▇▇▇▇▇▇ Chemical Group, Inc. and its subsidiaries ("▇▇▇▇▇▇") and
of ▇▇▇▇▇▇ Chemical Australia Pty Ltd. & its controlled entities ("Penrice")
included in the Offering Memorandum are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of
Regulation S-X under the 1933 Act.
(iv) Financial Statements. The financial statements, together with
the related schedules and notes, of the Company and its subsidiaries included in
the Offering Memorandum present fairly in all material respects 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, except as indicated therein or in the notes thereto and,
except that data with respect to unaudited interim periods do not contain
footnote disclosure and reflect adjustments which the management of the Company
considers necessary to present fairly in all material respects the financial
information for such periods. The financial statements, together with the
related schedules and notes, of ▇▇▇▇▇▇ included in the Offering Memorandum
present fairly in all material respects the financial position of ▇▇▇▇▇▇ and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of ▇▇▇▇▇▇ and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with GAAP applied on a consistent basis throughout the
periods involved, except as indicated therein or in the notes thereto and,
except that data with respect to unaudited interim periods do not contain
footnote disclosure and reflect adjustments which the management of the Company
considers necessary to present fairly in all material respects the financial
information for such periods. The financial statements, together with the
related schedules and notes, of ▇▇▇▇▇▇▇ included in the Offering Memorandum
present fairly the financial position of Penrice and its controlled entities
3
at the dates indicated and the statement of operations, stockholders' equity and
cash flows of Penrice and its controlled entities for the periods specified;
said financial statements have been prepared in conformity with Australian GAAP
applied on a consistent basis throughout the periods involved, except as
indicated therein or in the notes thereto and, except that data with respect to
unaudited interim periods do not contain footnote disclosure and reflect
adjustments which the management of the Company considers necessary to present
fairly in all material respects the financial information for such periods. The
selected historical consolidated financial data included in the Offering
Memorandum present fairly the particular information shown therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Offering Memorandum. The pro forma financial statements and
other pro forma financial information of the Company and its subsidiaries and
the related notes thereto included in the Offering Memorandum present fairly in
all material respects the information shown therein, 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 or contemplated thereby, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects 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 which are material with
respect to the Company and its subsidiaries considered as one enterprise, other
than those in the ordinary course of business, and (C) except for regular
quarterly dividends on its outstanding common stock, there has been no dividend
or distribution of any kind declared, paid or made by the Company on any class
of its capital 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 Registration Rights 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 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 Subsidiaries. Each "significant subsidiary" of
the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly organized and
is validly existing as a corporation or partnership, as the case may be, in good
standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be, has corporate or partnership, as the case may
be, power and authority to own, lease and operate its properties and to conduct
its business as
4
described in the Offering Memorandum and is duly qualified as a foreign
corporation or partnership, as the case may be, 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 or in Schedule C hereto, all of the issued and outstanding
capital stock of each corporate Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company, directly
or through subsidiaries, and all of the partnership interests of each
partnership Subsidiary have been duly authorized and validly issued and are
owned by the Company, directly or through subsidiaries, in each case free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock or partnership
interests, as the case may be, of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary. The only
Subsidiaries of the Company are listed on Schedule C hereto.
(viii) Capitalization. The shares of 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 Registration Rights Agreement. The
Registration Rights Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or 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), and except that rights to indemnification and
contribution thereunder may be limited by applicable law.
(xi) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and, at the Closing Time, will have been duly executed
and delivered by the Company and 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 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).
(xii) 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 authenticated in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor, will constitute valid
and binding obligations of the Company,
5
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 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), and will
be in the form contemplated by, and entitled to the benefits of, the Indenture.
(xiii) Description of the Securities, the Indenture and the
Registration Rights Agreement. The Securities, the Indenture and the
Registration Rights Agreement will conform in all material respects to the
respective statements relating thereto contained in the Offering Memorandum and
will be in substantially the respective forms previously delivered to the
Initial Purchasers.
(xiv) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or partnership
agreement, as the case may be, 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 it 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 as are
disclosed in the Offering Memorandum or that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this Agreement,
the Registration Rights 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, therein and in the Offering Memorandum (including the
issuance and sale of the Securities, the use of the proceeds from the sale of
the Securities as described in the Offering Memorandum under the caption "Use of
Proceeds" and the filing of the Registration Statement) and compliance by the
Company with its obligations hereunder, and under the Registration Rights
Agreement, the Indenture and the Securities 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, defaults or
Repayment Events or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or bylaws or partnership agreement, as the case may
be, of the Company or any of its subsidiaries or, to the best of the Company's
knowledge, 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 of the Company or any of its subsidiaries (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.
