EXHIBIT 1.2
BAUSCH & LOMB INCORPORATED
$140,000,000 Floating Rate Convertible Senior Notes Due 2023*
Purchase Agreement
July 29, 2003
Citigroup Global Markets Inc.
As Representative of the Initial Purchasers
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Ladies and Gentlemen:
Bausch & Lomb Incorporated, a corporation organized under the laws of
New York (the "Company"), proposes to issue and sell to the several parties
named in Schedule I hereto (the "Initial Purchasers"), for whom you (the
"Representative") are acting as representative, $140,000,000 original principal
amount of its Floating Rate Convertible Senior Notes Due 2023 (the "Firm
Securities"). The Company also proposes to grant to the Initial Purchasers an
option to purchase up to $20,000,000 additional original principal amount of
such Notes (the "Option Securities" and, together with the Firm Securities, the
"Securities"). The Securities are convertible into shares of Common Stock, par
value $0.40 per share (the "Common Stock"), of the Company at the conversion
price set forth herein. The Securities are to be issued under an indenture,
dated as of September 1, 1991, between the Company and Citibank, N.A., as
trustee (the "Trustee"), as amended by Supplemental Indenture No. 1, dated May
13, 1998, Supplemental Indenture No. 2 dated July 29, 1998, Supplemental
Indenture No. 3 dated November 21, 2002, Supplemental Indenture No. 4 dated
August 1, 2003, and proposed to be amended by Supplemental Indenture No. 5 to be
dated the Closing Date (as defined herein) (as so supplemented, the
"Indenture"). The Securities will have the benefit of a registration rights
agreement (the "Registration Rights Agreement"), to be dated as of the Closing
Date, between the Company and the Initial Purchasers, pursuant to which the
Company will agree to register the resale of the Securities under the Act
subject to the terms and conditions therein specified. To the extent there are
no additional parties listed on Schedule I other than you, the term
Representative as used herein shall mean you as the Initial Purchasers, and the
terms Representative and Initial Purchasers shall mean either the singular or
plural as the context requires. The use of the neuter in this Agreement shall
include the feminine and masculine wherever appropriate. Certain terms used
herein are defined in Section 18 hereof.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities or the Common Stock issuable upon
conversion thereof under the Act in reliance upon exemptions from the
registration requirements of the Act.
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* Plus an option to purchase up to $20,000,000 additional original principal
amount from the Company.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated July 29, 2003 (as amended or
supplemented at the date thereof, including any and all exhibits thereto and any
information incorporated by reference therein, the "Preliminary Memorandum"),
and a final offering memorandum, dated July 29, 2003 (as amended or supplemented
at the Execution Time, including any and all exhibits thereto and any
information incorporated by reference therein, the "Final Memorandum"). Each of
the Preliminary Memorandum and the Final Memorandum sets forth certain
information concerning the Company, the Securities and the Common Stock issuable
upon conversion thereof. The Company hereby confirms that it has authorized the
use of the Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the Securities by
the Initial Purchasers. Unless stated to the contrary, any references herein to
the terms "amend", "amendment" or "supplement" with respect to the Final
Memorandum shall be deemed to refer to and include any information filed under
the Exchange Act subsequent to the Execution Time that is incorporated by
reference therein.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to each Initial Purchaser as set forth below in this Section 1:
(a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. At the Execution Time, on the
Closing Date and on any settlement date, the Final Memorandum did not and will
not (and any amendment or supplement thereto, at the date thereof, at the
Closing Date and on any settlement date, will not) contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the Company makes no
representation or warranty as to the information contained in or omitted from
the Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Initial Purchasers
through the Representative specifically for inclusion therein.
(b) None of the Company, its Affiliates, or any person acting on
its or their behalf has, directly or indirectly, made offers or sales of any
security, or solicited offers to buy, any security under circumstances that
would require the registration of the Securities or the Common Stock issuable
upon conversion thereof under the Act.
(c) None of the Company, its Affiliates, or any person authorized
to act on its or their behalf has: (i) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities, or (ii) engaged in any
directed selling efforts (within the meaning of Regulation S) with respect to
the Securities or the Common Stock issuable upon conversion thereof; and each of
the Company, its Affiliates and each person acting on its or their behalf has
complied with the offering restrictions requirement of Regulation S.
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
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(e) The Company has been advised by the NASD's PORTAL Market that
the Securities have been designated PORTAL-eligible securities in accordance
with the rules and regulations of the NASD.
(f) No registration under the Act of the Securities is required for
the offer and sale of the Securities to or by the Initial Purchasers in the
manner contemplated herein and in the Final Memorandum.
(g) The Company is not, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Final Memorandum will not be, an "investment company" as defined in the
Investment Company Act, without taking account of any exemption arising out of
the number of holders of the Company's securities.
(h) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(i) Other than in connection with the contemporaneous sale of
$50,000,000 of the Company's 5.90% Senior Notes due 2008 or the Company's
proposed repurchase (the "Repurchase") of up to 1,000,000 shares of its Common
Stock with a portion of the proceeds of the offering of the Securities, the
Company has not paid or agreed to pay to any person any compensation for
soliciting another to purchase any securities of the Company (except as
contemplated in this Agreement).
(j) The Company has not taken, directly or indirectly, any action
designed to or that has constituted or that might reasonably be expected to
cause or result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(k) The Company (i) is a corporation duly organized, validly
existing and subsisting under the laws of the State of New York, (ii) has the
requisite corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Final Memorandum, (iii) is duly
qualified as a foreign corporation to transact business and is in good standing
(with respect to the jurisdictions which recognize such concept) 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 to qualify or to be in good standing would not have a material adverse
effect on the business, properties, financial condition or results of operations
of the Company and its subsidiaries taken as a whole (a "Material Adverse
Effect").
(l) Each subsidiary of the Company is a corporation, partnership,
limited liability company or business trust duly incorporated or organized,
validly existing and in good standing (to the extent the jurisdiction of its
incorporation recognizes such concept) under the laws of the jurisdiction of its
incorporation or organization, with the requisite power and authority to own,
lease and operate its properties and conduct its business as described in the
Final Memorandum, except where the failure to be so organized or to have such
power and authority would not result in a Material Adverse Effect; each such
subsidiary is duly qualified as a foreign corporation or organization to
transact business and is in good standing (with respect to the jurisdictions
which
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recognize such concept) 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 to qualify or to be in good
standing would not result in a Material Adverse Effect.
(m) Except as otherwise disclosed in the Final Memorandum, all of
the issued and outstanding shares of capital stock or other ownership interests
of each subsidiary of the Company which constitutes a "significant subsidiary"
as defined in Item 1-02(w) of Regulation S-X (each a "Significant Subsidiary")
are owned by the Company directly or through subsidiaries (except for shares
necessary to qualify directors or to maintain any minimum number of shareholders
required by law), free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity except as described in the Final Memorandum
and except for such security interests, mortgages, pledges, liens, encumbrances,
claims or equities that are immaterial to the Company and its subsidiaries taken
as a whole.
(n) The Company has outstanding equity capitalization as set forth
in the Final Memorandum (except for subsequent issuances, if any, pursuant to
employee benefit plans or agreements or pursuant to the exercise of convertible
securities or options); the capital stock of the Company conforms to the
description thereof contained in the Final Memorandum; the outstanding shares of
Common Stock have been duly authorized and validly issued and are fully paid and
non-assessable; the shares of Common Stock initially issuable upon conversion of
the Securities have been duly authorized and, when issued upon conversion of the
Securities against payment of the conversion price, will be validly issued,
fully paid and nonassessable; the Board of Directors of the Company has duly and
validly adopted resolutions reserving such shares of Common Stock for issuance
upon conversion of the Securities; the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive or other rights to subscribe
for the Securities or the shares of Common Stock issuable upon conversion
thereof; and, except as set forth in the Final Memorandum, no options, warrants
or other rights to purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding.
(o) The statements in the Final Memorandum under the headings
"Certain U.S. Federal Income Tax Considerations," "Description of the Notes" and
"Description of Common Stock" fairly summarize the matters therein described.
(p) This Agreement has been duly authorized, executed and delivered
by the Company.
(q) The Indenture has been duly authorized by the Company and, at
the Closing Date, will have been duly executed and delivered by the Company and
will constitute a valid and legally binding agreement of the Company,
enforceable in accordance with its terms except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws of general applicability
relating to or affecting the enforcement of creditors' rights and to general
equity principles.
(r) The Securities have been duly authorized, and, when delivered
pursuant to this Underwriting Agreement, will have been duly executed, issued
and delivered and (assuming the due authentication thereof by the Trustee) will
constitute valid and legally binding
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obligations of the Company, enforceable in accordance with their terms except as
the same may be limited by bankruptcy, insolvency, reorganization or other laws
of general applicability relating to or affecting the enforcement of creditors'
rights and to general equity principles, will be entitled to the benefits
provided by the Indenture and will be convertible into Common Stock in
accordance with their terms;
(s) The Registration Rights Agreement has been duly authorized by
the Company and, when executed and delivered by the Company, will constitute the
legal, valid, binding and enforceable instrument of the Company (subject, as to
the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity).
(t) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with the
transactions contemplated herein, in the Indenture or in the Registration Rights
Agreement, except such (i) as may be required under the blue sky laws of any
jurisdiction in which the Securities are offered and sold and, in the case of
the Registration Rights Agreement, such as will be obtained under the Act and
the Trust Indenture Act, and (ii) such consents, approvals, authorizations,
orders, registrations, filings and/or qualifications which, if not obtained,
would not have a Material Adverse Effect or affect the validity of the
Securities or the legal authority of the Company to comply with the Securities,
the Indenture, the Registration Rights Agreement or this Agreement.
(u) The issuance and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture, the
Registration Rights Agreement, this Agreement and the consummation of the
transactions herein and therein contemplated, will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of the Company or any
of its subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, the conflict, breach or violation of
which would have a Material Adverse Effect, or affect the validity of the
Securities or the legal authority of the Company to comply with the terms of the
Securities, the Indenture or this Agreement, (ii) result in any violation of the
provisions of the organizational documents of the Company or any of its
Significant Subsidiaries or (iii) result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body, domestic
or foreign, having jurisdiction over the Company or any of its subsidiaries or
any of their properties, the violation of which would have a Material Adverse
Effect or affect the validity of the Securities or the legal authority of the
Company to comply with the Securities, the Indenture, the Registration Rights
Agreement or this Agreement.