6
(xv) 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 subsidiaries principal
suppliers, manufacturers, customers or contractors, which, in either case, would
reasonably be expected to result in a Material Adverse Effect.
(xvi) Absence of Proceedings. 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
would, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, or which would, individually or in the aggregate,
reasonably be expected to materially and adversely affect the properties and
assets of the Company and its subsidiaries considered as one enterprise or the
consummation of this Agreement or the Registration Rights Agreement or the
performance by the Company of its obligations hereunder or thereunder; the
aggregate of all pending legal or governmental proceedings 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,
would not reasonably be expected to result in a Material Adverse Effect.
(xvii) 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, 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 or invalidity or inadequacy, singly or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect.
(xviii) 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 (other than under state
securities laws, or the 1933 Act and the rules and regulations thereunder with
respect to the Registration Rights Agreement and the transactions contemplated
thereunder) 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.
(xix) 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 regulatory agencies or bodies necessary to
conduct the business now operated by them, except where the failure to so
possess would not have a Material Adverse Effect; the Company and its
subsidiaries
7
are in compliance with the terms and conditions of all such Governmental
Licenses, except as disclosed in the Offering Memorandum or where the failure to
so 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
as disclosed in the Offering Memorandum or when 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, would reasonably be expected to result in a
Material Adverse Effect.
(xx) Title to Property. The Company and its subsidiaries have good and
marketable title to all material real property owned by the Company and its
subsidiaries and good title to all material personal property 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 or (b) would not, singly or in the
aggregate, reasonably be expected to result in 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, and under which the Company or any
of its subsidiaries holds properties described in the Offering Memorandum, 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 the Company or any of its subsidiaries to the continued possession of
the leased or subleased premises under any such lease or sublease, except such
as would not, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
(xxi) Environmental Laws. Except as described in the Offering
Memorandum and except 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 basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental
8
body or agency, against or affecting the Company or any of its subsidiaries
relating to Hazardous Materials or Environmental Laws.
(xxii) 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" as such term is defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xxiii) Rule 144A Eligibility. The Securities are not, and at the
Closing Time will not be, 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,
as such term is defined in Rule 501(b) under the 1933 Act ("Affiliates"), or any
person acting on its or any of their behalf (other than the Initial Purchasers,
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
Purchasers with the representations and warranties set forth in Section 2 and
the procedures set forth in Section 6 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchasers
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.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Initial Purchasers or to
counsel for the Initial Purchasers shall be deemed a representation and warranty
by the Company to each Initial Purchaser as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchasers; 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 each Initial Purchaser, severally and not jointly, and each
Initial Purchaser, severally and not jointly, agrees to purchase from the
Company, at the price set forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such Initial Purchaser,
plus any additional principal amount of Securities which such Initial Purchaser
may become obligated to purchase pursuant to the provisions of Section 11
hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the office of Brown &
Wood llp, One World Trade Center, New York, New York 10048, or at such other
place as shall be agreed upon by the Initial Purchasers and the Company, at 9:00
A.M. on the third business day after the date hereof (unless postponed in
accordance with the provisions of Section 11), or such other time not later than
ten
9
business days after such date as shall be agreed upon by the Initial Purchasers
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 Purchasers for the respective accounts of the Initial Purchasers of
the Securities to be purchased by them. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the Initial Purchasers, may (but shall not be obligated to)
make payment of the purchase price for the Securities to be purchased by any
Initial Purchaser whose funds have not been received by the Closing Time, but
such payment shall not relieve such Initial Purchaser from its obligations
hereunder. The certificates representing the Securities shall be registered in
the name of Cede & Co. pursuant to the DTC Agreement and shall be made available
for examination and packaging by the Initial Purchasers in The City of New York
not later than 10:00 A.M. on the last business day prior to the Closing Time.
(c) Qualified Institutional Buyer. Each Initial Purchaser severally and not
jointly represents and warrants to, and agrees with, the Company that it is a
"qualified institutional buyer" within the meaning of Rule 144A under the 1933
Act (a "Qualified Institutional Buyer") and an "accredited investor" within the
meaning of Rule 501(a) under the 1933 Act.