(v) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included or incorporated by reference
in the Final Memorandum present fairly in all material respects the financial
condition, results of operations and cash flows of the Company as of the dates
and for the periods indicated, comply as to form with the applicable accounting
requirements of Regulation S-X and have been prepared in conformity
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with generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein); the summary
financial data set forth under the caption "Summary Financial Information" in
the Final Memorandum fairly present, on the basis stated in the Final
Memorandum, the information included therein;
(w) Other than as set forth in the Final Memorandum, (i) there are
no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which if determined adversely to the Company or such
subsidiary, would individually or in the aggregate, have a Material Adverse
Effect or which would materially and adversely affect the consummation of the
transactions contemplated under this Agreement, the Registration Rights
Agreement or the Indenture or the performance by the Company of its obligations
hereunder or thereunder and (ii) to the Company's knowledge no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
(x) PricewaterhouseCoopers LLP, who have certified the financial
statements of the Company and its consolidated subsidiaries included or
incorporated by reference in the Final Memorandum, are independent public
accountants with respect to the Company as required by the Securities Act and
the rules and regulations of the Commission thereunder.
(y) There are no stamp or other issuance or transfer taxes or
duties or other similar fees or charges required to be paid in connection with
the execution and delivery of this Agreement or the issuance or sale by the
Company of the Securities or upon the issuance of Common Stock upon the
conversion thereof.
(z) In the ordinary course of its business, the Company
periodically reviews the effect of applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws") on the business, operations and properties
of the Company and its subsidiaries. In the course of that review, the Company
uses reasonable business efforts to identify any processes or sites which are
reasonably likely to require any capital or operating expenditures for clean-up,
closure of properties or compliance with Environmental Laws, or any permit,
license or approval; and to evaluate associated costs and liabilities with
respect to such actions, any related constraints on operating activities, and
any potential liabilities to third parties. On the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not, individually or in the aggregate, have a Material Adverse Effect,
except as set forth in the Final Memorandum.
(aa) Other than as set forth in the Final Memorandum: (i) the
Company and its subsidiaries take commercially reasonable steps to determine
that they own or have the right to use all patents, trademarks, service marks,
trade names, copyrights, trade secrets and confidential information
("Intellectual Property") used in the business of the Company and its
subsidiaries as described in the Final Memorandum and have taken all
commercially reasonable steps to secure assignments of such Intellectual
Property from their respective employees and contractors, except where the
failure to own, have the right to use or take such steps to secure assignments
of such Intellectual Property would not reasonably be expected to have a
Material Adverse Effect; (ii) to the Company's knowledge, none of the technology
employed by the Company or its
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subsidiaries has been obtained or is being used by the Company or its
subsidiaries in violation of any contractual or fiduciary obligation binding on
the Company, its subsidiaries, or any of their respective directors or executive
officers or any of their respective employees or consultants, except for such
violations that would not reasonably be expected to have a Material Adverse
Effect; and (iii) the Company and its subsidiaries have taken and will maintain
reasonable measures to prevent the unauthorized dissemination or publication of
their own confidential information, except where the failure to take or maintain
such measures would not reasonably be expected to have a Material Adverse
Effect. Except as set forth in the Final Memorandum, to the Company's knowledge,
neither the Company nor any of its subsidiaries has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties. Except as set forth in the Final Memorandum,
the Company and its subsidiaries have not received any written charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation of the Intellectual Property of any
third party (including any claim that the Company or any of its subsidiaries
must license or refrain from using any intellectual property rights of any third
party) which, if the subject of any decision, ruling or finding adverse to the
ability of the Company to use such rights, the Company would, individually or in
the aggregate, have a Material Adverse Effect.
(bb) There is and has been no failure on the part of the Company or
any of the Company's directors or officers, in their capacities as such, to
comply with any provision of the Sarbanes Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the "Sarbanes Oxley Act"),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(cc) Prior to the date hereof, the Company has furnished to the
Representative letters addressed to the Representative, each substantially in
the form of Exhibit A hereto, duly executed by each officer and director of the
Company identified by the Representative.
Any certificate signed by any officer of the Company and delivered to the
Representative or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Initial Purchaser.
2. PURCHASE AND SALE. (a) Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Initial Purchaser, and each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 97.50% of the original principal amount thereof, plus accrued interest,
if any, from August 4, 2003 to the Closing Date, the original principal amount
of Firm Securities set forth opposite such Initial Purchaser's name in Schedule
I hereto. The initial purchasers have agreed to reimburse the Company for
$175,000 of its expenses in connection with the offering of the Securities.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Initial Purchasers to purchase, severally and not jointly,
the Option Securities at the same purchase price as the Initial Purchasers shall
pay for the Firm Securities, plus accrued interest, if any, from August 4, 2003
to the settlement date for the Option Securities. The option may be
7
exercised in whole or in part at any time (but not more than once) on or before
the 13th day after the date of the Final Memorandum upon written or telegraphic
notice by the Representative to the Company setting forth the original principal
amount of Option Securities as to which the several Initial Purchasers are
exercising the option and the settlement date. Delivery of the Option
Securities, and payment therefor, shall be made as provided in Section 3 hereof.
The original principal amount of Option Securities to be purchased by each
Initial Purchaser shall be the same percentage of the total original principal
amount of Option Securities to be purchased by the several Initial Purchasers as
such Initial Purchaser is purchasing of the Firm Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional Securities.
3. DELIVERY AND PAYMENT. (a) Delivery of and payment for the Firm
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 A.M., New York City time, on August 4,
2003, or at such time on such later date not more than three Business Days after
the foregoing date as the Representative shall designate, which date and time
may be postponed by agreement between the Representative and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representative for the respective accounts of the several
Initial Purchasers against payment by the several Initial Purchasers through the
Representative of the purchase price thereof to or upon the order of the Company
by wire transfer payable in same-day funds to the account specified by the
Company. Delivery of the Securities shall be made through the facilities of The
Depository Trust Company unless the Representative shall otherwise instruct.