(d) Denominations; Registration. Certificates for the Securities shall be
in such denominations ($1,000 or integral multiples thereof) and registered in
such names as the Initial Purchasers may request in writing at least one full
business day before the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
Initial Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will furnish
to each Initial Purchaser, without charge, such number of copies of the
Preliminary Offering Memorandum, the Final Offering Memorandum and any
amendments and supplements thereto and documents incorporated by reference
therein as such Initial Purchaser may reasonably request prior to the Placement
Completion Date (as defined below).
(b) Notice and Effect of Material Events. The Company will promptly notify
each 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 Placement Completion Date, any
material changes in or affecting, or any developments involving prospective
material changes in or affecting, the condition, financial or otherwise, or the
earnings or business of the Company and its subsidiaries 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 any
event shall occur as a result of which it is necessary, in the reasonable
opinion of the Company, its counsel, the Initial Purchasers or counsel for the
Initial Purchasers, 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
10
Offering Memorandum by preparing and furnishing to each 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 Purchasers) 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. The Company will
advise each Initial Purchaser promptly of any proposal to amend or supplement
the Offering Memorandum and will not effect such amendment or supplement without
the consent of the Initial Purchasers. Neither the consent of the Initial
Purchasers, 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) Qualification of Securities for Offer and Sale. The Company will use
its reasonable best efforts, in cooperation with the Initial Purchasers, to
qualify the Securities for offering and sale under the applicable securities
laws of such jurisdictions as the Initial Purchasers may designate and will
maintain such qualifications in effect as long as required for the sale of the
Securities; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
(e) Rating of Securities. The Company shall take all reasonable action
necessary to enable Standard & Poor's Ratings Group, a division of The ▇▇▇▇▇▇-
▇▇▇▇ Companies, Inc. ("S&P"), and ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") to
provide their respective credit ratings of the Securities.
(f) DTC. The Company will cooperate with the Initial Purchasers and use its
reasonable best efforts to permit the Securities to be eligible for clearance
and settlement through the facilities of DTC.
(g) Use of Proceeds. The Company will use the proceeds received by it from
the sale of the Securities in the manner specified in the Offering Memorandum
under "Use of Proceeds".
(h) Restriction on Sale of Securities. During a period of nine days from
the date of the Offering Memorandum, the Company will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 or securities of the Company that are
convertible into, or exchangeable for, 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
and any filing of the Offering Memorandum (including financial statements and
any schedules or exhibits and any
11
document incorporated therein by reference) and of each amendment or supplement
thereto, (ii) the preparation, reproduction and delivery to the Initial
Purchasers of this Agreement, any Agreement Among Initial Purchasers, the
Indenture and such other documents as may be required in connection with the
offering, purchase, sale and delivery of the Securities, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the Initial
Purchasers, including any charges of DTC in connection therewith; (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Initial Purchasers in connection therewith
and in connection with the preparation of the Blue Sky Survey, any supplement
thereto and any Legal Investment Survey, (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 Purchasers in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company shall reimburse the Initial Purchasers for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchasers.
SECTION 5. Conditions of Initial Purchasers' Obligations. The obligations
of the several Initial Purchasers 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
Purchasers shall have received the favorable opinions, dated as of the Closing
Time, of (i) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ (a partnership including professional
corporations), counsel for the Company, in form and substance reasonably
satisfactory to counsel for the Initial Purchasers, to the effect set forth in
Exhibit A hereto and (ii) ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President and General
Counsel of the Company, in form and substance reasonably satisfactory to counsel
for the Initial Purchasers, to the effect set forth in Exhibit B hereto.
(b) Opinion of Counsel for Initial Purchasers. At the Closing Time, the
Initial Purchasers shall have received the favorable opinion, dated as of the
Closing Time, of Brown & Wood llp, counsel for the Initial Purchasers, with
respect to the matters set forth in (i) (1) (with respect to corporate existence
and good standing only), (3) through (5), inclusive, (6) (with respect to the
information under the headings "Description of Notes and Debentures" and
"Exchange Offer; Registration Rights") and (ii) the last paragraph on page 5 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 Purchasers. 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.
12
(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 Offering Memorandum, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Initial
Purchasers 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 change, (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) Accountant's Comfort Letters. At the time of the execution of this
Agreement, the Initial Purchasers shall have received from Ernst & Young LLP,
PricewaterhouseCoopers LLP and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chartered Accountants letters,
each dated such date, in form and substance reasonably satisfactory to the
Initial Purchasers, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to Initial Purchasers 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 Purchasers
shall have received from Ernst & Young LLP, PricewaterhouseCoopers LLP and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chartered Accountants letters, each dated as of the Closing
Time, to the effect that they reaffirm the statements made in the letters
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 Baa2 by ▇▇▇▇▇'▇ and BBB by S&P, and the Company shall have
delivered to the Initial Purchasers a letter dated the Closing Time, from each
such rating agency, or other evidence reasonably satisfactory to the Initial
Purchasers, confirming that the Securities have been assigned such ratings; and
since the date of this Agreement, there shall not have occurred a downgrading in
the rating assigned to the Securities or any of the Company's other securities
by any nationally recognized securities rating agency, 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) Registration Rights Agreement. At the Closing Time, the Registration
Rights Agreement shall have been fully executed and delivered by the Company.
(h) Additional Documents. At the Closing Time, counsel for the Initial
Purchasers shall have been furnished with such documents and opinions 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
13
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 Purchasers and counsel for the Initial Purchasers.
(i) 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 Purchasers 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 and 8 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. Each of the Initial Purchasers 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. Offers
and sales of the Securities will be made only by the Initial Purchasers or
Affiliates thereof qualified to do so in the jurisdictions in which such offers
or sales are made. Each such offer or sale shall only be made to persons whom
the offeror or seller, or any person acting on behalf of the offeror or seller,
reasonably believes to be Qualified Institutional Buyers.
(ii) No General Solicitation. The Securities will be offered by
approaching prospective Subsequent Purchasers on an individual basis. No general
solicitation or general advertising (within the meaning of Rule 502(c) under the
1933 Act) will be used in the United States in connection with the offering of
the Securities.
(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, in connection with an offer and sale to such purchaser pursuant to
clause (a) above, each such third party shall, in the judgment of the applicable
Initial Purchaser, be a Qualified Institutional Buyer.
(iv) Subsequent Purchaser Notification. Each Initial Purchaser will
take reasonable steps to inform persons acquiring Securities from such Initial
Purchaser 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 prior to the earlier of (x) the date when such
Securities can be sold pursuant to Rule 144 under the 1933 Act without any
limitations under clauses (c), (e), (f) and (h) of Rule 144 and (y) the date
which is two years after the later of the original issuance date thereof and the
last date on which the Company or any "affiliate" of the Company was the owner
of such Securities (or any predecessor Securities), except (1) to the Company or
any subsidiary thereof, (2) to the Initial Purchasers, (3) pursuant to a
registration statement which has been declared effective under the 1933 Act, (4)
as long as the Securities are eligible for resale pursuant to Rule 144A, to a
person whom the seller reasonably believes is a Qualified
14
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 (5)
pursuant to any other available exemption from the registration requirements of
the 1933 Act.
(v) Restrictions on Transfer. The transfer restrictions and the other
provisions set forth in the Officers' Certificate (as defined in the Indenture)
establishing the form and terms of the Securities pursuant to Sections 2.1 of
the Indenture, including the legend required thereby, shall apply to the
Securities except as otherwise agreed by the Company and the Initial Purchasers.
Following the sale of the Securities by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to the Company for any losses, damages or liabilities
suffered or incurred by the Company, including any losses, damages or
liabilities under the 1933 Act, arising from or relating to any resale or
transfer of any Security.
(vi) Delivery of Offering Memorandum. Each Initial Purchaser will
deliver to each purchaser of the Securities from such Initial Purchaser, in
connection with its original distribution of the Securities, a copy of the
Offering Memorandum, as amended and supplemented at the date of such delivery.
(vii) Placement Completion Date. The Initial Purchasers will notify
the Company in writing as soon as possible, but in any event within five
business days, after they have completed the placement of the Securities (the
"Placement Completion Date").
(b) Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:
(i) In connection with the original distribution of the Securities,
the Company agrees that, prior to any offer or resale of the Securities by the
Initial Purchasers, the Initial Purchasers and counsel for the Initial
Purchasers shall have the right to make reasonable inquiries into the business
of the Company and its subsidiaries. The Company also agrees to provide answers
to each prospective Subsequent Purchaser of Securities who so requests
concerning the Company and its subsidiaries (to the extent that such information
is available or can be acquired and made available to prospective Subsequent
Purchasers without unreasonable effort or expense and to the extent the
provision thereof is not prohibited by applicable law) and the terms and
conditions of the offering of the Securities, as provided in the Offering
Memorandum.