(b) If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the Option Securities (at the expense of the Company) to the Representative on
the date specified by the Representative (which shall be within three Business
Days after exercise of said option) for the respective accounts of the several
Initial Purchasers, against payment by the several Initial Purchasers through
the Representative of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to the account specified by
the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representative on the settlement date for
the Option Securities, and the obligation of the Initial Purchasers to purchase
the Option Securities shall be conditioned upon receipt of, supplemental
opinions, certificates and letters confirming as of such date the opinions,
certificates and letters delivered on the Closing Date pursuant to Section 6
hereof.
4. OFFERING BY INITIAL PURCHASERS. (a) Each Initial Purchaser
acknowledges that the Securities and the Common Stock issuable upon conversion
thereof have not been and will not be registered under the Act and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons, except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Act.
(b) Each Initial Purchaser, severally and not jointly, represents
and warrants to and agrees with the Company that:
8
(i) it has not offered or sold, and will not offer or sell,
any Securities within the United States or to, or for the account or
benefit of, U.S. persons (x) as part of their distribution at any time
or (y) otherwise until one year after the later of the commencement of
the offering and the date of closing of the offering except:
(A) to those it reasonably believes to be "qualified
institutional buyers" (as defined in Rule 144A
under the Act) or
(B) in accordance with Rule 903 of Regulation S;
(ii) neither it nor any person acting on its behalf has made
or will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising
(within the meaning of Regulation D) in the United States;
(iii) in connection with each sale pursuant to Section
4(b)(i)(A), it has taken or will take reasonable steps to ensure that
the purchaser of such Securities is aware that such sale is being made
in reliance on Rule 144A;
(iv) any information provided by the Initial Purchasers to
publishers of publicly available databases about the terms of the
Securities shall include a statement that the Securities have not been
registered under the Act and are subject to restrictions under Rule
144A under the Act and Regulation S;
(v) it will not engage in hedging transactions with regard
to the Securities prior to the expiration of the distribution
compliance period as (defined in Regulation S), unless in compliance
with the Act;
(vi) neither it, nor any of its Affiliates nor any person
acting on its or their behalf has engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with
respect to the Securities;
(vii) it has not entered and will not enter into any
contractual arrangement with any distributor (within the meaning of
Regulation S) with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the
Company;
(viii) it and they have complied and will comply with the
offering restrictions requirement of Regulation S;
(ix) at or prior to the confirmation of sale of Securities
(other than a sale of Securities pursuant to Section 4(b)(i)(A) of
this Agreement), it shall have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the distribution compliance period
(within the meaning of Regulation S) a confirmation or notice to
substantially the following effect:
9
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "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, or (ii) otherwise until one year
after the later of the commencement of the offering and the
date of closing of the offering, except in either case in
accordance with Regulation S or Rule 144A under the Act.
Additional restrictions on the offer and sale of the Securities
and the Common Stock issuable upon conversion thereof are
described in the offering memorandum for the Securities. Terms
used in this paragraph have the meanings given to them by
Regulation S."
(x) it acknowledges that additional restrictions on the
offer and sale of the Securities and the Common Stock issuable upon
conversion thereof are described in the Final Memorandum;
(xi) it has not offered or sold and, prior to the date six
months after the date of issuance of the Securities, will not offer or
sell any Securities to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or as agent) for the
purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995;
(xii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation
to the Securities in, from or otherwise involving the United Kingdom;
(xiii) it has only communicated or caused to be communicated
and will only communicate or cause to be communicated any invitation
or inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) received by it in connection with the issue or
sale of any Securities, in circumstances in which section 21(1) of the
FSMA does not apply to the Company; and
(xiv) it is an "accredited investor" (as defined in Rule
501(a) of Regulation D).
5. AGREEMENTS. The Company agrees with each Initial Purchaser
that:
(a) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period referred
to in paragraph (c) below, as many copies of the Final Memorandum and any
amendments and supplements thereto as they may reasonably request.
(b) The Company will not amend or supplement the Final Memorandum,
other than by filing documents under the Exchange Act that are incorporated by
reference therein, without the prior written consent of the Representative;
PROVIDED, HOWEVER, that, prior to
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the completion of the distribution of the Securities by the Initial Purchasers
(as determined by the Initial Purchasers), the Company will not file any
document under the Exchange Act that is incorporated by reference in the Final
Memorandum unless, prior to such proposed filing, the Company has furnished the
Representative with a copy of such document for their review and the
Representative have not reasonably objected to the filing of such document. The
Company will promptly advise the Representative when any document filed under
the Exchange Act that is incorporated by reference in the Final Memorandum shall
have been filed with the Commission.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the Representative), any
event occurs as a result of which the Final Memorandum, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it should
be necessary to amend or supplement the Final Memorandum to comply with
applicable law, the Company will promptly (i) notify the Representative of any
such event; (ii) subject to the requirements of paragraph (b) of this Section 5,
prepare an amendment or supplement that will correct such statement or omission
or effect such compliance; and (iii) supply any supplemented or amended Final
Memorandum to the several Initial Purchasers and counsel for the Initial
Purchasers without charge in such quantities as they may reasonably request.
(d) The Company will arrange, if necessary, for the qualification
of the Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Representative may designate and will maintain such
qualifications in effect so long as required for the sale of the Securities;
PROVIDED that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any jurisdiction where
it is not now so subject. The Company will promptly advise the Representative of
the receipt by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(e) The Company will not, and will not permit any of its Affiliates
to, resell any Securities or Shares of Common Stock issued upon conversion
thereof that have been acquired by any of them.