(ii) Integration. Except following the effectiveness of the
Registration Statement, the Company agrees that it will not and will cause its
Affiliates not to make any offer or sale 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 Purchasers, (ii)
the resale of the Securities by the Initial Purchasers to Subsequent Purchasers
or (iii) the resale of the Securities by such Subsequent Purchasers to others)
the exemption from the registration
15
requirements of the 1933 Act provided by Section 4(2) thereof or by Rule 144A
thereunder or otherwise.
(iii) Rule 144A Information. The Company agrees that, in order to
render the Securities eligible for resale pursuant to Rule 144A under the 1933
Act, until the earlier of (i) the second anniversary of the original issuance
date of the Securities and (ii) the date when no 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 (such information, whether made available to holders or
prospective purchasers or furnished to the Commission, is herein referred to as
"Additional Information").
(iv) 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 to, purchase or agree to purchase or otherwise acquire
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) unless, immediately upon any such purchase, the Company or any
Affiliate shall submit such Securities to the Trustee for cancellation.
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchasers. The Company agrees to indemnify
and hold harmless each Initial Purchaser and each person, if any, who controls
any 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, as incurred, 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 in any
Additional Information, 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, as incurred, 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, as incurred (including
the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably
incurred in investigating, preparing to defend 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
16
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 any Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Offering Memorandum (or any amendment or supplement thereto) and provided,
further, that as to the Preliminary Offering Memorandum this indemnity agreement
shall not inure to the benefit of any Initial Purchaser or any person
controlling that Initial Purchaser on account of any loss, claim, damage,
liability or action arising from the sale of Securities to any person by that
Initial Purchaser if that Initial Purchaser failed to send or give a copy of the
Final Offering Memorandum, as the same may be amended or supplemented, to that
person and the untrue statement or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact in such Preliminary
Offering Memorandum was corrected in said amended or supplemented Final Offering
Memorandum and the delivery thereof would have constituted a complete defense to
the claim of that person, unless such failure resulted from non-compliance by
the Company with Section 3(a). For purposes of the second proviso to the
immediately preceding sentence, the term Final Offering Memorandum shall not be
deemed to include the documents incorporated by reference therein, and no
Initial Purchaser shall be obligated to send or give any supplement or amendment
to any document incorporated by reference in a Preliminary Offering Memorandum
or supplement thereto or the Final Offering Memorandum to any person. The
foregoing indemnity agreement is in addition to any liability which the Company
may otherwise have to any Initial Purchaser or to any controlling person of that
Initial Purchaser.
(b) Indemnification of Company, Directors and Officers. Each Initial
Purchaser severally agrees to indemnify and hold harmless the Company, its
directors, 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 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 such Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇
expressly for use in the Offering Memorandum (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each 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 to the extent it is not
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 ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the
17
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. No indemnifying party shall, without the prior
written consent of the indemnified parties, 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 7 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.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request 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, as incurred, (i) in such proportion 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
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 Purchasers 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 Purchasers 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 and the total underwriting discount received by the Initial
Purchasers, bear to the aggregate initial offering price of the Securities.
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 any such untrue or
18
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 Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing to defend 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 8, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Initial Purchaser has otherwise been required to pay 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls an
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 such Initial
Purchaser, and each director of the Company, 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.
The Initial Purchasers' respective obligations to contribute pursuant to this
Section 8 are several in proportion to the principal amount of Securities set
forth opposite their respective names in Schedule A hereto and not joint.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Initial Purchaser or controlling person, or by or on behalf
of the Company, and shall survive delivery of the Securities to the Initial
Purchasers.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Initial Purchasers 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
19
time of execution of this Agreement or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects 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 reasonable judgment of the Initial Purchasers,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities 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 National Market System has been suspended or materially limited
(other than in accordance with New York Stock Exchange Rules 80A and 80B or any
similar rules of the American Stock Exchange or the NASDAQ National Market
System regarding limitations on trading during significant market declines and
extraordinary market volatility), 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 7 and
8 shall survive such termination and remain in full force and effect.