(f) None of the Company, its Affiliates, or any person acting on
its or their behalf (other than the Initial Purchasers) will, directly or
indirectly, make offers or sales of any security, or solicit offers to buy any
security, under circumstances that would require the registration of the
Securities or Common Stock issuable upon conversion thereof under the Act.
(g) Other than in connection with sales of Securities pursuant to
the registration statement required to be filed by the Company under the
Registration Rights Agreement, none of the Company, its Affiliates, or any
person acting on its or their behalf other than the Initial Purchasers will
engage in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of the Securities
in the United States.
11
(h) So long as any of the Securities or the Common Stock issuable
upon the conversion thereof are "restricted securities" within the meaning of
Rule 144(a)(3) under the Act, the Company will, during any period in which it is
not subject to and in compliance with Section 13 or 15(d) of the Exchange Act,
provide to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information required to be
provided by Rule 144A(d)(4) under the Act. This covenant is intended to be for
the benefit of the holders, and the prospective purchasers designated by such
holders, from time to time of such restricted securities.
(i) Other than in connection with sales of Securities pursuant to
the registration statement required to be filed by the Company under the
Registration Rights Agreement, none of the Company, its Affiliates, or any
person acting on its or their behalf (other than the Initial Purchasers) will
engage in any directed selling efforts with respect to the Securities, and each
of them will comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by Regulation S.
(j) Other than in connection with sales of Securities pursuant to
the registration statement required to be filed by the Company under the
Registration Rights Agreement, any information provided by the Company to
publishers of publicly available databases about the terms of the Securities
shall include a statement that the Securities have not been registered under the
Act and are subject to restrictions under Rule 144A under the Act and Regulation
S.
(k) The Company will cooperate with the Representative and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(l) The Company will reserve and keep available at all times, free
of pre-emptive rights, the full number of Shares of Common Stock issuable upon
conversion of the Securities.
(m) The Company will not for a period of 90 days following the
Execution Time, without the prior written consent of Citigroup, directly or
indirectly, offer, sell, contract to sell, pledge, otherwise dispose of, enter
into any transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any Affiliate
of the Company or any person in privity with the Company or any Affiliate of the
Company of, file (or participate in the filing of) a registration statement with
the Commission in respect of, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act in respect of, any shares of capital stock of the
Company or any securities convertible into, or exercisable or exchangeable for,
shares of capital stock of the Company (other than the Securities), or publicly
announce an intention to effect any such transaction; PROVIDED, HOWEVER, that
the Company may file a registration statement with respect to, and issue and
sell Common Stock or securities convertible into or exchangeable for Common
Stock pursuant to any employee stock option plan, stock ownership plan or
dividend reinvestment plan of the Company described in the Final Memorandum and
in
12
effect at the Execution Time, and the Company may issue Common Stock issuable
upon the conversion of securities or the exercise of warrants outstanding at the
Execution Time and described in the Final Memorandum.
(n) Other than in connection with the Repurchase, the Company will
not take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities. The
Company agrees that the Repurchase will be conducted in compliance with Rule
10b-18 and Regulation M under the Exchange Act, to the extent applicable.
(o) Between the date hereof and the Closing Date, the Company will
not do or authorize any act or thing that would result in an adjustment of the
conversion price.
(p) The Company agrees to pay the costs and expenses relating to
the following matters: (i) the preparation of the Indenture and the Registration
Rights Agreement, the issuance of the Securities, the fees of the Trustee and
the issuance of the Common Stock upon conversion of the Securities; (ii) the
preparation, printing or reproduction of the Preliminary Memorandum and the
Final Memorandum and each amendment or supplement to either of them; (iii) the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the Preliminary
Memorandum and the Final Memorandum, and all amendments or supplements to either
of them, as may, in each case, be reasonably requested for use in connection
with the offering and sale of the Securities; (iv) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities; (v)
any stamp or transfer taxes in connection with the original issuance and sale of
the Securities; (vi) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Securities;
(vii) any registration or qualification of the Securities for offer and sale
under the securities or blue sky laws of the several states and any other
jurisdictions specified pursuant to Section 5(d) (including filing fees and the
reasonable fees and expenses of counsel for the Initial Purchasers relating to
such registration and qualification); (viii) admitting the Securities for
trading in the PORTAL Market; (ix) the transportation and other expenses
incurred by or on behalf of Company representative in connection with
presentations to prospective purchasers of the Securities; (x) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (xi) all other costs
and expenses incident to the performance by the Company of its obligations
hereunder.
(q) The Company will, for a period of twelve months following the
Execution Time, furnish to the Representative (i) all reports or other
communications (financial or other) generally made available to stockholders,
and deliver such reports and communications to the Representative as soon as
they are available, unless such documents are furnished to or filed with the
Commission or any securities exchange on which any class of securities of the
Company is listed and generally made available to the public and (ii) such
additional information concerning the business and financial condition of the
Company as the Representative may from time to time reasonably request (such
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to
stockholders).
13
(r) The Company will comply with all applicable securities and
other laws, rules and regulations, including, without limitation, the Sarbanes
Oxley Act, and use its best efforts to cause the Company's directors and
officers, in their capacities as such, to comply with such laws, rules and
regulations, including, without limitation, the provisions of the Sarbanes Oxley
Act.
6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASERS. The
obligations of the Initial Purchasers to purchase the Firm Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties of the Company contained herein at the Execution
Time, the Closing Date and any settlement date pursuant to Section 3 hereof, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Company shall have requested and caused ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President and General Counsel of the Company, to furnish to the
Representative his opinion, dated the Closing Date and addressed to the
Representative, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation subsisting under the laws of the State of
New York, with power and authority to own, lease and operate its
properties and conduct its business as described in the Final
Memorandum;
(ii) the Company is duly qualified as a foreign corporation
to transact business and is in good standing (with respect to the
jurisdictions which recognize such concept) 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 to qualify or to be in good standing would not have
a Material Adverse Effect;
(iii) each Significant Subsidiary is a corporation,
partnership, limited liability company or business trust duly
incorporated or organized, validly existing and in good standing (to
the extent the jurisdiction of its incorporation recognizes such
concept) under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own, lease and
operate its properties and conduct its business as described in the
Final Memorandum; each Significant Subsidiary is duly qualified as a
foreign corporation to transact business and is in good standing (with
respect to the jurisdictions which recognize such concept) 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 to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Final Memorandum all of the issued and
outstanding capital stock or other ownership interests of each
Significant Subsidiary of the Company has been duly authorized and
validly issued, is fully paid and non-assessable and (except for
shares necessary to qualify directors or to maintain any minimum
number of shareholders required by law and/or shares of those
subsidiaries for which the Company does not own all of the
14
outstanding capital stock as described on an exhibit to the opinion)
are owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity except as described in the Final Memorandum and except
for such security interests, mortgages, pledges, liens, encumbrances,
claims or equities that are immaterial to the Company and its
subsidiaries taken as a whole;
(iv) the Company's authorized equity capitalization is as set
forth in the Final Memorandum and the capital stock of the Company
conforms to the description thereof contained in the Final Memorandum
and the Securities conform to the description thereof contained in the
Final Memorandum; the outstanding shares of Common Stock have been
duly authorized and validly issued and are fully paid and
nonassessable; the shares of Common Stock initially issuable upon
conversion of the Securities have been duly authorized and, when
issued upon conversion of the Securities against payment of the
conversion price, will be validly issued, fully paid and
nonassessable; the Board of Directors of the Company has duly and
validly adopted resolutions reserving such shares of Common Stock for
issuance upon conversion of the Securities; the holders of the
outstanding shares of capital stock of the Company are not entitled to
any preemptive or other rights to subscribe for the Securities or the
shares of Common Stock issuable upon conversion thereof; and, except
as set forth in the Final Memorandum, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any securities for,
shares of capital stock of or ownership interests in the Company are
outstanding;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
agreement of the Company, enforceable in accordance with its terms
except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws of general applicability relating to or
affecting the enforcement of creditors' rights and to general equity
principles; and the Indenture is in a form which will permit it to be
qualified under the Trust Indenture Act;
(vii) the Securities have been duly authorized, executed and
delivered and (assuming the due authentication thereof by the Trustee)
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms except as the same may be
limited by bankruptcy, insolvency, reorganization or other laws of
general applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles, will be entitled
to the benefits provided by the Indenture and will be convertible into
Common Stock in accordance with their terms;
15
(viii) the Registration Rights Agreement has been duly
authorized, executed and delivered and constitutes the legal, valid,
binding and enforceable instrument of the Company except as the same
may be limited by bankruptcy, insolvency, reorganization or other laws
of general applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles;
(ix) the statements set forth under the headings "Description
of the Notes" and "Description of Common Stock" in the Final
Memorandum, insofar as such statements purport to summarize certain
provisions of the Securities, the Indenture, the Common Stock and the
Registration Rights Agreement, provide a fair summary of such
provisions;
(x) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property that is
not adequately disclosed in the Final Memorandum, except in each case
for such proceedings that, if the subject of an unfavorable decision,
ruling or finding would not singly or in the aggregate, have a
Material Adverse Effect;
(xi) no consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, in the Indenture
or in the Registration Rights Agreement, except such as may be
required under the blue sky or securities laws of any jurisdiction in
which the Securities are offered or sold (as to which such counsel
need express no opinion beyond that set forth in paragraph (xiii)
below) and such other approvals (specified in such opinion) as have
been obtained;
(xii) the issuance and sale of the Securities and the
compliance by the Company with all of the provisions of the
Securities, the Indenture, the Registration Rights Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated, will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of the
Company or any of its Significant Subsidiaries pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its
Significant Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Significant Subsidiaries is
subject, which would have a Material Adverse Effect or affect the
validity of the Securities or the legal authority of the Company to
comply with the terms of the Securities, the Indenture, the
Registration Rights Agreement or this Agreement, (ii) result in any
violation of the provisions of the organizational documents of the
Company or any of its Significant Subsidiaries or (iii) result in any
violation of any statute or any order, rule or regulation of any court
or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its
16
subsidiaries or any of their properties which would have a Material
Adverse Effect or affect the validity of the Securities or the legal
authority of the Company to comply with the Securities, the Indenture,
the Registration Rights Agreement or this Agreement;
(xiii) assuming the accuracy of the representations and
warranties and compliance with the agreements contained herein
(without regard to the representation found in Section 1(f)), no
registration under the Act of the Securities or the Common Stock
issuable upon conversion thereof, and no qualification of an indenture
under the Trust Indenture Act, are required for the sale and delivery
of the Securities by the Company to the Initial Purchasers or the
offer and sale by the Initial Purchasers of the Securities in the
manner contemplated herein and in the Final Memorandum; and
(xiv) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Memorandum, will not be an
"investment company" as defined in the Investment Company Act, without
taking account of any exemption arising out of the number of holders
of the Company's securities.
In addition to giving the opinions set forth above, such counsel shall
state that he has no reason to believe that at the Execution Time or on the
Closing Date the Final Memorandum contained or contains any untrue statement of
a material fact or omitted or omits to state any material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading (in each case, other than the financial statements and
other financial information contained therein, as to which such counsel need
express no belief).