SECTION 11. Default By One or More of The Initial Purchasers. If one or
more of the Initial Purchasers fail at the Closing Time to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Initial Purchasers shall have the right, but not
the obligation, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Initial Purchasers, or any other Initial Purchasers, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Initial Purchasers shall not have completed such arrangements within such 24-
hour period, then this Agreement shall terminate without liability on the part
of any non-defaulting Initial Purchaser.
No action pursuant to this Section shall relieve any defaulting Initial
Purchaser from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Initial Purchasers or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Offering Memorandum or in any other
documents or arrangements.
SECTION 12. 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
20
form of telecommunication. Notices to the Initial Purchasers shall be directed
to ▇▇▇▇▇▇▇ ▇▇▇▇▇ at Sears Tower Building, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; notices to the Company shall be directed to it at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of the Corporate
Secretary.
SECTION 13. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Initial Purchasers 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 Purchasers 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 Purchasers 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
any Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. 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 Purchasers and the Company in accordance with its terms.
Very truly yours,
IMC GLOBAL INC.
By: /s/ ▇. ▇▇▇▇ ▇▇▇▇, ▇▇.
-----------------------------------
Name: ▇. ▇▇▇▇ ▇▇▇▇, ▇▇.
Title: Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
CHASE SECURITIES INC.
SALOMON BROTHERS INC
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Authorized Signatory
22
SCHEDULE A
Principal Principal
▇▇▇▇▇▇ ▇▇▇▇▇▇
of of
Notes Debentures
------------ ------------
Name of Initial Purchaser
-------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.............. $100,000,000 $ 50,000,000
▇.▇. ▇▇▇▇▇▇ & Co. Inc.................... 60,000,000 30,000,000
Chase Securities Inc..................... 20,000,000 10,000,000
Salomon Brothers Inc..................... 20,000,000 10,000,000
------------ ------------
Total.................................... $100,000,000 $200,000,000
============ ============
Sch-A
SCHEDULE B
IMC GLOBAL INC.
$200,000,000
6-1/2% Notes due 2003 (the "Notes")
$100,000,000
7-3/8% Debentures due 2018 (the "Debentures")
The Notes
---------
1. The initial offering price of the Notes shall be 99.614% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the Notes
shall be 99.014% of the principal amount thereof.
3. The interest rate on the Notes shall be 6-1/2% per annum.
The Debentures
--------------
1. The initial offering price of the Debentures shall be 98.995% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the
Debentures shall be 98.12% of the principal amount thereof.
3. The interest rate on the Debentures shall be 7-3/8% per annum.
Sch-B
SCHEDULE C
List of Significant Subsidiaries
--------------------------------
GSL corporation*,
a Delaware corporation
▇▇▇▇▇▇ Chemical Europe Limited,
an England corporation
▇▇▇▇▇▇ Chemical North America, Inc.,
a Delaware corporation
IMC AgriBusiness Inc.,
a Delaware corporation
IMC-Agrico Company,
a Delaware general partnership
IMC Central Canada Potash Inc.,
a Delaware corporation
IMC Chemicals Inc.*,
a Delaware corporation
IMC Global Operations Inc.,
a Delaware corporation
IMC Global Potash Holdings Inc.,
a Delaware corporation
IMC Inorganic Chemicals Inc.,
a Delaware corporation
IMC Kalium Carlsbad Potash Company,
a Delaware corporation
IMC Kalium Ltd.,
a Delaware corporation
______________________________
* Common stock has been pledged for the benefit of 10.25% Senior Secured
Discount Notes due July 15, 2001 issued by ▇▇▇▇▇▇ Chemical North America, Inc.
and 8.5% Senior Secured Notes due July 15, 2000 issued by Sifto Canada Inc.
Sch-C-1
IMC Kalium ▇▇▇▇▇ Corp.,
a Delaware corporation
IMC Salt Inc.,
a Delaware corporation
International Minerals & Chemical (Canada) Global Limited,
a Canada (Federal) corporation
KCL Holdings, Inc.,
a Delaware corporation
NAMSCO Inc.*,
a Delaware corporation
Phosphate Resource Partners Limited Partnership,
a Delaware limited partnership
Sifto Canada Inc.,
an Ontario corporation
The Vigoro Corporation,
a Delaware corporation
------------------
* Common stock has been pledged for the benefit of 10.25% Senior Secured
Discount Notes due July 15, 2001 issued by ▇▇▇▇▇▇ Chemical North America, Inc.
and 8.5% Senior Secured Notes due July 15, 2000 issued by Sifto Canada Inc.
Sch-C-2