In rendering such opinion, such counsel may rely: (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York or the federal laws of the United States, to the extent such counsel
deems proper and specifies in such opinion, upon the opinion of other counsel of
good standing whom such counsel believes to be reliable and who are satisfactory
to counsel for the Underwriters and (B) as to matters of fact, to the extent
such counsel deems proper, on the certificates of responsible officers of the
Company and public officials. References to the Final Memorandum in this
paragraph (a) include any supplements thereto at the Closing Date.
(b) The Company shall have requested and caused ▇▇▇▇▇ Peabody LLP,
to furnish to the Representative their opinion, dated the Closing Date and
addressed to the Representative, to the effect that and the statements in the
Final Memorandum under the heading "Certain U.S. Federal Income Tax
Considerations" fairly summarize the matters therein described.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent such counsel deems proper, on the certificates of responsible
officers of the Company and public officials. References to the Final Memorandum
in this paragraph (b) include any supplements thereto at the Closing Date.
17
(c) The Representative shall have received from Mayer, Brown, ▇▇▇ &
Maw LLP, counsel for the Initial Purchasers, such opinion or opinions, dated the
Closing Date and addressed to the Representative, with respect to the issuance
and sale of the Securities, the Indenture, the Registration Rights Agreement,
the Final Memorandum (as amended or supplemented at the Closing Date) and other
related matters as the Representative may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representative a
certificate of the Company, signed by (x) the Chairman of the Board and (y) the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have carefully examined
the Final Memorandum, any amendment or supplement to the Final Memorandum and
this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date with
the same effect as if made on the Closing Date, and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied hereunder at or prior to the
Closing Date; and
(ii) since the date of the most recent financial statements
included or incorporated by reference in the Final Memorandum
(exclusive of any amendment or supplement thereto), there has been no
material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, properties,
financial condition or results of operations of the Company and its
subsidiaries taken as a whole, whether or not in the ordinary course
of business, other than as set forth or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(e) The Company shall have requested and caused
PricewaterhouseCoopers LLP to have furnished to the Representative, at the
Execution Time and at the Closing Date, letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance reasonably
satisfactory to the Representative and PricewaterhouseCoopers LLP, of the type
described in AICPA Statement on Auditing Standards No. 72.
(f) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Final Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (e) of this
Section 6; or (ii) any change, or any development involving a prospective
change, in or affecting the business, properties, financial condition or results
of operations of the Company and its subsidiaries taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto), the effect of which, in any case referred to in clause (i)
or (ii) above, is, in the sole judgment of the Representative, so material and
adverse as to make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated in the Final Memorandum (exclusive of
any amendment or supplement thereto).
[
18
(g) The Securities shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD and the
Securities shall be eligible for clearance and settlement through The Depository
Trust Company.
(h) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or potential
decrease in any such rating or of a possible change in any such rating that does
not indicate the direction of the possible change.
(i) Prior to the Execution Time, the Company shall have furnished
to the Representative a letter addressed to the Representative substantially in
the form of Exhibit A hereto from each officer and director of the Company
previously identified by the Representative.
(j) The Company shall have caused the shares of Common Stock
initially issuable upon conversion of the Securities to be approved for listing,
subject to issuance, on the New York Stock Exchange
(k) Prior to the Closing Date, the Company shall have furnished to
the Representative such further information, certificates and documents as the
Representative may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representative and counsel
for the Initial Purchasers, this Agreement and all obligations of the Initial
Purchasers hereunder may be cancelled at, or at any time prior to, the Closing
Date by the Representative. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Initial Purchasers, at Mayer, Brown,
▇▇▇▇ & Maw LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on the
Closing Date.
7. REIMBURSEMENT OF EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Initial Purchasers, the Company will reimburse the Initial
Purchasers severally through Citigroup on demand for all expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees, Affiliates and agents of each Initial Purchaser and each person who
controls any Initial Purchaser within the meaning
19
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other U.S. federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Memorandum, the Final Memorandum or in any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
any such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum, the Final Memorandum, or in any amendment thereof or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Initial Purchaser through the
Representative specifically for inclusion therein. This indemnity agreement will
be in addition to any liability that the Company may otherwise have.
(b) Each Initial Purchaser severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers, and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to each Initial Purchaser, but only with reference to written
information relating to such Initial Purchaser furnished to the Company by or on
behalf of such Initial Purchaser through the Representative specifically for
inclusion in the Preliminary Memorandum, the Final Memorandum or in any
amendment or supplement thereto. This indemnity agreement will be in addition to
any liability that any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the fourth sentence of the 10th
paragraph and the 11th and 12th paragraphs under the heading "Plan of
Distribution" in the Preliminary Memorandum and the Final Memorandum constitute
the only information furnished in writing by or on behalf of the Initial
Purchasers for inclusion in the Preliminary Memorandum, the Final Memorandum or
in any amendment or supplement thereto.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel (including local counsel) of the indemnifying party's choice
at the indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any separate
counsel, other than local counsel if not appointed by the indemnifying party,
retained by the indemnified party or parties except as set
20
forth below); PROVIDED, HOWEVER, that such counsel shall be satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel (including local counsel) to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest; (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party; (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action; or (iv)
the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers
severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending any loss, claim, damage, liability or action)
(collectively "Losses") to which the Company and one or more of the Initial
Purchasers may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and by the Initial
Purchasers on the other from the offering of the Securities; PROVIDED, HOWEVER,
that in no case shall any Initial Purchaser be responsible for any amount in
excess of the purchase discount or commission applicable to the Securities
purchased by such Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Initial Purchasers severally shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Initial Purchasers on the other in
connection with the statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) received by it, and benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions. Relative fault shall be determined by reference to, among other
things, whether any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Initial Purchasers on the other,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Initial Purchasers agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of
allocation that does not take account of the equitable considerations referred
to above. Notwithstanding the
21
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Initial Purchaser within the meaning of either the Act or the Exchange Act and
each director, officer, employee, Affiliate and agent of an Initial Purchaser
shall have the same rights to contribution as such Initial Purchaser, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act and each officer and director of the Company shall have the same
rights to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
9. DEFAULT BY AN INITIAL PURCHASER. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the original principal
amount of Securities set forth opposite their names in Schedule I hereto bears
to the aggregate original principal amount of Securities set forth opposite the
names of all the remaining Initial Purchasers) the Securities which the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase; PROVIDED, HOWEVER, that in the event that the aggregate original
principal amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
original principal amount of Securities set forth in Schedule I hereto, the
remaining Initial Purchasers shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Initial Purchasers do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Initial
Purchaser or the Company. In the event of a default by any Initial Purchaser as
set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding five Business Days, as the Representative shall determine
in order that the required changes in the Final Memorandum or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Initial Purchaser of its liability, if any, to the
Company or any nondefaulting Initial Purchaser for damages occasioned by its
default hereunder.
22
10. TERMINATION. This Agreement shall be subject to termination in
the absolute discretion of the Representative, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on such
exchange or Market; (ii) a banking moratorium shall have been declared either by
U.S. federal or New York State authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United
States; or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representative, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated in
the Final Memorandum (exclusive of any amendment or supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the indemnified persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representative, will be mailed,
delivered or telefaxed to the Citigroup General Counsel (fax no.: (212)
▇▇▇-▇▇▇▇) and confirmed to Citigroup at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: General Counsel; or, if sent to the Company, will be mailed,
delivered or telefaxed to Bausch & Lomb Incorporated, attention Treasurer (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇), and confirmed to it at Bausch & Lomb Incorporated, ▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of the Legal Department.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
indemnified persons referred to in Section 8 hereof and their respective
successors, and, except as expressly set forth in Section 5(h) hereof, no other
person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York. The parties
hereto each hereby waive any right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement.
15. WAIVER OF TAX CONFIDENTIALITY. Notwithstanding anything herein
to the contrary, purchasers of the Securities (and each employee, representative
or other agent of the Company) may disclose to any and all persons, without
limitation of any kind, the U.S. tax treatment and U.S. tax structure of any
transaction contemplated herein and all materials of any
23
kind (including opinions or other tax analyses) that are provided to the
purchasers of the Securities relating to such U.S. tax treatment and U.S tax
structure, other than any information for which nondisclosure is reasonably
necessary in order to comply with applicable securities laws.
16. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
17. HEADINGS. The section headings used herein are for convenience
only and shall not affect the construction hereof.
18. DEFINITIONS. The terms that follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
"Citigroup" shall mean Citigroup Global Markets Inc.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"PORTAL" shall mean the Private Offerings, Resales and Trading through
Automated Linkages system of the NASD.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
24
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and the several Initial Purchasers.
Very truly yours,
BAUSCH & LOMB INCORPORATED
By:
----------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
CITIGROUP GLOBAL MARKETS INC.
By:
-----------------------------
Name:
Title:
For itself and the other several
Initial Purchasers named in
Schedule I to the foregoing
Agreement.
26
SCHEDULE I
Original Principal
Amount
of Firm
Securities to be
Initial Purchasers Purchased
------------------ --------------------------
Citigroup Global Markets Inc........................................ $ 56,000,000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. ............................................... 28,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated................................... 28,000,000
Fleet Securities, Inc. ............................................. 8,400,000
McDonald Investments Inc. .......................................... 8,400,000
HSBC Securities (USA) Inc. ......................................... 5,600,000
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. .................................... 5,600,000
Total............................................. $ 140,000,000
-------------
A-27
EXHIBIT A
[Letterhead of officer, director or major stockholder of the Company]
July ___, 2003
Citigroup Global Markets Inc.
As Representative of the Initial Purchasers
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with a proposed
Purchase Agreement (the "
Purchase Agreement") between Bausch & Lomb
Incorporated, a New York corporation (the "Company") and you as representative
of a group of Initial Purchasers named therein, relating to an offering of
Floating Rate Convertible Senior Notes Due 2023, which will be convertible into
common stock, $0.40 par value (the "Common Stock"), of the Company.
In order to induce you and the other Initial Purchasers to enter into
the
Purchase Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc., directly or indirectly, offer, sell,
contract to sell, pledge or otherwise dispose of, enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the undersigned or any affiliate of the
undersigned or any person in privity with the undersigned or any affiliate of
the undersigned of, file (or participate in the filing of) a registration
statement with the U.S. Securities and Exchange Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the U.S. Securities
and Exchange Commission promulgated thereunder with respect to, any shares of
capital stock of the Company or any securities convertible into, or exercisable
or exchangeable for such capital stock, or publicly announce an intention to
effect any such transaction, for a period of 90 days after the date of the
Purchase Agreement, other than shares of Common Stock disposed of as bona fide
gifts approved by Citigroup Global Markets Inc.
If for any reason the
Purchase Agreement shall be terminated prior to
the Closing Date (as defined in the
Purchase Agreement), the agreement set forth
above shall likewise be terminated.
Very truly yours,
By:
------------------------------
Name:
Title:
A-1